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“SAY CHEESE PIZZA”
As a matter of fact, people tend to forget those who are behind their achievements and have stood for them whenever they have needed assistance. A Malayan Proverb is “One can pay back the loan of Gold but one dies forever in debt to those who are kind”. Realizing the fact we express our gratitude to those who have helped us throughout in this Marketing Plan. In fact it will be right to say that without their co-operation this effort may have ended up in disaster. Our gratitude will be meaningless if we are not grateful to Allah for His kindness upon us. His benevolence and blessings have made us capable. We are whole-heartedly thankful to Him. We are very thankful to our project advisor Prof. Tariq Sohail for offering us with every help possible. His sincere cooperation has helped us to complete this project. We are also very thankful to the institution of which we have been a part. Its teachers have been very helpful and co-operative. We are very thankful to them. We are thankful to all those who guided us actively in completion of our project.
SUBMITTED TO: Sir. TARIQ SOHAIL
SUBMITTED BY: Arslan Ali Amna Rasheed Mariam Nazir Aqsa Rauf
MBA -II AIR UNIVERSITY ISLAMABAD.
DATE OF SUBMISSION: 11th of December 2009
TABLE OF CONTENTS
• EXECUTIVE SUMMARY • MISSION • KEYS TO SUCCESS OBJECTIVES • MARKET CONDITION • COMPANY SUMMARY • RESEARCH PLAN Instrument Sampling Plan Gathering Information Margin of Error Confidence Level Population Size Response Level Findings • CONSUMER BEHAVIOR • FACTORS AFFECTING CONSUMER BEHAVIOR Cultural Factors Social Factors Personal Factors
• CONSUMER DRIVEN STRATEGY 4 Cs----4 Ps • MARKET SEGMENTATION • THE TARGET MARKET • POSITIONING • NEW PRODUCT DEVELOPMENT STRATEGY Idea generation Idea Screening Concept development and testing Business Analysis Beta Testing and Market Testing Commercialization • PRICING STRATEGY Selecting the Pricing Objectives Penetration Strategy Price Sensitivity Estimation Demand Curve Product Mix Strategy • BRANDING STRATEGY • PACKAGING • ADVERTISEMENT
Say Cheese Pizza is a new player in Air University. The parlor is inside the campus that has a strong need for additional food options. Bolstered by the need for more choices in students-oriented experiences, combined with the option for delivery, the parlor is positioned to take advantage of the market demand and serve the students in the University. The population of Air University is rapidly growing with the addition of new departments and more number of students being enrolled each semester. It is Say Cheese Pizza’s strategy to exploit the first-mover opportunity and establish itself as the preferred pizza provider to the market. We believe a locally-owned pizza parlor is the best option to serve the rapidly growing population with a fresh, unique menu as opposed to any other national chain franchise. This business plan calls for an exciting, profitable start-up year ahead with future forecasted growth as we meet the demands of the community. In all, this plan describes a healthy company with good growth prospects, looking to manage its orderly growth in the near future.
“Say Cheese Pizza” creates a friendly and pleasant atmosphere for customers in a well-designed and productive environment in which people can work happily. We are sensitive to the look and taste of good pizza as well as to high-quality ingredients. We look to provide the best possible value to our customers who desire great tasting pizza and to provide customers with the satisfaction of receiving a great value, both tangibly and intangibly. Our customers are our neighbors as we are residents of our market area. We will also create and nurture a healthy, creative, respectful, and fun working environment, in which our employees are fairly compensated and encouraged to respect the customer and the quality of the product we produce. We seek fair and responsible profit, enough to keep the company financially healthy for the long term and to fairly compensate owners for their investment and risk.
Keys to Success:
The keys to success in this business are:
Delivering the customer value proposition. Marketing: promoting a new company and product. Product quality and consistency.
Pricing effectively with respect to the project quality and customer value proposition.
The objectives for “Say Cheese Pizza” are:
To establish the market presence needed to support marketing and sales goals and to attract customers To reach healthy monthly sales by the end of the year, and average monthly sales increasing modestly by steadily through Year 3. To achieve double digit profit margins.
In the cafeteria of Air University, lots of food items are available except pizza which, in our opinion, was an opportunity because pizza, being a well accepted product among the students, pizza can certainly be a success. We are differentiating our product from others which are already available in our cafeteria by providing quality pizza with two varieties. 1. High cheese pizza 2. Normal cheese pizza
Say Cheese Pizza is a privately-owned pizza parlor offering a product menu that does not currently exist in the market and have the honor of being the pioneer. Our customers are students, Faculty and Staff members of Air University, Islamabad.
Say Cheese Pizza offers high quality pizza to a growing community that currently has limited availability of food stuff and no availability pizza. At start up we will be open from 9 a.m. to 5 p.m. Monday - Friday. Our menu will include pizzas with various combinations of toppings. Predefined, high-margin pizzas will be highlighted on the menu.
To determine the needs and wants of the market and to analyze the acceptability of our product, we formulated a comprehensive research plan which included:
The instrument which we used in our survey is questionnaires which included open-ended as well as close-ended questions.
We randomly selected students from our sample size which is 3000 including faculty members as well.
We approached our sample size with in university regardless of gender basis and calculated information from them on the spot through questionnaire. The research plan comprises several stages:
Defining the population of concern: We are concerned with the population of our target market.
• Specifying a sampling frame, a set of items or events possible to measure: • We included students of both genders and faculty members of Air University as well. • Specifying a sampling method for selecting items or events from the frame: • Method which we have used is QUESTIONNAIRES. • Sample size is about 249. • Sampling and data collecting: we collected primary data through our survey.
MARGIN OF ERROR:
The margin of error is the amount of error that we can tolerate or we can say the amount of random sampling error in survey’s result which we have conducted in Air University. We have taken 5% margin of error in our survey because it’s a common choice for everyone. We have found 5% of errors in our survey.
The confidence level is the amount of uncertainty. Typical choices are 90%, 95%, 99%.confidence level and it is important issue in sampling because when we use sample data to draw inferences about the population, we hope to be fairly “on target” and have some idea of the extent of possible error. We have used 90% confidence level in this survey to get fair results. Higher confidence level requires a larger sample size.
The aggregate of objects with which we are concerned is called population size or we can say how many people are there to choose our random sample. If we don’t know the population size we use 20,000 but in our survey the number of population we are targeting by providing them quality pizza is about 3000.
It is basically what we expect the result will be after surveying our target market. There are respondents who give 50% response in some questions and in rest of questions there response level varies on options. Margin of error Confidence level Population size Response level Our recommended size is 5% 90% 3000 50% 249
So this is the recommended sample size of our survey which we have done in Air University. If we create a sample of this many people and get responses from everyone, we are more likely to get a correct answer then we would from a large sample where only a small percentage of the sample respond to our survey.
The findings in response of questionnaire are as follows:
Question #1 *would u like to have a 4 inches pizza inside your campus? Yes 74% no 24%
YES 76% NO 24%
Question#2 *which pizza would you like to have? 74% 4% 4% 18%
Chicken 74 Veg 4% Beef 4% All in one 18%
Question #3 *which type of pizza would you like the most? 70% 30%
YES 70% NO 30%
Question#4 *what price would you prefer for heavy cheese pizza? 80% 12% 8%
60 Rs 65 Rs 70 Rs
Question#5 * what price would you prefer for normal cheese pizza? 84% 16%
YES 84% NO 16%
Question # 6 * would you like some different flavors which are not available in the market? 36% 64%
YES 36% NO 64%
Question#7 *which location would you like pizza parlor to be at? 52% 40% 2% 6%
Law n 52%
closer to entrance gate 2% other 6%
Question#8 *would you like special occasions like sports week, birthday or party etc? 6% 94%
YES 76% NO 24%
Question#9 *would you like to have a delivery service of pizza? 18% 82%
YES 18% NO 82%
Question#10 *how many times would you like to have pizza in a week? 16% 44% 44%
once 16% tw ice 44% option 44%
Since we are following a customer driven strategy so it is important to take care of consumers’ behavior towards “Say Cheese Pizza”.
Factors affecting Consumer behavior:
Pizza is not a traditional food item in Pakistan and it was launched in 1993 for very first time in the country. It clearly was not a part of our culture but gradually has become a part of it and now is widely accepted all over the country. Moreover, keeping in view the target market, most of the students of Air University are from the backgrounds where pizza is neither anything new nor inacceptable.
Being a private sector university, general population of the university has relatively higher buying power and most of them are status conscious. So whenever they plan for a treat, party or function, pizza comes first and if a high quality pizza is available inside the campus, there could be nothing better for them.
As far as personal factors are concerned, most of the target customers are of the age group of 18-25 and hold good buying power as well. In fact, pizza has become a part of lifestyle of a person in major cities of Pakistan, and this case is even better when it comes to private sector universities including our target market.
Variety Seeking Buying Behavior
Inside the premises of Air University is a well established Cafeteria with huge seating capacity but very limited and low quality food items and that is why most of the students are interested in having modern food items such as pizza inside the campus. Say Cheese Pizza can be a great success keeping in view the variety seeking buying behavior of the target customers.
CONSUMER DRIVEN STRATEGY
The reason for existence of a product: People want pizza to eat, but why they prefer the brands like pizza hut. The reason is that because they have no idea where the pizza was made. So we offer a clear message and product that addresses consumer concerns. We are offering our pizza with two major varieties and our menu will include pizzas with various combinations of toppings. 3. High cheese pizza 4. Normal cheese pizza
I- Consumer wants and needs As it is obvious from the survey findings that or target customers want the pizza and the response was quite encouraging. They not only are interested in just the pizza but also showed interest in different varieties and tastes which we are offering. We will so take care of the market demand of the pizza and its variants.
Pricing refers to affordability. Pizza was introduced as a safe, healthy and affordable product. The prices, which were, currently set when the product was introduced was affordable and the objective was to offer a quality product at a standard price. MARKUP PRICING: The most elementary pricing method was used. Unit Cost/1-Return On Sales HEAVY CHEESE: (45.22+1.22) /(1-25% )= 61.92 NORMAL CHEESE: (41.22+1.22)/(1-25%)=56.58
II- Cost to satisfy:
Cost Calculation: Heavy cheese pizza Variable cost per unit : Ingredients (42 rs) Electricity (200/30=66/300 units=0.22) Packaging (Rs 3 per box) Normal cheese pizza Variable cost per unit: Ingredients(Rs 38 ) Electricity(Rs 0.22) Packaging( 3 rs per box) Rs 41.22 Rs 45.22
FIXED COST PER UNIT: Rent Per Day (Rs 66) Oven Rent (Rs 300) Total ( 300+66 )= 366/300 BREAK EVEN POINT: Price: H- 60 N- 55 Variable Cost: 45.22 41.22 Ratio: 33.33% 66.66% Avg. Price: 19.99 36.66 56.65
Avg. Cost: 15.07 27.47 42.54
FIXED COST / PRICE – VARIABLE COST: 11000 / 56.65 - 42.54 =779 Units Total cost will be recovered in approximately three days.
Pizza is placed in the market at the point where customers can reasonably look for it i.e. in the lawn. The distribution is intensive. As we selected the whole university as target market, so consumers can buy the pizza from our outlet.
III- Convenience to buy:
According to the survey findings, most of the target customers opted for the pizza outlet to be placed in university lawn and that shows that it would be convenient for them and we have well taken care of customer’s convenient access to the retail outlet. This offers a proper system for consumers to access the product easily.
Promotion refers to influencing people We have introduced the product in a convincing and different style. Our product is basically for cheese lovers and for this we have a logo which explains this fact. This figure is embossed on the packaging of pizza. From there the advertising message started. This involved true visual elements i.e. posters, conducting other events i.e. sports week, concert of artists, parties etc IV- Communication We have conveyed the information about our product in a successful manner to our target customers. We have done this by placing posters all around the university to make the customers aware about the “Say Cheese Pizza”.
Markets consist of buyers, and buyers differ in one and more ways. They may differ in their wants, resources, locations, buying attitudes and buying practices. Through market segmentation a company divides large heterogeneous markets into smaller segments that can be reached more efficiently and effectively. As we are not big company and do not have a business on large scale but still we segmented our consumer market demographically. It is the most popular basis for segmentation because customer needs, wants and usage rates often vary closely with demographic variables. We divided the consumer market of Air University by age group i.e. from 18-25 years.
THE TARGET MARKET
After evaluating different segments, we must now decide which and how many segments we will target. It consists of a set of buyers who share common needs or characteristics that the company decided to serve. We are basically working on undifferentiated marketing (mass marketing). A specific demographic target market was not chosen for our pizza; instead the goal was to develop a product to be used by consumers of all ages - from teenagers to seniors. It was intended as a liking product especially for students of Air University. In fact, pizza is targeting to be also an alternative to other snacks.
Beyond deciding which segment of the market we will target, then we must decide what position we want to occupy in those segments. Our products position is the way the product is defined by consumers on important attributes- the place the product occupies in consumers’ minds. We have done our pizza positioning by doing a massive advertising campaign.
Our competitive edge is to be first-to-the-market with pizza in a friendly environment. Additionally, the location of “Say Cheese Pizza” is crucial as a convenience model to customers. Air University students frequently visit the front lawn. This location is directly in the center of activity in this university and inevitable for all the students and faculty members of the university.
To drive customers to “Say Cheese Pizza”, we will employ several techniques outlined below. Advertising has been done by placing the posters all over the campus with attractive logos and colors. Additionally, special discounts and membership offers will also be launched soon and in case of special events such as Sports week, we have planned to come up with special promotional prices and offers. Future plans are to advertise in university newspaper as well as on the official website of Air University. With the increasing sales, lots of further marketing activities will be considered.
Website Marketing Strategy:
Advertising campaign has also been launched on the internet by means of world’s most popular website “Facebook”. We also own and run a fan page of Air University on Facebook which holds almost 600 students from our target market. Future opportunities exist in offering online ordering.
NEW PRODUCT DEVELOPMENT STRATEGY
New Product Development Process:
We have generated many ideas for new product launch in our university. We have surveyed our university campus and found that what is missing in our university. Many ideas were put in by our group fellows like ice-cream parlor, pizza corner, old book shop, dance classes etc
2. Idea Screening
The object is to eliminate unsound concepts prior to devoting resources to them. The main things which we considered in this stage are:
the customer in the target market benefited from the product the size and growth forecasts of the market
the current or expected competitive pressure for the product idea the industry sales and market trends the product idea is based on the product will be profitable when manufactured and delivered to the customer at the target price
Keeping in mind all this we sorted out the best ideas and then from them chose one idea that was pizza corner. For this we also have consulted our instructor. He also gave some suggestions on launching a pizza corner in our own university.
3. Concept Development and Testing
Then we developed the marketing details like:
The target market and the decision maker in the purchasing process Benefits provided by the product consumers reaction to the product the product be produced in most cost effectively manner its cost to produce it
Testing the Concept by asking a sample of prospective customers what they think of the idea.
For this purpose we distributed a questionnaire with the response of which we came to know about demands of the customers as well as their perception about the upcoming pizza which helped us a lot in the later stages.
4. Business Analysis
Estimate likely selling price based upon competition(in our case it’s a monopoly) and customer feedback Estimate sales volume based upon size of market
Estimate profitability and breakeven point
All of these analyses has been done in the pricing part of Consumer driven strategy section.
5. Beta Testing and Market Testing
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Produce a physical prototype or mock-up Test the product (and its packaging) in typical usage situations Conduct focus group customer interviews Make adjustments where necessary Produce an initial run of the product and sell it in a test market area to determine customer acceptance In this we made a prototype of our product and tested on the students in the university campus. The response was good, encouraging and in favor of our product that’s why we decided to launch pizza in our campus.
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Launch the product Produce and place advertisements and other promotions Fill the distribution pipeline with product Critical path analysis is most useful at this stage We have done a massive advertising campaign in our own campus by posters plus have put an advertisement on internet as well.
Pricing strategies usually change as the product passes through its life cycle. The introductory stage is not only difficult but also challenging and critical because it alone can sail the ship through or can sink it in the beginning if not set properly.
SELECTING THE PRICING OBJECTIVES:
The clearer the pricing objective the easier is to set price. Our objective is to provide good quality pizza with variety. We have selected penetration strategy.
In case of our product price is highly elastic that is customers are highly price sensitive and they want a quality product. The quantity demand will increase significantly as price declines. We have two products and their price varies according to the quantity and types of cheese. We have chosen penetration pricing strategy because our product is of the nature that can gain mass appeal fairly and quickly, as the product life cycle progresses, there will be changes in the demand curve and cost as such the pricing policy should be revaluated overtime.
People want to have good food but still they can be sensitive of the price increment or decrease because of income level for the reason that most of the population in university is of students. In short, they need food with quality better then the rest with affordable prices.
ESTIMATION DEMAND CURVE:
We did the survey and the results were showing that high demand of good quality pizza with better taste and affordable price.
PRODUCT MIX STRATEGY:
Product Line: We are developing product line rather than single product so that we could cater all the target market which includes heavy cheese lovers. SAY CHEESE is offering two types of pizzas i.e. Heavy cheese and Normal Cheese with prices of Rs. 60 and Rs. 55 respectively. The amount of ingredients and quality differs which justifies the price differences.
This is a brand new product from a newly born company but we are planning to come up with more product lines and variants so for that purpose, a branding strategy was carefully chosen:
Corporate name combined with individual family name:
“Say Cheese” is right now offering two product lines i.e. Heavy Cheese pizza and Normal Cheese pizza coming under the flag of same company. In the future, it will help us to name our products which are yet to come. The brand name is not only meaningful, likeable and adaptable but also is memorable.
A well designed packaging can build brand equity and drive sales. And it also affects consumers’ later product experiences. Keeping in view these factors, the packaging has been taken special care of. The packaging is done in a 5x5 inches paperboard on which the logo of the company has been labeled beautifully. This not only attracts the customers’ attention but also helps in making a favorable overall impression of the product and the company.
A product can be a success even if it is not what the firm depicts it to be only through strong and aggressive advertisement campaign and on the other hand a product can prove to be a flop if advertising strategy is not run properly and effectively. Keep this in view, “Say Cheese” has been effectively advertised throughout the Air University Campus by means of posters which are not only attractive but also informative. The response of poster advertisement has been encouraging and lots of target customers have been found showing interest in them. In addition, we own a fan page of Air University on world’s largest website www.facebook.com and we have almost 600 students of Air University as fans on that page and this number is increasing day by day. Using this forum, we have put an advertisement on the same fan page as well which is turning out to be effective.
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