marketing plan paper (molife)
TRANSCRIPT
MBA IN MARKETING AND
ENTREPRENEURSHIP
STRATEGIC MARKETING MANAGEMENT
NAME OF STUDENT: SAITOT K JOEL
REG //: 2015010034
NAME OF INSTRUCTOR: Dr. KASTORY
SUBMISSION DATE: 17/7/2015
TERM PAPER – MARKETING PLAN REPORT
NAME OF PRODUCT/BRAND – “MOLIFE”
MARKRTING PLAN PERIOD – 5YEARS
EXECUTIVE SUMMARY
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This report will serve as a marketing plan to introduce an innovative green coconut drink for
ABC Company by the name of "MoLife" in the Tanzanian market. MoLife would be a
revolution in the soft drinks industry of Tanzania as the proposed market plan is covering all
aspects of the marketing such as the target customers, current market situation and
preferences of people. I want to market Green Coconut Water. I have prepared this feasibility
plan on that basis. I have assigned a name for the product as “MoLife”. Since the raw
materials are very much available in our country, I have decided to give the product an
international image.
MoLife is a kind of soft drink that provides the consumers with processed green coconut water
in bottles. For the marketing purpose of the product I have decided to launch three product
lines. The MoLife would be launched in the market at 250 ml. 500 ml. and 1 Litre bottle. I
have set a reasonable price for the product so that all kinds of people can afford to buy this soft
drink. I would gain a competitive advantage, as this is a first hit in the market.
I have targeted a huge market segment for the product. Tanzania is a large populated country.
Lots of people are looking for such a product. Green Coconuts are not available all the time.
For example: a person walking on the street. Suddenly he feels thirsty. Now if he wishes to
drink green coconut water he cannot find it easily. It is not always found in the right place at
the right time. If I launch our product in the market, a person willing to drink green coconut
water can have it from a nearby shop. At present this is not possible. Our target market
includes health conscious people, sick people, sportsperson & many other consumers
which I have segmented from the Demographical, Geographical, and Psycho graphical &
Behavioral point of view.
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I have prepared a financial documentation for this feasibility plan of a new product. As I am
introducing the product in three categories at 250 ml, 500 ml and 1 Liter bottles, I have
prepared the Break-Even-Analysis for each of the product line. I have prepared the feasibility
plan for five-year basis.
For 250mls the break-even point is at 4158004 Units. That means if ABC Company sale
4158004 Units a year, they will make neither profit nor loss. So to make profit ABC has to
create a market demand in such a way so that more than 4158004 Units are sold every year.
Obviously the unit cost will eventually come down because of the law of Marginal Cost. Then
the break-even point will also come down. But that is from the long run perspective. So
initially ABC might suffer loss but ultimately they would earn enough profit. The consumers
will first taste the product by consuming the 250ml bottles. So ABC might gain a short run
profit from that.
For 500mls the break-even point is 4914004.914 units per year. So they have to sell more
than 4914004.914 units to earn profit. I know that after the product is ill promoted, people
will eventually consume more of 500mls, as pet bottles are more in demand. The price is such
that people will turn to the 500mls because ABC will provide them at lowest possible market
price.
For 1 Litre bottles I have a different plan. I know many people are not going to consume the 1
Litre package. So I have assigned more profit on them per unit. Our target is to sell less
quantity of products but achieving higher profit. For 1 Litre bottles I have estimated the
break-even point at 1724137.931 bottles per year. As I can see, I have prepared the selling
price in such a way so that, to be in a profit earning zone ABC have to sell least amount of
units comparing the other 2 product lines.
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I have given an elaborate discussion on financial summary at the later stage of the feasibility
plan. I have considered the Target Costing Pricing Policy; which means an ideal price is set
first based on customer considerations then target costs will ensure that the price is met. I
decided the market price before. Then I calculated the estimated unit price & fixed price.
Then I decided how much profit margin is possible on each of the product line. I have
assigned three different profit margins for three product lines. This price setting is based on
the current market research.
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TABLE OF CONTENTS PAGE
COVER PAGE…………………………………………………………………..1
EXECUTIVE SUMMARY……………………………………………………..2
TABLE OF CONTENTS……………………………………………………….5
1. INTRODUCTION……………………………………………………………...7
1.1 PRODUCT PORTRAYAL………………………………………………......7
1.2 PRODUCT PROFILE………………………………………………………..7
2. MARKET RESEARCH AND ANALYSIS…………………………………..8
2.1 MARKET DESCRIPTION…………………………………………………..8
2.2 MARKET SEGMENTATION ANF TARGETING………………………..8
2.3 COMPETITIVE ANALYSIS………………………………………………...11
2.3.1 SWOT ANALYSIS………………………………………………………….11
2.3.2 COMPETITOR ANALYSIS……………………………………………….12
3. MARKETING PLAN………………………………………………………….13
3.1.1 SETTING THE PRICE OBJECTIVE…………………………………….13
3.1.2 DETERMING DEMAND……………………………………………….....13
3.1.3 ESTIMATING COST………………………………………………………14
3.1.4 TYPES OF COST AND LEVEL OF PRODUCTION……………………14
3.1.5 ANALYZING COMPETITORS COST, PRICE AND OFFER………….14
3.1.6 SELECTING A PRICE METHOD…………………………………………15
3.2.1 ADVERTISING………………………………………………………………15
3.2.2 PERSONAL SELLING………………………………………………………15
3.2.3 PROMOTIONAL TOOLS……………………………………………………16
4. MANUFACTURING AND OPERATION………………………………………17
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4.1 LOCATIONS……………………………………………………………………17
4.2 HUMAN RESOURCE………………………………………………………….17
4.3 TECHNOLOGICAL ASPECTS……………………………………………….17
5. FINANCIAL ANALYSIS AND PROJECTION……………………………….18
5.1 SALE FORECASTING …………………………………………………..……18
5.2 PROFIT AND LOSS PROJECTION ………………………………..……..…19
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1. INTORUCTION
1.1 Product Portrayal
‘MoLife’ is a product that serve different segment of customer. The product is green coconut
water, which is unique in the current market. The green coconut water will be processed
and sold in glass bottle of convenient sizes of 250 ml, 500 ml and 1 liter. The green
coconut water will be very much refreshing and provide great support to the sick and
health conscious people. Our target market is very large with different segments. Our
expected sales are very high. The development cost is 32151.950 USD approx.
1.2 Product Profile
Name of the Product: MoLife
Type of Product: Green Coconut Water
Ingredients: Pure natural green coconut water,
Sugar, mineral salts, vitamins C.
Container: Stylish glass bottle
Container size: 250 ml, 500 ml, 1 Litre
Product Price: 250 ml for 0.154USD
500 ml for 0.231USD
1 litre for 0.489USD
Estimated Durability: 12 Months from date of manufactured
Machinery used: Advanced technology imported from USA, UK and Netherlands.
Brand Slogan: Always Pure… Always Refreshing
2. MARKET RESEARCH AND ANALYSIS
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ABC Company wants to develop and introduce a new Product. So, I have gathered
information through in-depth interviews. I made a survey of the market to have a clear idea
about our market, our customer demand, needs and wants. This information helps ABC to
know about the current market and prospects of our new product.
2.1 Market Description
Tanzania is a country of about 40 million people. The total market size of the soft drink
industry is about 5 million and day by day it is increasing. I have a spread nationwide market
of different convenient product. People are nowadays very much concerned about the market
and product conditions. So I have a growing prospect of customers of “MoLife”. Among the
population I worked out few segments of customers who will prefer our product most.
2.2 Market Segmentation and Targeting
Market Segments
I have observed and analyzed the market and based on the nature of the market I segmented
the market in the following sectors:
Geographic Segmentation:
Tanga, Pwani, Dar es salaam, Zanzibar, Arusha, Kilimanjaro, Lindi, Mtwara and Mwanza.
Demographics:
Individuals
Family
Sportsman
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Business buyer
Psycho graphics:
Higher class
Higher mid class
Middle class
Behavioral:
Sick people
Health conscious
Sophisticated who take the new product from the market.
Target market and projections:
Analyzing all the segments, I decided our target market according to our product category.
The target customers of “MoLife” are sick people, health conscious people, sportsmen and
tourists. I have decided to charge 0.154USD for 250 ml bottles, 0.231USD for 500 ml bottles
and 0.489USD for 1 Litre bottles, if we consider price versus taste received then we can see
that taste received is more in value. Therefore charging the mentioned prices is justified. The
following graph gives a clear idea of our target market.
Target Market:
Health Conscious – 32%
Sick people – 43%
Tourist – 3%
General people – 22%
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I separate our target market into four different segment based on their geographic,
demographic, psychographic and behavioral characteristics.
Health conscious: Health conscious people basically the sports person are one of our largest
target markets. In this segment, I get a lot of potential customer. Half of our total population
is young. This is a significant number that I have to concern about them and provide product,
which is fit for them. About 5 million people of this total number are health conscious. They
spend about 6.430USD in a month in average.
Sick people: Sick people are one of our major considerations. More than 1 million children
suffer from diarrhea that needs liquid food. Not only child but also the adult might suffer from
those types of problems.
Tourists: Every year a huge number of tourists visit Tanzania. I want to provide them with
“MoLife”.
General Customers: Besides the above segments, the general customers will acquire a
significant portion of our target market.
Market Needs:
“MoLife” wants to satisfy its customers need. That’s why it is important to identify the
market needs. Our first consideration is to provide the best product to our customers. That’s
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why I offer three different sizes of bottle with different prices for its different segment of
customers.
250 ml: The lowest price for the rural mid social class and individuals.
500 ml: Its target the sick people and tourist
1 litre: For a small family.
2.3 Competitive Analysis
The Soft drink industry is very much competitive. Many soft drink companies have acquired a
significant portion of the market. But the unique features of “MoLife” will take it far beyond
the reach of the competitor. Because no one has yet thought about selling green coconut water
in such a specialized way, to evaluate our prospect of “MoLife” in the current market I have
analyzed the market situation in various ways. Following are some demonstration of the
analysis:
2.3.1 SWOT analysis:
The product existence in the future is depending on its strengths, weakness, opportunities and
threats analysis:
Strengths:
1. Available input materials
2. Low production cost
3. Technological and marketing knowledge
4. Strong distribution channel
5. Easy manufacturing process
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6. Reasonable price
Weaknesses:
1. It is easy to copy the idea by others
2. Taste differ from the natural green coconut water
3. Green coconut water cannot be preserved for longer period
Opportunities:
1. Monopoly market
2. Large market
3. High demand
4. Might have a chance to get subsidies by Govt. to export
Threats:
1. High competition in future by copying the idea
2. Entrance of new product
3. Alternatives are avoidable in some segment
4. Uncertainty of launching a new product.
2.3.2 Competitor Analysis
The major soft drinks and juice companies in Tanzania of current market are:
Said Salim Bakhresa & Co Ltd
Coca cola
Pepsi
Foreign Products etc
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Distinct Competency:
These companies can try to entrance our market by launching new product lines to compete
us. Yet, I have distinct competitive advantage. That is our product is still brand new. The
other companies will take sometimes to enter into the market. Till then ABC can have a
monopoly market condition. The other advantage that I have is good price. ABC will sell
products in a reasonable price then other competitors do.
Strategies against competitors:
To compete with the major competitors ABC can adopt the following measures:
Providing the best service to create high customer satisfaction
Reasonable and acceptable pricing
Promising and providing top quality product
Launching highly effective mass promotional activities
Continuous innovation and modification of the products
Creating and maintaining long term customer relationship
Creating “Brand Loyalty” among the target consumers
3. MARKET PLAN
Pricing Strategies
I have decided to set a reasonable price for our product when ABC Company will develop it. I
considered many factors in setting the pricing policy. I will describe a six-step procedure:
3.1.1. Setting the pricing objectives:
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Our company has decided where it wants to position its market offering. I have chosen our
objective to maximize market share. I believe that a higher sales volume will lead to
reasonable unit costs and higher long-run profit. I have set the reasonable price because I
assume that the market is price sensitive. Our overall objective is to capture the maximum
market share by setting reasonable price.
3.1.2. Determining Demand:
Each price will lead to different level of demand and therefore have a different impact on
company’s marketing objectives.
3.1.3. Estimating costs:
I have estimated the cost and want to charge a price that covers the cost of production,
distribution and selling the product, including a fair return for its effort and risk.
3.1.4. Types of cost and level of production:
There are two types of cost: a) fixed and b) variable. In our new product development project
fixed cost is 257,215.60USD. Fixed cost includes- machinery, monthly bills, and salaries of
employees and so on, regardless of output.
There are some variable costs like-cost of bottle, packaging and so on. These costs tend to be
constant per unit production. I have estimated that per unit variable cost is 0.081USD for 250
ml, 0.162USD for 500 ml and 0.314USD for 1 litre.
3.1.5. Analyzing competitor’s costs, prices and offer:
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I have analyzed our competitors’ price and found that Azam charges 0.129USD for 250 ml
bottle, Coca cola 0.154usd for 250 ml Pac.
3.1.6. Selecting a pricing method:
I have chosen the target costing method to set price for our product; pricing that starts with an
ideal selling price based on customer considerations, then target cost will ensure that the price
is met.
Promotional Strategies:
To acquire a strong position in the market, ABC needs to give special emphasis on effective
promotional activities. In order to get the maximum market share ABC will have to use all
four tools of marketing promotion. Specially, advertising through mass media will support us
a lot.
3.2.1 Advertising:
I initially will give more emphasis on paper ads and TV commercials. Because, advertising
through these media is the most effective way to reach the customers and position our product
in their mind. I am anticipating that this will have a massive impact on the teenagers and other
enthusiasts. Few neon signs and bill boards of “MoLife” also can be set up in some core
points of the city. I hope to reach 75% of our customers through effective advertising.
3.2.2 Personal Selling:
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Though personal selling skill is not that much effective for convenient products like
“MoLife”, I will inspire and train the sales persons of the retail stores to convince people to
buy our product when they will come to buy any drinks item, the sales persons will inform the
consumers about the cool refreshing taste of “MoLife” and about the nutritious aspects. I hope
that will play a significant role to increase ABC sales.
3.2.3 Promotional Tools:
I have also planned to apply some promotional tools. Initially for sometimes I will distribute
our product at 50% discount just make our new product familiar with the customers. This will
be the market-testing period for our product. Later, ABC may apply the strategy of giving
gifts, lucky coupons, tour tickets depending on the market and competitive situations.
Public Relations:
I have future plans to hold seminars, commit social development, supporting social activities,
to arrange cultural functions and mobile game shows for publicity purpose.
Distribution Channel
In the initial stage, ABC will distribute the products with our sole distribution channel. When
our market will spread out, ABC will distribute our products through dealers. I will set our
own outlets in few core market positions. When ABC will go for mass marketing, I will
supply our product nationwide through dealers. Our dealers will take the products to every
district of the country. “MoLife” will be available in all retail stores of the country.
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Services and warranties
As ABC are targeting to the top most customer satisfaction and building long-term customer
relationships, there is no alternative for us rather than providing top quality service. Giving
the customers timely and instant quality service is our primary concern. I even planned to
open few customer service centers where will response to customers’ interactions. ABC will
collect information, suggestions, ideas and opinions of the customers through these centers
and will innovate and modify our product accordingly. I also will change any defected
product.
4. Manufacturing and Operations
4.1 Locations
I will set our manufacturing and other working areas in convenient locations. I will prefer the
locations to set up our manufacturing firms, warehouses and inventories in different core
business points of the country where it will be easier to both collect the raw materials and
transport the final goods to the market.
4.2 Human Resource
The board of directors will be responsible for the recruiting activities. Recruiting will be done
through written tests followed by interviews.
4.3 Technological Aspects
To create and innovate new quality products ABC needs to use advanced technology. ABC
will need high tech machineries imported from the foreign countries. Not to mention, skilled
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people to operate them. I have already studied all the technical aspects and prepared a list of
instruments and their costs. The machinery will be collected when required.
5. FINANCIAL ANALYSIS AND PROJECTIONS
5.1 Sales Forecasting
The following Table and graph show our (ABC) expected sales for the coming five years
(USD):
Expected Sales(Per year) 250 ml. Bottle 500 ml. bottle 1 Litre bottle
First Year 51443.120 57873.510 19291.170
Second Year 57873.510 64303.900 21863.326
Third Year 70734.290 74592.524 25721.560
Fourth Year 77164.680 83595.070 30865.872
Fifth Year 81022.914 86167.226 32151.950
5.2 Profit and Loss Projection
For 250 ml
Item Year 1 Year 2 Year 3 Year 4 Year 5
Total Sales 571533.063 642974.696 785857.962 857299.595 900164.575
Total Cost (581307.256) (621818.713) (702841.627) (743353.084) (767659.958)
Total Profit (9774.193) 21155.983 83016.335 113946.511 10303000
Tax 18% — 11034.549 58928.094 71300.164 78723.407
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Net Profit (9774.193) 32693.590 69809.801 98367.906 99502.770
For 500 ml
Item Year 1 Year 2 Year 3 Year 4 Year 5
Total Sales 964751.412 1071946.013 1243457.375 1393529.817 1436407.657
Total Cost (986421.826) (1067444.740) (1197081.402) (1310513.482) (1342922.648)
Total Profit (21670.414) 4501.273 46375.973 83016.335 93485.010
Tax 18% — (3800.509) (18550.389) (33206.534) (37394.004)
Net Profit (41670.414) 4700.764 47825.584 69809.801 76091.006
For 1 Litre
Item Year 1 Year 2 Year 3 Year 4 Year 5
Total Sales 694482.120 787079.736 925976.160 1111171.392 1157470.200
Total Cost (727920.148) (790680.754) (884821.664) (1010342.877) (1041723.180)
Total Profit (33438.028) (36018.018) 41154.496 100828.515 115747.020
Tax 18% — — (7407.80442) (18149.1327) (20834.4636)
Net Profit (66876.056) (39619.036) 44692.698 80497.109 99448.212
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