250ml shandy nr brick pack

250 ml Brick pack CSD SHANDY Drinks

Table of Contents

1.0-Company Introduction:..........................................................................................................22.0-Competitors / Market Players....................................................................................................23.0-STP...................................................................................................................................3

3.1-Segmentation...................................................................................................................33.1.1-Geographic Segmentation..............................................................................................33.1.2-Demographic.............................................................................................................33.1.3-Psychographic............................................................................................................3

3.2-Targeting........................................................................................................................33.3-Strategic Positioning............................................................................................................3

4.0-Marketing Mix.....................................................................................................................44.1-Place (Distribution).............................................................................................................44.2-Promotions......................................................................................................................54.3-Pricing............................................................................................................................54.4-Product..........................................................................................................................6

5.0-Green Marketing..................................................................................................................76.0-Meta Market.......................................................................................................................77.0-Value Chain.........................................................................................................................8

7.1-Supply Side......................................................................................................................87.2-Demand Side...................................................................................................................9

8.0-Data base Variables................................................................................................................99.0-Competitive Advantages........................................................................................................1010.0- Balanced Scorecard............................................................................................................10Appendix:..............................................................................................................................12

Exhibit 1............................................................................................................................12Buyers Utility Map...........................................................................................................12

Exhibit 2............................................................................................................................13Income Statement ............................................................................................................13

Exhibit 3............................................................................................................................15Cash Flows ....................................................................................................................15

Exhibit 4............................................................................................................................16Balance sheet...................................................................................................................16

Exhibit 5............................................................................................................................17Break-Even....................................................................................................................17

Exhibit 6............................................................................................................................18Cost break up..................................................................................................................18


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1.0-Company Introduction:

Shandy Cola was established in early 1980s with more than 30 products. In 1995 Shandy

Cola came with an innovative PET packing for their CSDs which revolutionized the

whole CSD industry. Now PET bottle is available in 300 ml at a low market price of

Rs10. They changed their packing from glass bottles to PET bottles because their assets

of empty glass bottles were stolen by other competitors. Then they came with a new idea

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of PET bottles. This also added to the customer convenience due to the non returnable

bottles. Shandy Drinks were the trend setters in CSD industry. They have 6 different

flavors in the market. They are launching a new flavor that is Shandy DEW. Considering

these facts we chose Shandy Cola for our strategic marketing plan.

2.0-Competitors / Market Players:

The main market players in the CSD industry are

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Pepsi Cola

Coca Cola

RC Cola

Amrat Cola

Mecca Cola

Pakola

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Players Market Share (Lahore)

Pepsi Cola 44 %

Coca Cola 38 %

Shandy Cola 7 %

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Others 11 %

3.0-STP:

3.1-Segmentation:

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3.1.1-Geographic Segmentation:

In geographic segmentation our attention will be on the metropolitan city of Lahore, the

vicinity of Lahore and few other areas of Central Punjab.

3.1.2-Demographic:

Young and energetic people are our demographic segments.

3.1.3-Psychographic:

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Strivers:

These are trendy people who favor stylish products.

3.2-Targeting:

Our potential target markets for Shandy Drinks are

Young, energetic, people who favors stylish products

The city of Lahore

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3.3-Strategic Positioning:

Positioning is defined as the marketers’ effort to identify a unique selling proposition for

the product. With this the product occupies a clear, distinctive and attractive position

relative to competing products in the minds of target consumers. For positioning the firm

has to consider for each potential segment, how it would approach serving that group of

customers and how it would want to be perceived by those customers. It could be done by

a slogan that is based on patriotism which could stand out in the minds of customers. e.g.

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Shandy cola slogan is “ ” meaning “It’s yours, drink it until

you are satisfied”

A positioning statement answers these questions:

Who are the customers?

What is the set of needs that the product fulfills?

Why is the product the best option to satisfy those needs?

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For our product brick pack Shandy Cola we have answered the above questions as

follows:

Our customers are those consumers who have problem with returning of glass

bottle and depositing some amount for it.

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Our Product fulfills the need of those consumers who want disposable packing for

health or hygiene purpose or who do not want to deposit money and return the

bottle to the store.

It is the best option as it is much more convenient to those people who do not

want to return the bottle right on spot and can easily consume it while driving

back home. Also it is much hygienic than the used washed glass bottle because it

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is disposable and consumers do not have to worry about transferable diseases like

Hepatitis.

4.0-Marketing Mix:

4.1-Place (Distribution):

Company currently is covering the metropolitan city of Lahore because they have limited

production facility. Gradually they will increase to other cities of Punjab their production

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facility in Lahore. They are outsourcing their distribution and they select their channels of

distribution like Punjab University, Kinnaird College will increase to GCU & UET.

They are customizing distribution with the name of channel

Ravians Shandy

Punjabian Shandy

KCite Shandy

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UETian Shandy

4.2-Promotions:

The different promotion strategies that will be used by Shandy Drinks to position its

product in new packing as the highly convenient handling will be:

4.2.1-Promotion through Bill boards:

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The company is also doing the promotion through billboards near the main markets and

main roads in Lahore only.

4.2.2-Promotion through Hammering:

Company is also doing their marketing via sponsorship, sponsoring in different T.V

channels and FM radio for Lahore & Punjab. Shandy Cola is doing sponsorship in time

check after each fifteen minutes in different TV channels and FM radio. They usually do

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not commercialize through complete advertisement because capacity is limited & Shandy

drinks are only available in Lahore & some areas of Punjab.

4.2.3-Promotion through Sponsorship:

Our company will sponsor the local sports events like Polo and Kabbadi. This is because

the slogan of the company is based on patriotism. That’s why company will sponsor the

local events (the colors of Lahore).

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4.2.4-Promotion Through Customize Distribution of Wedding Halls:

Company will market its product through customize distribution to local wedding halls of

A+ Places in Lahore.

4.3-Pricing:

4.3.1-Pricing Objective:

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The pricing objective of the company is to increase market share in the metropolis of

Lahore. Their higher unit volume sales will lead to lower cost. The fixed cost remains the

same but Variable cost will go down. V.C per unit is approximately Rs. 5 / unit that will

go down to approximately Rs. 2 – 2.5 / unit (Exhibit 5).

4.3.2-Pricing Strategy:

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Company sets low price (penetration pricing) as compared to other market leaders (Pepsi,

Coke) because customers do not perceive it as high priced product. Low price

discourages actual & potential competition. The selling price is Rs.10 / unit including

V.C, F.C and distribution cost.

4.4-Product: AUGMENTED

EXPECTED

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Augmented:

It is the fourth level of customer value hierarchy, a set of attributes and conditions, above

buyers’ expectations when they purchase the product. In order to meet with the

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expectation of the customer, company monitors each of the production work carefully

and implements quality assurance method for production and packaging of the product.

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4.4.1-PLC:

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4.4.2-BCG Growth Matrix Share:

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High Low

Growth High

Rate

* ?

Cash Cows Dog

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Low

Relative Market Share (Cash Generation)

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The Company is in Low MS & High Growth Rate quadrant. After the new packaging

introduction the company will move towards Star because they will able to increase

market share.

5.0-Green Marketing:

Green marketing is done to support your product and show your product as an

environment friendly product in the mind of the customers.

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5.1-Lean Green:

Company is doing the green marketing and they are incorporating with Lean green

strategy. In lean green marketing companies do green marketing but they don’t publicize

it. Company’s interest is only in reducing costs, improving efficiencies and creating low

cost competitive advantage. Their point of differentiability and substantiality is low.

6.0-Meta Market:

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In Meta market different industries are involved. In our product chemicals, plastic, paper,

cardboard/packaging are used as Meta market.

7.0-Value Chain

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Information (Customers, Raw

Materials)Raw Material Processing Production

DistributionWhole sellerWare housePackagingRetailer Customers Information


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7.1-Supply Side

7.1.1-Information:

The following key information is considered while manufacturing the CSD

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Customer preferences

Availability and cost of raw materials

Current prices of CSD in markets

7.1.2-Raw Material:

The raw material used in the manufacturing are bought from local supplier.

7.1.3-Processing:

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The company processes the raw material for the final production in desired proportion.

Approximately 50% value added in processing.

7.1.4-Production:

In the production of Shandy CSD, CO2 is inserted at a pressure of 1.0-1.2 psi with small

technology addition. Value added in terms of its addition of CO2 (taste).

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7.1.5-Packaging:

After production, new packing has done their self in production house. Value added in

terms of its new packing.

7.2-Demand Side

7.2.1-Warehouses:

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Company stores its products in their own warehouses at plant site to meet the demand in

time. Company is already behind the demand. Value added terms of its storage to meet

demands.

7.2.2-Distributors:

Company outsources its distributions to local distributors.

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7.2.3-Retailers:

Distributors provide the final product to retailers with no defect. Value added is due to

reach without defects and company provides chillers to retailers for chilling the CSD.

7.2.4-Customer:

Retailer sells chilled products to customer. The value added is chill product with beautiful

and attractive packing.

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7.2.5-Information:

The final key information given by customers is

Convenience in buying the product

Expected taste and variability in taste

Perceived price and satisfaction level.

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8.0-Customer Variables:

Flavors

Design of packing

Customize Distribution

Taste

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Carbonation (Pressure)

Temperature

SKB

9.0-Competitive Advantages:

Our company has the following competitive advantages:

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Innovative packing

Multi flavors

Low price

Low Packing cost

10.0- Balanced Scorecard

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FINANCIAL PERSPECTIVES(How do we look to shareholders)

Goals Measures

SurviveCash flows (To survive in the CSD industry with the help of using our cash flow)

SucceedTo succeed in the market by reviewing our quarterly sales growth and operating income.

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ProsperOur target would be to increase our market share and ROE by generating more sales.

Profits

The company’s aim would be to increase profits and market share by generating more sales.

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INTERNAL BUSINESS PERSPECTIVES(What must we excel at?)

Goals Measures

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Technology Capability

Used innovative & cheaper technology for new packing introduction

Product Development

Introduced new package, to be number 1 in delivering value to the customers

Manufacturing excellence Measuring the unit cost and capacity

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INNOVATION & LEARNING PERSPECTIVES(Can we continue to improve & create value)

Goals MeasuresTechnology Leadership leader in the CSD brick pack technology

Product FocusPercentage of products which are generating higher sales or 90%

Time to Market looking at our competitors if they are affecting our growth

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CUSTOMER PERSPECTIVES(How do customers see us?)

Goals Measures

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New ProductThe CSD product packing is an innovative and new in the market

Responsive SupplyWe would be delivering the products on time as per specification

PriceHow customers compare the price with value the customer perceives out of it.

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Appendix:

Exhibit 1

10.0-Buyers Utility Map

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Purchase Delivery Use Supplements Maintain Disposal

Customer

Productivity

Simplicity

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Convenience

Risk

Fun & Image

Environmental

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Friendly

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Exhibit 2

Income Statement (Shandy Drinks)

2009 2010 2011 2012 2013Unit Price 10 10 12 12 14Sale unit 4,200,000 4,368,000 4,542,720 4,724,429 4,913,406

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Sales 42,000,000 43,680,000 54,512,640 56,693,146 68,787,683Cost Per Unit Price 7.5 7.95 8.43 8.93 9.47Cost of goods sold 31,500,000 34,725,600 38,281,501 42,201,527 46,522,964

Gross profit 10,500,000 8,954,400 16,231,139 14,491,618 22,264,720

Fixed Cost 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000Depreciation 70,000 70,000 70,000 70,000 70,000

1,070,000 1,070,000 1,070,000 1,070,000 1,070,000

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Operating profit 9,430,000 7,884,400 15,161,139 13,421,618 21,194,720

Profit before tax 9,430,000 7,884,400 15,161,139 13,421,618 21,194,720

Tax 34% 3,206,200 2,680,696 5,154,787 4,563,350 7,206,205

Net profit 6,223,800 5,203,704 10,006,351 8,858,268 13,988,515

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Exhibit 2 (Continued……….)

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Income Statement (Shandy Drinks)

2014 2015 2016 2017 2018Unit Price 14 14 16 16 16

Sale unit 5,109,942 5,314,340 5,526,913 5,747,990 5,977,910Sales 71,539,191 74,400,758 88,430,616 91,967,840 95,646,554Cost Per Unit Price 10.04 10.04 10.04 10.64 10.64Cost of goods sold 51,286,915 53,355,972 55,490,211 61,172,409 63,604,958

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Gross profit 20,252,276 21,044,786 32,940,404 30,795,431 32,041,596

Fixed Cost 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000Depreciation 70,000 70,000 70,000 70,000 70,000

1,070,000 1,070,000 1,070,000 1,070,000 1,070,000

Operating profit 19,182,276 19,974,786 31,870,404 29,725,431 30,971,596

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Profit before tax 19,182,276 19,974,786 31,870,404 29,725,431 30,971,596

Tax 34% 6,521,974 6,791,427 10,835,937 10,106,647 10,530,342

Net profit 12,660,302 13,183,359 21,034,467 19,618,785 20,441,253

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Exhibit 3

Cash Flows (Shandy Drinks)

2009 2010 2011 2012 2013

EBIT 9,430,000 7,884,400 15,161,139 13,421,618 21,194,720Depreciation 70,000 70,000 70,000 70,000 70,000

Tax 3,206,200 2,680,696 5,154,787 4,563,350 7,206,205

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OCF 6,293,800 5,273,704 10,076,351 8,928,268 14,058,515

2014 2015 2016 2017 2018

EBIT 19,182,276 19,974,786 31,870,404 29,725,431 30,971,596Depreciation 70,000 70,000 70,000 70,000 70,000

Tax 6,521,974 6,791,427 10,835,937 10,106,647 10,530,342

OCF 12,730,302 13,253,359 21,104,467 19,688,785 20,511,253

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Pay Back Period 5.11 Years

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Exhibit 4

Shandy DrinksBalance sheet

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For the year ended on 31 December 2009

Rs. Rs.

Cash & Bank 473,000 Inventory 1,000,000 Total Current Assets 1,473,000 Fixed Assets:

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Machinery 700,000 Less: Depreciation 70,000 630,000 Furniture and Fixtures 70,000 Less: Depreciation 10,500 59,500 Vehicles 700,000 Less: Depreciation 70,000 630,000 Office Equipment 112,500 Less: Depreciation 22,500 90,000 1,409,500

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Working Capital Rs 451,300 Total Assets Rs3,333,800 Liabilities and Owner's Equity Debt 30% 1,000,140 Equity 70% 2,333,660 Total Liabilities 3,333,800

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Exhibit 5

Break-Even (Shandy Drinks)

The break-even analysis indicates the amount of units Shandy Drinks have to sell in order

to recover the variable cost as well as fixed cost.

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Break-Even = Fixed Cost/price-variable cost

= 1,000,000/(10-7.5)

= 1,000,000/2.5

= 400,000 units

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Exhibit 6

Cost break up (Shandy Drinks)

300ml Plastic bottle 250ml brick Pack

Type of Packing for CSD 3.45 2.25

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Packing 2.00 2.00

Cap 0.65 0.00

CSD 3.77 3.14

Total (Rs. / Unit) 9.87 7.50

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250ml shandy nr brick pack

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