CHAPTER – 1 INTRODUCTION
1.1. BACKGROUND OF THE STUDY: Nestlé Bangladesh Limited is a leading Food company with lots of global strategic brands operating in Bangladesh. MAGGI is one one of the the strat strateg egic ic bran brands ds of Nest Nestlé lé Bangladesh Limited. Worldwide MAGGI brand is used for Nestlé's Soup, Noodles, Seasonings, Recipe Mixes and Sauces.
In Bang Bangla lade desh sh,, MAGG MAGGII bran brand d has has two two
Image – Proposed MAGGI Ketchup
product categories under this strategic brand name: Noodles and Soups. As part
Foll Follow owin ing g this this herit heritag agee and and busi busine ness ss
of the brand extension and value creation
exce excell llen ence ce in ketch ketchup up busin busines ess, s, Nest Nestlé lé
objective of the company, Nestlé now is
Bangla Bangladesh desh is also intere interested sted to explor exploree
goin oing to lau launch nch MAGG MAGGII Ketc Ketchu hup p in
the business in local market. Moreover, in
Bangla Banglades deshi hi market. market. Ketchu Ketchup p and Sauce Sauce
Bang Bangla lade desh sh,, ther there's e's a huge huge mark market et for for
business of Nestle under the brand name
Ketchup and sauces. A very good number
MAGG MAGGII is very very much much prof profit itab able le and and
of play players ers incl includ udin ing g some some very very stro strong ng
succe successf ssful ul in othe otherr coun countr tries ies speci special ally ly
local players are operating successfully in
South Asian regions like in Nestle India
this market.
(10 (10,000 ,000 tons tons per ann annum) um) and and Nest Nestle le
Now Nestle would like to launch in this
Malay Malaysia sia (12, (12,00 000 0 Tons Tons per per annu annum) m).. In
segment
most of the countries, where MAGGI has
marketing
launched its ketchup range, it has become the market leader in this category.
and
making plan.
a
five
years
1.2. OBJECTIVE OF THE STUDY: 1.2.1. Broad Objective To plan of launching MAGGI Ketchup in Bangladesh to grasp a major portion of market share.
1.2.2. Specific Objectives:
To see the market situation and have an overview of the ketchup industry
To analysis opportunity and issue
To set the objectives
To set marketing strategy
To set financial projection and implementation controls.
1.3 SCOPE:
Our particular report all most covers the marketing plan on MAGGI Ketchup in Bangla Banglades desh h for the next next five five years. years. It shows shows the feasibili feasibility ty of launch launching ing of our product.
1.4 LIMITATIONS: We are lucky enough to get a chance to prepare a report on “marketing Plan for introducing in MAGGI Ketchup in Bangladesh” We tried heart & soul to prepare a well-informed report. In spite of trying our level best, there may be some lacks in the paper. Those lacking are following: •
In the month of June, all organizations remain busy. So, the employees were too busy to answer our queries.
•
It was too short time to make a overall marketing plan in only 2 weeks.
•
We also faced a destruction of all our documents for wastage of the hard disk of our computer. In spite of our massive problem, we at last have tried to make it fulfilled. We beg your pardon for our unintentional delay.
1.5. METHODOLOGY: Methodology consists of step by step, organized and systematic fashion to complete the entire research. It should be such that effective and efficient result should be adopted. The main objective of this report is to plan the marketing activities and its feasibility and analyzing its effec effecti tive vene ness. ss. The The prim primary ary info inform rmati ation on and and some some secon seconda dary ry info inform rmati ation on abou aboutt the the competitors were collected from Internet.
CHAPTER-2 ORGANIZATIONAL OVERVIEW 2.1. COMPANY BACKGROUND: Nestle is the world’s largest food company involved in nearly every field of nutrition, with a turnover of 88 billion Swiss Francs. It is largest not only in terms of its sales but also in terms of its produc productt range range and its geogra geographi phical cal presenc presence. e. Its field field of nutriti nutrition on includ includes es infant infant formula, formula, milk products, chocolate and confection confectionery, ery, instant instant coffee, ice-cream, culinary products, frozen ready-made meals, mineral water etc. Nestle is also major producer of pet food. In most of these product groups and in most markets, Nestle is the leader or at least a strong number two. Nestle is focused f ocused company with more than 94 percent of the sales coming from the food and beverage sector. Nestle is present around the globe, on all continents, with around 230,000 people working in more than 84 countries with 468 factories and with sales representatives in at least another 70 countries. Most popular brands of Nestle are Nescafe, Nido, Maggi, Polo, Smarties, Milo, Perrier, Friskies, Kit Kat, and Crunch. Some of their products have broken records: 3,000 cups of Nescafe are consumed every second, and Kit Kat merited an entry in the Guinness Book of World Records as the world’s best selling chocolate bar, with 418 Kit Kat fingers eaten every second around the world.
2.2. HISTORICAL BACKGROUND: Nestlé is an international company with its headquarters in Vevey, Switzerland. In 1867 Henri Nestlé, a chemist from Frankfurt who had settled in Vevey, became interested in infant
feeding. To satisfy a clear need, he developed and produced a milk-based food for babies whose mothers could not nurse them. The new product soon became well- known worldwide under the name of “Farine Lactee Nestlé “(Nestlé Milk Food).
In order to expand into a broader product category and meet more people’s needs, the Nestlé Company’s first diversification occurred in 1905 when it merged with the Anglo- Swiss Condensed Milk Company (est.1866). Today, processing milk food is still the company’s chief activity together with the other products of Nestlé family such as chocolates, instant milk-based drinks, culinary products, frozen foods, ice cream, dairy products and infant foods.
Nestlé is still primarily concerned with the field of nutrition, but it has also als o acquired interests in pharmaceuticals pharmaceuticals and cosmetics cosmetics industries.A industries.Ass a result of the company’s company’s initiative initiative and bold activity, it has grown into a large organization, employing almost 230,000 people in nearly 500 factories worldwide. Nestlé products are now widely distributed on all continents and sold in more than 100 countries.
2.3 NESTLÉ IN BANGLADESH: Nestle Bangladesh Limited started its first f irst commercial production in Bangladesh in 1994. In 1998, Nestle S.A. took over the remaining 40% share from the local partner and Nestle Bangladesh became a fully owned subsidiary of Nestle S.A. Nestle Bangladesh’s vision is to be recognized as the most successful food and drink company c ompany in Bangladesh, by generating susta sustain inab able le,, prof profit itab able le grow growth th and and cont contin inuo uous usly ly impr improv ovin ing g resu result ltss to the the bene benefi fitt of shareholders and employees. The world-class factory is situated at Sripur, 55 km north of Dhaka. The factory produces instant noodles, cereals and repacks milks, soups, beverages and infant nutrition products.
2.4. HISTORY OF NESTLÉ BANGLADESH LIMITED:
Popular Nestlé brands entered this part of the sub-continent during British rule and the trend continued during the pre-independence days of Bangladesh. After independence in 1971, Nestlé World Trade Corporation, the trading wing of Nestlé S.A., sent s ent regular dispatches of
Nestlé brands to Bangladesh through an array of indentures and agents, and some of the brands such as Nespray, Cerelac, Lactogen, and Blue Cross etc. et c. became household names. In the the early early eigh eighti ties es Tran Transco scom m Ltd. Ltd. was was appo appoin inte ted d the the sole sole agen agentt of Nestl Nestléé prod produc ucts ts in Bangladesh. In 1992 Nestlé S.A. and Transcom Ltd. acquired the entire share capital of Vita Rich Foods Ltd. Nestlé S. A. took 60 percent while Transcom Ltd. acquired 40 percent.
The name of the company was also changed at this time to Nestlé Bangladesh Limited. In 1998 Nestlé S.A. took over the remaining 40 percent share from Transcom Limited.Today Nestlé Bangladesh Ltd. is a strongly positioned organization. We will continue to grow throug through h our policy policy of constan constantt innova innovatio tion n and renova renovatio tion, n, concen concentra tratin ting g on our core core competencies, with the aim of providing the best quality food to the people of Bangladesh.
REPORT BODY
CHAPTER-3 SITUATIONAL ANALYSIS
3.1 CURRENT MARKET SITUATION
MAGGI finds 46 brands of Tomato ketchup are currently available in Bangladesh ketchup market. Among the brands, 34% are selling Ketchup, are also selling the Chili variant along with Tomato ketchup. The total volume of the sauce 68% volume comes from Tomato Ketchu Ketchup p & the remain remaining ing 32% comes comes from from chili. chili. Brands Brands with with the highest highest penetr penetratio ation n nationally are the local brands Pran & Ahmed, mostly used for in home consumption by the middle-income household Vs Best & Druk are used mostly for foodservice and by the higher income household. Analysts predict that the ketchup market in Bangladesh have a great potentiality to growing fast. fa st. It is assumed the next five years ketchup market in Bangladesh will be increased more than 25% percent. So, there have a great potentiality potentiality to make a good profit. For this great potentiality to margin profit, comprehensive competitive pressure has been increased increase d in the market. The estimated volume of the ketchup market is 1100 ton, with 25% growth expected within 5 years the total market size will be BDT 1.7 billion. To gain market share in this environment, MAGGI Ketchup must carefully target specific market segments.
3.2 MARKET MARKET DESCRIPTION: DESCRIPTION: Our product will hold the position in the market because we are providing high quality with better tastier ketchup for the customers who are willing to money on the best. We posses good information about the market and serves the best quality with reasonable pricing. Unlike the mainstream products, we will not serve lower quality for maintaining lower cost.
3.2.1 Target Market: MAGGI Ketchup market consists of middle middle and upper-income upper-income household household as well as foodservice sector for example; restaurant.
Target Market Market 30% 70% 70%
Families
Rest Restura urant nt
3.2.2 Target Market Forecast: Potential Customers Families Restaurants Total
Growth
2012
2013
2013
2014
2015
25%
25000
31250
39062
48828
61035
15%
1500
1725
1983
2281
2625
24.5%
26500
32975
41045
51109
63660
3.2.3 Market Demographics : The profile for MAGGI Ketchup customers consist of the following geographic, demographic, and behavior behavior factors. Please note that MAGGI Ketchup has two target segment customers, Families consumers and restaurants.
Families: Geographic: •
The immediate target is the city of Bangladesh.
•
Middle-income and upper-income household.
Demographics: •
Singles and families.
•
Mostly females and children.
•
Have a household income of more than 10,000 tk per month.
•
Consuming per year at least 3 ketchup bottles.
•
Conscious consumer about their health.
Behavior Factors: •
Paying a premium for higher quality, tastier ketchup.
•
Health consciousness
Restaurants (and their customers): Geographic: •
Fast food and restaurants in the cities of Bangladesh.
Demographics: •
Male and female.
•
Single and families.
•
Tend to patronize higher-quality restaurants.
Behavior factors: •
Health consciousness
•
High-quality meal.
3.2.4 Market Needs: MAGGI Ketchup provides individuals, individuals, families families and restaurants with high-quali high-quality ty tomato and chili ketchup. MAGGI Ketchup seeks to fulfill the following benefits that are important to their customers. •
High quality: MAGGI Ketchup offers a wide selection of health conscious
choices, and utilizes high quality ingredients. •
Competitive pricing. Our products will be priced competitive to the market.
3.2.5 Market Trends: The market for ketchup has exploded within the last five years. Explanations for this trend are: •
increase of supply has reinforced reinforced the demand. demand. Within Within the Market supply: The increase last few years many firms that were producing different types of food items have moved to production of ketchup because of the increased margins and market demand.
•
Health consciousness: Now-a-days people have become more health conscious and MAGGI Ketchup contains nutritious ingredients with tastier flavor.
•
Food quality. quality. The prefere preference nce for high-q high-qual uality ity ingred ingredien ients ts is increas increasing ing as customers are learning to appreciate the qualitative differences.
3.2.6 Market Growth:
Now the total size of the ketchup market is more than BDT 1.2 billion. Analysts forecast forecast that the market size will be growing faster. Now people are appreciating appreciating the more taste of nutritious nutritious food. MAGGI MAGGI Ketchup Ketchup contains contains nutritious nutritious ingredient ingredient makes food more tasty and delicious. delicious. So, customer growth has risen. This customer growth rate can be forecasted to gain better market share.
3.3 SWOT ANALYSIS: MAGGI Ketchup has several powerful strengths on which to build, but our major weakness is higher pricing than local product and unimpressive packaging. The major opportunity is growing growing demand for foodservice foodservicess area as well as household household user of ketchup ketchup that benefits benefits us to expand our market. We also face the threat of ever-high competition and downward pressure on pricing. The following SWOT analysis captures the key strengths and weaknesses within the company and describes the opportunity and threats of outside the comp compan any y by MAGG MAGGII Ketc Ketchu hup. p. Tabl Table2 e2.1 .1 summ summari arize zess the the main main stren strengt gths, hs, weakn weakness ess,, opportunities and threats facing MAGGI Ketchup.
3.3.1 Strengths: MAGGI Ketchup can build on three strengths:
Brand Image: In Bangladesh, two brand products of MAGGI: - MAGGI Soup and MAGGI Noodles have gained highest market share in the competitive market as well as succeed to make a good brand image. This brand image helps to make an assurance better quality and taste of MAGGI Ketchup to the potential customers.
Attractive trade promotion: Our product offers competitive competitive trade promotion promotion to the retailers, which ultimately helps to increase secondary sales.
Quality and Taste: Our product maintains good quality and makes it delicious which ultimately helps to gain more ketchup consumer.
3.3.2 Weakness:
By waiting to enter the market until the initial shakeout and consolidation of competitors has occurred, MAGGI Ketchup has learned from the successes and mistakes of others. Nonetheless, we have two main weaknesses:
Unimpressive packaging: Our packaging is not so impressive when compare to imported brands’ packaging.
Price: Price is comparatively high to local brands. Table2.1 MAGGI Ketchup’s Strength, Weakness, Opportunity and Threats.
Strengths
Weakness:
•
Higher Brand image
•
Unimpressive packaging
•
Attractive trade promotion
•
Higher pricing than local brands
•
Quality and Taste
Opportunity
Threats
•
Developing foodservice industry
•
Improvement
of
product
packaging quality. •
and
•
Increased competition
•
Modest economy
•
Downward pressure on pricing
Decreased operations cost
3.3.3 Opportunity:
MAGGI Ketchup can take advantages of three major market opportunities:
Developing foodservice industry: People are appreciating the more taste of food. MAGGI Ketchup is not only delicious itself but also increases the taste of other food when MAGGI ketchup is mixed with it. Habit of taking fast-food has been risen when restaurants serves MAGGI Ketchup with other foods. continuouss improvemen improvementt Improvement of product & packaging quality: With continuou process, we improve the ability to improve product improve product & packaging quality.
Decreased operations cost: Follow a disciplined continuous improvement process that facilitates their ability to promote growth while reducing their delivered product cost and eliminating non-value added activities.
3.3.4 Threats: We face three treat at the introducing of the MAGGI Ketchup:
Increased competition: More companies (local and foreign brands) are currently available in the market. To gain the reasonable market share, we have to maintain our quality all the best.
Modest economy: A slump in the economy-reducing customer's disposable income spent on eating out.
Downward pressure on pricing: Increased competition and market share strategies are pushing the product price down.
3.4 PRODUCT OFFERING: MAGGI Ketchup is going to launch two popular variants in the market. MAGGI has created MAGGI tomato ketchup and MAGGI chili ketchup that are differentiated and superior to competitors. Customers can taste the quality and freshness of the product in every bite. The following are characteristics of the product: 1. Best qu quality 2. More More dura durabi bili lity ty 3. Posses Posses no no harmf harmful ul chemi chemical cal ingre ingredie dient nt MAGGI, one of the strategic brands of Nestlé, is dedicated dedicated to providing the best foods to people throughout their day, throughout their lives. With our unique experience of anticipating consumers’ needs and creating solutions, MAGGI contributes to consumers’ well-being and enhances consumers’ quality of life.
3.5 COMPETITIVE REVIEW: Increased entry of established sauce, ketchup and pickle food industry has pressured industry participants to continually add features and cut price. Key competitors include:
Table. 2.2Selected Competitive company’s targeted consumer and price Brand Pran Best Ahmed Druk Roza Meridian BD Heinz Others
Pack Size Price Mkt. Share 340 340
40 49
340 40 400 63 300 45 285 46 340 50 300 49 Avg. 320 Avg.45
Targeted Consumer
20.0%
Middle and upper- income household& also
19.3%
restaurants Middle and upper income households &
13.4% 11.6% 7.0% 4.7% 3.5% 2.6% 17.9%
foodservice area Middle-income household Upper income households& foodservice area Households & Restaurants Middle-income household Middle and upper- income household Upper income households& foodservice area Household & foodservice area
100.00%
Pran: The ketchup ketchup market market is domina dominated ted by Pran Pran with with its 20% market market share share with with 340 gram packed size which is sold in taka 40. Pran is the best selling sauce in household. Middle and upper-income households prefer pran for home consumption. In terms of availability, Pran is available in most of the store. High numeric distribution of Pran can be seen nationally. It has 250 distributors in all over Bangladesh. Pran is giving highest trade promotion to the retailers. It offers credit for the retailers for highest selling in the market.
Best: Best is also the most popular brand in the middle & upper income households. It holds 19.3% market share with 340 gram packed size which is sold in taka 50. Best is the
best selling sauce in foodservice area. In Fast food shop 4gm best sauce is very much popular. It is giving competitive trade promotion to the retailers.
Ahmed: The local brand brand Ahmed gains 13.4% 13.4% market share with its its 340 gram packed size which is sold in taka 40. The middle-inco middle-income me household household mostly uses for it in home consumption.
Druk: Druk is the most popular brand upper income households. It acquires the best selling sauce in foodservice area. Most of the renowned restaurants use druk for food serve. Druk has 11.6 % market share with its 400gram packed packed size which is sold in taka 63.
Roza: Roza possess 7 % market share. It is also consumed for household consumption as well as restaurants. The chili flavor is mostly used in the restaurant.
Meridian: Meridian is used mostly for in home consumption by the middle-income households. It gains 5% of the total market share. It gives incentive trade promotion for retailers. It offers 1 Sauce free for 1 dozen of sauce purchase for retailers.
BD: BD is the newly entry sauce industry in the ketchup market. Within a short time, it gains 3.5% market share for TV communication with high frequency.
Heinz: Foreign brands Heinz acquire 2.6% share with its 300 gram packed size which is sold in taka 49. Resturants and upper-income households is the main customer of Heinz.
Others: Roma, Roma, Kohinoor, Kimball, Kimball, Del Monte, Monte, Seema, Suree and others have the rest market. market. Most of them are used in the restaurants. restaurants. Most of the restaurants restaurants use Chili sauce for cooking and other purposes.
Despite this strong competition, MAGGI Ketchup can carve out a definite image and gain recognition among the targeted segments. Figure-2.1 shows competitive company’s markets share holding :
3.6 KEYS TO SUCCESS: The keys to success success are produc producing ing ketchup ketchup that that meets meets market market demand demand.. In additi addition, on, our ketchup must ensure total customer satisfaction. If these keys to success are achieved, it will become a profitable company. The following are the areas where the company is pioneer: •
Uncompromising commitment to the quality of the product.
•
Continuously revitalize the products.
•
Commu Communic nicate ate the differe differenti ntiatio ation n and quality quality of our offeri offering ng throug through h person personal al interaction and media.
3.7 CRITICAL ISSUES : MAGGI Ketchup is still in the speculative stage. Its critical issues emerge from the SWOT analysis and review of the market: •
•
National economic conditions, which are not favorable to the people. Constantly monitor customer satisfaction, ensuring that the growth strategy will never compromise satisfaction level.
3.8 DISTRIBUTION REVIEW: Our strategy strategy assume assumess that that we need need to go into into special specialty ty channe channels ls to address address our target target customer's needs. We position our products as the highest quality, highest incentive offering for our own distribution channel. Our distribution channel is:
Manufactur
re
Distribut or
Final Retailer
consumer
CHAPTER-4 MARKETING STRATEGY 4.0 MARKETING STRATEGY : Our marketing strategy is based on a positioning of product differentiation. On the consumer side, we have targeted the middle to upper class households who need ketchup for family and their children to add extra taste to their eating. Most of the middle class consumers want the price of the ketchup be 40 to 45 tk. i.e. they want lower- priced product with high durability and preservation ability. Most of this segment can be demographically described by age (3045).
Besides, we have set a goal to serve some restaurants on the business side. This target market ranges from the small to three or 5 star hotels who want to serve their customers ketchup with a different but wonderful taste and want more preservation within a reasonable price.
Each of the four marketing mix strategies conveys our differentiation to the target marker segments identified above.
4.1 POSITIONING:
Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. Actually our strategy is to grab an unoccupied position. Our market positioning strategy is given below in a table:
Company&
Target
Product
Consumers
Nestlé(Maggi)
Quality conscious
More
At an affordable
Tastier, spicy
consumers of
preservation
price for the
ketchup from the
ketchup
ability and tasty
middle class and
pure ingredients at a
upper class
moderate price.
(Ketchup)
Benefits
Price
Value Proposition
families.
4.2 PRODUCT STRATEGY: Our Maggi ketchup, including all the features described in the earlier Product Review, will be sold with a more preservation ability warranty than the other products in the market. In the following year, we will try to increase more taste and ingredients and launch ketchup which the lower-middle class consumers will also be able to buy. Building the Maggi Brand is an integral part of our product strategy. The brand and logo will be displayed on the product and its packaging and reinforced by its prominence in the introductory marketing campaign.
4.3 PRICING STRATEGY:
Maggi ketchup will be introduced at 38 taka wholesale and 45 taka estimated retail price per unit if we want to have some profitability. We expect to lower the price of this first product when we expand the product line by launching the next ketchup. These prices reflect a strategy of attracting desirable channel partners and taking marker share from our major competitor Pran.
4.4 DISTRIBUTION STRATEGY: Our channel strategy is to use selective distribution to have our product sold through wellknown stores and shopping malls. During the first year, we will add channel partners until we have coverage in the country market and the product is included in the major ketchup catalo catalogs gs and Website Websites. s. In suppor supportt of our channe channell partne partners, rs, Maggi Maggi will will provid providee detaile detailed d specification handouts, full-color photos and displays featuring the product. We will also arrange special trade terms for retailers who place volume orders.
4.5 MARKETING COMMUNICATION STRATEGY: By integrating all messages in all media, we will reinforce the brand name and the main points of product differentiation. We will introduce advertising on a pulsing basis to maintain brand awareness and communicate various differentiation messages. Advertising agency will also also coor coordi dina nate te publ public ic rela relati tion onss effo effort rtss to buil build d the the Magg Maggii bran brand d and and supp suppor ortt the the differentiation message. To attract marker attention and encourage purchasing, we will offer some products of Maggi such as Maggi noodles free. To attract, retain and motivate channel partners for a push strategy, we will use trade sales promotion and personal selling to channel partners. Until the Maggi brand has been established, our communications will encourage purchases through channel partners rather than from our Website.
4.6 MARKETING RESEARCH: Using research, we can identify the specific features and benefits that our target market segmen segments ts value. value. Feedback Feedback from from market market tests, survey surveyss and focus groups groups will will help help us to develo develop p our ketchu ketchup. p. We are also measuri measuring ng and analyz analyzing ing custom customer’s er’s attitu attitudes des toward toward competi competing ng brands brands and produc products ts by survey surveying ing in the househ household oldss and restau restauran rants. ts. Brand Brand awareness research will help us to determine the effectiveness and efficiency of our messages
and media. As we want to establish our own image, we will initiate questionnaire to be acquainted with the consumer’s need and wants. Finally, we will use Customer satisfaction studies to gauge marker reaction.
4.7 OBJECTIVES: We have have set some some success successive ive and achievable achievable financial financial and marketin marketing g objecti objectives ves to be successful in the marker .
4.7.1 Financial Objectives: •
We want to gain a no loss-no gain condition over the next 3 years.
•
We want to produce total revenue of BDT 4750000 in 1 st year and BDT
6,650,000 in the next year. •
Within 5 years, we want to produce an amount of profit 3.2 million
based on per unit price of BDT 38(wholesale price)
4.7.2 Marketing Objectives: Achieve a first-year unit sales volume of 125,000 units, which represents a projected marker share of around 4% in the product line.
•
Increase second-year share to 5.50%.
•
Arrange of distribution through the leading retailers and distributors in the
country market within next 6 years
CHAPTER-5 FINANCIAL ASPECTS 4.0 FINANCIAL ASPECT: This section will offer a financial overview of MAGGI Ketchup as it relates to the marketing activities. activities. MAGGI Ketchup Ketchup will address address break-even analysis, analysis, sales forecasts, forecasts, expenses forecasts and indicate how this activities link to the marketing strategy:
4.1 BREAK-EVEN ANALYSIS: The break-even analyses indicate that BDT 4,000,000 will be required in sales revenue to reach the break-even point. Our market research forecasts that within 3 years we will reach the break-even point.
4.75
6.65
7.6
8.5
10.5
Table. 4.1 Break-even Analysis Break-even Analysis: Break-even Units Break-even Revenue
500,000 4,000,000
Assumptions: Per-Unit Revenue
38.00
Per-Unit Variable Cost
30.00
Fixed Cost
4.2 SALES FORECAST:
4,000,000
We feel feel that that the the sales sales forec forecast astss grou group p custo custome mers rs into into two two categ categor orie ies: s:
famil families ies and
restaurants. So, both types of customers will lead us to differently forecast of our sales volume:
Table.4.2 Yearly Sales Forecast
Sales Families Restaurant s Total Sales Cost of
2012
Sales Forecast 2013 2014
2015
BDT
BDT
BDT
BDT
3325000 BDT
4655000 BDT
5320000 BDT
5985000 BDT
1425000 BDT
1995000 BDT
2280000 BDT
2565000 BDT
3135000 BDT
4750000
6650000
7600000
8550000
10450000
2012
2013
2014
2015
2016
BDT
BDT
BDT
BDT
BDT
1837500 BDT
2572500 BDT
2940000 BDT
3307500 BDT
4042500 BDT
787500 BDT
1102500 BDT
1260000 BDT
1417500 BDT
1732500 BDT
2625000
3675000
4200000
4725000
5775000
2016 BDT 7315000 BDT
Sales Families Restaurant s Total Sales
4.3 EXPENSE FORECAST: Our expenses occur as the result of both historically successful marketing endeavors and projected marketing programs designed to take advantage of expanding markets and improved improved product product lines. Similarly, Similarly, the developmen developmentt of publishing publishing department department will incur higher start-up expenses than maintenance costs after the initial publication. We have chosen these two new marketing programs as areas where expenses can initially build up because research indicates that they will cause our market share to increase exponentially over time.
Table.4.3 Yearly Expense Budget
2012 Personal selling
BDT
Marketing Expense Budget 2013 2014 BDT
BDT
2015
2016
BDT
BDT
100000 BDT
144500 BDT
165000 BDT
185000 BDT
227500 BDT
600000 BDT
867000 BDT
990000 BDT
1110000 BDT
1365000 BDT
Total Marketing
300000 BDT
433500 BDT
495000 BDT
555000 BDT
682500 BDT
Expenses Percent of Sales
1000000 26.67%
1445000 27.50%
1650000 27.5%
1850000 27.4%
2275000 27.6%
Advertising Sales promotion
CHAPTER-5 CONTROLS 5.1 CONTROLS The purpose of our marketing plan is to serve as a guide for the organization. This marketing plan includes a detailed budget schedule and managerial assignment for every action program. For control purpose, the plan also allows for month-by-month comparison of actual versus projected sales and expense. If there is any mishap in the quality or in the price fixing, the company will control this for its own sake. A contingency plan, attached, has been developed for implementation in case of severe downward pricing pressure. The following areas will be monitored to gauge performance:
Revenue: Monthly and annual
Expense: Monthly and annual
Customer satisfaction: Monthly
5.2 IMPLEMENTATION MILESTONES: The following milestones milestones identify the key marketing programs. programs. It is important to accomplish accomplish each one on time, and on budget. Nestle will carry carr y out its marketing strategy strate gy and achieve its objectives through a variety of scheduled programs. We will follow a five years planning to achieve our profit margin. We will now analyze the year wise action programs as follows:
2012: We have a plan to initiate a -----tk sales promotion to educate dealers and generate considerable awareness for the product launch in 2009. As part of this push trade strategy, Nestle will perform personal sales promotion. A volume of ----units will be used for this purpose. Then advertising programs through the various mass Medias radio, television, print, internet etc will will be performed to acknowledge people about the product.
2013: In the very beginning of this year, the personal sales promotion will be withdrawn. We have a target to gain at least the sales revenue of ----tk in this year projected. By this revenue, we can cover partially the losses of the previous year. To reach the breakeven point next year we have to build the platform. We expect that people are fully aware of our product now.
2014: This year is very much important for running our business. This year when we have to reach our break-even point as we expect. We will complete our sales of 500000 units to achieve no loss-no profit situation. Here we will earn ---------tk of sales revenue, while the sales promotion will be accelerated with respect to the market demand.
2015: The past three years were to build up the platform for the sales of our product. In this year we will emphasize on the quality control of our product. To maintain the other marketing action we may have less emphasize on this task. We will try to maintain the price same as before. The revenue function may get a downward sloping for the quality control at the same price. So we have to increase the sales volume at a slight amount. From the very beginning of the year year we have to notice that we are getting nearer to the profitability targeted.
2016: Gaining satisfying profitability is the main target of this year. Further features should be added to our product. Frequent analysis of the quality of the product will be carried out for the quality control. Analyzing customer satisfaction is also a vital activity for running the business.
.
5.3 MARKETING ORGANIZATION:
The chief marketing marketing officer of Maggi, Maggi, Nestlé Bangladesh Bangladesh Limited is responsible responsible for overall overall marketing strategy, direction and implementing it. We have hired the country’s most familiar marketing channels to handle national sales campaigns, trade and consumer sales promotions and public relations officer. The following figure shows the structure of the seven person marketing organization.
5.4 CONTINGENCY PLANNING: Every business has some risks and difficulties. Similarly, our product may face some risks and difficulties.
5.4.1 Difficulties and Risks:
•
Pran possesses the major parts of the market. As a new product, we may
have to suffer if we cannot persuade the consumers. •
It is risky in the first year to make every consumer believed that ours’ is the
best tasty and quality product. •
From the business view point, the restaurants may not be eager to use new
product as they trust the common ones.
5.4.2The Worst Risks: •
Other potential competitors may produce products with the same features.
•
If the competitors decrease their price, initially we will not be able to decrease our price as we are just launching our product.
•
For inflation and decreasing living standard, people may not be willing to buy this product and this may create the run on of our business. business.
5.5 The Marketing Program: Maggi ketchup will use direct selling as the marketing arm to sell its products.
Direct Selling: We will have the school representatives. They will make their initial presentation to a school principal. We will do it to make the present guardians familiar of our product and its taste and quality.
APPENDIX Bibliography
1. Kotler Philip, Marketing Management, 11 th edition, Prentice Hall, 2003 2. Kotler Philip & Armstrong Gary, Principles of Marketing, 11 th edition, Prentice Hall, 2006 3. http http:/ ://w /www ww.. Nest Nestle le .com .com
4. http://www.nutrition.nestle.com
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