BBM 1114 ● PRINCIPLES OF MARKETING

Group Assignment

Marketing plan for launching a new product in the market

Submitted by

Arnob Prosad

Student ID

110057070

1
 Table of contents

Executive Summary

Introduction

Objectives

Marketing Plan
Financial Analysis and Documentation

Conclusion and Recommendations

References

Executive Summary

We want to market Green Coconut Water. We have arranged this possibility plan on
that premise. We have relegated a name for the item as "Tropifresh". Since the crude
materials are a lot of accessible in our nation, we have chosen to give the item an
indigenous picture.

Tropifresh is a sort of soft drink hat gives the buyers handled green coconut water in
bottles. For the showcasing reason for the item, we have chosen to dispatch three
product offerings. The Tropifresh would be propelled in the market at 250 ml. 500
ml. and 1 Liter container.
We have set a sensible cost for the item so a wide range of individuals can stand to
purchase this soda pop. We have followed the Target Costing pricing approach. We
would increase the upper hand, as this is an original hit in the market.

We have focused on a gigantic market portion for the item. Bangladesh is an

enormous populated nation. Loads of individuals are searching for such an item.
Green Coconuts are not accessible constantly. For instance: an individual strolling in
the city. Out of nowhere, he feels parched. Presently in the event that he wishes to
drink green coconut water, he can't discover it without any problem. It isn't constantly
found in the perfect spot at the ideal time. In the event that we dispatch our item in the
market, an individual ready to drink green coconut water can have it from a close-by
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 Demo graphical, Geographical, Psycho
graphical & Behavioral point of view.

We have prepared a financial documentation for this feasibility plan of a new product.
As we are introducing the product in three categories at 250 ml, 500 ml and 1 Liter
bottles, we have prepared the Break-Even-Analysis for each of the product line. We
have prepared the feasibility plan for five-year basis.

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 Liter containers, we have an alternate arrangement. We realize numerous

individuals won't expend the 1 Liter bundle. So we have doled out more benefits on
them per unit. Our objective is to sell fewer items yet accomplishing higher benefits.
For 1 Liter containers, we have evaluated the make back the initial investment point at
1724137.931 jugs every year. As should be obvious, we have arranged the selling cost
in such a manner along these lines, that, to be in a benefit acquiring zone we need to
sell the least measure of units looking at the other 2 product offerings.

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.

Introduction

1. Product Description

1.1 Product Portrayal

‘Tropifresh’ 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 and

health conscious people. Our target market is very large with different segments. Our
expected sales are very high. The development cost is tk.2.5 million approx.

1.2 Product Profile

Name of the Product:  Tropifresh

Type of Product: Green Coconut Water

Ingredients: Pure natural green coconut water,

Sugar, mineral salts, vitamins C.

Container: Stylish glass bottle

Container size: 250 ml, 500 ml, 1 Liter

Product Price: 250 ml for Tk. 12

500 ml for Tk. 18

1 liter for Tk. 38

Estimated Durability: 12 Months from date of manufactured

Machinery used: Advanced technology imported from

USA, UK and Netherlands.

Brand Slogan: Coola Coola… Always Refreshing.

Objectives

2. Market Research and Analysis

Our company wants to develop and introduce a new Product. So, we have gathered
information through in-depth interviews. We made a survey of the market to have a
clear idea about our market, our customer demand, needs and wants. This information
helps us to know about the current market and prospects of our new product.

2.1 Market Description

Bangladesh 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 “Tropifresh”. 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 Tk. 12 for 250 ml bottles, Tk.
18 for 500 ml bottles and Tk. 38 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:

Health Conscious – 32%

Sick people –        43%

Tourist –                  3%

General people – 22%

We separate our target market into four different segment based on their geographic,
demographic, psycho graphic 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 Tk. 500 in a month in average.

Sick people: Sick people are one of our major considerations. More than 1 million
children suffer from diarrhea 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 Bangladesh. We want to provide

them with “Tropifresh”.
General Customers: Besides the above segments, the general customers will acquire
a significant portion of our target market.

Market Needs:

“Tropifresh” wants to satisfy its customers need. That’s why it is important to identify
the market needs. Our first consideration is to provide the best product to its
customers. That’s 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.

500 ml: Its target the sick people and tourist

1 liter: For a small family.

2.3 Competitive Analysis

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:

2.3.1 SWOT analysis:

The product existence in the future is depending on its strengths, weakness,

opportunities and threats analysis:

Strengths:

1.Available input materials

2.Low production cost

3.Technological and marketing knowledge

4.Strong distribution channel

Easy manufacturing process

Reasonable price

Weaknesses:

It is easy to copy the idea by others

Taste differ from the natural green coconut water

Green coconut water cannot be preserved for longer period

Opportunities:

1.Monopoly market

2.Large market

3.High demand

4.Might have a chance to get subsidies by Govt. to export

Threats:

1.High competition in future by copying the idea

2.Entrance of new product

3.Alternatives are avoidable in some segment

4.Uncertainty of launching a new product.

2.3.2 Competitor Analysis

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.

Strategies against competitors:

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

Marketing Plan

3.1Pricing 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 company’s 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 Tk. 6.3 for 250 ml, Tk. 12.6 for 500 ml and Tk. 24.4 for 1 litre.

3.1.5. Analyzing competitor’s costs, prices and offer:

We have analyzed our competitors’ price and found that Pran charges tk.10 for 250
ml bottle, Starship charges tk. 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:

To acquire a strong position in the market, we need to give special emphasis on

effective promotional activities. In order to get the maximum market share we will
have to use all four tools of marketing promotion. Specially, advertising through mass
media will support us a lot.
3.2.1 Advertising:

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
“Tropifresh” 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
“Tropifresh”, 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
“Tropifresh” 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. “Tropifresh” 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.

Issues

4. Manufacturing and Operations

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 machinery 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

6.1 Sales Forecasting

The following Table and graph show our expected sales for the coming five years:

Expected Sales(Per year) 250 ml. Bottle 500 ml. bottle 1 Liter bottle
First Year 4000000 4500000 1500000

Second Year 4500000 5000000 1700000

Third Year 5500000 5800000 2000000

 Fourth Year 6000000 6500000 2400000

Fifth Year 6300000 6700000 2500000

6.2 Profit and Loss Projection

For 250 ml.

Item Year Year 2 Year 3 Year 4 Year 5

1

Total Sales 44440 49995000 61105000 66660000 69993000

000

Total Cost (45200 (48350000) (54650000) (57800000) (59690000)

000)
 Total Profit (76000 1645000 6455000 8860000 10303000
0)

Tax 40% — 658000 2582000 3544000 4121200

Net Profit (76000 987000 3873000 5316000 6181800

0)

For 500 ml.

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total 750150 83350000 96686000 108355000 111689000

Sales 00

Total Cost (76700 (83000000) (93080000) (101900000) (104420000)

000)

Total (16850 350000 3606000 6455000 7269000

Profit 00)
 Tax 40% — (140000) (1442400) (2582000) (2907600)

Net Profit (16850 210000 2163600 3873000 4361400

00)

For 1 Litre

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 54000000 61200000 72000000 86400000 900000

00
 Total Cost (56600000) (61480000 (68800000) (78560000) (81000
) 000)

Total (2600000) (280000) 3200000 7840000 900000

Profit 0

Tax 40% — — (1280000) (3136000) (36000

00)

Net Profit (2600000) (280000) 1920000 4704000 540000

0

Conclusion and Recommendations

Therefore with the given strategies and the through analysis before we launch this
amazing new product in the market it can be projected that we can achieve our
objectives successfully. In order to stay on track and stick to our plan we need hard
working and dedicated individuals,so my recommendation would be to go through all
the aspects of the plan thoroughly and if any issues come up we can work through it
and solve it and ensure its success.
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