Brief Description of the ProjectBusiness Idea:
Housewives love plastic bags and shoppers find it indispensable because plastic bags are light enough for anyone to carry it easily. There is more harm than benefit by the use of plastics bags. Plastic is not biodegradable and releases harmful dioxins into the air. Besides, people who work in plastic industries areat a greater risk for cancer and other diseases. Colored plastic bags contain harmful toxic metals likechromium and copper which can cause allergies. Now everyone has come to realize that plastic bags havemany disadvantages that have adversely affected the environment.I think jute can be a most viable option to the light plastic bags. Jute being bio-degradable it does not pollute the air. Disposal of jute will be no problem as they rot easily and turn to soil.There are two manufacturers of jute bags in the market till date. They are covering 100% market share inthe premium segment but they have a very limited distribution. Consumers have to go to departmentstores and Thamel area to get those bags. The bags they are producing are less attractive, heavier andexpensive. The price they have charged doesn’t go with the product quality.I conducted a survey with 100 people in the department stores and local markets to know the viewregarding the quality and availability of jute bags. From that survey I found that people are very muchaware about their health and they want to use jute bag which is environment friendly but the bags areexpensive, less attractive and are not available in the local market.
As per the market survey majority of people are ready to use jute bags instead of plastic bags. They saidthat the jute bags which are in the market are heavier, expensive, not well designed and limiteddistribution. They also said that if they get the jute bags which are reasonable, well designed, environmentfriendly and don’t have any harmful affects on human health they will be happily using such bags for their daily use.So I want to start this business. I want to manufacture jute bags which have good finishing, reasonable price, lightness, attractive design and wide distribution.
Chapter1. Marketing Plan
1. 1. ProductThe product we are dealing with is jute bag. Jute bag is the best alternative for the plastic bag. Its size will be 18 by 9 inches. Their will be two colours which will be normal jute color and other one will be in black. Both color bags will be embroided with different color thread and with zipper. It is durable, can bereuse and carry up to 15 kilograms. It can reuse even after people reach home, for their future shoppingand packing needs.1. 2. Market simulationThe target segment of this business is segment A which is upper class. Till now all the jute bags are pricessimilar and have similar quality. There are two major competitors engaged in this business. Thecompetitors are covering 60% and 40% market share respectively. I estimate to cover 40 % market share by the end of 3 rd year. This business targets the upper class segment because they are the major shoppersand are willing to pay premium price for the natural and environment friendly product.The average cost of the product is Rs.60 and the market price per bag is Rs.75 for the existingcompetitors.The product demand is highly sensitive to price, promotion and place: - one unit change in price effectssales by 100 units, when Rs.10000 is spend on promotion, it has 1200 units of effect on sales units.Similarly, spending Rs. 5000 on Place or distribution will have 500 units’ effect on sales units.
Business Plan for Jute Bag