Term paper On Marketing Plan of P K Chips January 12, 2016 Department of Marketing Comilla University Page | 1 Prepared for Md. Abdullah al Jamil Assistant professor Department of Marketing Comilla University Prepared by Group Name: Radiant Sl.no Name Id 01 Rubina Akhter 1007017 02 Md.Akramul Kabir 1007020 03 Saima Ahmed 1007032 04 Mst.Rokshana Akhter 1007039 05 Marzan Akhter 1007052 Page | 2 Letter of Transmittal January 12, 2016 Md. Abdullah al Jamil Assistant professor Department of Marketing Comilla University Subject: Submission of term paper Dear Sir, We are submitting an assignment titled for ‘New product Marketing plan’ as a part of the requirement of the course. Your guideline has been followed in every aspect of preparing this assignment. We have really enjoyed working on this project and we hope that our work would meet the level of your expectation. Any query on this assignment is appreciated. Thank You. Sincerely, “RADIANT GROUP” Page | 3 ACKNOWLEDGEMENT Thank you our course instructor Abdullah Al Jamil give us topic “Marketing plan of one products” and start us to research this topic and assure us that he will help us. Then we start this research and observe many unknown and sensitive subject. We are very glad that in spite of many limitations we have completed the Term Paper successfully. At the time of preparing this Term Paper, we received cordial and sincere assistance from many concerns. First of all we want to thank the immeasurable grace and profound kindness of Almighty Allah, the supreme authority of the universe. Then we would like to thank to assign this type of work and lots of cordiality to all our group members for their kind consideration Page | 4 Table of contents Serial Topic Page number * Executive summary 06 1 Situation Analysis 07-09 2 Market opportunity and issues 10-12 3 Objectives 4 Marketing Strategy 12-13 5 Target Markets 14-15 6 Positioning 15-16 7 Marketing mix 16-19 8 Marketing Research 19 9 Financial Projections 19-21 10 Reviews and Control 21-23 11 Marketing Organization 23 12 Contingency Planning 24 * Conclusion 24 12 Page | 5 Executive Summary Friendz Limited started its first commercial production in Bangladesh. Friendz Limited vision is to be recognized as the most successful food and drink company in Bangladesh, generating sustainable, profitable growth and continuously improving results to the benefit of shareholders and employees. The company will continue to grow through our policy of constant innovation and renovation, concentrating on our core competencies and our commitment to high quality, with the aim of providing the best quality food to the people of Bangladesh. The company wants to launch a new type of chips in the market. It is totally different from the traditional chips named PK chips. It is a high quality carrots chips which can be harmless. In that product, there have some special ingredients which provide nutrition. So definitely, that product will be an exclusive product in the market. The target market of that product will be those who think that chips are harmful for health; those who have digesting problems; and the current users of the chips. Our chips will provide some exceptional tastes which will provide great pleasure. The chips will be sugarless so it will not be harmful for teeth. There will no chemical color in this chip. This is mainly a natural product which has no bad side effect. After analyzing the market demand we have seen that there is a demanding the market for this kind of product. And after SWOT analysis we have seen that the company has a great opportunity to enter in this business. Otherwise, there are a few risk involved this business. The product will be a very new product and there is chance of rejection by the market. The competition will also high. And if we succeed any large company can easily enter this market. Considering all the possible. After estimating the cost and sales we can say that it will be profitable. Plan analysis the current situation, followed by different opportunities and threats, then marketing and financial objectives, after that marketing strategy, subsequently action programs, afterwards it also discusses the budget, and finally the conclusion. The cost of the product (each) would be varying on packets, and the price would be 10 taka. Targeted markets are separated into two segments such as children, youngest. PK Chips is providing chips with very testy and healthy including carrot nutrition. Page | 6 1. Situation Analysis There are many companies in chips market. Our various products in this market are Ring chips, Potato chips, milk products, chocolate and confectionery, ice-cream, mineral water, soft drinks etc.. In the chips market we have 15 percent share. Now we want to expand our market share through satisfying our customer by their desired another product Carrot Chips. Therefore we are going to launch a carrot chips named PK CHIPS. 1.1 Customers: Bangladesh is an over populated country. It has a large amount of population. And many of them are fond of chips. So there is vast market for the chips industry. But some people are disinterested about the chips. So the people have also some negative ideas about the product. 1.2 Competitors: The chips industry in Bangladesh is not small. There are a lot of chips producers. Some of them are national and some of them are local suppliers. Some companies also export their chips. In our country many foreign brands are also available. They are comparatively costly also. So the consumers’ taste and demand are changing from low quality chips to high quality chips. Now the chips industry of Bangladesh is very competitive. The major competitors of chips, brands name are Pran Meridian chips Indian lay’s chips Bombay chips Ruchi chips etc. 1.3 Company: Friendz Ltd is food & Beverages Company in terms of sales as well as product range and geographical presence. Friendz Ltd covers nearly every field of nutrition: milk products, chocolate and confectionery, ice-cream, mineral water, soft drinks etc. Friendz Ltd, started its commercial production in 2005 and currently employs 300 people directly in the company and another 500 people indirectly in the industry. Today Friendz Limited is good positioned to grow through Page | 7 its policy of constant innovation and renovation, concentrating on its core competencies and commitment to high quality, with the aim of providing the best quality food to the people of Bangladesh. The company now wants to launch new chips in the market. This chips is totally different from other traditional chips. Its quality will be very high and which will be harmless. In that product, there will have some special ingredients which will provide nutrition and which will be work as digester. 1.4 Context: Friendz limited entered into the market 2005 in Bangladesh. There has a demand of chips product. At present, a lot of chips are available in the market and there is an idea in the market that chips are very harmful for the teeth. So a lot of conscious people do not take chocolate or chips and many parents do not feel comfort to give this to their children. So people have a latent demand of harmless chips. Friendz Limited wants to launch chips with high quality and which will be harmless. Bangladesh has a lot of resources. Even then many items of the chips especially chemical ingredients have to be imported from abroad. So the supply of raw materials from local sources is very important in producing the chips and the suppliers of raw materials are available in Bangladesh & suppliers who offer them at the best prices, the providers of utilities-power, gas & water etc. and the customers who buy their products & services by redeeming their claim intimae by making prompt payment and by distributing proper product on due dates. 1.5 The Market: Our main vision is to making satisfy the customer and run profitably. Based on our R&D department we have identified that our new product is in good demand. Most health conscious people are liking to consume this product as this is ease to consume and time and cost effective. 1:6 Market Needs Our Research and development department found that people preferring the new taste because they has need of nutrition because it is good for health, and as they can consume the product easily majority of people would like to have this product. And in south Asia region and Bangladeshi are Page | 8 mostly affected by various types of diseases so in that case we provide our product as a solution of nutrition. Therefore customers can easily consume based on their desired need. 1.7 Economy: Bangladesh is a developing country. Though the economic condition of this country is not so good, The economy is turning from agricultural sector to and industry sectors. So the future of any industry like chips in this country is very bright. 1.8 Government: The govt. is also attentive about the industry sector and encourages and helps to establish new Businesses. 1.9 Legal : The govt. regulations or the legal condition of Bangladesh is also not a big obstacle at starting new business or to launch new product. But in terms of introducing new consumer product, a company must obtain the approval of BSTI (Bangladesh Standard & Testing Institute). So to launch a new chips the company must obtain BSTI approval. 1.10 Technology: The technological environment of Bangladesh is not developed. So, new and advanced technology and machinery have to be imported from the abroad to produce qualified chips. 1.11 Socio-cultural: From the socio-cultural point of view, there is no barrier for chips. The chips have a good acceptance in Bangladesh. But many people are aware about its bad effect. They know that chips are harmful for health and there is a strong idea about this in mind of the people. Page | 9 2. Market Opportunity and Issues 2.1 SWOT Analysis Strengths 1. Expert and experienced management. 2. High quality product offering. 3. Less price than competitors. 4. Best quality and services. 5. Maintain strong delivery schedule. 6. Company has strong manpower. 7. Customer loyalty of the company. 8. Use of modern technology & Public Relations. 9. Financial stability. 10. Product has the brand personality. 11. Vast Market. 12. Unique product features like flavor, packaging, tests, hygienic etc. Weaknesses: 1. “PK Carrot Chips” is kind of a new product line of the company. 2. As it is a new flavor product, it will be difficult to manage customers for the company. 3. Lack of proper knowledge about the market and the demand because it’s never surveyed before. Opportunities: 1. There is a demand for this kind of product. 2. Good and initiative employees. 3. Mature retail market in Bangladesh. 4. Developed communication channel. 5. Company has a lot of proper channels to deliver the product. Page | 10 Threats: 1. The present chips manufacturers are also strong competitors. 2. As it is a new product, there is a chance of rejection by the market. 3. It may fail to fulfill the expectations of the customers. 4. High cost of the raw materials. 5. Political environment of the country. 6. Lack of brand awareness. 7. Compressed product life cycle. 8. Foreign chips company. 2.2 Competitors Strength: 1. Established brands- the competitors have established brand like Lays, Kurkure ,Pran, Ruchi ,Mr Twist etc.. 2. Product supply- the competitor’s product supply is very larger than our product. 3. Price- the products are similar price like us. 2.3 Competitors Weakness: 1. Tasty and healthy alternative to Biscuit, Chanachur etc.. 2. we provide our product as a solution of nutrition . 3. General consciousness among the consumers of bad effect of chips . 2.4 Points of Difference: The point of difference that makes this carrot chips than the others areNew idea- PK Carrot Chips concept is first in Bangladesh in the Snacks industry. Different experience & knowledge- The customers will have the distinctive feelings & experiences that they will not get although other chips exists in market. Strong distribution channel- As this product has strong channel distribution channel, the consumer get it at every retail shop. Page | 11 2.5 Competitive Advantage: Our competitive advantage is really a superior one; 1. 100% vegetable chips. 2. High contents of vitamin A ,C, D & Calcium ,minerals. 3. Good level of carbohydrate 4. Less fat & calories than other. 5. Good contents of protein & amino acids. 6. Tasty & healthy. 3. Objectives 3.1 Marketing objectives To maintain positive , steady growth each month. To increase new customer who don’t buy chips. To attract current customers of the present chips. Generate brand equity in the market so that in future no company can take the market by producing same product. Create loyal customers. 3.2 Financial objectives: Our sales objective is 1000000 packet chips for the first six months. 4. Marketing strategy The greatest objective is to establish our existing brand in the industry. The marketing strategy will seek to first create customer awareness regarding the product and establishing connections with targeted markets and work toward building customer loyalty and referrals. The major marketing strategies arePage | 12 Increase awareness and image. Cross selling. Quality and test leadership. Mass distribution. We decides to market Carrot Chips all over the country especially in the urban and sub urban areas. Customers will be communicated through advertisements such as leaflets, quality posters, Kiosks, newspaper ads, internet and other media ads & later on radio & TV ads. 4.1 Mission: To provide customer highest quality canned chips and attract current customers of the present chips. Generate brand equity in the market so that in future no company can take the market by producing same product. 4.2 Marketing Objectives: Running these product there are a lot of possibility in marketing and financial gain. It will help the company to increase total sales volume. So our main objective is to satisfy our customer and do maximization of profit. At the same time it will enable the company to capture greater market share. 4.3 Financial objectives: The product will have three types of packets. The sizes of the packets are small, medium and large. Four main factors will help us decide what to charge for our product or service: 1) Our fixed and variable costs; 2) The profit we want to make; 3) Our market research data on competitors’ prices; 4) To reach the breakeven point within 15 months. Page | 13 5 .Target Markets: Our main target market people are the young age’s people who like to eat chips very much. Mostly the school going students and the children. Beside that we also focus the young generation people. Although our main target market is young people but we also prefer the people of adult and old ages people. Also our focus goes to all types of peoples of the country and the current user of the chips. 5.1 Target Market Segments: We have targeted the entire chips market based on the geographic segmentation, demographic, psychographic, and behavioral factors. We segmented our market on the basis of following categories: Geographic: 1. At the beginning our entire market will introduce our product in six Metropolitan cities. 2. Especially for the convenient transportation areas. 3. Our total targeted are population is 2 million Demographic: 1. Our target customer age range will be 4 years to 30 years. 2. Family size 3. Generation Psychographic: 1. Social Class (Middle class, upper class, and middle upper class). 2. The Conscious people. 3. The lower middle class, middle class, and upper middle class. Behavioral: Page | 14 1. Occasion (Birthday occasion) 2. Benefits (Quality product) 3. Readiness Stage (Unaware, aware, intending to buy) 4. Attitude toward product ( Positive) 5. Those who have negative idea about the traditional chips. 6. Those who seek good quality. 7. The non-users and regular users of the chips 8. Those who are aware about the bad effect of the traditional chips. 6. Positioning Market positioning requires the determination of a frame of reference- by identifying the target market and the nature of the competition and the ideal points-of-parity and points-of- difference brand association. We will always try to position our product through Image differentiation By related marketing and Superior Communicable Product differentiation. We will use logo and short advertisements so that people can consistently see the advertisement so the product will occupy a clear, distinctive, and desirable place in the mind of the consumer relative to competitors’ product. Friendz Ltd. will use USP (Unique Selling Proposition) for product. To do brand differences that make a better differentiation or that has the potential to create company costs as well as customer benefits. A difference is worth establishing to the extent that it satisfies the following criteria. Important Distinctive Superior Communicable Page | 15 Affordable and Profitable To capture the customer user easily Friendz Ltd. will also develop some positioning strategy to position “ PK Carrot chips”. There are some requirements how Friendz Ltd. capture the customer value. These are given below: i) By proper offerings. ii) To show the interest of the product. iii) By preemptive and then other competitors can`t copy this product and its services. iv) By creating product superior valve. v) By advertising vi) To know about the customary satisfaction. vii) To ensure the better quality. viii) Ensuring that its 100% Harmless chips ix) By offering chips with affordable price 7. Marketing Mix Our marketing mix for the new product “PK Chips” is as follows: 7.1 Product: For launching a product in the market, there is some procedure that should be followed by every marketer to move in the long run. Our product will enable our customers to have a different experience to try our chips. They will be able to differentiate our product in quality which is unique in the chips market. They will not be able to feel the same way for the other chips in the market. Generally different size of chips packet will be produced for customer. These are small, medium and big size. 7.2 Price: Price is the amount of money customer wish to pay to obtain the product. Necessary strategies pertain to the locations of customer price flexibility related item within a product line Page | 16 and terms of ale. Here, they can set maximum Tk.10 for small and TK.15 for medium and TK 20 large packet. Pricing policy for its product due to the following reasons: Distinctive Packaging Brand Name Cost of raw materials Discounts, allowances and payment period will be reasonable for customers. 7.3 Place: By using the present distribution channel Friendz Ltd can easily market this new product “PK Chips”. The company has many consumer products. The company can use its present marketing channel to make the products available all over the country. We also can make some new channels and assign some distributors to promote this new product. Friendz Ltd. can also use its current delivery vehicles to deliver the new product “PK Chips” product to the wholesalers. The company can use its local offices to deliver to the retailers. So at introduction stage, company’s current marketing channel is enough to deliver the products to wholesalers and retailers. We can use mobile shop in the shopping malls, offices and crowded areas so that people can purchase the product easily when they like to consume. 7.4 Promotion: It plays an important role in the exchange process by informing customers of an Organization’s product or service and convincing them of its ability to satisfy their needs or wants. We will use the following promotional mix: o Advertising o Personal selling o Direct marketing o Sales promotion Page | 17 Friendz Ltd will take a large promotional program for this product. The company will keep a handsome amount for the promotional activities of the product. As it is a new Product more promotion is needed to build up the product awareness.Friendz Ltd. will use ads through TV, Radio, and Newspaper, Internet, Information, Home Delivery, Bill Board, Ticket Advertises, Concert Programs, Power point Information, Banner, Festoon, Placard, Joining Fair to aware people about this chip. The company will take the strategy to create awareness about the bad effects of the traditional chips. Then the company will present its chips to the market as harmless to children and students as well as young, old and all age people. 7.4.1 Advertisement: In the newspaper advertising, the company will know or inform the people about the bad effect of the traditional chips and inform about the good sides of the Apple chips. In their TV commercial they will also try to build awareness in the minds of the customers and try to acquire a strong position in the minds of the customers. In the electronic media’s advertising the company can present famous and renowned doctors to inform people about the difference between traditional chips and Carrot chips. 7.4.2 Public Relation: The company will take a mass public relation program. Nestlé Bangladesh Ltd will have to take this kind of promotional activities such as stall booking in many trade fair, child fair etc. to create a positive image about the brand. 7.4.3 Retailers and Wholesalers: Nestlé Bangladesh Ltd will give many facilities to the retailers and the wholesalers. To take the competitive advantage the company will give more facilities than its competitors. The intermediaries are given many gifts items such as wall clock, T-shirts etc. and sales helping equipment’s such as keeping pots, bill board etc. Page | 18 7.4.4 Others: They will develop some cartoons which will be used on the T-shirts, bill boards, neon boards, and in some ads to attract the children and young people. The company also uses this brand’s logo, picture, symbol etc. on many toys, dolls and on many other things to know and attract the target market. 8. Marketing Research During the initial phase of the marketing plan development, several focus groups were held to gain insight into prospective customers. These focus groups provided helpful insight into the decision making processes. An additional source of dynamic market research is a feedback mechanism based on a suggestion system. In the suggestion system customers are asked to rate in terms of a given scale. There are also several open ended questions that allow the customer to freely offer constructive criticism or praise. Friendz Ltd will work hard to implement reasonable suggestions in order to improve their products offerings, as well as show its commitment to the customer that their suggestions are valued. The last source of market research is competitive analysis. Friendz Ltd will send people to local competitors to gain information about their product offerings and also its competitors’ product offerings. 9. Financial Projections This section will offer a financial overview of “pk chips.” as it relates to the marketing activities. We have addressed all expenses forecasts with fixed costs and variable costs and with first six months estimated costs, sales forecasts with the first six months estimated sales, break-even analysis, and the possible profit after six months in this section. Page | 19 Expenses Forecast: Estimated total Cost for the first Six Months: Fixed cost Tk.13,00,000 Raw materials Tk. 12,00,000 Rent Tk. 1,60,000 Employee (Operation & Sales) Salary Tk. 15,00,000 Packaging Tk. 2,00,000 Promotional Expenses Tk. 7,00,000 Distribution Tk. 1,50,000 Commission Tk. 10,00,000 Operational Expenses Tk. 1,70,000 Administrative Expenses Tk. 2,50,000 Insurance Tk. 15,000 Interest Tk. 50,000 Miscellaneous Expenses Tk. 1,00,000 Total Tk. 67,95,000 Sales Forecast There will not be enough sales in first month. In the second month the sales will be increasing at a satisfactory rate. From the third month the increasing rate of sales will be very high. That means from month three there will be a steady increase in production and sales. Our sales forecast is 1000000 packet chips for the first six months. On an average per piece of chips will be sold for Tk.10. Page | 20 Estimated Sales for the first Six Months: Estimated Sales (TK.) 1200000 1000000 Sales 800000 600000 1080000 900000 400000 200000 720000 180000 540000 360000 0 1 2 3 4 5 6 Consecutive Month Break-even Analysis BEV= Fixed cost / (Price- Variable cost) 100000 10-5 =200000 units So, breakeven point can be achieved within 6 months. 10. Reviews and Control: Marketing plan includes different kinds of budget and managerial assignment for every action program. We describes how to implement marketing plan. For control purposes, the plan also allows for quarterly comparison of actual versus projected sales and expenses. If they cannot do this comparison among the plan then they never go to the competition. For their better performance they need comparison between actual and projected sales and expenses. If there find out any gap in plan and output, we have to take corrective actions. Not only that, if there is any problem arise in production, marketing process, or any other areas, we have to take necessary steps to overcome that. Finally, the management will monitor the total environment, progress,and gap and will take Page | 21 the corrective actions if necessary. The company always has to maintain the TQM (Total Quality Management). 10.1 Action Programs The new brands of “PK Chips “will be introduced in July. We make an action program for the next six months. And we believe that, if our six month action programs will run well, then we will achieve our goals easily. And we will continue our business according our cycle. July: As we know there is no alternative without advertising to reach the product to the customers mind. Therefore at the eve of month we will advertise to the newspapers about our new product. Our product is low involvement and buyers show habitual buying behavior therefore we will advertise on different TV channels so that we can develop unique position to the customers. Then we will collect their information of different dealers. At the last of Month we will start production new sweet favorite Carrot Chips named “PK Chips” August: At the beginning of the month will arrange a meeting for the suppliers, dealers and some specific customers. For advertising campaign we will go to different schools, Shopping malls, and parks to provide them free chips pack and we will provide them a leaflet through which they can write their opinion and they will get a coupon so that on their first time purchase they will get Tk. 2 discount and they will leave the leaflet to the retailer and we will collect it. September: Getting experience from the meet will apply some initiatives and at this month we will advertise of our new product in the Television, Radio, Bill Board, Banners, and in the Poster. Then we will launch our product in to the market. In the primary stage we will produce small, and medium. October: After doing our successful operations of three month, at the fourth month we give extra benefits to the dealers and sellers to improve our sales. We will give small toys for the kinds, and to add Page | 22 experience we the product will have a tin number by doing sms (short text message) the consumer can meet the sport celebrity. This experience will attract our potential customers. November: Observing the situations, at this stage we will produce large packet for the couple. And this month our product will be available in almost every shop within the country. December: Observing and analyzing we take necessary actions to develop product sales and increase our profit. We can easily understand the marketing position of our product. If we learn that our condition is suitable then we will make divisional dealers to distribute to the whole country. Side by side we take control over it in necessary. In this way we will continue our production and give a particular image to the mind of every customer. 11. Marketing Organization Company Organogram: CEO DIRECTOR Chief marketing Chief HR GM Product & Service GM HR Operation GM Sales & Distribution GM HR Training Chief Finance GM Finance & Accounts GM Corporate Chief IT GM IT & Planning GM IT & Page | 23 12. Contingency Planning Difficulties and risks: Problems generating visibility. An already established competitor that chooses to compete on quality and flexibility. Worst case risks may include: Determining that the business cannot support itself on an ongoing basis. Having to liquidate equipment to cover liabilities. Conclusion We all know that, today’s fast moving world respect the new, innovative ideas. To keep the same pace with this situation Friendz Ltd. Company had decided to launch a chips and it has a bright future in its market. As the product is innovative, the consumers are going to appreciate it. And according to the R&D (Research and Development) department this product will be a strong product mix for our company. And once our “Friendz Ltd.” will reach to the hand of our targeted customers we will be able to capture the most market share Friendz Ltd. Company solves its weakness and overcomes its threats. Also Friendz Ltd. Ltd Company adds exclusive taste in chips and our product has some exclusive characteristics that will help us to acquire position in the minds of the customers. This Carrot Chips contain such advantage or features that will achieve its customer satisfaction. Page | 24