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BUSINESS PLAN

1 Introduction
This business plan relates to Bakerman Jelly which is currently sold in the wholesale market and now moving their focus into retailing this particular product. Bakerman Jellys strategic focus is to grow their business not only in terms of physical expansion but also to create a brand image which will bring Bakerman Jelly as a day to day usage product. The purpose of this plan is to help the management to create brand awareness for their products and to expand their business to new markets within Sri Lanka. This report is compiled by Pettah Essence Suppliers Consultancies during August and September 2010. This plan is laid out as follows: The plan focuses on the industrial analysis including competitor, customer, macro- environment, etc. We also did our analysis with the use of models such as Porters Five Forces, etc. With the results through this analysis we came up with a suitable marketing plan for the next five years. To support the plan and to implement it a clear view on the operational and human resource activities are stated in this document. Along with this a thorough financial analysis is conducted to assess the feasibility of the whole strategic process. Last but not least, failing to implement the suggested solution what other plans can be implemented is briefed under the contingency plan. This document is confidential and has been made available to the individual to whom it is addressed strictly on the understanding that its contents will not be disclosed or discussed by any third parties except for the individuals own advisors. This plan is strictly for information only and does not constitute a prospectus or an invitation to subscribe for shares. Forward looking projections and statements in the plan have been compiled by the promoters for illustrative purposes and constitute an estimated profit forecasts. The eventual outcome may be more or less favourable than that portrayed.
1 Chapter: Marketing plan

Management lead by Mr. Kandavel and his partners and assisted by Hip

BUSINESS PLAN For further details regarding any confidentiality mater of this plan contact Miss. Michelle Ratnasothy, Consultant of HIP Consultancies.

2 Company Background
Pettah Essence Suppliers are well established wholesalers in the essence and bakery products for the past 5 decades. They are well known for their

quality and the lowest cost in terms of bulk purchases. The company focuses on more than 1000 products which range from cake essence to products such as Jelly. They are well established in places such as Pettah in Colombo, Kandy and Jaffna. As their business is currently in a stable position for the past many decades for quite a longer period they have not thought of expanding their business.

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The import raw materials from various places around the world and they are the sole distributors for many of the well established FMCG brands in Sri Lanka. It is a family business which is owned by two cousin brothers on a partnership basis. Their main brands are Bakerman and Twins. Their main time constraints. Despite of all the complexities they are facing at the moment, the management has planned to effectively focus on expansion for the future survival of the company.
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issue in terms of running the business is the lack of human labour and the

2.1 Vision
To become the leading manufacturer and retailer of confectionery and bakery items in Sri Lanka

2.2 Mission
Our purpose is to;

Create Bakerman as a household brand. Become the leading brand in the confectionery and bakery items market.

Become the Must have product at every house. Position our brands in terms of Best Cost Providers.

2.3 Goals
To create awareness among the target audience To expand the markets To build the brand image

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2.4 Objectives
2.4.1 Strategic Objectives

Open up our own manufacturing plant in Sri Lanka within 2 years Forming an in-house Research and Development team within the next two years.

Continuously coming up with new products targeting the segment of household successfully within the next five years.

Portray our organization as one of the most ethical companies in Sri


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Lanka withn the next three years. Increasing brand awareness and maintaining a stable loyal customer base for the next two years.

Make our brand Bakerman available extensively in all the retail outlets in Sri Lanka within the next five years.

2.4.2 Finance Objectives

Increase sales revenue by 35% within this year.

3 Industry Overview
A major portion of the monthly budget of each household is reserved for FMCG products. The volume of money circulated in the economy against FMCG products is very high, as the number of products the consumer use is very high. Competition in the FMCG sector is very high resulting in high pressure on margins. FMCG companies are trying to outdo each other in getting to the urban areas consumers first, since there is a high turnover rate. But each of them has seen a significant expansion in the retail reach in mid-sized towns and villages. Some who could not do it on their own, have backed on other FMCG majors distribution network. Consequently, companies that have taken to rural Sri Lanka like chalk to cheese have seen their sales and profits expanding. According to the Lanka

BUSINESS PLAN Business Online report, four major changes have taken place in the last decade in the FMCG sector.

Firstly, the FMCG companies have discovered that large section of rural population yet untapped is ready to accept their products, but there are challenges regarding penetrating in the rural Sri Lanka. Higher innovation and improved availability can help increase the retailer penetration in the rural market vis--vis the more saturated urban market
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As the demand fluctuations have become rampant as brand portfolio of FMCG companies have widened and they are serving large number of small markets, there is increasing need to adopt just-in-time manufacturing principles. Therefore, the supply chain of the FMCG companies needs to be lean and efficient to enable just-in-time production.

There has been mushrooming of regional companies, which are posing a threat to the bigger FMCG companies. Competition has intensified and the dominance of one player across the product range has reduced. Therefore, FMCG companies need to respond by innovative marketing means which are high decibel and reach the masses, but at the same are cost effective and doesnt inflate the promotional budget.

As the FMCG companies are expanding their operations they need to have strict control on the processes to contain costs and remain efficient. Therefore, the IT and manufacturing systems deployed have to be monitored closely to achieve the desired standards of the business.

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4 SWOT Analysis
In the business context every company has many strengths, weaknesses, opportunities and threats. Through the strengths and by reducing the weaknesses in an organization it will benefit them in achieving external opportunities and also companies need to look out for arising threats to gain more competitive advantage and be more successful.

4.1 Strengths
Strength is the availability of resources and competencies that can provide advantages and to the organization in achieving its goals and objectives. The strengths faced by Pettah essence suppliers are mainly,

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BUSINESS PLAN They have a wide range of colours and flavors such as mango, strawberry, pineapple, orange etc. which they offer to the customers to capture the market. Well established reputation in Pettah as most of the wholesalers and retailers only purchase FMCG items from Pettah Essence Suppliers as they have created brand loyalty. They also maintain a high standard in the quality of products in comparison to the competitors by importing quality raw materials from abroad. Even though they focus on cost cutting they believe that its important for the quality to be in the expected standard.
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4.2 Weaknesses
Weaknesses are the non availability or the lack of resources and competencies that will either disrupt or obstruct the organization in achieving its objectives. The main weakness the company is facing currently is that they have four stores only in Pettah and none of the products are brought out to the super markets as they dont cater island wide. Especially when thinking of expansion they do not have enough human labour to facilitate and conduct the number of stores, factories etc. Another weakness would be that they dont record the transactions that take place in the stores, due to that no documents are available regarding the products. This will lead to confusions and errors in the companys accounts and other related documents. Business is done mainly on trust and relationship wise which can be of a greater risk to the organization because the retailers can change their suppliers as and when they desire. The packaging is not sufficient and attractive enough to draw the potential customers such as households in the target market.

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4.3 Opportunities
These are the opportunities created in the external environment towards the business organization. It is all a matter of how the firm takes advantage of these opportunities in order to gain competitive advantage over the competitors. The company has an opportunity of expanding the business into different areas where it will be easily accessed by the customers and also it will be a privilege to create brand awareness amongst more potential customers. They can come up with more flavors for jelly as currently they are manufacturing only four types of flavors. (Mango, pine apple, orange, strawberry). The new flavors can consist of mint, lime, chocolate, vanilla, apple etc. so that they can increase their loyal customer base.
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Bakerman has the opportunity to improve on their packaging as thats the first promotion tactic which will attract the customers to purchase the product. Packaging is very important to any business as it will act as a silent sales person for that particular brand/ product. Therefore the packaging needs to be done attractively and appropriately.

4.4 Threats
A business firm should always avoid threats occurring in the external environment as it will harm the organization. Most companies analyses the external environment in order to identify potential threats which could occur in the current period and takes action to prevent them. Pettah essence suppliers are facing many threats.

When other competitor brands have many flavours of jelly, bakerman has only four products which will be threat as they need to produce more flavours to capture the target market.

The main threat is that the product is not available everywhere as they dont cater island wide, due to that the potential target market is

BUSINESS PLAN small as most of the customers are unaware of the brands and products.

Since motha is the market leader in the industry and has highly captured the market the competition is intensifying to bakerman. It will also involve a high cost when bakerman try to enter the product into the market as they will have to start from scratch and will need to incur a huge cost when buying shelf space etc.

As the market leader motha could prevent bakerman from entering the super markets by promoting their products more, buying more shelf space as they have a huge profit margin and they have been in the super markets for a long period of time. Also another tactic they can use is campaigning against bakerman by creating a negative attitude towards bakerman products by telling the customers to use a familiar reputed brand.
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5 Environmental Analysis (PESTEL Analysis)


5.1 Political
Every good or service in Sri Lanka is being taxed. According to the Department of Inland Revenue any good or service imported or supplied will be charged Value Added Tax at 12% p.a. also when the government budget changes annually the percentage varies. The government changes the exchange rate every week and it remains the same throughout the week despite the exchange rate changes in the world market (Exchange rates, 2010).

5.2 Economical
Increase in the world prices of the raw materials like gelatin and sugar affects the price of jelly and also if the import tax keeps fluctuating the prices of jelly will fluctuate along with it. The governments budget decides on the import tax. The inflation rate will affect the purchase of raw materials and the purchase of jelly by consumers the company will not a great control over the price. Jelly is not a necessity so consumers will use on their disposable income when purchasing it. In the domestic environment, high interest rates, high taxation, artificially strengthened rupee until April and then allowing it to float and drop in sales due to low disposable income levels of the consumers despite the drop in inflation to 5.3 in March 2009, had a cumulative adverse effect on businesses in several ways. (Jayawardena, 2009)

5.3 Socio Cultural


Having desert after lunch and dinner has become customary even a small piece of chocolate or fruit is considered to be desert. The reason could be the influence of the western countries cultures and the Sri Lankans like having a full course meal to satisfy them mentally and physically. Many households from rural to urban areas have adapted to this. Health consciousness has led people to be more careful in the food they consume. Many FMCG products are low sugar, low fat, no preservatives and artificial colouring etc.
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5.4 Technological
Because of the advancement in technology companies have been able to reduce their costs to a larger extend which has led them to sell in larger quantities for a low price. Organizations in the FMCG industry have moved from manual workers to automate machinery packaging too is done by machinery.

5.5 Environmental
The environment is under many threats by garbage disposal on land and in water especially in the urban areas different oxides polluting Ministry of Environment is mainly focusing on because many organisation dont give much attention to it. Waste liquids are sent into the canals and rivers. Solid waste is dumped in mash land. At present the packaging of bakerman jelly by Pettah Essence is not eco friendly which can become a big threat in the future. The present quality standards law is not very strict on packaging but the environmental laws are changing becoming stricter on disposal garbage because of the threats arising in the environment. (Perera, 2003) states that roughly 80-85% of the municipal domestic sold waste produced in Sri Lanka consists of organic waster including food items and garden related waste. The balance 15%-20% consists of paper, glass, plastic, metals and other inorganic materials. (Alagan, n.d)
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the air. Disposal of waste in an eco friendly manner is what the

5.6 Legal
According to the Ministry of Environment Food Act No. 26 of 1980 the packaging used should be of suitable quality and of hygiene conditions. Quality standards certification like ISO for the production process system and SLS and SGS for the product is required. Workmen's Compensation Ordinance Act No 19 of 1934 and its subsequent amendments defines the payment of compensation to injured workers is defined in the. (Employers Federation of Ceylon, 1998). Workers deal with machinery so they need to be given a safe work environment. Labour is 10% of the cost of production in the

BUSINESS PLAN FMCG Industry (Prince, Personal Communication, 2010) so they need to be looked after well.

6 Competitor Analysis
6.1 Motha Confectionery Works Ltd.
Motha Confectionery Works Ltd. Being one of the leading distributes baking and Confectionery products such as Jelly Crystals, Icing Sugar, Corn Flour, Flavoured Custard Powder, Baking Powder, Flavoured Pudding Mix, Gelatine and etc. They offer different flavours of jelly crystals which may include the newly introduced varieties such as, Greengage, Raspberry, and Diet Orange Jelly & etc.. they also can be considered as an indirect competitor since they offer different other instant desserts such as Pudding Mix- Strawberry, Chocalete, Watalappam and Pudding Mix -Butterscotch, Caremal, Mango Flavour. (Motha, 2010)
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giant in the Sri Lankan FMCG industry, produces and

6.2 Harvest Confectionery Ltd.


Harvest is a well known FMCG company in Colombo and its suburbs. It's popular for offering a unique variety of FMCG items including jelly crystals. As per Motha they also offer a variety of flavours and other instant desserts. They recently followed Motha in coming up with different flavours of Moss jelly (quick set) which indeed would directly affect the Bakers mans sales. They do offer in 100g, 200g, and 500g, packing. (Harvest, 2010)

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7 Porters five forces


7.1 Threat of New Entrants (High)
because there is a high opportunity for new businesses to enter the market and with an average start up cost in small scale, and compete effective with well established brands in the market. Which means a high potential competition can be expected and successfully compete in the near future. Therefore here we should focus on the barriers that need to be prevailing over by new entrants.
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This is an industry that the possibility of promising new entrants is greater,

In such industry, economies of scale are significant to focus on. Therefore we need to give center of attention on reducing the production cost as much as possible. Also the years of experience they posses in performing in the industry will count the success towards the industry. So there is a great advantage for Bakerman product to compete and success with the new inexperienced entrants since it is difficult to produce at low cost until new entries become experienced and established in the market.

Since the Bakerman manufacturing factory located in Pettah there is a great advantage towards its supply and distribution channel. Also a new entrant to the areas such as Colombo and Kandy where Bakerman well distributed will not be easily overtake by. But there is a great chance of new entrant affect to the areas where Bakerman product not well distributed other than Colombo and Kandy.

In this industry there is a high chance of coming up with differentiations of the product. Since Bakerman introduce different

BUSINESS PLAN flavours of jelly to the market such as mint, lime, vanilla which is new to the market that will help to reduce the competition. Then again treat of new entrants with new flavours which is not available in the market could be always affected. Thus, it is obvious that the threat of new firms entering the industry is high. So to compete with treat of new entrants Bakerman should be effectual by lowering cost, enhancing distribution channel and by differentiating the product.

7.2 Bargaining Power of Suppliers (less)


Even suppliers are essential for the success of industry performance Since Pettah Essence is mainly a business which wholesaling production ingredients/ raw materials such as flour, sugar, essence, coloring, etc, to other competing manufactures as well as promoting Jelly under their own brand name would be considered as forward integration where they do not actually deal with suppliers. Therefore Bakerman generally do not even want to consider switching ingredients suppliers which means switching cost of supplier is definitely low. In other hand the bargaining power of suppliers of fuel, electricity, water can be eventually affect. Especially the frequent changes in prices of these might make an impact, but that wont count toward the productivity cost as much. Thus it can be considered that the bargaining power of suppliers is evidently low.
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7.3 Bargaining Power of Customers (high)


The customers are the ultimate target of all of the industries in the country. When considering the bargaining power of customers it seems to be comparatively high since the switching cost of customers is low due to both substitutes and indirect competitors. When switching cost is very low due to unavailability of brand supermarkets such as keels, cargills, arpico would not consider on resave a shell space the market where other brands gives a wide choice of brands to purchase. If customer misses one there is always option to

BUSINESS PLAN another. Furthermore, the variations in quality and limited preferred flavors of Jelly would increase the power of its buyers reducing switching costs. There are also cons related to inefficiencies in delivery service and the unavailability of the brand in outstation. Well establish brands like Motha, Delmage would definitely make an impact on the unavailability of the brand each and every supper markets.this would again have a tendency in reducing the switching cost. Thus, the bargaining power of buyers is relatively low since all buyers have a wide choice of having dominant players in the market in such eminent brands.
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7.4 Threat of Substitutes (High)


There are many substitutes for jelly. So the threats of substitutes are very high and competitive hence there are many products that are available in the desserts category such as Instant caramel puddings, ice cream, custard, instant watalppan, etc under well established brand names. These choices reduce the switching costs of the customer due to the desire nature of the product jelly. The price/performance ratio because of the substitutes for jelly are plenty there are always another option to customers to move on. If the customer cannot meet the price of jelly or difficulty of search on a one particular brand name there are verity of similar product available in the market at different price rates, different brand or substitutes. Thus, the threat of substitutes is high as evidenced above.

7.5 Competitor/ Industry Rivalry (High)


All the four factors of the industry analysis above ultimately encroach on the direct competitive rivalry between a business and its competitors. According to all facts which discussed above There is a quite a big number of other brands competing directly with Bakerman and many indirect and substitutes as well. The direct competitors provide a very

BUSINESS PLAN similar product range with different flavors and quality standards. Therefore other similar brands such as Motha, Delmage consider as direct competitors which need to be more concern when it come to decision making or strategy improvements on towards the Bakerman jelly. Also the indirect competitors are functioning in the large to medium scale with a different and optional range to the customers in the stroke of appetite. Therefore it is also important to keep eye on the indirect competitors such as elephant house, Cargils, Perera and sons share. On overall since the brand is not yet established in the consumers mind it has been a disadvantage in competing with the other rivals in the same category. Thus, although indirect rivalry is at a minimal direct competition has its effects on the business based not only price but on differentiation which enables it to face competition effectively.
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who produce deserts items to the same set of consumer market

8 Marketing plan
8.1 Target Market
Moving from wholesaling to retailing Bakerman Jellys current target market, rather their primary target market would be the households in Sri Lanka as its a day to day FMCG product.

8.2 Market Position


In the market for Jelly, Motha is the current market leader and Harvest is the market challenger. As Bakermans awareness level is very poor and as it is new to the retail market, it is one of the market followers currently. Bakerman intend to capture the market leader position by penetrating the retail market.

8.3 Current Trends in the market


In the current market the demand for instant puddings/desserts are continuously increasing due to the fact that it is easy to make and use. In

BUSINESS PLAN Sri Lanka as women are becoming more career oriented and engage themselves in different fields of interests, the time they spend on cooking is very less though they have the interest of trying them out. Hence, instant puddings/desserts have become their choices when it comes to ease of cooking. At the same time, a new trend is emerging where jelly is combined with other desserts such as trifle, cakes, etc. Women who are enthusiastic about cooking especially in trying out new recipes find jelly as one of the most suitable ingredient in the preparation of many new desserts. Quite similarly the Jelly market has become a very attractive market for children. Children love to eat jelly due to its different colours and flavours. The new trend in targeting the children is to coming up with different moulds and shapes of jellys and also readymade jelly tubs in different shapes in that case.
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8.4 Strategic Focus


As Pettah Essence Suppliers are mainly focusing on wholesaling thus far, currently they intend to position and promote their brands, especially Bakerman. As a result they are at present focusing more towards their retailing. Hence, their strategic focus is to grow their business in terms of expanding their market into different locations as retailing and widen their distribution network. In order to create awareness they intend to focus more on promotional and marketing aspects.

8.5 Growth Strategies


Currently the company does not focus on any growth strategies as they were solely focusing on wholesaling in which they are well established and is the market leader in supplying raw materials. In consideration to their retailing sector when analyzing the companys growth strategies in terms of Ansoffs Matrix they intend to focus on; Market Development where they want to expand their market into different locations as retailers since they are currently situated only in pettah. Hence, to successfully expand they need to widen their distribution network which they are currently lacking of.

BUSINESS PLAN Market Penetration As wholesalers Pettah Essence Suppliers are the sole distributors of raw materials of confectioneries and bakery ingredients for all the leading companies in Sri Lanka. As retailers they have been successful in establishing their products in terms of the reputation of their wholesaling. Yet, the use of Bakerman Jelly among the target market is comparatively low with Motha, etc. Thus, the company intends to penetrate the market through effective marketing communications and positioning.

8.6 Generic Strategy


Bakerman Jelly is low cost leadership as a result of which they pass on the cost benefit to the customers. But as the market is very competitive it is vital for Bakerman Jelly to also focus on differentiation strategies. Therefore it becomes an imperative for them to become a Best Cost Provider to focus on differentiation while reducing costs effectively in all possible ways.
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In accordance to the generic strategies of Porters the current strategy of

8.7 Pricing Strategy


The current pricing strategy of Bakerman Jelly is penetration pricing. They should continue to follow the same pricing strategy as it is a product targeted at the mass market including all income levels and social classes. As Bakerman intends to capture the position of a market leader in terms of god quality provider at lower prices, it should continue with the penetration pricing strategy.

8.8 Placing Strategy


Currently Bakerman Jelly is only available exclusively in their own retail shops which are mainly situated in Pettah. This would not be a very effective strategy in terms of trying to penetrate the market and also for market development. Thus, it is important that Bakerman makes their product extensively available everywhere in the market, especially in other retail outlets such as supermarkets and other confectionery stores. Currently their distribution is in locations such as Colombo where it covers only Pettah, Kandy and also Jaffna which is currently of high potential as a result of the end of war. Thus far, Pettah Essence suppliers didnt have

BUSINESS PLAN intermediaries in their retail sector due to lack of man power and the complexity of handling it. Yet, they used few agencies in terms of good relationships they had with them to distribute to Kandy and Jaffna. The distribution was done within the organization on the basis of trust and reliability they had on each other and not with valid agreements, etc. As mentioned above, in order for Pettah Essence to make their product Jelly an everyday product, they should make the product available extensively. We suggest that Pettah Essence should first of all focus on expanding their distribution within Colombo. As they are only established in Pettah they would be Cargills, Keels, Laugfs, etc. and also the grocery stores in places where the population is quite high. When the company establishes itself within Colombo, they should widen their distribution all around Sri Lanka. This will again be by approaching the supermarkets such as Cargills, Keels, etc. and the grocery stores around Sri Lanka. Hence, in order to successfully do this the supermarkets averagely charge a commission of 35% in the selling price. This will include the relevant distribution cost which is incurred by the supermarkets to distribute our product Jelly in all their outlets around Sri Lanka. Quite similarly we suggest Pettah Essence to have agreement with external distribution agencies to distribute to all the other grocery stores. These, agencies too averagely charge a commission of 35% from the selling price of the product. Therefore, the basic cost on distribution which Pettah Essence will bare would be 35% of the selling price of the product.
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should now target all the supermarkets around Colombo. The supermarkets

8.9 Product
In terms of the product Bakerman has only four flavours of Jelly which is not adequate and attractive enough to attract the market. Hence, they should focus on coming up with different flavours of Jellys, in different quantities and in different shapes/moulds as it will increase the range of choices for the target market. This captures a lot of shelf space, and also will be one of the modes through which Bakerman Jelly can become the top of the mind brand. Having new additions to this particular product line will give them

BUSINESS PLAN the competitor competitive brands in advantage over other terms of differentiation. Bakerman Jelly can also consider of including a specific ingredient that would be of health the conscious which can be product as a healthy dessert. This will attract women, rather mothers in terms of buying them for their children.
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used to

position

8.10 Packaging
Currently the packaging of Bakerman Jelly is very poor in terms of quality as well as attractiveness. Hence, they should improve their packaging in terms of quality as well as the appearance. They should come up with solid box packaging which is air proofed. They should also use different colours and different images which represent the respective flavours of the jelly. Additionally, having the packaging of the Jelly in the shape of its flavours will be a Unique Selling Point to Bakerman. For example, if its strawberry flavoured Jelly the packaging would be in the shape of a strawberry. Along with the packaging giving different moulds for the jelly would be another strategy to differentiate your product.

8.11 Promotional Plan 8.12 Positioning Statement


One of the targets of Bakerman Jelly is to make their product as a daily used product. In other words to make it be a part of their customers every memorable moments in life. Hence the positioning statement will be as follows;

BUSINESS PLAN Jolly Life with Jelly We recommend this statement as we intend to target mainly kids as our target market and also the households. Hence the statement should be catchy, unique and suitable for all the segments of our target market. The main idea behind this is to make them easily remember and recall our product. Thus, we are focusing making Bakerman Jelly as the top of the mind brand in terms of Jelly.

8.12.1 8.12.1.1

Push and Pull Strategies Push Strategy

As Bakerman is new to the market of retailing its product Jelly, an initial push strategy of some sort is useful because the brand Bakerman and the product Bakerman Jelly is not yet familiar to the companys target market which is the households. Actively, engaging the intermediaries such as the companys retailers such as supermarkets and other grocery stores through networking and through trade promotions will be a smart choice for Pettah Essence Suppliers to do. The biggest issue the company might face is when they assume that their brand Bakerman is familiar in the market since they have a well established wholesale market. As Bakerman Jelly is totally new to the retailing market itll be very difficult to get the target market to quickly adapt to this particular Jelly as there are already well established brands such as Motha, Harvest, etc. which has captured the market widely and also the target market is unaware about the Bakerman Jellys quality
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BUSINESS PLAN and taste. Hence push marketing will make the Bakerman brand more persuasive and ubiquitous. Itll also help Bakerman Jelly to acquire leads which can be converted into a loyal customer base in the long run.
8.12.1.2 Pull Strategy

While focusing on a push strategy, pull strategy should also be utilized alongside for Bakerman jelly. For example, Bakerman Jelly can pull in buyers by creating the demand in terms of wide range of choices, preferred tastes and also in terms of higher quality product with lower prices. The first attraction can be done through intensive sales promotions. Once the initiate push marketing strategies at specific segments of the captured target market. There are several instances where pull marketing is especially pertinent. As Jelly is a FMCG which is widely available everywhere in any retail outlets the possibility of getting your target market to purchase the Jelly only through push marketing is inadequate. Hence first of all it is important for Bakerman to create brand awareness and build the trust on their brand in terms of quality which will lead the target market to ask for Bakerman Jelly during purchases. This is one effective source through which the target market can be captured.
8.12.2 Sales Promotions Chapter: Marketing plan 22

company gets the target market to try the Bakerman Jelly then they can

A major issue Bakerman is facing currently is their poor promotional strategies. As they are mainly focusing on wholesaling they do not actually have any specific promotional strategies for their product Jelly. Promoting on mass media wouldnt be appropriate as it incurs high cost.
8.12.2.1 Pull Promotions

As the product is new to the retail market widely, sales promotions will be the most suitable mode of promotion for Bakerman Jelly. Free sample giveaways, buy one get one free, premiums such as free jelly moulds and recipes, etc. would be suitable. Also having competitions such as draws for sending in the packages of the Jelly would also increase the purchase of the product.

BUSINESS PLAN Free giveaways such as stickers of famous cartoon characters will easily attract children in buying the product.
8.12.2.2 Push Promotions

As trade promotions discounts for the retailers, commission on sales of the product, in-store promotions such as posters, banners, POP sales, etc. will be few of the ways through which the retailers can be motivated to push the Bakerman Jelly towards the target market.
8.12.3 Buy more shelf space Chapter: Marketing plan 23

Buying more shelf space in the prime outlets such as supermarkets will give them the advantage of making the consumers buy your product more than your competitors as it will be available extensively.
8.12.4 Leaflets / Brochures

Distributing leaflets and brochures outside the retail shops especially in and out of the supermarkets which includes interesting recipes will be an effective method of making your customers aware of your product.
8.12.5 Sampling/premiums with other products

As bakery products such as baking powder, etc are well established in the market under the Bakerman brand name, giving away samples of Bakerman Jelly or as premiums when customers purchases Bakerman bakery products would be an effective way of making your customers try the Bakerman Jelly. Hence, if the quality and taste is up to the expectations of the customers this will trigger repeat purchases.
8.12.6 Direct Mails

With the help of the marketing team in the organization direct mails can be sent to potential customers. Identifying the potential customers would not be of any issue as we are targeting the mass market.
8.12.7 Facebook

Facebook can be another mode through which you can create a group for Bakerman Brand where you can promote it. A Facebook web page will be created as its the best and free promotional plan for Bakerman. Any future promotions could also be edited on this page. It will also help Bakerman keep track of its customer base by roughly having an idea of their existing

BUSINESS PLAN customer base. Bakerman will be personally able to connect with its customers and personalize their preference and opinions about the Bakerman Jelly which will give them immense ideas on how to improve the product in terms of the flavor, price, package, distribution, etc.

9 Operational Plan
This operational plan is the action plan of the pettah essence suppliers where it leads the company to reach its organisational goals and objectives. It is an operational plan for the next three years. It includes an outline of the resources, machinery used to manufacture, technology which is used and also how to acquire the staff and suppliers. Since we are more focused on the expansion of the business and out distribution networks the operations for the pettah essence of suppliers are limited.

9.1 Availability of Raw materials


All the jelly flavoured products are locally made in the factory. The ingredients to make this product include sugar, gelatine, malik acid and
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BUSINESS PLAN colour powder. The main flavours available in the industry market will be pineapple, orange, strawberry and mango. In addition to these flavours Pettah essence will hope to produce many other different flavours according to the customer preference. The raw materials will be purchased by the parent company (Pettah Essence of Suppliers) where they can continue to import the raw materials from abroad.

9.2 Equipment needed


Pettah essence is currently using machinery for the powdering of jelly, packaging and labelling which is a huge process in the organisation. As for the high promotions and the awareness programs. Therefore they would need another machine within the next two years for the production process.
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the forecast the sales is expected to grow within the next two years due to

9.3 Technology required


The main technology used for pettah essence will the promotional aspects they want to focus on where they will create a website and also send direct mail to the potential customers regarding the new flavours and essence regularly . A data base can also be created with regard to the retail outlets to keep count of all the customers there are in the target market. A CRM software can be used in the organisation to ensure that the customers are looked after with standard and quality based product. An IT system is also needed to keep in track and record information such as the materials needed, stocks available, and the employees payroll etc.

9.4 Location & distribution


The stores are mainly operating in Colombo (pettah), kandy and jaffna. With the expansion they are suggested to enter the supermarket chains and grocery shops within Colombo. Then with the growth of sales they can expand to other supermarkets and grocery shops island wide. Mainly, will be focused on expanding their distribution channels to kaluthara, negombo, mout lavinia, wellawatthe, kolpetty etc. Maintenance and safety As there are many machinery equipments used to produce jelly in different flavours maintenance of those equipments should be carried out for the

BUSINESS PLAN machines to work effectively to avoid destruction of the regular work that needs to be done. Safety of the employees should be taken care of by training them to use the machinery accurately and also the company should obtain a group insurance policy offered by insurance companies for the entire organisation as a whole.

9.5 Quality control


As the quality should be maintained at all times of bakersman jelly they will ensure that the quality of the jelly packets are high and will maintain the standard by testing the ingredients and also the colouring used for different wont be harmful to the health of the customers. They also will make sure that all the jelly packets are ISO 9001 certified to maintain the standard and quality of the brand and image.
Chapter: Marketing plan 26

flavours by chemists to make sure that the issues are eliminated and that it

10 Human Resource plan


Pettah Essence, being one of the competitors in the FMCG industry, extremely values the overall contribution of its employees as their level of contacts with the target customers decide the path to long term organizational success or dilemma. Therefore, the management should be capable of recruiting and selecting right people for the right job at right time to ensure efficiency and effectiveness.

BUSINESS PLAN

10.1 Management team


The company management team, currently consist a staff of four, where it involves a manager and three executive personnel who are responsible of undertaking all operational activities of the place. Also, it should be mentioned that the staff is properly compensated with the amount of work load they undertake since employee satisfaction is a vital aspect in attaining long term objectives. They will be both directly involved in day to day operations as well as behind the scenes.

10.2 Workforce
to the sections where each person is responsible, is such as ware house personnel, in store personal shoppers and data entry and accountants. But in the near future when you are to have your own distribution operation system, in house, you should be looking forward to hire more people to fill in the positions of sales executive, drivers and etc Furthermore it is important to mention that at the moment, Pettah Essence is consisted of four labourers handling and operating the machinery.
Chapter: Marketing plan 27

Currently the employees at Pettah Essence has been categorized according

10.3 Skills required vs. skills available


Efficient managerial as well as technical skills Knowledge about the products- for example the different colors, flavors etc available Technical knowledge such as adequate computer skills Customer service- fluent in English / Tamil and Singhalese, politeness, make the customer feel at ease, understand customer preferences and knowledge of what the customer is looking for Staff must have sense of changes in environment, competitors and recent trends.

10.4 Human resource functions


By implementing a planning process Pettah Essence will be able to establish the company goals and objectives for a certain period of time. The

BUSINESS PLAN owner of Pettah Essence will be able to identify the required skills and the number of employees. A proper planning process will be the basic foundation of Pettah Essence. As a means of functioning as a whole, Strategic decisions will solely be made by the top management. Since our client is falling under the category of small business units, it is obvious that set out annual targets are fairly smaller than the targets to be achieved by a multinational firm. It is vital that employees are confident and thorough about the job specifications and have a thorough knowledge about the product, its uses supportive management team and directors. This will enable the business to identify the employee requirements as well as suggestions. The owner of Pettah Essence can implement different means of empowerment and certain activities to make employees feel the sense of belongingness to the organization and make work atmosphere more interesting. Such as choosing the best employee of the month, best idea generator of the month and also the best chef for the month. This will help employee ethics and honesty.
10.4.1 Recruitment Chapter: Marketing plan 28

and its benefits. Also they should be given the feeling of having a

Currently as mentioned above there are four labourers operating and handling the machinery. As a result of expansion the company will be purchasing a machinery to be in use in the year 2010. Hence a recruitment of minimum of four labourers is vital. Quite similarly, as we expect the demand of Bakerman Jelly to increase rapidly in another 2 to 3 years, this will lead to increase in production. Hence it vital that they recruit another set of four employees to handle the production, which will give a total of 12 labourers in the production process.
10.4.2 Training and development

Training can be known as the key element to improve the Pettah Essence operations. By implementing a training program at Pettah Essence, existing employees and the new coming employees, will build up a good understanding of the business as well as build up their skills.

BUSINESS PLAN There is no exact recruiting process being practiced in the organization. As a strategy, they get the new recruits to be blend with the old employees and to get them selfs trained which can be known as the on the job training. By implementing a on the job training program Pettah Essence will not incur any cost. The company should also train the new recruits of the production labourers in terms of handling and operating the machinery. This can be done through in-house training with the help of existing employees which will not be a huge impact on their cost.
10.4.3 Compensation Chapter: Marketing plan 29

It is important that the company should take necessary action to develop a compensation package which is more attractive for its staff in terms of, rewarding incremental commissions on sales under step by step basis, providing medical and lodging facilities. This could increase the profitability as well as the employee satisfaction. Currently Pettah Essence wage rates to their employees are in the average level of wages, which are being given to its competitor employees, thus they should be looking forward to increase the level in order to retain their employees. So, as a derivation of stretched expenses for staff compensation package, company would have to stretch out its budget on the provision of miscellaneous expenses from year 2011 onwards.

10.5 Organizational Structure (hierarchy- flat structure)


As we mentioned earlier, Pettah Essence is falling under the category of small business units, it is obvious that set out annual targets are fairly smaller than the targets to be achieved by a multinational firm. So, after the analysis, we realized that they should carry on having a flat organizational hierarchy, where it would involve an operational manager, below the chairperson, and the executives to undertake all activities.

BUSINESS PLAN

11 Financial Plan (in Rupees)


11.1 Cost and Financing
Chapter: Marketing plan
126,314,283.75

Cost

Financing

Rent 432000Capital Salary 879840Commercial financing (89%) 2,717,918 Depriciation 120000Borrowings from all partners (11%) 335,922 water 24000Marketing Telephone 18000Borrowings from Partners (100%) 400,000 Electricity 60000 Other Expen 20000 Machinery 1500000 Shelf Space 150000 Sampling / Premiums 50000 FacebookFacebook 30000 Direct Mails Direct Mails 10000 Leaflets / Leaflets / Brochures 60000 Brochures Sales Promotions Sales Promotions 100000 Total 3453840 Total 3,453,840

11.2 Forecasted Income Statement (2010 / 2011)


A pril M ay June J u ly A u g u s t S e p t e m b e r O c t o b e r N o v e m b e D e c e m b e rJ a n u a r y F e b r u a r y M a r c h r 23 ,3 1 9 .0 0 1 9 ,7 6 5 .5 0 1 8 ,6 5 2 .5 0 1 6 ,7 4 9 .0 0 21 ,39 6 .0 0 2 0,6 25 .00 1 8,4 47 .00 2 1 ,5 2 5.0 0 2 1 ,3 7 5 .0 0 2 2 ,9 5 7 .5 0 1 8 ,7 9 8 .0 0 22 ,30 6 .5 0

N o o f U n it s

S a le s R e v e n u e 1 , 2 8 2 , 5 4 5 . 0 0 0 8 7 , 1 0 2 . 5 0 0 2 528 81 15 0 9 2 1 , 1 9 5 . 0 02,0 16 , 7 8 0 . 0 1 , 1 3 4 , 3 70 103 1 4 , 5 8 5 .10, 0 8 3 280 1 .4, 0 7 5 , 6 2 5 .10, 0 6 22 6 61 55, 0 3 3 , 8 9 0 .10, 0 2 6 , 8 5 7 . 5 0 1, 1, , 0 7. 1 17 2 0 2 5 .1 , 0 1 , 7 5 10 1 2 , 0 2 .1 2 Total S a le s c o m m is s ofn Units 4 8 , 8 9 0 . 7 5 3 8 0 , 4 8 5 . 8 8 3 5 9614,790.00 , 4 1 8 . 2 737,748.00 0 3 9 7 , 0 3 1 . 2 5 5 5 , 1 0 4 . 7 5 11,062,357.126 8 . 7 5 4 1 , 9 3 1 . 8 8 6 1 , 8 6 1 . 5 0 4,575,021.26 4 ,0 6 0 .6 3 3 22 5 4 11 ,87 3 .0 3 4 4 ,3 5 6.2 5 1 1 ,4 4 4 1,274,828.54 3 4 29 ,40 0 .1 3 No io 885,297.60 N e t S a le s R e v e n u e 8 3 3 , 6 5 4 . 2 5 7 0 6 , 6 1 6 . 6 3 6 6 6 , 8 2 6 . 8 8 5 9 8 , 7 7 6 . 7 5 7 6 4 , 9 0 7 . 0 0 7 3 7 , 3 4 3 . 7 5 5 9 , 4 8 0 . 2 5 6 9 , 5 1 8 . 7 5 6 4 , 1 5 6 . 2 5 2 0 , 7 3 0 . 6 3 7 2 , 0 2 8 . 5 0 9 7 , 4 5 7 . 3 8 6 7 7 8 6 7 Sales Revenue 33,813,450.00 40,576,140.00 48,691,368.00 58,429,641.60 70,115,569.92 251,626,169.52 D ir e c t c o s t Sales commission . 9 2 4 4 8 , 2 8 1 . 5 411,834,707.50 , 8 614,201,649.00 8 4 17,041,978.807 7 . 9 620,450,374.568 5 . 0 0 2 0 , 6 7 6 . 1 0 2 6 , 3 3 8 . 6 88,069,159.33 528,874 42 3 ,0 3 8 .7 0 3 79 7 .3 2 4 85 ,26 1 .2 67,775.00 18,3 4 4 8 8 ,1 8 7.0 0 8 4 ,7 4 5 4 4 05 ,91 1 .4 2 5 24,540,449.47 C o n t r ib u t io n 3 0 4 , 7 7 9 . 3 3 2 5 8 , 3 3 5 . 0 921,978,742.50 , 9 026,374,491.00 2 2 31,649,389.200 2 . 2 937,979,267.047 1 . 2 5 0 0 , 0 5 4 . 5 3 4 5 , 6 8 9 .163,557,010.19 24 3 ,7 8 8 .1 8 2 18 9 .4 3 2 79 ,64 5 .7 69,568.75 41,1 2 2 8 1 ,3 3 1.7 5 7 9 ,3 2 3 2 8 6 91 ,54 5 .9 6 2 Net Sales Revenue 45,575,120.45 Rent 3 6 ,0 0 0 .0 0 3 6 0.00 36 ,00 0.0 Direct cost 3 6 , 0 0 0 . 0 0 3 6 , 0 0 0 . 0 0 13,943,437.20 , 0 0 16,732,124.640 S a la ry 73 ,3 2 0 .0 0 7 3 ,3 2 0 .0 0 7 3 ,3 2 0 .0 0 7 3 ,3 2 0 .0 0 73 ,32 0 .0 0 Contribution 8,035,305.30 23,844,015.36 D e p ric ia t io n 10 ,0 0 0 .0 0 1 0 ,0 0 0 .0 0 1 0 ,0 0 0 .0 0 1 0 ,0 0 0 .0 0 10 ,00 0 .0 0 w a te r 2 ,0 0 0 .0 0 2 ,0 0 0 .0 0 2 ,0 0 0 .0 0 2 ,0 0 0 .0 0 2 ,0 0 0 .0 0 Rent 432,000.00 432,000.00 T e le p h o n e 1 ,5 0 0 .0 0 1 ,5 0 0 .0 0 1 ,5 0 0 .0 0 1 ,5 0 0 .0 0 1 ,5 0 0 .0 0 Salary 879,840.00, 0 0 0 .1,059,840.00 E le c t r ic it y 5 ,0 0 0 .0 0 5 ,0 0 0 .0 0 5 ,0 0 0 .0 0 5 0 0 5 ,0 0 0 .0 0 O t h e r E x p eDepriciation 1 , 6 6 6 . 6 7 1 , 6 6 6 . 6 7 1 ,120,000.00, 6 6 6 . 6 7120,000.00 n 6 6 6 .6 7 1 1 ,6 6 6 .6 7 T o t a l c o s t water 1 2 9 , 4 8 6 . 6 7 1 2 9 , 4 8 6 . 6 7 1 2 9 , 24,000.00 , 4 8 6 . 6 7 24,000.00 7 4 8 6 .6 7 1 29 1 29 ,48 6 .6 Telephone 18,000.00 18,000.00 N e t p r o f it Electricity 1 7 5 , 2 9 2 . 6 6 1 2 8 , 8 4 8 . 4 2 1 1 4 , 60,000.00 , 4 2 2 . 7 6 72,000.00 5 3 0 1 .5 1 8 9 1 50 ,15 9 .0 Other Expen 20,000.00 20,000.00 Total cost 1,553,840.00 1,745,840.00 320,078,549.57 0 . 0 0 24,094,259.480 0 . 0 028,913,111.38 0 0 . 0 0 3 6 , 0 0 0 . 0 0 6,0 00.00 36,00 3 6 ,0 0 0.0 0 3 6 ,0 3 6 ,0 0 0 .0 0 3 6 ,0 103,761,482.27 7 3,3 20 .00 7 3,3 20 .00 7 3 ,3 2 0.0 0 7 3 ,3 2 0 .0 0 7 3 ,3 2 0 .0 0 7 3 ,3 2 0 .0 0 73 ,32 0 .0 0 28,612,818.43 34,335,382.12 41,202,458.54 136,029,979.75 1 0,0 00 .00 1 0,0 00 .00 1 0 ,0 0 0.0 0 1 0 ,0 0 0 .0 0 1 0 ,0 0 0 .0 0 1 0 ,0 0 0 .0 0 10 ,00 0 .0 0 2 ,00 0 .0 0 2,0 00 .00 2 ,0 0 0.0 0 2 ,0 0 0.0 0 2 ,0 0 0 .0 0 2 ,0 0 0 .0 0 2 ,00 0 .0 0 432,000.00 432,000.00 432,000.00 2,160,000.00 1 ,50 0 .0 0 1,5 00 .00 1 ,5 0 0.0 0 1 ,5 0 0.0 0 1 ,5 0 0 .0 0 1 ,5 0 0 .0 0 1 ,50 0 .0 0 1,239,840.00 1,419,840.00 1,599,840.00 6,199,200.00 5 ,00 0 .0 0 5,0 00 .00 5 ,0 0 0.0 0 5 ,0 0 0.0 0 5 ,0 0 0 .0 0 5 ,0 0 0 .0 0 5 ,00 0 .0 0 120,000.006 . 6 7 1 , 6120,000.00 6 . 6 7 1 , 120,000.006 6 . 6 7 1 ,600,000.00 1 ,66 6 .6 7 1,6 6 6 6.6 7 1 ,6 6 6 6 6 .6 7 1 ,6 66 6 .6 7 24,000.00 1 2 9 , 4 8 6 . 6 7 2 9 , 4 8 6 . 6 7 2 9 , 4 24,000.008 6 . 6 7 2 9 , 424,000.00 8 6 . 6 7 2 9120,000.00 1 1 8 6.6 7 2 9 ,4 1 1 8 6 .6 7 2 9 ,4 1 1 ,48 6 .6 7 18,000.00 18,000.00 18,000.00 90,000.00 30 86,400.00 1 4 0 , 0 8 2 . 0 8 1 1 , 6 1 5 . 6 2 5 1 ,103,680.008 4 . 5 8 7 0 124,416.00 0 3 . 1 9 6 2446,496.00 1 1 8 4 5.0 8 4 9 ,8 1 1 ,5 6 7 .8 6 1 6 ,2 1 1 ,05 9 .2 9 20,000.00 20,000.00 20,000.00 100,000.00 1,940,240.00 2,137,520.00 2,338,256.00 9,715,696.00

Net profit

6,481,465.30

22,098,175.36

26,672,578.43

32,197,862.12

38,864,202.54

BUSINESS PLAN

11.3 Forecasted Cash flow Statement (2011 2015)

year 01 Cash In Fl ow sales Capital Total Cash In Flow cash out fl ow Rent Staff salaries Telephone Water electricity Other Exp Total cash out flow net cash flow B/f Carried Down Balance 21,978,742.50 1,500,000.00 23,478,742.50

year 02 26,374,491.00 26,374,491.00

year 03 31,649,389.20 1,500,000.00 33,149,389.20

year 04 37,979,267.04 37,979,267.04

year 05 45,575,120.45 45,575,120.45

11.4 Unit Cost


The unit cost is for a 100g packet of Jelly.
Cost for the pr oduct uni t Material cost paking cost over head other exp Total

19.80 3.60 1.89 0.50 25.79

11.5

De s cr ipt ion Cost of a product unit OAR (Overhead Absorption Rate) Total Cost per unit Profit Margin Pr ice pe r 100g packe t Agent cost 35% Revenue at hand Profit in hand per unit Expected sales per month in average Per month sales 100 g pack

Unit s 25.79 1.89 27.68 200% 55.36 19.38 35.98 8.30 955 units 34,378.56

Unit Price

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Chapter: Marketing plan

432,000.00 879,840.00 18,000.00 24,000.00 60,000.00 20,000.00 1,433,840.00 22,044,902.50 12,295,800.00 34,340,702.50

432,000.00 1,059,840.00 18,000.00 24,000.00 72,000.00 20,000.00 1,625,840.00 24,748,651.00 34,340,702.50 59,089,353.50

432,000.00 1,239,840.00 18,000.00 24,000.00 86,400.00 20,000.00 1,820,240.00 31,329,149.20 59,089,353.50 90,418,502.70

432,000.00 1,419,840.00 18,000.00 24,000.00 103,680.00 20,000.00 2,017,520.00 35,961,747.04 90,418,502.70 126,380,249.74

432,000.00 1,599,840.00 18,000.00 24,000.00 124,416.00 20,000.00 2,218,256.00 43,356,864.45 126,380,249.74 169,737,114.19

BUSINESS PLAN

11.6 Sales and Marketing Costs


Activities Shelf Space Sampling / Premiums Facebook Direct Mails Leaflets / Brochures Sales Promotions T lE ota xpens e C (R ost s.) 21 00 21 01 200000 150000 50000 50000 40000 30000 10000 10000 75000 60000 100000 100000 450 700 400 000

Description Monthly paid emloyee salary

Rs. Per dayRs. Per month 2011 2012 2013 2014 2015 17500 17500 18000 18500 19000 19500 15500 15500 16000 16500 17000 17500 Total monthly paid employee salary 33000 33000 34000 35000 36000 37000 Daily paid employee salary in average 640 Total salary for the daily paid employees 40320 40320 40820 41320 41820 42320 Total salary per month 73320 73320 74820 76320 77820 79320 Total salary per leadership 879840 879840 897840 915840 933840 951840

11.7 Salary

11.8 Rent

D escription Square feet Price per Square feet Rent per month Rent per year

Units 400 Rs. 90 36000 432000


32

Chapter: Marketing plan

21 02 150000 45000 30000 10000 50000 75000 300 600

BUSINESS PLAN

11.9 Depreciation
Liife time of the machinery Asset Value Depriciation

12.5 years 1500000 120000

11.10

Ratio Analysis

Year T o ta l F C C o n tr ib u tio n ( p e r u n it) B E P ( in u n i t s ) R O I = P B T / C a p ita l ( % ) G P M a r g in O P M a r g in N P M a r g in

2011 2012 2013 1 ,1 6 1 ,9 5 3 1 ,3 9 4 ,3 4 4 1 ,6 7 3 ,2 1 2 30 30 30 3 9 ,2 9 5 4 7 ,1 5 4 5 6 ,5 8 5 3 10 6 24% 59% 59% 19% 54% 55% 13% 38% 38%

2014 2 ,0 0 7 ,8 5 5 30 6 7 ,9 0 2 8 59% 55% 39%

2015 2 ,4 0 9 ,4 2 6 30 8 1 ,4 8 2 9 59% 55% 39%

Y ears 1 2 4

CF DCF @ 10% (1,500,000.00) 1.00 20,544,902.50 0.909 24,748,651.00 0.826 35,961,747.04 0.683 NPV

PV (1,500,000.00) 18,677,184.09 20,453,430.58 24,562,357.11 62,192,971.78


33

Chapter: Marketing plan

BUSINESS PLAN

12 Contingency plan
12.1 Plan A
After analyzing current market projection in the industry we have decided to develop brand awareness and an expansion strategy for bakerman jelly. This decision was taken based on the market research we have carried out, resource availability of bakerman, evaluating cost and benefit of market alternatives available for target market, target audience income and purchasing power, geographic considerations in relation to skewness, customer demand for jelly in the market and so on. In order to gaining market share and long term profit, Increasing the brand awareness of the product and expansion strategy is the best option currently available for bakerman jelly. However this plan might not be similar to the actual out come due to risk factors such as; Government tax regulations might be fluctuating at the time when the product is actually lounging to the target market. Unexpected cost increases would be affected to a great extent because the government changes of its tax policies and import and export tariffs and therefore less or Non-availability of materials. Those fluctuations will directly course to the cost of production, then to the prices and targeted profit. Recession of the economic situation of the country affects the personal income levels of potential customers. If the income levels decrease then

34

Chapter: Marketing plan

BUSINESS PLAN that will affect to the expected purchasing power of customers. And therefore sales will decrease for a certain amount of the target. Also, Sales projections may be lower than projected due to direct and indirect competition, changes in demand or problems with marketing strategy or distribution channel. Due to the above mentioned reasons, we would like to recommend a plan B for Baersman jelly, if plan A wouldnt bring the expected benefits in terms of increased market share, make brand awareness, improved customer satisfaction, increased reputation and profits. The plan B we propose could
Chapter: Marketing plan 35

be acknowledged as follows;

12.2 Plan B
Target only the main areas where bakerman products are currently available such as Kandy and Colombo rather expanding the distribution channel. But the brand awareness program will focus on all selected locations targeting future expansion of the market share.

13 Balance Scorecard
Financial Perspective Goals Survi ve Succeed Prosper Measures Continuous maintenance of healthy cashflow Achieving shorter payback periods or quicker breakeven Continuous increase on ROI and market share

Customer Perspective Goals New flavors Customer Satisfaction Measures Most Find preferred out flavors by the customers customer competitors

BUSINESS PLAN brand preferences Preferred retailers Retailers who give more shelf space in their supermarkets.

Internal business Perspective Goals Technology effectiveness Introduction of new flavors New flavors Measures Reduction in the cost of units Effectiveness of introduction of new flavors at supermarkets
Chapter: Marketing plan 36

New flavors of competitors available

Learning and Growth Perspective Goals Training Measures Effectiveness of factory workers in using the machinery and sales representatives with sales. Technology How is introduction of new machinery contributing towards the overall product quality. Flavor contribution Innovation vs. Competition Identify the sales percentage of each flavors contribution Introduction competing competitors. of new flavors existing with

BUSINESS PLAN

14 References
Alagan, R. (2009). Sri Lanka's Environmental Challenges. Retrieved 8 30, 2010, from Global Vision: http://www.gvglobalvision.org/publications/Sri %20Lanka%92s_Environmental_Challenges.pdf Exchange Rates. (2010). Retrieved 07 21, 2010, from Customs.gov: http://www.customs.gov.lk/exchange_rates/er100823.pdf
Harvest Jelly. (2010). Retrieved 07 21, 2010, from Home: http://stores.burgundybuttons.com/-strse-1146/Saltbox-Harvest-JellyRoll/Detail.bok Motha Jelly. (2010). Retrieved 07 12, 2010, from Motha Home: http://halaal.acju.net/food-processing-facilities/36-motha.html

Perera, Mr.K.L.S. 2003, An Overview of the Issue of Solid Waste Management In Sri Lanka in Martin J. Bunch, V. Madha Suresh and T. Vasantha Kumaran, eds., Proceedings of the Third International Conference on Environment and Health, Chennai, India.

15 Bibliography
Performance appraisal methods (n.d.). The HR management. Retrieved May 17, 2010, from http://www.humanresources.hrvinet.com/performanceappraisal-methods/ Stone, J, R. (2005).Human Resource Management. (5th Ed.).John Wiley and sons, Australia.

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BUSINESS PLAN

16 Appendices
16.1 Summary of the Objectives
STRATEGIC OBJECTIVES SMART

Manufacturing plant

2 years

In-house Research and Development team

2 years

New products targeting the segment of household

5 years

Ethical company in Sri Lanka

3 years

Brand awareness and maintaining a stable loyal customer base

2 years

Extensively in all the retail outlets

5 years

38

Chapter: Marketing plan

BUSINESS PLAN
FINANCIAL OBJECTIVES SMART

Increase sales revenue by 35%

1 year

16.2 HR Considerations
Chapter: Marketing plan 39

BUSINESS PLAN

16.3 Risk Factors

40

Chapter: Marketing plan

BUSINESS PLAN

Table of Contents
1 Introduction......................................................................................................... 1 2 Company Background .........................................................................................2 2.1 Vision ........................................................................................................... 3 2.2 Mission ......................................................................................................... 3 2.3 Goals............................................................................................................. 3 2.4 Objectives .................................................................................................... 4 2.4.1 Strategic Objectives................................................................................4 2.4.2 Finance Objectives..................................................................................4 3 Industry Overview............................................................................................... 4 4 SWOT Analysis ....................................................................................................6 4.1 Strengths...................................................................................................... 6 4.2 Weaknesses.................................................................................................. 7 4.3 Opportunities................................................................................................ 8 4.4 Threats.......................................................................................................... 8 5 Environmental Analysis (PESTEL Analysis).........................................................10 5.1 Political........................................................................................................10 5.2 Economical..................................................................................................10 5.3 Socio Cultural..............................................................................................10 5.4 Technological..............................................................................................11 5.5 Environmental.............................................................................................11 5.6 Legal...........................................................................................................11 6 Competitor Analysis...........................................................................................12 6.1 Motha Confectionery Works Ltd. .................................................................12 41 Chapter: Marketing plan

BUSINESS PLAN
6.2 Harvest Confectionery Ltd. ...............................................................12 7 Porters five forces.............................................................................................13 7.1 Threat of New Entrants (High).....................................................................13 7.2 Bargaining Power of Suppliers (less)............................................................14 7.3 Bargaining Power of Customers (high).........................................................14 7.4 Threat of Substitutes (High).........................................................................15 7.5 Competitor/ Industry Rivalry (High).............................................................15 8 Marketing plan ..................................................................................................16 Chapter: Marketing plan 42 8.1 Target Market..............................................................................................16 8.2 Market Position............................................................................................16 8.3 Current Trends in the market......................................................................16 8.4 Strategic Focus............................................................................................17 8.5 Growth Strategies........................................................................................17 8.6 Generic Strategy.........................................................................................18 8.7 Pricing Strategy...........................................................................................18 8.8 Placing Strategy..........................................................................................18 8.9 Product........................................................................................................19 8.10 Packaging..................................................................................................20 8.11 Promotional Plan........................................................................................20 8.12 Positioning Statement................................................................................20 8.12.1 Push and Pull Strategies......................................................................21 8.12.2 Sales Promotions.................................................................................22 8.12.3 Buy more shelf space..........................................................................23 8.12.4 Leaflets / Brochures.............................................................................23 8.12.5 Sampling/premiums with other products.............................................23 8.12.6 Direct Mails.........................................................................................23 8.12.7 Facebook.............................................................................................23 9 Operational Plan ...............................................................................................24

BUSINESS PLAN
9.1 Availability of Raw materials .............................................................24 9.2 Equipment needed......................................................................................25 9.3 Technology required ...................................................................................25 9.4 Location & distribution.................................................................................25 9.5 Quality control ............................................................................................26 10 Human Resource plan......................................................................................26 10.1 Management team....................................................................................27 10.2 Workforce..................................................................................................27 Chapter: Marketing plan 43 10.3 Skills required vs. skills available...............................................................27 10.4 Human resource functions.........................................................................27 10.4.1 Recruitment........................................................................................28 10.4.2 Training and development...................................................................28 10.4.3 Compensation.....................................................................................29 10.5 Organizational Structure (hierarchy- flat structure)....................................29 11 Financial Plan (in Rupees)................................................................................30 11.1 Cost and Financing....................................................................................30 11.2 Forecasted Income Statement (2010 / 2011).............................................30 11.3 Forecasted Cash flow Statement (2011 2015).........................................31 11.4 Unit Cost ..................................................................................................31 11.5 Unit Price...................................................................................................31 11.6 Sales and Marketing Costs.........................................................................32 11.7 Salary........................................................................................................32 11.8 Rent.......................................................................................................... 32 11.9 Depreciation..............................................................................................33 11.10 Ratio Analysis..........................................................................................33 12 Contingency plan ............................................................................................34 12.1 Plan A........................................................................................................34 12.2 Plan B........................................................................................................ 35

BUSINESS PLAN
13 Balance Scorecard ............................................................................35

14 References......................................................................................................37 15 Bibliography.................................................................................................... 37 16 Appendices......................................................................................................38 16.1 Summary of the Objectives.......................................................................38 16.2 HR Considerations.....................................................................................39 16.3 Risk Factors...............................................................................................40

Executive Summary
The focus of the report is to give effective and efficient solutions for Pettah Essence Suppliers to successfully to expand themselves around Sri Lanka. The expansion is related in terms of widening their distribution channels

44

Chapter: Marketing plan

BUSINESS PLAN along with increasing level of awareness about their products, especially Jelly. Hence, we as a consultancy team implemented and carried out a thorough analysis to identify the possibilities and the best ways to expand their business. As a result of our analysis we suggest a marketing plan which focuses on how their current marketing mix should be improved. This was followed by a thorough plan on how their operational activities and requirements should be fulfilled in order to successfully expand their business. It is also vital to understand the HR practices that should be implemented. Thus, a HR plan
Chapter: Marketing plan 45

is also recommended to the management. The feasibility of the whole project is assessed through a financial analysis which forecasts and projects the organizations performance in terms of the particular product Bakerman Jelly. Finally, a contingency plan is suggested having the consideration that theres always a certain amount of uncertainty which can obstruct what we plan. Therefore, we are quite confident that this report will be of great use and support to the management of Pettah Essence Suppliers. If the management has any further inquiry do not hesitate to contact our consultancy firm.