Professional Documents
Culture Documents
Rohit Sir
Rohit Sir
We want to market Green Coconut Water. We have prepared this feasibility plan on
that basis. We have assigned a name for the product as Jaul. Since the raw
materials are very much available in our country, we have decided to give the
product an indigenous image.
Jaul is a kind of soft drink that provides the consumers with processed green
coconut water in bottles. For the marketing purpose of the product we have decided
to launch three product lines. The Jaul would be launched in the market at 250 ml.
500 ml. and 1 Litre bottle.
We have set a reasonable price for the product so that all kinds of people can afford
to buy this soft drink. We have followed the Target Costing pricing approach. We
would gain a competitive advantage, as this is a first hit in the market.
We have targeted a huge market segment for the product. India is a large populated
country. Lots of people are looking for such a product. Green Coconuts are not
available all the time. For example: a person walking on the street. Suddenly he
feels thirsty. Now if he wishes to drink green coconut water he cannot find it easily.
It is not always found in the right place at the right time. If we launch our product in
the market, a person willing to drink green coconut water can have it from a nearby
shop. At present this is not possible. Our target market includes health conscious
people, sick people, sportsperson& many other consumers, which we have
segmented from the Demographical, Geographical, Psycho
graphical&Behavioral point of view.
For 250mls the break-even point is at 4158004 Units. That means if we sale 4158004
Units a year, we will make neither profit nor loss. So to make profit we have to create
a market demand in such a way so that more than 4158004 Units are sold every year.
Obviously the unit cost will eventually come down because of the law of Marginal
Cost. Then the break-even point will also come down. But that is from the long run
perspective. So initially we might suffer loss but ultimately we would earn enough
profit. The consumers will first taste the product by consuming the 250ml bottles. So
we might gain a short run profit from that.
For 500mls the break-even point is 4914004.914 units per year. So we have to sell
more than 4914004.914 units to earn profit. We know that after the product is well
promoted, people will eventually consume more of 500mls, as pet bottles are more in
demand. The price is such that people will turn to the 500mls because we are
providing them at lowest possible market price.
For 1 Litre bottles we have a different plan. We know many people are not going to
consume the 1 Litre package. So we have assigned more profit on them per unit. Our
target is to sell less quantity of products but achieving higher profit. For 1 Litre bottles
we have estimated the break-even point at 1724137.931 bottles per year. As we can
see, we have prepared the selling price in such a way so that, to be in a profit earning
zone we have to sell least amount of units comparing the other 2 product lines.
We have given an elaborate discussion on financial summary at the later stage of the
feasibility plan. We have followed the Target Costing Pricing Policy; which means
an ideal price is set first based on customer considerations, then target costs will
ensure that the price is met. We decided the market price before. Then we calculated
the estimated unit price & fixed price. Then we decided how much profit margin is
possible on each of the product line. We have assigned three different profit margins
for three product lines. This price setting is based on the current market research.
New Product
1. Product Description
Jaul is a product that serve different segment of customer. The product is green
coconut water, which is unique in the current market. The green coconut water will be
processed and sold in glass bottle of convenient sizes of 250 ml, 500 ml and 1 liter.
The green coconut water will be very much refreshing and provide great support to
the sick andhealth conscious people. Our target market is very large with different
segments. Our expected sales are very high. The development cost is Rs.2.5 million
approx.
India is a country of about 150 million people.. The total market size of the soft drink
industry is about 20 million and day by day it is increasing. We have a spread
nationwide market of different convenient product. People are nowadays very much
concerned about the market and product conditions. So we have a growing prospect of
customers of Jaul. Among the population we worked out few segments of
customers who will prefer our product most.
2.2 Market Segmentation and Targeting
Market Segments
We have observed and analyzed the market and based on the nature of the market we
segmented the market in the following sectors:
Geographic Segmentation:
Sylhet
Rajshahi
Khulna &Barishal
Chittagong
Dhaka
Demographics:
Individuals
Family
Sportsman
Business buyer
Psycho graphics:
Higher class
Higher mid class
Middle class
Behavioral:
Sick people
Health conscious
Sophisticated who take the new product from the market
Target market and projections:
Analyzing all the segments, we decided our target market according to our product
category. The target customers of Jaul are sick people, health conscious people,
sportsmen and tourists. The company decided to charge Rs. 15 for 250 ml bottles, Rs.
25 for 500 ml bottles and Rs. 40 for 1 Litre bottles, if we consider price versus taste
received then we can see that taste received is more in value. Therefore charging the
mentioned prices are justified. The following graph gives a clear idea of our target
market.
Target Market:
Tourist 3%
We separate our target market into four different segment based on their geographic,
demographic, psychographic and behavioral characteristics.
Health conscious: Health conscious people basically the sports person are one of
our largest target market. In this segment, we get a lot of potential customer. One
third of our total population is young. This is a significant number that we have to
concern about them and provide product, which is fit for them. About 5 million
people of this total number are health conscious. They spend about Rs. 500 in a
month in average.
Sick people: Sick people are one of our major considerations. More than 1 million
children suffer from diarrhoea that need liquid food. Not only child but also the
adult might suffer from those types of problems.
Tourists: Every year a huge number of tourists visit India. We want to provide them
with Jaul.
General Customers: Besides the above segments, the general customers will
acquire a significant portion of our target market.
Market Needs:
Jaul wants to satisfy its customers need. Thats why it is important to identify the
market needs. Our first consideration is to provide the best product to its customers.
Thats why we offer three different sizes of bottle with different prices for its different
segment of customers.
250 ml: The lowest price for the rural mid social class and individuals.
The Soft drink industry is very much competitive. Many soft drink companies have
acquired a significant portion of the market. But the unique features of Jaul will
take it far beyond the reach of the competitor. Because, no one has yet thought about
selling green coconut water in such a specialized way. To evaluate our prospect of
Jaul in the current market, we have analyzed the market situation in various ways.
Following are some demonstration of the analysis:
2.3.1SWOT analysis:
1.Monopoly market
2.Large market
3.High demand
4.Might have a chance to get subsidies by Govt. to export
Threats:
The major soft drinks and juice companies of current market are:
Pran Groups
Starship
Uro Cola
RC Cola
Coca cola
Pepsi
Acme
Danish
Foreign Products etc.
Distinct Competency:
These companies can try to entrance our market by launching new product lines to
compete us. Yet, we have distinct competitive advantage. That is our product is still
brand new. The other companies will take sometimes to enter into the market. Till
then we can have a monopoly market condition. The other advantage that we have is
lower price. We will sell products in reasonably lower price then other competitors do.
To compete with the major competitors we can adopt the following measures:
Providing the best service to create high customer satisfaction
Reasonable and acceptable pricing
Promising and providing top quality product
Launching highly effective mass promotional activities
Continuous innovation and modification of the products
Creating and maintaining long term customer relationship
Creating Brand Loyalty among the target consumers
3. Market Plan
Pricing Strategies
We have decided to set a reasonable price for our product when we will develop it.
We considered many factors in setting the pricing policy. We will describe a six-step
procedure:
3.1.1. Setting the pricing objectives:
Our company has decided where it wants to position its market offering. We have
chosen our objective to maximize market share. We believe that a higher sales volume
will lead to lower unit costs and higher long-run profit. We have set the lower price
because we assume that the market is price sensitive. Our overall objective is to
capture the maximum market share by setting lower price.
3.1.2. Determining Demand:
Each price will lead to different level of demand and therefore have a different impact
on companys marketing objectives.
3.1.3. Estimating costs:
We have estimated the cost and want to charge a price that covers the cost of
production, distribution and selling the product, including a fair return for its effort
and risk.
3.1.4. Types of cost and level of production:
There are two types of cost: a) fixed and b) variable. In our new product development
project fixed cost is 2,00,00,000 taka. Fixed cost includes- machinery, monthly bills,
and salaries of employees and so on, regardless of output.
There are some variable costs like-cost of bottle, packaging and so on. These costs
tend to be constant per unit production. We have estimated that per unit variable cost
is Rs. 6.3 for 250 ml, Rs. 12.6 for 500 ml and Rs. 24.4 for 1 litre.
3.1.5. Analyzing competitors costs, prices and offer:
We have analyzed our competitors price and found that Pran charges Rs.10 for 250
ml bottle, Starship charges Rs. 12 for 250 ml Pac.
3.1.6. Selecting a pricing method:
We have chosen the target costing method to set price for our product; pricing that
starts with an ideal selling price based on customer considerations, then target cost
will ensure that the price is met.
Promotional Strategies:
We initially will give more emphasis on paper ads and TV commercials. Because,
advertising through these media is the most effective way to reach the customers and
position our product in their mind. We are anticipating that this will have a massive
impact on the teenagers and other enthusiasts. Few neon signs and bill boards of
Jaul also can be set up in some core points of the city. We hope to reach 75% of our
customers through effective advertising.
3.2.2 Personal Selling:
Though personal selling skill is not that much effective for convenient products like
Jaul, we will inspire and train the sales persons of the retail stores to convince
people to buy our product when they will come to buy any drinks item. The sales
persons will inform the consumers about the cool refreshing taste of Jaul and about
the nutritious aspects. We hope that will play a significant role to increase our sales.
3.2.3 Promotional Tools:
We have also planned to apply some promotional tools. Initially for sometimes we
will distribute our product at 50% discount just make our new product familiar with
the customers. This will be the market-testing period for our product. Later, we may
apply the strategy of giving gifts, lucky coupons, tour tickets depending on the market
and competitive situations.
Public Relations:
We have future plans to hold seminars, commit social development, supporting social
activities, to arrange cultural functions and mobile game shows for publicity purpose.
Distribution Channel
In the initial stage, we will distribute the products with our sole distribution channel.
When our market will spread out, we will distribute our products through dealers. We
will set our own outlets in few core market positions. When we will go for mass
marketing, we will supply our product nationwide through dealers. Our dealers will
take the products to every district of the country. Jaul will be available in all retail
stores of the country.
Services and warranties
As we are targeting to the top most customer satisfaction and building long-term
customer relationships, there is no alternative for us rather than providing top quality
service. Giving the customers timely and instant quality service is our primary
concern. We even planned to open few customer service centers where will response
to customers interactions. We will collect information, suggestions, ideas and
opinions of the customers through these centers and will innovate and modify our
product accordingly. We also will change any defected product.
4.1 Locations
We will set our manufacturing and other working areas in convenient locations. We
will prefer the locations to set up our manufacturing firms, warehouses and
inventories in different core business points of the country where it will be easier to
both collect the raw materials and transport the final goods to the market.
4.2 Human Resource
The board of directors will be responsible for the recruiting activities. Recruiting will
be done through written tests followed by interviews.
4.3 Technological Aspects
To create and innovate new quality products we need to use advanced technology. We
need high tech machineries imported from the foreign countries. Not to mention,
skilled people to operate them. We have already studied all the technical aspects and
prepared a list of instruments and their costs. The machinery will be collected when
required.
6. Financial Analysis and Documentation
The following Table and graph show our expected sales for the coming five years:
For 1 Litre