KATHMANDU UNIVERSITY SCHOOL OF LAW

DHULIKHEL, KAVRE

A REPORT

ON

MARKETING MANAGEMENT AND STRATEGIES

OF

SURYA NEPAL PRIVATE LTD.

(FOR THE PARTIAL FULFILMENT FOR THE REQUIREMENT IN BBM, LL.B 6 TH SEMESTER)

SUBMITTED BY: SUBMITTED TO:

AAYUSH KOIRALA SUMITRA JOSHI SHRESTHA

AMIT KUMAR SUBJECT TEACHER

AYUSNAB KARKI MARKETING MANAGEMENT

BINOD SHRESTHA

CHAHANA SHAH

SISTA THAPALIYA
ACKNOWLEDGEMENT
It is the only section of the report where we are allowed to articulate what we really feel about above
all, the deepest and the heartiest gratitude to all who have put their effort into our enthusiasm, zeal,
and endeavor to make us able to produce something as this.

We, hereby, would like to grab the opportunity to express our esteemed gratefulness to all our teachers.
To be particular in this very report, we are very much thankful to our Marketing Management teacher
Sumitra Joshi /Shrestha, who assigned us to go out to the real world and look at the Marketing
Management of a Company and its Strategies and Mr. B.K.Gurung, Marketing Head of Surya Nepal
Private Limited for answering our queries in regards to Surya Nepal Private Limited.

We are also acknowledged to the helpful and willing teachers and staffs of Kathmandu University School
of Law. We also like to express our gratitude towards Dr. Bipin Adhikari, Dean, for providing us full
support. Last but not least we would like to remember our friends and families for having faith on us.

Thanks for everything.

AAYUSH KOIRALA

AMIT KUMAR

AYUSNAB KARKI

BINOD SHRESTHA

CHAHANA SHAH

SISTA THAPALIYA
PREFACE

This report is prepared for the partial fulfillment of the requirement for the Bachelors in Business
Management and Bachelor's of Law (BBM, LL.B), 6th Semester in Kathmandu University School of Law.
This report tries to analyze the Marketing Management and Marketing Strategies of Surya Nepal Private
Limited.

The report has tried to explore the various aspects of the marketing environment of the company, which
are providing various strengths, weakness, opportunities, and threats.

Apart from that, this study also deals with various strategies used by Surya Nepal Private Limited
ABSTRACT
Surya Nepal Private Limited is the one best and successful organization established with a vision of
"Growth through Quality and Excellent" in 1987. It is a joint venture between BAT (British American
Tobacco) holding 2% shares, ITC Limited with 59% and Nepalese entrepreneurs holding 39%. It has its
factory in Simra, with the head office established in Kathmandu. It has given a new era to the domestic
cigarette market. The company initially started its production with two brands of cigarette, Naulo, and
Bijuli of which Naulo was later dropped. At present, the SNPL produces Surya, Shikhar, Khukuri, Bijuli,
and Chautarithe each of which has their own brand extensions. Surya in the highest selling brand in
Nepal at the premium segment whereas Khukuri at general segment brand. It has over 70% to 75% of
the total market share of the cigarette industry in Nepal in terms of value. In the premium segment, it
commands about 95% of the total market share. In the high segment, it is about 820% to 85% while in
the lower segment its sales about 60%. In terms of brands and sales, its brands are the most sellable
brands in Nepal. It has the largest and strongest distribution network coverage in most all the FMCG
companies in Nepal. SNPL begins its work to lead the business house of Nepal in terms cigarettes
manufacturing and marketing. It makes its product available at all the outlet of the country; satisfy the
need of the customers. It is the most successful organization in this competitive and dynamic situation.
It produces and markets its product to all level of the people in terms of income which makes enable to
people use the brand and satisfy their need with reasonable price without compromising its quality. It is
continuously adopting the change that takes in the environment which gives its opportunities as well as
the threat. Although having the pressure from both internal and external factor it is running its activities
continuing its activities satisfactorily. It has not only fulfilling the desire of people but also contributed in
the area of social as well as national sectors. It has support in the large sector of the nation, for example,
educational, health, sport, developmental, tourism, handicapped and orphan child and people.
Contents
Contents ........................................................................................................................................................ 5
COMPANY PROFILE: ...................................................................................................................................... 6
BACKGROUND: .......................................................................................................................................... 6
LINES OF BUSINESS: .................................................................................................................................. 6
LOGO: ........................................................................................................................................................ 6
VISION AND VALUES: .................................................................................................................................... 7
CORE VALUES: ........................................................................................................................................... 7
Nation Orientation: ............................................................................................................................... 7
Trusteeship: .......................................................................................................................................... 7
Excellence: ............................................................................................................................................ 7
Customer Focus..................................................................................................................................... 7
Respect for People: ............................................................................................................................... 7
Innovation: ............................................................................................................................................ 7
Corporate Governance:......................................................................................................................... 7
BUSINESS: ...................................................................................................................................................... 8
Tobacco: .................................................................................................................................................... 8
Cigarette:............................................................................................................................................... 8
Leaf Tobacco: ........................................................................................................................................ 8
Garments: ................................................................................................................................................. 9
John Players: ......................................................................................................................................... 9
Safety Matches: ...................................................................................................................................... 10
Agarbatti: ................................................................................................................................................ 11
Environment: .............................................................................................................................................. 12
Market Segmentation, Targeting and Positioning for Competitive Advantage ......................................... 19
Pricing: ........................................................................................................................................................ 23
Distribution Channel: .................................................................................................................................. 25
Conclusion ................................................................................................................................................... 26
ANNEX: ........................................................................................................................................................ 27
COMPANY PROFILE:

BACKGROUND:
Surya Nepal Private Limited (SNPL) is an Indo-Nepal-UK joint venture, which started operations in Nepal
in 1986. Surya Nepal Private Limited is one of the largest private sector enterprises in Nepal and a
subsidiary of ITC Limited, India. The balance shares are held by Local Nepalese individuals & Corporate
shareholders and British American Tobacco (Investment) Limited, UK.

LINES OF BUSINESS:
SNPL is currently engaged in the business of Cigarettes, Safety Matches, Agarbatti and Readymade
Garments in Nepal. SNPL's commitment to its corporate vision "enduring value for all stakeholders" has
been uncompromising through the years and is reflected in every product, process, and service provided
by the company.

The company has been the recipient of prestigious FNCCI National Excellence Award for being the best-
managed corporation in Nepal. The company is also the recipient of various national safety and
environmental awards and the factory is ISO -9001:2000 certified.

LOGO:

Their logo stands for their ethos and the beliefs they hold true as a company. It reflects our passion for
quality and excellence and our compelling vision to create enduring value for all our stakeholders.

The mountain stands for their deep roots in Nepal and connotes a sense of solidity and permanence,
symbolic of their position as the nation's foremost professionally managed company. The rising sun
stands for leadership as well as their passion for excellence. It encapsulates the pioneering spirit that
inspires them to create and innovate products that adhere to the highest international standards as well
as create enduring value for their stakeholders. The sun also represents the optimism that they feel for
the future and their deep conviction that, by generating employment, earning foreign exchange and
through their various CSR efforts, help create a better, brighter tomorrow for everyone.
VISION AND VALUES:
To be an internationally benchmarked multi-business corporation in Nepal, delighting domestic
consumers with a proud Made in Nepal. To be a partner in nation-building and creating enduring
values for all stakeholders.

CORE VALUES:
Nation Orientation:
They are aware of their responsibility to generate economic value for the nation. In pursuit of their
goals, they will make no compromise in complying with applicable laws and regulations at all levels.

Trusteeship:
1. As professional managers, they are conscious that SNPL has been given to them in trust by all their
stakeholders. They will actualize stakeholder value and interest on a long-term sustainable basis.
2. Highest standard of Corporate Governance Absolute Integrity.

Excellence:
They do what is right, do it well and win. They go the extra mile and seek superiority in all that they
undertake.

Customer Focus
They are always customer-focused and will always strive to surpass customer expectations in terms of
value, product quality, and satisfaction.

Respect for People:

1. They are result-focused, setting high-performance standards for themselves as individuals and teams.
2. They will always respect and value people and uphold human dignity.
3. They acknowledge that every individual brings a different perspective and capability to the team and
that a strong team is driven by the variety of perspectives within it.

Innovation:
They will constantly pursue newer and better processes, products, services, and management practices.

Corporate Governance:
Corporate Governance is a systemic process by which companies are directed and controlled to enhance
their wealth-generating capacities. The governance process should ensure that companies are managed
within the applicable statutory parameters in a manner that meets stakeholders aspirations and
societal expectations.
The operations of Surya Nepal Private Limited are governed by its Corporate Governance Policy.SNPL
believes that any meaningful policy on corporate governance must provide empowerment to the
executive management of the company, and simultaneously create a mechanism of checks and balances
which ensure that the decision-making powers vested in the executive management are not only not
misused, but are used with care and responsibility.
 BUSINESS:

Tobacco:
Cigarette:
Surya Nepal Pvt. Ltd. (SNPL) has been in the business of cigarette m
manufacturing
anufacturing for more than 25 years
and has built successful brands like Surya Legend, Surya 24 Carat, Surya Luxury Kings, Shikhar Filter
Kings, Khukuri Filter, Pilot Filter, Bijuli and Chautari to cater wide spectrum of consumer taste and
preference.

As onene of the leading FMCG Companies in Nepal, SNPL has a large distribution network in the country
for its products which reach over 5000 whole sellers and over 1,00,000 retailers.

Leaf Tobacco:
Agriculture forms a major part of Nepal's Economy and iiss a source of employment for 66% of the
country's population. Agriculture accounts for about 39% of the country's GDP. As per the World Bank
Report in 2010, 25.16% of Nepalese live below the poverty line. Tobacco has the potential to improve a
lot of agricultural
ultural wage workers who traditionally form one of the poorest households in the country.
Tobacco is the world's most widely cultivated cash crops and it generates more revenues than other
cash crops like sugarcane in Nepal. The Farmers who choose tobacco farming in Nepal do so because the
crop grows even in poor soils and in difficult agro
agro-climatic
climatic conditions besides fetching stable prices.
Farmers can earn good yield from very small plots of tobacco, enabling ththem
em to put tobacco earnings
into growing othe
otherr staple crops.

SNPL's Leaf Development activities presently cover more than 10,000 farmers. The potential of direct
employment through tobacco cultivation is more than 3.5 lakhs man days per season and indirect
seasonal employment through tobacco buying, stemming, processing, godown management,
transportation etc is more than 1.5 lakh man
man-days
days per season.
SNPL's supports to Nepalese tobacco farmers to construct curing sheds have enabled them to protect
their harvested crop from inclement weather and to un undertake
dertake to cure under suitable conditions in
order to produce quality tobacco. The country produces approximately 2.20 million kgs
kg of cigarette
tobacco with SNPL procuring almost 100% of the produce.
Garments:
John Players:
Surya Nepal Private Limited launched the fashionable and youthful men's apparel brand, John Players, in
October 2004. John Players is designed keeping in mind the fashion preference of today's youth and the
most contemporary trends. The brand stands for style, charisma, and attitude and brings them into your
wardrobe with its vibrant yet relaxed collection. John Players knows the pulse of the youth and offers to
clothe for the discerning youth. John Players has everything that appeals to the new generation. The
brand is currently available in its Exclusive branded outlets and high-end multi-brand outlets across the
country. John Players now enjoys high recognition from both consumers and in the fashion industry.

John Players provides a complete wardrobe solution for the fashion and quality conscious male in Nepal.
The range includes formal, casual and party wear shirts, formal and casual trousers, chinos and trousers,
sweat shirts, trendy tees, jackets, 100% pure merino wool sweaters and blazers. Also available are
trendy denim.
Symbolizing
bolizing attitude, fashion, vibrancy, and the youth have embraced denim, not just as a clothing
option but as a mark of lifestyle. Within the apparel segment, the Denim category is one of the fastest
growing. This is evident in the metros as well as rest o
off the country. The brand has been strengthened
with an enhanced range with the incorporation of multiple fits - Regular, Slim and Skinny.

Safety Matches:
SNPL markets Safety matches sourced from independent vendors. The Safety Matches business
leverages
erages the core strengths of SNPL in sales and distribution, brand building, supply chain management
in offering Nepalese consumers high
high-quality safety matches.

Our Tir Safety matches effectively address the need for a quality product in this industry and
an has
successfully created a place for itself in the hugely competitive market.
Agarbatti:
The objective behind the companys plan to enter the agarbatti business is to create employment
opportunities in Nepal amongst the weaker section of society. It is expected that SNPLs strong
distribution network would aid in penetration of the market and enable capture of a reasonable share of
the market.

Research reveals that 65% of consumers do not exhibit any specific brand loyalty thereby providing a
space in the market to build brand equity. SNPLs access to ITCs Mangaldeep brand, product portfolio,
and technical knowledge will be a competitive advantage.

The value proposition of Mangaldeep agarbatti is to provide superior fragrance experience to

consumers at competitive prices. The portfolio of Mangaldeep consists of offers which are either flower
or herb or wood (Sandal) based fragrance and others which are fine fragrance (i.e. not based on any
flavor, shrub etc.). The most premium offer in the portfolio Fragrance of Temple (Gold) variant is a
masala based agarbatti which is light brown in colour and contains natural ingredients and herbs.
Environment:
Environment means the surroundings, external objects, influences or circumstances under which an
organization has to operate. It is the aggregate of all condition, events, and influences that surround the
organization and affect its operations. Organizations have to operate within the framework of the
external and internal environment. The external environment might care either opportunity or pose
threats. Similarly, the internal environment might either impart strength or cause weaknesses. It also
consists of the organizational environment that might be either controllable or beyond
control.According to Keith Davis (1989) defines business environment as "the aggregate of all condition,
events, and influences that surround and affect a business."In the word of Ricky Griffin, "Business
environment is the combination of all the factors, actors and the forces that are surrounding the
business which directly and indirectly affect the day to day operation of the business." As the
organization has to operate within these frameworks, it is always desirable that organizations be able to
utilize their internal strengths or minimize their weaknesses so that the opportunity in the external
environment could be tapped, or in some cases, threats could be minimized. Such practices are covered
under SWOT analysis, where, opportunity means a favorable condition in the external environment of
the organization to grow or achieve its missions or goals. Similarly, the threat could be the unfavorable
conditions in the external environment that create risk or cause damage to the organization. These two
aspects cannot be changed by the organization. Strength means a capability of the organization that can
be used to gain advantage and may cover the areas like research, product development, finance or
technology. Weakness means a limitation or constraint creating strategic disadvantages and may cover
the areas mentioned above. In this part, we deal with the external environment for Surya Nepal Private
Limited. A business represents organized efforts of enterprises to produce and market product to make
the profit through customer need satisfaction. The business environment is the aggregate of all
conditions, events, and influences that surround and affect it. It is the sum total of the environmental
factors which provides an atmosphere for business. As the business environment helps in adaptation,
strategic orientation, boundary spanning, lobbying and stability for a business organization, its
importance increases in this change-oriented world.

Analysis of Environment

Assessment of Internal Environment Since, Surya Nepal came into operation in 1986 as a tobacco
industry (manufacturing and distribution) and diversified into Garments in 2004 (now permanently
closed) and Safety Matches in 2007, It has been planning to manufacture fast moving consumer goods
(FMCG), like noodles, biscuits, and others. Likewise, it has already decided to establish the new
manufacturing plant in Tanahun district. The internal environment analysis seeks to identify the
strengths and weakness in business. Factors those are internal to the business, some of which can be
easily changed or improved upon are:
 1. Human Resource

2. Finance

3. Technology

4. Raw Material Source

5. Brand Image

Human Resource

Surya Nepal philosophy affirms the Company's belief that people are its major assets, and that together
they will sustain Surya Nepal as an institution with vitality and perpetuity.

Respect for People:

It is result focused, sets high-performance standards, respects and value people and uphold
humanness and human dignity. It believes in to acknowledge that every individual brings different
perspectives and capabilities to the team.

Capability Building:

It conducts capability building programs as

a. Recruitment /Induction of new entrants

b. Exposure to skills/operatives on new technology & best work practices

c. The introduction of quality circle/SGA/5-S.

d. Productivity /Quality month

e. Attendance award

Communication:

To enhance the communication inside the organization, it follows:

a. One to one interaction with employees

b. Daily cross-functional team meeting

c. News bulletin Surya Kiran

Training & Development:

Under training and development programs, it includes:

a. Competency mapping & training as per gap identified.

b. Training on Product knowledge to the new entrant.

c. Training on SGA/5-S through expert

d. Outbound training program for all employees

Employee Engagement:

a. Children painting

b. Women empowerment through vocational training (Sewing, candle making at Surya Niwas.

c. Training on vermin composting for household waste management at Surya Niwas.

d. Stress Management through Yoga classes

e. Fitness club at Surya Niwas.

Finance

The SNPL depends upon various financial institutions like commercial banks, development banks,
finance companies, insurance companies, capital market institutions etc. for the supply of funds and
insurance companies. The major suppliers of funds to SNPL are Nabil Bank Ltd; Standard Chartered Bank
Ltd. SNPL has taken insurance policy from National Insurance Company, Oriental Insurance company,
and Himalayan General Insurance Company.

Technology

SNPL uses statistical analytical tools and enhances process capability through NV study/Cp & Cpk. It uses
highly specialized and automated plant and machinery for the production of cigarettes. It relies on both
the capital intensive and labor intensive technologies but it focuses more on automation/online
monitoring system to avert human intervention. It believes in the culture of building continual
improvement through the encouragement of innovation/creativity. It timely updates technology to
leverage Quality/Productivity/Energy saving. In past, it used to depend upon technician wise tool boxes
which were pretty difficult to locate but nowadays, it uses centralized shadow board which is easy to
locate.

Raw Materials

The tobacco is homegrown in the Terai region for i.e. in Bara, Parsa, and Sarlahi, Dang, and Chitwan
which has the weather- wet, hot and humid and topography plains, suitable for the cultivation of
tobacco. The raw materials for making cigarettes for SNPL are imported from the Virginia on the regular
basis which is of the best quality. Suppliers are individual or organizations who supply inputs and
resources to the business organizations. Supplier environment that influences the business activities are
cost availability and continuity of supply of raw material needed in the production. cost and availability
of finance, energy, human resources and cost availability and the existence of sources and means for
supply of plants and machinery, spare parts and after sale service and the existence of substitute
materials, bargaining power of suppliers and infrastructural support for the availability of different
factors of production. The major supplier of raw material (tobacco) in SNPL is India. The simple
packaging is done in Dhankuta whereas the sophisticated packing is done in third countries and the
cigarette paper used for this packaging is also of the foreign countries where the packaging is done.

Assessment of External Environment

General Environment affects the organization and its task environment. It is also called the remote
environment. It is composed of a set of forces that are outside the organization's operating system i.e.
political, economic, social, legal and technological factors. These factors are uncontrollable. It presents
the opportunities, threats, and constraint for the organization.

Political Environment

Political factors define the legal and regularity parameters within which firms must operate. The
direction and stability of the political factors are a major consideration for managers for formulating
company strategy. The SNPL has also been affected by the political factors of Nepal. The political factors
have determined the following constraints in the smooth functioning of the SNPL.

a. The political instability in Nepal has also affected the SNPL.

b. The government of Nepal has placed different tax regulation on the cigarettes sales in Nepal.

c. The cigarettes are not allowed to be advertised in the electronic media like television and radio.
They lead to lower coverage towards the consumers of its products.

d. The government decision regarding the tax rate, interest rate, minimum wage legislation affects
the pricing policy of the company.

e. The government awareness programs on injuries caused due to smoking of cigarettes have also
been the problem for SNPL.

Economic environment

Economic factors concern the nature and direction in which the firm operates. Because the consumption
patterns are affected by the relative affluence of various market segments, each firm must consider
economic trends in the segments that affect its industry. The economic factors effects on the SPNL are
as follow:

a. The existing market rate affects the pricing policy and the economy of the SPNL.

b. The inflation rate and recession also affect the company.

c. The level of disposable income of the costumers also affects the company growth and strategy
formulation

d. The propensities of the people to spend on cigarettes also affect the economic decision of the
company.

e. The import duties are high in Nepal which restricts the company from importing more and it turn
affects the economy of the SNPL.

Social Environment

Social factors that affect a firm involve the belief, values, attitudes, opinion, and lifestyle of persons in
the firm's external environment as developed from cultural, ecological, demographical, and educational
and ethical conditioning. Social, cultural, demographic and environmental changes have a major effect
on all products, services, markets, and customers. The social forces are more or less dynamic. The SNPL
is also affected by the social changes and the factors. The social factors that have placed the constraint
on the SNPL are as:

a. As the cigarette is not assumed as a favorable product by the society, there is hesitance to talk
about it and consume it.

b. The smoking in Nepal has not yet been so freely adopted and the people often hide while
smoking.

c. Company's social and moral ethics are also causing promotional difficulties for its sales i.e. as
good corporate citizens; the company doesn't prefer smoking to the citizen below 18 years.

d. Due to the demographic changes in the population most of the people use cheaper brands for
which the market for premium brands is very low in terms of value.

e. There are some businessmen who do not like to make the profit from selling cigarettes brands
which destroy the company opportunity of creating the new market.

f. Women smoking cigarettes in Nepal are also not accepted by the society hence the SNPL has the
disadvantages of creating new consumers.
Technological Environment:

The technological factors involve the technological changes that help to avoid obsolescence and
promote innovation. The technological factors suggest the adoption of creative technology that creates
the possibilities for new products, for improvement in the existing products or in manufacturing and
marketing techniques. The SNPL is also one the organization in Nepal that adapts and uses the latest
technology for marketing and manufacturing the product. The SNPL invest lots of amount on the R&D
activities to find out the customers needs and preferences and also determines the latest and possible
technology to make the product. The SNPL has been launching new products in regular interval of time
to satisfy the different customer's requirement. The brands like Surya light, Shikhar light and menthol
are the outcomes of the creative technological work of the SNPL. The SNPL has adopted all the latest
technology for the smooth functioning of its business. From marketing to finance, from manufacturing
to distribution the SNPL has all the latest technology use. The SNPL also have the linkage of its
Kathmandu head office with its Simra factory. The order placed in the Kathmandu office is directly sent
to the Simra factory for the dispatch due to the networking between the factory and the office.

Legal Environment

Laws protect business firms from unfair means. On the one hand, this helps to protect the copyright,
patent right, and other issues. The legislative framework thus creates both opportunities and threats for
business. However, in the case of tobacco companies i.e. Surya Nepal, the government has prohibited
for advertisement on public media. The Government of Nepal, Ministry of Health and Population, has
given high priority to primitive health services by specifying education and information about the
dangers of smoking. The National Health Education, Information and Communication Centre, Ministry of
Health and Population, has drafted The Smoking (Prohibition & Control) Act, 2058. In order to reduce
the consumption of tobacco products the National Health Education Information and Communication
sector (NHEICC) has been carrying out several anti-tobacco mass media activities. These activities have
been reducing the domestic market.

Legal action against tobacco:

a. Excise tax on tobacco products: Tobacco products are levied excise tax for two reasons. One is
to raise revenue and the other is to discourage consumption.

b. Health warning: Requirement of putting warning labels on tobacco product packaging and
advertising as "Smoking is injurious to health".

c. Health tax on tobacco products: Two paisa per stick of cigarette from July 15, 1994.

d. Mass information: The NHEICC, MoHP is primarily responsible for anti-tobacco IEC activities. It
produces print, audio and audiovisual materials with the objective of educating the audience
about the harmful effects of tobacco use.

e. Every year on 31st May World No-Tobacco Day is observed.

 f. Ban on smoking in public places

g. Ban on advertising and promotion of tobacco products since 14 December 1998

h. The Smoking (Prohibition & Control) Act, 2058 (2001/02)

i. Likewise, international pressure on tobacco control is rising with the initiation of WHO, and
other NGOs/INGOs. Prohibition of all forms of advertisement, promotion, and sponsorship is
growing worldwide. These shows, the Surya Nepal Company Limited have to face with so many
threats in the future.

Environmental Analysis

Evidence indicates irreparable environmental damage from tobacco agriculture, particularly when
associated with the deforestation necessary to increase farmland for tobacco growth and cure tobacco
plants. Environmental degradation also results from the tobacco plant leaching nutrients from the soil,
as well as pollution from pesticides and fertilizers. The manufacturing of tobacco products also produces
an immense amount of waste. Tobacco Company produces millions of kilograms of chemical waste and
manufacturing waste which litters in streets and waterways. Hence, from the environmental view,
Tobacco industry is taken as a cost to government rather than the income source.
Market Segmentation, Targeting and Positioning for Competitive
Advantage

Market segmentation is the process of dividing an entire market up into different

customer segments. Targeting or target marketing then entails deciding which potential customer
segments the company will focus on. Marketing segmentation always comes before targeting, which
helps a company be more selective about who they are marketing their products to. Marketing
segmentation and targeting are equally important for ensuring the overall success of a company.

Market segmentation is the practice of dividing customers into groups of potential buyers
that have similar preferences and buying habits. As opposed to mass marketing, in which the company
offers the same product to the market, in targeted marketing, a specific group of customers is the focus
of marketing efforts. In other words, target marketing is matching marketing efforts to the needs of a
specific market segment. Small companies typically do not have the means to target mass markets, nor
can they afford to make costly mistakes in marketing. As a result, small-business managers need to bear
in mind market segmentation principles in their marketing efforts.

Target market and segmentation of SNPL.

As the smoker are not alike and they have different needs, wants and desires and the different
backgrounds, education and experience, Surya Nepal has differentiated its product as per these criteria.
The Surya cigarette market of Nepal is highly differentiated and can be broken down into several
categories. One categorization, for example, is based on price positioning in the market. Another
categorization is based on product design and taste, for example, king size cigarettes, filter cigarettes,
and menthol cigarettes. Pack size (e.g. packs of 10 cigarettes or so-called big packs containing 20
cigarettes). Such categorization is important when analyzing the market and market-specific consumer
preferences.

The basis of the segmentation of the Surya cigarette is as follows:-

Geographic segmentation:-

SNPL has also geographically segmented its product like rural and urban areas. Khukuri, Pilot,
Bijuli are more focused on rural areas because they cannot afford the high categories cigarettes and its
demand is low. Whereas for urban areas Surya classic, Surya luxury kings, Surya lights are more focused.
We often find Bijuli, Khukuri cigarettes in Kathmandu valley also though it is targeted to the rural areas.

Demographic segmentation:-

Demographic segmentation helps Surya Nepal easily to locate and reach the specific segments
of the market in a cost effective way. It has targeted all kinds of consumers. Bijuli, Khukuri, and Pilot are
targeted at semi-urban consumers and who has satisfactory income level and especially those who
perform heavy physical work. The other brand offered is King size filter and it includes cigarette like
Shikhar and Surya, especially Surya ice and regular Surya cigarette is targeted to young adults and the
achiever of urban areas of Nepal who belong to the premium class. The supply of the cigarettes to these
demographic areas is done on the basis of demand for these cigarettes.

Gender:-

Surya cigarettes are targeted to male group only. Surya Nepal strictly discourages the
consumption of Suryas brand by the female consumer.

Income, education, and occupation:-

Income has been an important variable for Surya Nepal for distinguishing between the market
segments because it is the indicator of the ability to pay for specified types of cigarettes offered by
Surya Nepal. For a consumer whose income level is low, Surya Nepal offers bijuli, Khukuri and Pilot. For a
moderate-income level Surya Nepal offers Shikhar cigarettes and for high-income level, it offers Surya
regular. Surya Nepal has very carefully combined income with the demographic variables to define and
target the segment more accurately. Surya Nepal also updates the consumer.

Psychographic segmentation:-

Personality

The marketer of Surya Nepal has been trying to appeal to understand how personality
influences consumer behavior. Such knowledge enables them to better understand their consumers and
segment and target those consumers who are likely to respond positively to their product
communication. The marketers of Surya Nepal targets ethnocentric consumers by stressing nationalistic
feelings in their promotional appeals. As well as brand personality, the Brand personality provides an
emotional identity for a brand and encourages consumers to respond with feelings and emotions
towards it.

Competitive Advantage of SNPL Currently, the company enjoyed the monopolistic leadership in
the market, competing only with foreign brands like Marlboro, Camel etc. SNPL is the market leader in
the cigarette industry in Nepal due to its efficient distribution network, cost, innovation, research and
technology which provides the best working environment. The major competitive advantages of SNPL
are as follows:

1. Backup from ITC Limited in product development, material purchase:ITC Limited, being the
parent company, it provides backup support to the organization in various fields like the
development of new product, purchase, and supply of raw material as well as other necessities
and also assists in designing the new techniques for the development and marketing of its
products. This is a special benefit to SNPL over its competitors which makes it more competitive
is every aspect.
 2. National wide distribution network:

The huge distribution network of SNPL is an advantage for the organization to beat its
competitors. SNPL has its distribution in all over Nepal through many distributors, 20000 wholesalers
and more than 100000 retailers which the widest supply of any product yet found in the country. Its
competitors distribution channel is not huge as SNPL thats why they cover more market.

3. High Market Share:

The huge market share of SNPL is one of the major competitive advantages of the company.
SNPL covers almost 75-85% of the total market share in terms of value which represents them as the
strong position of the organization over its competitors.

4. Use of Best Technology:

The technology used y SNPL is the best technology used in the production of cigarettes in the
company. Due to its advanced technology many other cigarettes company cannot compete it like JCF.
ITC support SNPL thats why they change their technology frequently by which their product quality
looks better while consumption.

Marketing mix of SNPL

Product: - SNPL products are as follows:-

Cigarettes: Surya Classic, Surya Luxury Kings, 24 caret Surya Cigarette, Surya Lights, Shikhar,
Shikhar Lights, Khukuri Filter, Bijul.

Garments: John players, springwood (SNPL has currently stopped its garments production).

Safety matches: Tir

Agarbattis: like Mangaldeep etc

Recently the company is producing toffees too.

Price:

It is one of the important marketing mixes which should not take it lightly. According to SNPL, it
has priced its product as per its cost of production and also by focusing its competitors in the market. As
per the government increase the taxes the company has to increase its price.
 Promotion:

As much as we promote the product as much as its sales increases but in the context of Surya
Nepal, there cigarettes product cannot be promoted because the law has banned the promotions of
such brands. But it promotes other product like Agarbattis, Safety Matches, John Player clothing via the
advertisement on social media, television, and newspapers. SNPL increases public relation for
promotion by forming:

SNPL Asha: creating enduring value through community empowerment

SNPL Khelparyatan: creating enduring value through sports and tourism

SNPL Prakriti: creating enduring value through environment preservation

SNPL Suswasthya: creating enduring value through community health

Place:

Another area that should be focused while marketing is its place. As we all know SNPL has one
of the top distributional channels in Nepal. Its products can be found every corner of Nepal.
Pricing:

Pricing comes under 4P's which is product, place, promotion, and price. Pricing is very important and
difficult process. it must reflect supply and demand relationship. Pricing should take the following
factors into consideration:

Fixed and variable costs, competition, company objectives, proposed positioning strategies, target group
and willingness to pay.

Pricing is a critical variable in marketing in Nepal. Nepalese companies put extra emphasis on pricing as a
competitive too. While interviewing Mr. Gurung we asked him about the pricing strategies of the
company, he explained to us that Surya Nepal Private Limited basically target different category of
people with different product and differences on their pricing. He said Nepalese companies do not base
their pricing on demand mainly because they do not usually make research-based objectives sales
forecasts. Which is why value based pricing is followed by very few companies and one of those few
companies includes Surya Nepal'. In fact, Surya Nepal was the first company that launched its shikar
brand based on its perceived value. The companys other brand khukuri and bijuli were on costs and
competitive pressure. Likewise, for other product such as candies, garment, agarbatii, safety matches
etc. were basically introduced by Surya Nepal to grow employment opportunities and also because
these products are mostly household these are reasonable and cheap with the best quality. The pricing
is done according to taste and preference of the consumer. For candies Rs.2, Agarbatii from Rs.10 to
Rs.20. likewise, the cigarette is:

S.No Product category Price of the large size

1 Surya 24 carat king 20 BE 190

2 Surya 24 carat light 20 BE 190

3 Surya Luxury king 20 BE 180

4 Surya lights 20 BE 180

5 Surya Polar Ice 20 BE 180

6 Shikhar filter kings 20 BE 110

7 Shikhar light 110

8 Shikhar menthol 110

9 Shikhar special filter 80

10 Khukuri filter 65

11 Bijuli filter 35

12 Pilot filter 50

13 Chautari filter 35

14 Bijuli plain 25
Distribution Channel:
Distribution channel (a.k.a. marketing channel) moves goods and services from producers to
consumers. They are used because they have greater efficiency in making goods available to target
markets. SNPL has its distribution in all over Nepal through 60 wholesale distributors, 6000 secondary
wholesalers and 75000 retailers which are the widest supply chain of any product yet found in the
country. Secondary wholesalers receive goods from the wholesale distributors in cash and supply it to
the retailers. There is another middleman called door salesman who go to the retailers and sell the
goods. Door salesman receives the goods in credit from the wholesale distributors or main dealers.

Surya Nepal Pvt. Ltd comprises over 5000 wholesalers and over 85000 retailers for the distribution of
Cigarette Distribution plays important role in the sales of products like cigarettes. Huge the distribution
channel lead to higher sales. So the company must have a great distribution channel. The retailers of
Surya receive the products from the whole sellers or the daily sales services produced by Surya Nepal.
Though the are doing their work properly, there are creating constraints that are affecting the
distributions. These can be overcome only by using wide distribution channel as well as effective daily
sales services. The huge distribution network of SNPL is an advantage for the organization to beat its
competitors. SNPL has its distribution in all over Nepal through 60 distributors, 6000 wholesalers and
75000 retailers which the widest supply chain of any product yet found in the country. The distribution
network of other competitors is not huge or not so wide which makes lower and availability of their
brands while most of the brands of SNPL are found in all 75 districts.

The functions performed by Distribution Channel are:

Helping to complete the transaction.

Help fulfill completed transactions.
Conclusion

The policy of the nation is emerging as the threat for the company. However, the company is
able to capitalize its opportunities by taking advantages of its strengths and overcoming its
weakness. The company is well aware of its responsibility being a corporate citizen. Realizing
that it's engaged in various social activities, it is able to maintain its corporate image.

Recommendation
SNPL is one of the successful and leading companies producing and marketing the product with
reasonable price. It is seen that it is mainly focused on the producing and marketing in
appropriate condition and help in the suitable sector of the society which is suffering from the
problem. Although there is no more comment on the SNPL about the cigarette. There are some
points to be recommended as the research has developed for the welfare of the user and
organization itself. Some of them are as follows.

SNPL is producing cigarette, in our country, people are from the different economic
background so it is needed to focus on producing the cigarette in price varieties which enable
them to be brand loyalty. Cigarette is harmful to the health of people, it will better for SNPL to
focus its mind not only marketing huge quantity in society but also make awareness people use
in limit It focuses mainly on the local market for its product and few in the foreign market, it
will be appropriate for SNPL to maintain its quality with adopting new technology which
enhances its quality, helps in entering in the market outside the country and gives strength to
compete in the global market. Nowadays SPNL's products are marketing in everywhere which
may pinch to its policy, rules, regulations, and norms so it will be appropriate to allow those
authorized dealers which are licensed from concern authority.

Although it has contributed in the various development sectors of Nepalese economy, it should
not forget to take a step in environmental protection.
ANNEX:
Questionnaire

Q.N. 1. As representing this institution, what thing pop up in your mind when we listen to the word
marketing?

Q.N 2. Among the five marketing concept (Production, product, selling, marketing and social marketing)
which concept do our organization follow and how?

Q.N 3 how does our organization addresses five core concept (Product and services, Value satisfaction
quality, exchange transaction relationship, markets) of marketing?

Q.N 4 how does our organization define the market?

Q.N.5 How does microenvironment (company its self, supplier, marketing channel firms, customer
market, competitor, publics) affects the ability of our company?

Q.N.6 How does macro environment (Demographic, Geographic, economic, natural, political, social,
technological) affects the ability of our company?

Q.N.7 In which categories does our organization fall as responding to the market environment (make
things happen, was thing happen, wonder what happen) how?

Q.N.8 how does the cultural and social factor affect the consumer buying behavior of our product?

Q.N.9.How does the personal and psychological factor affect the consumer buying behavior of our
product?

Q.N .10. Who is our competitor in the market? Why do consumers buy from them? What should we do
to the consumer to buy from us?

Q.N.11 what social factor affect purchase decision?

Q.N.12.What is the different segment of the market? Do we want to compete in all of them or only
some of them? Which one is growing or which or is contracting?

Q.N.13. what role does personal or demography factor play in purchase decision?

Q.N.14. what additional knowledge, skill, or resources will we required to achieve your strategic
objectives?

Q.N.15.How should your company react to compotator prices?

Q.N.16.What are the changes in consumption pattern which changes in the price of your product in
relation to by a reaction in price changing?

Q.N.17.What is the factor that affects distribution system In the future? What are the challenges going
forward?

Q.N.18. How is retailing in Nepal structure? What are the implications of foreign direct investment for
Nepalese retailer?

Q.N.19. How do you structure a marketing budget?

Q.n. 20What according to you the trend in relation to marketing 50 years before and now?

Q.n.21.According to you how does Surya Nepal deals with the political globalization of law in the
international market and how does it functioning according to its fluctuating domestic law?

Q.N.22.How do they settle the dispute of the passive smoker and the buyer respond towards the
product?

Q.N.23.Though Surya Nepal has been collecting revenue for the country how does it deal with social and
environmental aspect?

Q.N. 24.Who according to you is the target to sell your products?

Q.N.25.NHow does Surya Nepal in international products and service marketing work upon digital
marketing?

Q.N.26.In the case of our organization how our organization does segment the market? On what basis?

Q.N.27. How does our organization target the market? On what basis?

Q.N.28How does our organization position our good in the market? On what basis?

Q.N.29.How do you explain our product which is being consumed by consumers in the market?

Q.N.30.How do you get from where you are today to where you want to be in future? What are the
product and service strategy that we will have to take to create your ideal future business?

Q.N.31.What are the factors that you should consider while setting the price of the product or
commodity?

Q.N.32Among the general pricing approach (cost based, value based and competition based) which
approach does our organization follow and how?

Q.N.33What is the role of distribution channel in the context of marketing of our product in Nepalese
market? How? Please elaborate it
Q.N.34How is the distribution system of our company currently structured? What are the major
challenges that have occurred? What are the main issues in distribution that have been addressed in
recent years? How has the company handled this issue?

Q.N.35Which method does our organization use while setting the total promotion budget (affordable, %
of sales, competitive parity, objective and tax method) how?

Q.N.36. What is the current size of our market? What is the potential size of our market? Will it grow or
contract? How?

Q.N.37 How well does our product fit into the current market? Can you create a new market for our
product?

Q.N.38.Have you ever failed with the prediction that you have done for your future product marketing?

Q.N.39.Do you use some Marketing Strategy?

Q.N.40. Cigarette (Tabaco) it's difficult to promote the product in social media? How have you dealt with
this problem?

Q.N.41.How your product quality, quantities information are reached to the consumer?

Q.N.42.Any new plan you guys are planning so far flourishing you marketing internationally?

Q.N.43.Is theoretical method ever been applied practically in your company, How do you ever get
feedback and comment of the consumer?

Q.N.44.What kinds of distribution channel are you using for your Product?

Q.N.45.How have you so far consider the test and preference of your consumer?