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ASSIGNMENT 1ST SEMESTER : BUSINESS PROJECT 3

(BP304B)

SUBMISSION DATE : 23:59 ON 4 MAY 2020

FOR UPLOAD TO ELEARN IN
PDF FORMAT
TOTAL MARKS : 100
MATERIAL SUPPLIED : Attachment A: Product
categories and Product
Brands
Attachment B: Pasta &
Noodles grabbing a share of
the consumers’ plate
Before uploading your assignment/project, please read the
‘Instructions for Completing and Submitting Assignments’ and the
‘How to guide’.

INSTRUCTIONS TO CANDIDATES FOR COMPLETING AND SUBMITTING

ASSIGNMENTS
1. You must complete ONE assignment for this module.
2. The assignment will contribute 100% towards the final assessment mark.
3. If specified, this assignment must not exceed the page/word limit, including the reference list.
Students who exceed the page/word limit may find that only part of the submitted assignment will be
marked.
4. The assignment due date refers to the day up to which assignments will be accepted for marking
purposes. The deadline is 23:59 on the assignment due date. Late assignments will be accepted,
but marks will be deducted from the maximum mark if uploaded after 23:59 on the due date and up
to 23:59 the following day, after which no assignments will be accepted.
5. All assignments must be uploaded in 2 steps on eLearn:
a. STEP 1: Upload assignment (file saved as PDF, not scanned) to Check my Work for
Similarity (Turnitin) and download the similarity report.
b. STEP2: Upload similarity report for grading in Upload Assignment activity.
NB: Your assignment will not be graded if you do not follow the 2 steps outlined above.

6. If you fail to follow these instructions carefully, the IMM Graduate School cannot accept responsibility
for the marking of the assignment.

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SPECIFIC INSTRUCTIONS:

1. This assignment is based on a FMCG product, dried Italian pasta. In addition to

Annexure A (Product categories and product brands) & Annexure B (An
article on Pasta & Noodles grabbing a share of the consumer’s plate), YOU
NEED TO UNDERTAKE YOUR OWN DESK RESEARCH.
Please note: The extract does NOT contain all the information required to
complete the business plan. You will be required to consult additional sources,
including other academic material and textbooks. It is suggested that you visit
websites and read articles on FMCG companies that operate in Southern Africa
and worldwide.

2. The objective of the assignment is to test the APPLICATION of knowledge and

theory and provide you with the opportunity to explore practical business
management processes and the practical application of marketing within an
organisation. Please note that this is a business plan that you are developing
so the emphasis is not on quoting theory but interpreting and showing
application thereof. Marks will not be awarded for theory alone.

3. You should note the mark allocation and structure your answers accordingly.

4. You should check your final submission for presentation, accuracy, spelling and
grammar.

5. The plan should be approximately 30 pages (Arial font, 12pt, full justification, line
spacing 1.5). Please note the layout requirements for the reference list.

6. Make sure that you give a detailed reference list at the end of your assignment
and remember to include in-text citation references (in the body of your answers)
where you have referred to other sources. Use the correct IMM Graduate School
Harvard referencing guidelines.

QUESTION 1 [100]

Work through the scenario on page 6 re: Knorr entering the Dried Italian Pasta market
in South Africa. In the scenario Unilever South Africa is seriously considering launching
a range of dried Italian pastas in South Africa.

Compile a business plan for the ‘Knorr Dried Italian Pastas’ launching in the Southern
African market for the period 2020-2023 (in other words, a 3-year business plan).

For the sake of clarity 2020 to 2021 is year 1, 2021 to 2022 is year 2 and 2022 to
2023 is year 3.

The Business Plan must be presented in a comprehensive document that should

include the following:

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Note: Each point has a suggested page allocation e.g. ½ page, 2 pages, etc. This
is a suggestion only and the student does not have to adhere to this but should
ensure that the entire plan is approximately 30 pages in total.

1. IMM Graduate School cover page (1 page)

2. Cover page for business plan (1 page)
3. Table of Contents (1 page)
4. Executive Summary (1 page)
5. Introduction and Background (½ page)
6. Company Description (understanding the company) (3 pages)
7. Industry Analysis (1 page)
8. Competitor Analyses (1-2 pages)
9. Vision, Mission & Values (½ page)
The company will have a vision, mission and values. You need to ensure that this
still applies in the South African context.
10. SWOT Analysis (1-2 pages)
It is suggested that you utilise the McDonald’s process as reflected in the study
guide.
11. Business Objectives (½ page)
12. Target Market (1 page)
13. Marketing Plan (11 pages)
- Marketing objectives
- Market strategy
- Brand positioning and brand personality. In this instance you need to
consider positioning the product in the markets that it will be focused on.
- Identification/of target markets and segment assessment.
Please note that the target market is covered in point 12 so you merely need to
give a summary of what you recommended. This is purely to reflect that the
overall plan is all in one.
- Marketing strategy
- Product/service plan – include proposed offering and pricing guidelines
- Sales forecasts and other targets
- Action/implementation plan with timelines.
14. Operations Plan (2 pages)
- Operations objectives
- Distribution plan
- Development plan
- Operations implementation plan with timelines.
15. Financial Plan (1 page)
- Financial objectives
- Financial forecasts and targets
- Financial plan and operations budget with timelines.
16. Critical Risks, Critical Success Factors and Dependencies (1 page)
17. Measurements and Evaluation (1 page)
18. Summary and Conclusion (½ page)
19. Annexures/Business Considerations (1 page)
20. References (1-2 pages)

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Mark allocation is as follows:

Cover pages, Table of Contents, Executive Summary, Introduction and Background,

Company Description, Industry Analysis and Competitor Analyses (20)

Formulation of Vision, Mission and Values, SWOT, Business Objectives, Target Market
& Marketing Plan (45)

Operations Plan & Financial Plan (15)

Critical Risks, Critical Success Factors and Dependencies, Measurements and

Evaluation, Summary and Conclusion, Annexures/Business Considerations and
References (10)

By examining all the elements of the business plan, you need to ensure that:
- there is a common thread and flow throughout – that you understand the planning
process, and
- how these elements interrelate.

You need to demonstrate creativity and consistency in your thought processes. (10)

ASSIGNMENT TOTAL: 100

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Undergraduate presentation mark: Maximum -20

Spelling, grammar and syntax errors (should use UK / SA English NOT US English) -3
Using 1st person (I, we, us, etc.) or use of slang, informal language, colloquialisms,
such as telly versus television or ads versus advertisements
Table of contents errors (missing / no page numbers / no link to pages) -1
Formatting errors (font, alignment, spacing, numbering of questions missing) (See -2
Yearbook)
Layout, flow (each question starting on a new page, structural failures such as not -1
presenting one idea at a time – thus unfocused writing, i.e. the overuse of
unnecessary words, including verbosity or waffling)
Maximum
Referencing & in-text citation deduction -13
Limited citations (guideline – should cite at least one source per question’s answer) -2
Incorrect citation such as incorrect format; Missing authors, dates and/or pages or -2
Other errors (same author, same year, no (a) or (b) to distinguish
Missing information or incorrect referencing technique, i.e. adding a bibliography -2
instead of a reference list, or using non IMM Graduate School approved IMM
Graduate School Guideline to Harvard Referencing System techniques such as
APA, Chicago, etc.
Academic quality of references, i.e. if sources such as Wikipedia or Bizznews or -2
You magazine or personal blogs are used
Reference list not linking back to in text citations and vice versa -2
Limited references used -3
Minimum of 15 references (excluding textbook and study guide)
Note: A textbook is regarded as a single source, even if there are various
contributors
Note: The prescribed textbook and study guide should be included in the reference
list.
Total deduction

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Unilever South Africa – Knorr is entering the Dried Italian Pasta

market in South Africa

Unilever is a multinational corporation, selling fast moving consumer goods such as

beverages, foods, cleaning agents and personal care products. Unilever South Africa,
started operations in 1887 (Sunlight green soap bar) and established its first small
factory in Maydon Wharf, Durban in 1911. See Annexure 1, for a list of product
categories and product brands offered by Unilever South Africa.

Knorr is currently Unilever’s largest brand and is sold worldwide in more than 120
countries. The Knorr range includes soups, stock cubes and pots, meal makers,
sauces, seasonings and snacks. However, the popularity of the Knorr brand and its
products are hugely dependent on regular consumer feedback, consumer insights and
new product research and development. This enables the Knorr brand to constantly
enhance and re-design existing products and to develop new and innovative products
where it sees that there are gaps in its portfolio.

Knorr recognises the importance of manufacturing its own products to satisfy consumer
needs. It also gives Knorr the opportunity to improve bottom-line profits as a result of
improved efficiencies. It is aware, too, that this approach is critical to the company’s
expansion by ensuring that it grows an appropriate distribution network and ensuring
that its brands reach its customers effectively. Delivering in some cases is directly to
e.g. retailers such as the major chains’ distribution centres (Shoprite/Checkers) and/or
to wholesalers, such as Makro.

Knorr currently offer pasta sauces and a combination of pre-packed pasta and dried
sauce. In viewing its product portfolio, it became apparent to its marketing team that
within the Knorr range there is an opportunity to add a range of dried Italian pastas
(without any sauce). By adding these products to the current Knorr range will not only
enhance and expand the current offering but it will also compliment the current product
range of Knorr pasta sauces and pre-packed pasta and sauce combinations.

The research showed that, in South Africa, the dried Italian pasta market is dominated
by Fatti’s & Moni’s which is a product offered by Tiger Brands.

Stacey Grant, Consumer & Market Insights Director for Africa, instructed her team to
develop a business plan including a marketing plan for the launch of a range of
dried pasta products in South Africa. The business plan together with a proposed
marketing plan should enable the Group Executive Committee to make an informed
decision on whether to go ahead with the development and launch of such a product
range.

They were aware that this market continues to show growth in South Africa. She is
also aware that pastas & noodles has recently encountered opposition because it is
seen as a “high carb” product which is seen by some consumers and health experts
as being unhealthy.

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If Unilever decides to enter this market, it would have to take into account that:
1) There are more than 6000 Unilever scientists, chefs, engineers, etc globally that
can assist with the development of the product
2) Innovation is plays and extremely important role in ensuring that consumers have
an amazing experience
3) The sustainable living plan and improving the health of the planet is extremely
important
4) Unilever would be manufacturing the product themselves and that planning for
this product at the Indonsa Factory (factory for savoury products) in Riverhorse
Valley, Durban is required as the factory is running at maximum capacity.

Annexure 2 describes the pasta industry in Africa, including South Africa.

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Annexure 1:

Unilever South Africa Product Brands

Food & Beverages

Hellman’s
Knorr
Lipton
Ola
Glen
Joko
Knorrox
Rajah
Robertsons

Home Care
Comfort
Day2
Domestos
Handy Andy
Omo
Surf
Skip
Sunlight
Vim

Personal Care
Axe
Close up
Dove
Even & Lovely
Lifebuoy
Lux
Pepsodent
Pond’s
Shield
TRESemme
Vaseline
Brut
Fissan
Impulse
Radox
Dawn
Mentadent P
Organics

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Annexure 2:

Pasta & Noodles: Grabbing a share of the consumer’s plate in Africa

Africa provides the next growth market for pasta and instant noodles, driven by
a growing population, cost and convenience. We review the hotspots of growth
in Africa and seek ways to drive faster adoption in this product category.

Catherine, a young college going lady in Nairobi, Kenya has found the ultimate food
for herself and her colleagues. With the least of efforts and at only KSh. 30 (US 30
cents), she can make a meal of Indomie noodles for herself within 10 minutes and be
back to class for her afternoon lessons, saving her the hassle of making a regular meal
like rice or ugali, a regional staple – and saving some cash, as the semester draws to
a close, and cash gets tight.

“Instant noodles and spaghetti are the staple of university students. Noodles are
preferred more because of their ease of preparation. Soak them in some hot water,
add some tomato sauce and butter or margarine and you are good to go,” she tells the
writer.

“Once in a while, when we have adequate time, we usually add some soy mince on
top of the noodles to add some extra protein on top of the noodles, or even cook some
spaghetti with the soy mince,” she explains.

Catherine could be any of the young lads in any of Africa’s bustling university and
college scene, be it in Dar es Salaam, Tanzania, Douala, Cameroon or even in Addis
Ababa, Ethiopia.

Young, short of time and adventurous in their food habits, the growing young
generation of Africa is driving an appreciation of new food products from other cultures
and regions. And as urbanization takes hold in the continent, noodles and pasta
products are experiencing a big boom in Africa.

Production and consumption in Africa

The growth of pasta and noodles in most African countries is still relatively in the infancy
stage. However, it is notable that the adoption of pasta and instant noodles in the
continent could be one of the most critical dietary changes in several decades, despite
being a recent phenomenon.

In Africa, the consumption of products from maize, cassava and sorghum, or a mix of
two or three of these has dominated the lunch menu in many countries.

The consumption of rice and wheat-based products (for example bread and chapatti,
a regional favourite in Eastern Africa) has also grown substantially, and are of greater
importance in the Western and northern parts of the continent.

Pasta and instant noodles, already staples in a number of African countries, are
seeking to join the big league in the other parts of the continent where they have always
been seen as a luxury food item, especially for pasta.

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According to the International Pasta Organisation (IPO), Tunisia is the leading

consumer of pasta per capita in Africa, with each person in the North African country
taking 16 kg of pasta per year.

Only Italians, who are considered to be the originators of pasta and the largest
producers and exports of pasta in the World, consume more, taking 25.3 kg per person.

Other countries with significant per capita consumption of pasta in Africa are Libya,
taking 2 kg per person per year and South Africa, which consumes 1.9 kg per person
per year.

In terms of total consumption figures by country, Tunisia consumed 172,800 tonnes of

pasta in 2015, followed by South Africa, which took 91,000 tonnes.

According to the IPO, Africa produces just 5.8% of the pasta in the World, with the
Middle East producing 4.1%, with significant growth prospects expected.

The organisation says that it expects the Middle East & Africa region’s market size in
the dried pasta to grow from US$2,875 million in 2013 to US$8,836 million in 2018, a
growth of 25.5% per year; surpassing the European Union that is forecasted to fall from
US$8,270 million to US$8,047 million during the same period

Significant production capacity increase in Africa

Africa largely relies on imported pasta from Italy and Turkey; significant intra-Africa
trade, especially from Egypt into the COMESA region also meets rising local demand.

Egypt exported 72,372 tonnes of pasta in 2013. The top five importers of pasta in Africa
in 2013 included South Africa (15,148 tonnes), Morocco (8,327), Ghana (10,801),
Kenya (10,763), and Algeria (5043), according to the IPO.

The increasing demand and interest in pasta and noodles in Africa has elicited a wave
of investments, with Nigeria leading the way. K. C. Suresh, the Managing Director of
Olam Grains contends that the size of the Nigerian flour market, which is in excess of
US$2 billion, grows at 3.5% per year.

But the pasta market is growing at the rate of 8% per year, providing a strong economic
driver to investors, he says.

Grain milling companies in the country have over the last decade extended their
product lines to include pasta and noodles, on top of their wheat and baking product
lines. These include the Dangote Group, Flour Mills of Nigeria, the Dufil Group, and
Honeywell Flour Mills among others.

Dangote Pasta has a total capacity of 30,000 instant tonnes of pasta per year, and has
three noodles plants in Ikorodu, Kano and Kano. Olam, a new entrant into the Nigerian
market, bought out the pasta producer, Amber Foods to enter the pasta sector to take
advantage of the growing market.

Amber Foods, which was part of the BUA Group, operated two wheat mills and a pasta
manufacturing plant in Lagos, and had a non-operating mill in Kano, and a wheat and
pasta manufacturing plant under construction in Port Harcourt.

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Honeywell Flour Mills Plc, another giant, introduced its pasta products in 2009 and in
2010 debuted its noodles product lines. Flour Mills of Nigeria Plc, operates one of the
largest pasta and noodles plants in the country.

The Indonesian origin Indomie brand of instant noodles, made by the Dufil Group in
Nigeria, has also invested substantially in Africa, with the brand found in tens of
countries, from Kenya, to Nigeria and Ghana, having started off by importing the brand
into the continent.

But the investments in pasta and noodles manufacturing have gone beyond Nigeria.

The Indomie brand is currently being manufactured in Kenya at a factory put up by the
local distributing company Sawake in 2014 to serve the East African market. The
company also manufactures the popular brand in Ethiopia.

But Sawake is not alone. Nissin Foods, the Japanese food group, has been distributing
their brand of noodles in Kenya for a few years now in partnership with the Jomo
Kenyatta University of Agriculture & Technology, with plans to set up a plant in Kenya
in future.

Kapa Oil Refineries, a leading processor of oil and fat products is processing locally a
line of instant noodles, Numi, to its products list to take advantage of rising demand in
Kenya.

On the milling side, Broadways Group is currently erecting a new wheat mill with
capability to process flour for pasta processing, a regional first.

Demand in Ethiopia, driven by Italian influence and a large population offers the next
biggest bet for pasta and noodles in Africa.

The country imports a substantial amount of pasta from Italy and Turkey, despite the
presence of over 20 local manufacturers.

According to the USDA, pasta demand in Ethiopia is increasing aggressively but “some
of this demand goes unsatisfied, since there are insufficient supplies of pasta-quality
wheat.

Capacity and technology required in Africa

While local interest in pasta and noodles production continues to increase in the
continent, there is an urgent need to increase local capacity of the stakeholders to
support the growth of the sector.

“The industry is in need of investments in training in milling technology targeting the

pasta industry, and technical and quality aspects of pasta and noodles production in
the continent,” advises a consultant in the industry in Ethiopia.

This will support the growth of the sector, minimizing the difference between imported
products and locally manufactured ones, improving consumer acceptability, he says.

Challenges also remain with the consumers, who lack the exposure to the various
types of pasta products or more unique flavours of the noodles’ products.

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While on the Eastern Africa side spaghetti has the bulk of the pasta market, in Nigeria,
macaroni is the preferred option.

“A wider variety of pasta products are available on the shelf, but consumers’ exposure
on the other varieties is very limited in Kenya, so we sell mainly spaghetti,” a Marketing
Manager of a leading importer says.

Opportunity is also available to incorporate local grains (like sorghum, cassava, teff,
amaranth, etc) into pasta and noodles produced in Africa that also seek to improve the
nutritional quality of the grains, and utilize local raw materials.

Specific knowledge on formulations management and quality control will be required

in this area.

South Africa

1) The South African pasta & noodles sector is forecast to register an overall volume
growth of 7.5% during 2017-2022
2) Of the six categories, dried pasta is the largest in the South African pasta &
noodles sector
3) Hypermarkets & Supermarkets are the leading distribution channel in the South
African pasta & noodles sector, followed by convenience stores
4) Fatti’s & Moni’s' is the leading brand in the South African pasta & noodles sector
5) Flexible packaging was the most commonly used package material in the South
African pasta & noodles sector

Extracts from:
Just-food. (2019) “Country Profile: Pasta & Noodles in South Africa”. Available from:
<https://www.just-food.com/market-research/country-profile-pasta-noodles-in-south-
africa_id312181.aspx>. [Accessed on 2 October 2019]

FoodBusinessAfrica.com. (2016) “Pasta & Noodles: Grabbing a share of the

consumer’s plate”. Available from:
<https://www.foodbusinessafrica.com/2016/12/15/pasta-noodles-grabbing-a-share-of-
the-consumers-plate-in-africa/>. [Accessed on 2 October 2019]

© IMM Graduate School

Business Project: 1st Semester 2020 BP304B