You have been tasked with introducing the

Mr Clean brand in Pakistan!

Mr. Clean is a global household cleaning brand made by P&G,

created in 1950s. The overall brand portfolio includes bathroom
cleaners, Multi-surface liquids and sprays, and other cleaning
tools in several variants under the Mr. Clean brand. Your task is to
prepare a product launch plan for introducing the Mr. Clean Multi-
surface liquids and sprays in Pakistan. You can introduce either the
entire line-up of Mr. Clean liquids and sprays or just one or more
specific variants (with proper reasoning) as listed on the global Mr.
Clean website.

Your plan needs to be holistic, and should cover marketing,

finance, supply chain, and sales strategy elements. For each of
these areas we will provide a set of assumptions and a list of
expectations in the following pages. Good luck!

Contents
Financial � Page 1 � Supply Chain � Page 3 � Marketing � Page 7 � Sales � Page 10
Financia

The Finance function provides stewardship towards all business decisions, ensuring
the
organization reaches profitability goals and adds to shareholder's return. It is
critical to
understand the driving factors of all business decisions and propose solutions that
maximize
return and minimize the risks involved.

Your task is to prepare a detailed financial analysis on the Mr. Clean launch for
the next 5 years.
You should understand and question all assumptions behind the launch and
prospective
solutions offered by your counterparts. Your key objective would be to prioritize
and focus
investment on the right business fundamentals, while delivering a healthy profit
growth.

Key Measures

You are expected to fill the table below in absolute numbers and also show each
component
as a %age of your Sales Revenue for each year. Additionally you need to include NPV
of your 5
year plan. You may also include additional financial measures while explaining your
financial
plan.

Brand Financials Year 1 Year 2 Year 3 Year 4 Year 5

Volume

Price (PKR)

Sales Revenue (PKR)

Cost of Goods Sold

Gross Margin (PKR)

Marketing Expenses

Organization Costs

Profit (PKR)

Key Budgets

� Cost of Goods Sold (COGS): This is the cost of sourcing and transporting your
product and will
be determined through the Supply Chain Toolkit

� Marketing Spend Budget: For Year 1, this is capped at $3,500,000. For Years 2-5
your Marketing
Budget is capped at $2,000,000 (you can exceed by using your profit, if any).

� Organization Costs: Costs of running the organization are $300,000 per annum
1
Key Assumptions

Your financials must accommodate for the following:

Assumptions Year 1 Year 2 Year 3 Year 4

Year 5

$/PKR Exchange Rate 80 85 90 95

100

Inflation (YOY)* 5% 10% 5% 5%

5%

Sales Tax** 17% 17% 17% 17%

17%

Distributor Margin*** 12% 12% 12% 12%

12%

Corporate Tax Rate 35% 35% 35% 35%

35%

* Inflation has already been applied to all Year 1 Costs

**Sales Tax: is applied on your consumer price
*** Distributor Margin: is the incentive/payment made to your distributor. This
amount applies on your total revenue

Key Expectations

You are required to act as the CFO of your brand, keeping into consideration both
short term &
long term impact of your decisions on business growth and profitability. Evaluation
will be made
on the basis of how you deliver profits by incorporating a sustainable business
model. You may
take help of graphs and visual aids to enhance your presentation.

You may be asked to share calculations and rationale regarding the following
elements:

1) NPV and Breakeven Profitability

2) Building blocks of profit drivers (Pricing, COGs, Marketing Spend, etc)

2
Supply C

The task at hand is to build the downstream supply structure for Mr. Clean in
Pakistan. The key
questions that need to be answered are:

Volume Forecast for Year 1 (Annexure 1)

� What will be the monthly base forecast based on the marketing trends you
have established
in the Marketing toolkit?

� What will be the impact of the initiatives you are proposing as per your
Sales & Marketing
Strategy?

� What will be the Net Forecast for Year 1?

Distribution Structure (Annexure 2)

� What will be your downstream logistics structure based on your proposed

sales strategy?
How many replenishment points (and in what cities) do you propose and,
depending on the transit times, what will be the replenishment frequency?

� Assuming that you are operating with a single distributor who sells your
product across
Pakistan, what replenishment strategy will you adopt over the initial 5
years of your launch?
Option 1: Vendor Managed Inventory (You manage the inventory of your
customer)
Option 2: Customer Managed Inventory (The customer manages its own
inventory and orders
as per requirement)

� Based on your decisions above, what will be the inventory cover in terms of
days that needs to
be maintained at the distributor?

Supply Chain Operating Strategy (Annexure 3)

� What will be your strategy to maintain the target service level?

Define the inventory levels in terms of days required at your Central
Distribution Centre (DC) to
meet the desired service level

� What will be the warehousing cost (per annum) based on the projected
inventory levels?
� What transportation model will you use for replenishments (refer to options
in Annexure 3)?
� What will be the Total Logistics Cost/Finished Product Logistics Cost
(FPLC) per annum?

FPLC = Import Cost + Warehousing Cost + Transportation Cost

3
Annexure 1 � Volume Forecasting

Forecast in Cases Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Base Forecast
Marketing Initiatives*

Initiative 1
Initiative 2
Sales Initiatives*
Initiative 1
Initiative 2
Total Forecast

* For Year 1 the launch itself will be your primary marketing & sales initiative.
Use this for Years 2-5

Annexure 2 � Distribution Structure

Assume that the P&G Central DC is in Karachi and you replenish to your distributor
locations
from the DC. Get a map of Pakistan and mark the locations which you propose as your
replenishment points.

Replenishment Points Transit Times Replenishment Frequency Inventory Cover

City 1
City 2
City 3, 4, 5, etc

Based on the above, the national inventory cover at the distributor would be ____
Days.

4
Annexure 3 � Supply Chain Operating Strategy

Service Level and Inventory

To support 100% availability there has to be infinite inventory in the supply

chain. One can simply
not cater for the demand of every single unit hence there has to be a tolerance in
terms of
availability. The challenge is to maintain a service level of 99.5%. How many days
of cover
should you keep at your Central DC (assuming a forecast error of 20%)?

Watch out! Forecasting error can change based on the number of variants/flavors you
choose

to launch.

Number of Variants Launched Forecast Error

Less than or equal to 2 20%

3 25%

More than or equal to 4 30%

Warehousing

Products are stored on individual pallets within the warehouse. Each pallet holds a
finite number
of cases (containing a set number of units of product). The rent of each pallet is
PKR 150 per
week. This is the only cost element attached to warehousing. Based on your
forecasts,
determine the per annum Warehousing Cost.

Pallet Occupation

Product Line/Size Cases per Pallet

Mr. Clean Liquid 90

Mr. Clean Spray 90

Transportation

As mentioned earlier, you will have two transport options available to you. These
are:

1) Dedicated Fleet: You fix the number of trucks, with specific transporters, on a
monthly basis
and use the same fleet for all replenishments (monthly fixed rates + variable
charges for
each trip)

2) Non Dedicated Fleet: You contract with multiple transporters and fix the rate of
trucks for
future hires. There are no vehicles dedicated to you, hence the contract is
applicable
based on the availability of trucks when you require them.
 Dedicated Fleet Fixed Cost p/Month Variable Rent p/trip
Capacity
Non Dedicated Fleet (per container) (per container) (Cases per
container)

PKR 100,000 PKR 80,000

4,000

0 PKR 105,000
4,000

5
Product Import Cost

The assumption here is that each size and variant of your brand is being supplied
from a P&G
plant based in a foreign country. There are three types of cost attached in
bringing this product
to Pakistan; the manufacturing cost (i.e. the cost of production incurred by the
P&G plant),
taxes and import duties levied by the Pakistani government, and the freight cost of
shipping the
product from the P&G plant to your warehouse.

Determine the overall import cost of your product using the forecasts calculated
earlier, and
the keeping in consideration the cost elements below.

Watch out! Import costs are given in terms of one case of product. Refer to the
second table to
find out how many units of product one case contains.

Product Sizes Manufacturing Taxes & Duties Freight Cost

Cost (as a function of (per Container)

(per Case) import cost) USD 3,000

USD 3,000
Mr. Clean Liquid PKR 600 25%

Mr. Clean Spray PKR 560 25%

* One container carries 4000 cases of product

Case Count Units per Case

Product Size 8
Mr. Clean Liquid 8
Mr. Clean Spray

Finished Product Logistics Cost (FPLC)

Once you have determined each cost element of supplying the product (i.e. import
cost,
warehousing cost and transportation cost), you should be able to determine the
total logistics
cost AKA the FPLC. This cost should be reflected in your financials as the sourcing
cost/Cost of
Goods Sold.

FPLC = Import Cost + Warehousing Cost + Transportation

Cost

6
Marketin

The task at hand is to come up with a marketing plan for Mr. Clean in Pakistan. The
key
questions that need to be answered in your plan are:

Product Positioning (Where to Play), and

Marketing Strategy (How to Win with Consumers)

Background

I. Historically, Mr. Clean is a premium/mid tier brand, with strong potential for
success, given
the consumer base is small but economically powerful.

II. In Pakistan, the household cleaning market is a $30 Million per annum business.
The overall
penetration of Surface Sprays and Liquids as a category within household
cleaning
products is low, since nearly 70% of the population uses open acids, ordinary
soaps or even
detergents for household cleaning. Sprays and Liquids form only $4 Million
(13%) of the
current household cleaning category.

III. The size and scale of household cleaning market in Pakistan is summarized
below:

Pakistan � Household Cleaning Industry

Segments Share Value

Urban 85% $25.5 Million

Rural 15% $4.5 Million

Total 100 $30 Million

IV. The Pakistan household cleaning market represents one of the biggest
opportunities for
P&G to explore due to its size and scale.

Market Overview

The age of the demographic split of the Age Group (Years) Split

household Cleaning consumers in Pakistan is Under 20 20%

on the right. 21-35 55%

36 & above 25%

7
Consumer

With an increase in the number of working women per household and increasing
awareness of
household cleaning products, more and more consumers are switching from traditional
methods of cleaning to more effective, quicker cleaning solutions. Thus, their
expectations of a
household cleaning product have increased. Even housewives want to spend less time
on
household chores and spend more time taking care of themselves and their families.

The tables below show household cleaning products' consumption habits for the
Pakistani
consumer:

Consumers who use Household Cleaning Products Total %

Daily 35
Weekly 45
Sporadic (Occasional/Monthly) 20

The tables below show attributes for premium & mid tier household cleaning
products'
consumers:

Premium Tier Consumer Attributes

High Category Involvement (Regular user)

Equates high price with superior quality

Appreciates add-on benefits like scent etc.

Mid Tier Consumer Attributes

Moderate Category Involvement (Semi-regular/Rare user)
Strong interest in using quality, trusted brands but has issues with affordability

More focused on core benefit i.e. cleaning ability

Competition Market Competitors %Value

Larpic Share
The household cleaning segment has a highly Bax 18.5
fragmented competitive landscape, with
numerous brands and a large chunk of open Others/Unbranded 11.0
unbranded acids and cleaners collectively
making up the entire segment. However one 70.5
or two noticeable brands, in recent years,
have started gaining market share. These will
be your key competitors.

8
Expectations

Within your marketing plan, the following four expectations need to be met:
1. Go to Market Strategy (Product positioning and how to win with consumers)
2. Communication Idea/Unique Selling Proposition
3. Marketing Plan
4. A 30-45 second TV commercial and one Key Visual (Print Ad Poster)

9
Sales

The task at hand is to create the sales strategy for introducing Mr. Clean in
Pakistan. The key
questions that need to be answered are:

Where to Play

We expect you to define the trade channels you will prioritize in order to capture
share. It is also
key to define which variants will work best in certain stores and trade channels.

How to Win

Once you define the trade channels in which you will play, we expect you to outline
the
strategy of how to stand out in the store, leverage your relationship with the
customer, and
catch the eye of the consumer. This has all to do with your pricing strategy, the
packaging and
in-shelve placement of your product. A sales pitch can also make or break your
strategy, so
come prepared!

Trade Channels

The following channels of trade are available to you:

Number of
Store Type
Size of
Trade Stores

Top End Retail 30% 500

Eg: Metro, Makro,
Aghas, Al Fateh

Walk In Stores 35%

15,000
Eg: Utility Stores, General

Stores, etc

Cosmetics Stores 20%

10,000
Eg: Color Collection,
Gulf Cosmetics Stores

Kiryana Stores + 15%

100,000
Bakeries

10
Sales Representatives - Constraint

You have a dedicated sales force of 100 sales reps who are also selling other P&G
brands. Each
sales representative covers 50 stores per day and has a total of 600 stores to
cover over a period
of two weeks. A sales rep has roughly 5 minutes per sales call. He typically has
around 30
seconds to sell a concept to a customer.

Expectations

The following elements need to be addressed in your sales strategy:

� Distribution: How will the sales reps approach their customers? What will be
their sales pitch to

their customers?
� Right Pricing: What price points should we introduce this product at? How will we
ensure the

correct pricing is reflected in the store? What should the customer margin be
(the market
gives an average 10% retailing margin)?
� Shelving/Placement: How will the product be placed in the store (for each size)?
What
location in the store will be suitable for an ideal placement? Support with
reasoning.
� Merchandising/Positioning: How will the product stand out in the store? What can
we do to
ensure it goes in-line with the overall positioning of the brand?

11
Glossary

Sourcing: refers to the origin of the product. Sourcing cost is the

cost attached with importing and
warehousing product from different manufacturing sites across the
world
Distribution: is the process that takes product from the warehouse
to the customers and consumers.
Distribution cost is the per unit cost that needs to be paid to the
3rd party distributor
Organization: refers to all Human and Capital resource cost
involved with running the business
Variant: is defined as a member of the same brand family which
might differ in flavor, aroma, etc (for
example Zest may have multiple flavor variants; Aqua, Tropical
Mango, etc).
Tier/SEC : a consumer segment classified by house hold income
Freight Cost: is the cost of moving one container of product from
the sourcing site to the local warehouse.
Case/s: are a measuring unit. A case contains a set amount of
single units of product
Pallet: a wooden platform on which cases are stored within a
warehouse. Each pallet can hold a finite and
predetermined number of cases
Mileage: refers to the general usage duration of the product
Shelving/Placement: is the physical location in a store where your
product will be placed for consumers
Merchandising/Positioning: is the physical location in a store
where your product or associated marketing
material will be displayed for consumers
Trade Channel/s: is/are the different outlets available to a
consumer to shop for goods. Each trade channel
will have a set number of outlets across the country, and has an
overall contribution (in terms of usage by
consumers) towards the business.

12
Procter & Gamble Pakistan � 2010. This document is the
intellectual property of P&G Pakistan and should only be used
for the purpose/s defined by the Company.