Marketing your products and services
Market entry
Engaging the services of a local agent/distributor is the recommended strategy for entering the Pakistani market. The cost of distribution services are normally charged as a percentage of selling price.
Premium products in Pakistan rely on the upmarket segments of the population, the A and B demographics, defined as having an income greater than A$1500 per month. Comprising five per cent of the population; this represents a sizable market in a country with a population of 150 million. The general strategy is to first establish product (and/or brand) in the A and B demographic, consolidate, and then target the C demographic – 15–20 per cent of the population, with a monthly income greater than A$750.
The three biggest consumer markets in Pakistan are: Karachi (population: 10 million); Lahore (5.7 million); and Faisalabad (2.1 million).
Retailers that cater to high-income segment are identifiable by their location, and also the range of products stocked. The number of those retailers is relatively small, which makes targeting this group a manageable exercise.
Traditional advertising methods are applicable in Pakistan. Local advertising agencies can develop creative concepts and manage the delivery of television, press, magazine and outdoor campaigns.
Internet penetration among the general population is relatively low. However, within the trader/agent community, e-business activity is surging. While much of this activity is limited to email use, more sophisticated online business practices will emerge in the near future.
Distribution channels
It is essential to identify the most appropriate and competent agent/distributor for your product.
In Pakistan, there many people who claim to be traders or distributors in all fields, but very few are, in fact, capable.
A competent and experienced agent is necessary to facilitate importation through Pakistan’s (sometimes) complex regulations and because only a small number of retailers import directly; most use brokers and wholesalers. National distributors and region-specific distributors are active in the market.
Small independent operations are the dominant business structure in food importation to Pakistan.
Supermarket retailing is expanding in Pakistan and now accounts for over 10 per cent of sales.
Transport
In Pakistan, 80 per cent of goods are transported by road. The country’s railway network is extensive but the infrastructure has deteriorated. However, the government has designated transport infrastructure renewal as a priority for the coming years.
The major seaports, Karachi and Bin Qasim, are connected to the rail network. Rail is the preferred method, where possible, to freight petroleum products, coal, fertiliser, and bulk agrifood commodities such as wheat and sugar.
Karachi is Pakistan’s busiest seaport, accounting for 75 per cent of commercial maritime activity. Bin Qasim specialises in loose goods.
The major airline is the government-owned Pakistan International Airlines (PIA) which services the major centres as well as over 30 other domestic terminals. Aero Asia International is Pakistan’s largest private enterprise airline and provides domestic and international services.
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