business plan of marvelous bread

MARVELOUS

BUSINESS PLAN OF MARVELOUS BREAD

DEPARTMENT OF MANAGEMENT SCIENCESLAHORE COLLEGE FOR WOMEN UNIVERSITY

Submitted To: Ms. Hifza Younas

Submitted By:Faiza Butt Hina Zulfiqar Huma Khalid Sonia Tauhid Zainab Fatima

819827829848856

Business Plan Of Marvelous Bread

Serial # Sub Serial #

Contents Page #

1 Executive Summary 32 Industry Analysis 5

2.1 Competitor Analysis 52.2 Market Segmentation 6

2 2.3 Targeting 73 Explanation Of Venture 8

3.1 Why Bread 83.2 Location And Site Detail 93.3 Size Of Business 9

4 Production Plan 104.1 Manufacturing Process 104.2 Machinery And Equipment 104.3 Supplier Detail 124.4 Supplier Of Raw Material 12

5 Operational Plan 146 Organizational Plan 17

6.1 Form Of Ownership 176.2 Identification Of Partner 176.3 Terms Of Agreement 176.4 Management 18

7 Marketing Plan 217.1 Product 217.2 Price 227.3 Place 227.4 Promotion 22

8 Assessment Of Risk 249 Financial Plan 25

9.1 Statement Of Cost Of Goods Sold 259.2 Income Statement 269.3 Balance Sheet 27

10 References 28

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1) EXECUTIVE SUMMARY

Awareness of high quality baked goods is on the rise. Good bread is a rare combination of nutrition, convenience, and luxury. Today's consumer has less time to create wholesome, handmade bread, but increasingly appreciates the nutritional and sensory benefits it provides. Good bread provides fiber and carbohydrates in a convenient, low fat form that is portable and delicious. Good bread never goes out of style.

Marvelous Bread will produce and sell high quality breads in the flavor of almond and walnut to the residents of Lahore.

Marvelous Bread's main competition includes Dawn BreadBunniesB.PMarry Gold

Its advantage lies in the high quality of its products due to specialization and artisan manufacturing. The main marketing focus will be on variety, taste and fun seeking children and youngsters belonging to middle, upper-middle and upper class.Our bread is with reduced fat and carbohydrates. With the growing incidence of obesity and popularity of diets low calorie foods have gained immense popularity which is our core capability.

The site for the factory is in Muridkey. Exact address is 10 km Sheikhupura road GT road Muridkey. It is located in industrial area of Muridkey where Labor is easily available and at a cheaper cost. The size of our business is small scale because fixed assets of a firm do not exceed Rs.10,000,000 according to Ministry of Industries of Pakistan. Our firm will purchase machinery and equipment from Henan Sinocean Import & Export Co., Ltd.

We will purchase goods locally. Our business model is to create a consumer good and sell it to retailers. We will purchase ingredients directly from the manufacturer, use them to create our products which will then get placed in a large, clear display shelf for the consumer to browse and buy at their discretion. Recommendations from competitors, customers and wholesale supply houses are some of the factors we will use to create our approved vendor list.

We will operate on a First-in-First-Out (FIFO) food rotation system. The Production Manager will be responsible for checking that all ordered items are received. The Production Manager will also conduct a weekly food inventory and check for spoilage and damage.

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Marvelous bread will be distributed in various bakeries including Espresso, Kitchen Cuisine, Gourmet, Sweet And Salt, Shezan, Kashmir Bakers and grocery stores including Al-Fatah, Hyperstar, H- Kareem Bakhsh, Makro, Metro, Potpourri and Zenith.

Form of ownership of Marvelous Bread will be partnership. Partners of Marvel Bread include Faiza Butt, Hina Zulfiqar, Huma Khalid, Sonia Tauhid and Zainab Fatima.

The price which we have selected for our standard pack bread isRs.50/ + a mark up, so it will reach to Rs. 70/-

Major costs include equipment purchases, rent, ingredient purchases, site modifications, and marketing. Projected sales for the first year, based on market and competition studies, will total Rs. 29,328,000. Total operating expenses and cost of sales will leave a projected profit of Rs. 788,000.

The first three years of the firm of Marvelous Bread will be spent establishing company financial stability and increasing market share.

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2) INDUSTRY ANALYSIS

The bread industry in Pakistan has seen many changes in the last twenty-five years. It has emerged as a small-scale bakery processing industry to numerous industrial bread making units all over Pakistan. The bread industry in Pakistan is flourishing very quickly and bread products are gaining much popularity. Bread has been accepted as a popular substitute of rice, naan, chapatti, paratha. Currently, 5% of the total population of Pakistan

consumes packaged bread. The major factors for such a low percentage of people consuming bread are mostly economical and cultural. Now the trend is going to change, people are more conscious about their diet and health. And the life becomes faster and busy. People have less time to prepare or make food. They mostly prefer to buy eatable which are rich in taste and nutrition. B.Bread uses quality ingredients to create products with quality standards that are comparable to bakery products in any developed region of the world.MARKET TREND:Market is currently not using up to dated technology and generally companies are interested making the breads that remain at low cost. There is great deal of competition in the market. There is a huge market available where one can hit the target market.Currently, 5% of the total population of Pakistan consumes packaged bread. The major factors for such a low percentage of people consuming bread are mostly economical and cultural.

2.1) COMPETITOR ANALYSIS

Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats. Competitor profiling combines all of the relevant sources of competitor analysis into one framework in the supportof efficient and effective strategy formulation, implementation, monitoring and adjustment.

INDIRECT COMPETITOR: Indirect competitors of Flavored Bread are:

Different cakesBiscuitsCookiesPastries, etc

SUBSTITUTE COMPETITORS:A substitute competitor is any competitor that fills the same buyer need you fill but fills it in a different way. The substitute competitor of Flavored Bread is:

Dawn Bread

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BunniesB.PMarry Gold

2.2) MARKET SEGMENTATION

Market Segmentation is an effort to increase a company’s precision marketing. A market consists of a large identifiable group within a market with similar wants, purchasing power, geographical location, buying attitude, or buying habits. We have done the segmentation on the basis of the following variables.

DEMOGRAPHIC SEGMENTATION: GenderAgeIncomeSocial Class & Occupation

Demographics:Gender: flavored bread can be use by males and females as well Income: Flavored is basically for middle upper class people and it will be easily affordable for all type of these people. Age: Flavored bread will be useful at every stage of life. Young generations and older ones can also use this delicious bread.

GEOGRAPHIC SEGMENTATION:Area: Flavored bread is located in Lahore and it is easily available in all super stores and general stores. Psychographic: flavored bread is according to the customer needs and demands. It consists of natural flavors like chocolate and vanilla.

BEHAVIORAL SEGMENTATION:OccasionsBenefitsUsage Rate & AttitudeUsage rate

Flavored bread is particularly use by young generations who are very fond of flavors like generation X they love chocolates and different flavors products. Usage rate will be high because of these young generations .Benefits: it consists of Vitamin D and A so it is quite notorious and has energy as well.

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2.3) TARGETING

Target Market Children

Target Audience Children and Youngster

Age 3-12 years old

Gender Male & female both

Income class middle /upper-middle/upper class

Geographic Area Metropolitan cities

Psychographic variables Targets the variety, taste and fun seeking children and youngsters

Attributes Targets on the basis of its attributes to regular, potential and non-users all. It is intended towards interested, desirous and enthusiastic buyers

Likings innovation and fun loving

What motivates them Newness and variety

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3) EXPLANATION OF VENTURE

Our product is unique in sense that it provides with unique flavored in bread first time in Pakistan. Currently Marvelous has two flavors of breads

NutcrackerAlmond bread

It is also at the same time a product for the health conscious people as well. The bread industry in Pakistan has seen many changes in the last twenty-five years. It has emerged as a small-scale bakery processing industry to numerous industrial bread making units all over Pakistan. The bread industry in Pakistan is flourishing very quickly and bread products are gaining much popularity. Bread has been accepted as a popular substitute of:

RiceNaanParatha

3.1) WHY B.BREADHEALTH CONSIOUS: Consumers are increasingly concerned about their health and are well aware of the relationship between nutritious food and optimal health. Various concerns have caused consumers to monitor their dietary habits closely.The growing media coverage on health, the rising incidence of health conditions (obesity, diabetes and cardiac problems), concerns over physical appearance, changing lifestyle and also soaring costs of healthcare have all contributed to the demand for healthier bakery products. In addition, the aging baby boomer population has had a specific effect in increasing the demand for healthy foods. Some popular trends in the market are the introduction of low/light, functional, natural and organic products, as described below.

PRODUCT QUALITIES (DIFFERENTIATION):Our product provides with following type of health related benefits which provides the better health:

Flavored bread:The uniqueness of our bread is that it is flavored bread. We are going to provide it in two different flavors i.e. nutcracker and almond. Low / light bread:Our bread is with reduced fat and carbohydrates.

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With the growing incidence of obesity and popularity of diets low calorie foods have gained immense popularity which is our core capability.

Functional bread:In recent years, enhancement of the nutritional profile in bread products is a key trend that has gained a great deal of momentum. We will also trying to enhance the nutritional value of traditional bread products through the addition of functional ingredients, such as omega-3, multigrain, multivitamins etc.

Natural and organic bread: Increasing health awareness and concern over the consumption of artificial ingredients have fuelled the demand for natural products. Organic bread is yet another category gaining impetus in recent times, and the products are clearly labeled to draw attention to their organic nature. We will also have a look over it.

Pleasure:In addition to healthier products, consumers also are purchasing products that satisfy their taste buds. The taste enjoyment factor is vital in the marketplace and we will be focusing on this more deeply.

3.2) LOCATION AND SITE DETAILS

The site for the factory is in Muridkey where we can visit to see the desired place. Exact

address is 10 km Sheikhupura road GT road Muridkey. It is located in industrial area of

Muridkey where other industries are situated. It is regarded as the industrial area. Labor is

easily available and at a cheaper cost and raw material is also available there. It is having

all the required facilities need for the bread industry.

3.3) SIZE OF BUSINESS

The size of our business is small scale because fixed assets of a firm do not exceed

Rs.10,000,000 according to Ministry of Industries of Pakistan. We are starting a business

as small scale because we are using small number of employees.

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4) PRODUCTION PLAN

4.1) MANUFACTURING PROCESS

The process of manufacturing flavored bread is started. The first step is mixing. Flour is

collected in bowl and then weighed. All ingredients are then added in bowl. Ingredients

are flour, sugar, cream, salt, baking powder, Eggs, whole almonds and as per flavor

almond or walnut is added in proportion as per requirement. After addition of all

ingredients bowl is moved to spiral mixer. Water is added in different quantities. Mixing

time depends on quality of flour in general mixing time can vary from 6- 12 min.

On completion of mixing dough is cut into two equal dough piece and move into moulder. It has three set of roller. The dough piece is allowed to pass through these rollers. Now dough piece are slightly flattened. Dough pieces are shifted to contray oven, lidding is done manually and has fixed racks where mould box are placed after greasing. In contrary oven baking is done in absence of water .It results into a solid crust formation at the top .Temperature required for dexterisation is 225 deg c -and above. Loaves are then passed on to bread slicer.

4.2) MACHINERY AND EQUIPMENT Spiral Mixer

Construction:

High Speed Mixer is designed to mix any kind of dough

for mass production of bakery products. High speed

mixer is closed type and used to convert flour and other

inputs to form a lumpy mass of dough. Time lost in

fermentation is nil compared to slow speed mixers 2 hrs.

Controls:

The switches are provided with timers and on completion of prefixed time the mixing

operations get disengaged. There can't be any chance of over mixing and under mixing or

variation in dough consistency. The machine is fitted with latest electronic control panel

for easy operation with inbuilt safety devices.

Dough Moulder

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http://www.helical-gears.com/


Dough Moulder machine can be used for all types of dough in small and medium sized

bakeries.

Construction:

The construction is simple, safe and open. All moving parts

have ball bearings. Stainless steel rollers are fitted with

individual spring loaded teflon scrapers, is easily accessible

for cleaning. All touchable parts are nickel &. Chrome

plated.

Features:

Dough weight range from 400, 600, 800 gms.

Maximum length of moulded dough rolls 350 to 400 mm.

Maintenance free.

The machine has castor for transportation.

ON/OFF switch and line indicator in the side of the machine.

This machine requires very little space and foundation is not required.

Each machine is tested with dough before it leaves our factory.

Squeeze Roller - 3 pair S. Steel

Contray Oven

Precisely engineered, these ovens are known for

utmost efficiency, corrosion resistance and longer

service life. Owing to their superior quality, these

are widely demanded in the domestic as well as

foreign markets.

Construction:

The cone has ridges and the aluminum tracks are adjustable. Built in blower with cold air

prevents the piece from sticking. All moving parts have ball bearings and the machine

has castor for transportation. It is covered from all sides for safety precautions to avoid

any type of accidents and needs very little space and no foundation.

Features

Completely enclosed base.

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Maintenance free.

In these category of ovens temperature can be regulated from outside

Can be operated by unskilled labour.

Weight range from 400 to 800 gms.

ON/OFF switch and line indicator in the front of the machine.

It has a well designed control panel for controlling the temperature and time of

baking

Heating: Heating is maintained through air/ fuel

4.3) SUPPLIER DETAIL

Company Name: Henan Sinocean Import & Export Co., Ltd.

Company Address: 12# Building, Hong Guang Xin Cheng, South Huanghe Road,

Zhengdong New District, Zhengzhou, Henan, China

City/Province: Zhengzhou/Henan

Country/Region: China

Telephone Number: 86-371-86227202

Fax Number: 86-371-86227202

Contact Person: Miss Alice

Position: Manager

4.4) SUPPLIERS OF RAW MATERIAL:The list of main raw material for manufacturing flavored bread and name of their suppliers are following:

RAW MATERIAL SUPPLIERS

Almond Shimla Traders International It is a newly established trading concern in Pakistan.Factory Location: Lahore

Walnuts Shimla Traders InternationalIt is a newly established trading concern in Pakistan.Factory Location: Lahore

Wheat Flour Hellmann Group Of Companies12

http://www.made-in-china.com/sendInquiry/shrom_dbNQuLUrvEln_dbNQuLUrvEln.html


They are supplying wheat flour & wheat for bread

Sugar HUSSAIN SUGAR & MOLASSESAddress: 193-H,Akbari Mandi, Lahore

Condensed Milk United Dairy Farms (Pvt) LtdThey are offering from best quality milk. The product is available in bulk packs of 40 kg for industrial consumers.Address: 179-182, Kot Lakhpat Industrial Estate, Lahore, Punjab,

Baking Powder Imran Essence HouseAddress: Shop # 3, Sheikh Abdul Market, Akbari Road

Salt Ideal TradersAddress: 138-B 1st Floor, PCSIR 1 Lahore Pakistan

Eggs A-One Chicks & Feeds (Pvt) Ltd.#469 Shadmaan, #1 , Lahore

5) OPERATIONAL PLAN

Operations of Marvelous Bread includes manufacturing of flavored bread and selling

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START

Chopped walnuts, sugar, flour for bread, baking powder, salt., cream, fat-free milk

Dividing

Mixing

eggs, flour , sugar , whole almonds (skins on)

Mixing

Dividing

MouldingMoulding

Baking oven Baking oven

CoolingCooling

Packaging Packaging

Distribution

Retailers

Customer Eggs, flour, sugar, whole almonds


A. Sourcing/ReceivingMarvelous bread will use only vendors who are certified as organic. We will purchase goods locally. We will not buy from competitors. Instead we will use other small businesses whose products are produced within a 100 mile radius. We will utilize the visual method to keep inventory (where a manager counts inventory every day) ensuring that our economic order quantity is maintained at all times.

B. Shipping/Sending/SellingOur business model is to create a consumer good and sell it to retailers. We will purchase ingredients directly from the manufacturer, use them to create our products which will then get placed in a large, clear display shelf for the consumer to browse and buy at their discretion. Recommendations from competitors, customers and wholesale supply houses are some of the factors we will use to create our approved vendor list. We will also rely on newspapers, magazines and the internet if we require more sources. The criteria for final selection of these vendors will include conformance of products to our quality standards, certification, timely delivery, minimum order quantities and extension of trade credit due to our being a new company.

C. Inventory Management We will operate on a First-in-First-Out (FIFO) food rotation system. The Production Manager will be responsible for checking that all ordered items are received. The Production Manager will also conduct a weekly food inventory and check for spoilage and damage. We will use production schedules that maximize freshness and minimize waste.

D. Process/MethodsOur staff will be the primary manufacturers of our flavored breads. Family recipes that have been tested and approved by customers will make up the majority of our products. However, we want to try out new recipes from customers or those found on the internet to see if it is successful with customers. Our customers will enjoy the variety and appreciate our asking for their input.

E. TechnologyWe will use equipment similar to those used in restaurants. We will have a built in convection oven, commercial mixers and commercial refrigerators. In addition, some of the other supplies will include dough forming equipment and bread equipment.

Flow of bread from production to customers

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http://www.food.com/library/flour-64

http://www.food.com/library/sugar-139


After purchasing from the suppliers, raw material will be bringing to the factory. The process of manufacturing flavored bread is started. The first step is mixing. Flour is collected in bowl and then weighed .All ingredients are then added in bowl. Ingredients are flour, sugar, cream, salt, baking powder, Eggs, whole almonds and as per flavor almond or walnut is added in proportion as per requirement. After addition of all ingredients bowl is moved to spiral mixer. Water is added in different quantities. Mixing time depends on quality of flour in general mixing time can vary from 6- 12 min.

On completion of mixing dough is cut into two equal dough piece and move into moulder. It has three set of roller. The dough piece is allowed to pass through these rollers.

Now dough piece are slightly flattened. Dough pieces are shifted to contray oven, lidding is done manually and has fixed racks where mould box are placed after greasing. In contrary oven baking is done in absence of water .It results into a solid crust formation at the top .Temperature required for dexterisation is 225 deg c -and above. Loaves are then passed on to bread slicer.

After packaging bread will be distributed in various bakeries including Espresso, Kitchen Cuisine, Gourmet, Sweet And Salt, Shezan, Kashmir Bakers and grocery stores including Al-Fatah, Hyperstar, H- Kareem Bakhsh, Makro, Metro, Potpourri and Zenith.

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6) ORGANIZATIONAL PLAN

6.1) FORM OF OWNERSHIP:Form of ownership of Marvelous Bread will be partnership. The allocation of profits and losses, management and operation of the partnership will be set forth in a written "partnership agreement" signed by all of the partners. Also, the partners of a partnership do have some very limited protection from the claims of. A creditor must first seek recovery against the assets of the partnership before seeking recovery against the personal assets of the individual partners. Nonetheless, it is clear that the personal assets of the partners are ultimately exposed to the claims of partnership creditors.

6.2) IDENTIFICATION OF PARTNERSPartners of Marvelous Bread include Faiza Butt, Hina Zulfiqar, Huma Khalid, Sonia Tauhid and Zainab Fatima.

6.3) TERMS OF AGREEMENT:Terms of agreement between the partners of Marvelous Bread will be following:

1. Name and Business

The parties hereby form a partnership under the name of “Marvelous Bread” to produce flavored bread (Nut Cracker Bread and Almond Bread).

2. Term

The partnership shall begin on 18 July, 2012 and shall continue until terminated.3. Capital

The capital of the partnership shall be Re. 10,000,000 and shall be contributed in cash in equal proportion by the partners as follows:

A separate capital account shall be maintained for each partner.Neither partner shall withdraw any part of their capital account.

4. Profit and Loss

The net profits of the partnership shall be divided equally between the partners and the net losses shall be borne equally by them. A separate income account shall be maintained for each partner. Partnership profits and losses shall be charged or credited to the separate income account of each partner.

5. Salaries and Withdrawals

Neither partner shall receive any salary for services rendered to the partnership. Each partner may, from time to time, withdraw the credit balance in their income account.

6. Interest

No interest shall be paid on the initial contributions to the capital of the partnership.7. Management Duties and Restrictions

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The partners shall have equal rights in the management of the partnership business, and each partner shall devote their entire time to the conduct of the business. Without the consent of the other partner neither partner shall on behalf of the partnership borrow or lend money, or make, deliver, or accept any commercial paper, purchase or contract to purchase, or sell or contract to sell any property for or of the partnership.

6.4) THE MANAGEMENT

Management experience and Ability Each member of our management team has a vast experience in the relevant field.

FINANCE MANAGER

Job Summary

Develop and recommend approved finance strategies, practices and policies help to achieve the company business and finance objectives.

Duties and Responsibilities

Ensue feasibility and internal consistencyAvoid surprises means he should address what actions a firm should take if something going seriously wrongDevelop finance Strategies.Recommend Finance strategies.Make policies and practices that enhance investors and shareholders commitment. Keep investors motivation.Achievement of organization goals.Develop solid Finance plan for business that will help in future business needs.Work with the involvement of all necessary financial institutes or organizations that can provide a financial plug.Keep an eye on all finance

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Job characteristics

Create solutions of complex business problems.Should have finance knowledge.Quickly adapt to different cultures and business conditions.Able to handle high stress situations successfully and to constantly work under pressure in a complex and very competitive business environment.

MARKETING MANAGER

Job Summary

Develop and recommend approved Marketing strategies, practices and policies that help to achieve the company business and marketing objectives.

Duties and Responsibilities

Develop Marketing Strategies.Recommend marketing strategiesMake policies and practices that enhance customer commitment.Customer motivation.Achievement of organization goals.Develop solid marketing plan for products.Work with the involvement of all necessary media to promote product

Job characteristics

Create solutions of complex business problems.Should have experience in Marketing.Quickly adapt to different cultures and business conditions.Able to handle high stress situations successfully and to constantly work under pressure in a complex and very competitive business environment.

PRODUCTION MANAGERA production manager mainly guides the planning, scheduling, budget managing, coordination and management of industrial process. They also ensure that the production is in agreement with the guild, safety and union regulations.Roles and Responsibilities

Watch over the production process and coming up with a production schedule.Sketch out a timescale for the work.Recognizing training need.Making sure the production is cost effective.

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Responsible for the maintenance and selection of the equipment.Supervise the production processes and regulate schedules as per requirement.Evaluating the performance of people working under them.Keeping the team motivated.Figuring out the estimate material and human resources that will be needed.Implementing the organizations goals and policies along with the managers.Setting healthy and safe guidelines and making sure they are followed stringently.They make sure that the services and goods are made efficiently and they also ensure that the quantity, quality and price are right.Ensures costs & sets up quality standards.But finally, they see to it the customers are satisfied and goods are produced on time.

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7) MARKETING PLAN

7.1) PRODUCTOur basic product is flavored bread with two flavors:

Nutcracker bread Almond bread

Our product will be available in the size of medium-sized bread having 12 slices in a pack.

CORE PRODUCT:

Our core product is bread. Its core attribute is to fulfill the need of hunger. People use bread to satisfy their hunger.

BRAND:

“Marvel Bread” will be the brand name of this flavored bread.

LOGO:

LOGO: FEATURES

It is available in two distinctive and delicious flavors.It has high fiber content, enriched in carbohydrates. Also contains B-vitamins, minerals and a little protein and fat. Some added nutrients are -- Calcium, B vitamin-foliate andiron. Quality: The brand assures superior quality and taste. It is a healthy diet for everyoneStyle and Design:We design our product according to the demand of kids and children. Its packaging is made of “poly bags” as this packaging is least expensive.

POSITIONING STRATEGY:

More for more is our positioning strategy where we are offering more benefits for more prices

Positioning Statement/Slogan:

Introductory positioning statement:

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MARVELOUS


“NO MORE BORING BREAKFASTS!”

Statement to be used afterwards:

“BREAKFAST IS FUN!”

7.2) PRICINGPrice has been a major factor, affecting the buyer’s choice. Price is the only element in the marketing mix that produces revenues. Therefore, we will set prices for our product by taking into account all internal factors including marketing objectives, marketing mix strategy, costs etc and external factors including nature of the market and demand, competition and some other environmental factors like economy, government etc. The bread industry in Pakistan is not much competitive. And as we are offering a differentiated product that is not currently present in the market so we set our prices a little higher adopting “Market Skimming Strategy”. The price which we have selected for our standard pack bread isRs.50/ + a mark up, so it will reach to Rs. 70/-

7.3) PLACECurrently, we are only going to be introducing this product in the major city of Pakistan:

Lahore

And after wards we also target the other major cities like Islamabad, Karachi Multan etc. The foremost reason for this is that these are the most modern cities in the country, and our consumers are those educated health conscious people who are also aware of the nutritional value of the food they eat. These markets will also be able to act as a test market to see whether actually the product becomes popular here or not. If the product doesn’t gather familiarity fast, we will limit ourselves to these cities only, otherwise we will try to venture in to less educated and less urban areas of the country as well. Once the product is more popular and more people are ready to buy it, we will be introducing it in other cities as well.

7.4) PROMOTIONPromotion through product life cycle:Introduction:

Our product is a new and differentiated product which we are going to launch in market. As our product is made up of superior quality with added flavors, in addition it has a quality packaging, so its cost of production is more than other branded breads locally available in market. Introduction of the product in market also requires extensive promotion to mark its differentiated presence in market. So we need to charge handsome

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price for our product in initial phase, which will also support its high budget promotional activities.

Growth:

When our product will be accepted by the target audience and it will be in growth stage we will increase sales promotion and public relations activities, we will also extend our distribution network to other cities of Pakistan; there will be a reduction in price due to the mass production which will decrease per unit cost and our initial investment in product and promotion can be recovered

Maturity:

In maturity stage we will try to gain as much profit as we can through our product. Less-aggressive but consistent promotion will be carried out with sales promotion mainly. Price of the product will also be reduced because we will cut down our advertising expenditure.

Decline: (Re development)

We will launch new more flavors & variants of our product just before decline phase to avoid it and we will start whole new and different kind of promotional activities to re-position our product in market. Once again high budget would be allocated to promotion.

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8) ASSESSMENT OF RISK

There are many competitors in bread industry, which are also threat for our company.In Pakistan economic and political situation is the biggest threat for every industry.There are large companies who have brand loyal customers providing the market with not exactly similar but milky and other breads. It is a difficult to switching brand loyal consumers to a smaller and newer company.There is open market everywhere means any new company or existing ones can start the same production that may have more experience or more qualified staff.

WEAKNESSES OF BUSINESSIt can be risks to our business:

Health conscious societyHealth riskAtmosphere (Dull)Lack of motivational employeesCompact Locations

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9) FINANCIAL PLAN

9.1) STATEMENT OF COST OF GOODS SOLDMarvelous Bread

Projected Cost of goods sold As of year ended 31 Dec, 2012

2012 2013Merchandise inventory opening _ 25,000Add: Purchases 21,875,000 45,000,000 21,875,000 45,025,000Add: Wages 750,000 825,000 Rent expense 360,000 396,000 Electricity charges 960,000 1,056,000 Packaging expense 500,000 550,000 Travelling expenses 20,000 2,590,000 22,000 2,849,000Cost of goods available for sale 24,465,000 47,874,000Less: Merchandise inventory closing 25,000 30,000Cost of goods sold 24,440,000 47,904,000

EXPLANATION:Currently we are producing 2,500 units of bread in a year and the cost of production is Rs. 24,440,000. As it is shown in this projected statement that we will definitely require more capital for increasing production. Direct expenses may include the wages given to the labors that are operating machines, rent that will be available at Rs. 30,000 p.m., electricity charges, packaging expense, travelling expenses that will be outsource.The number of workers in our factory is 10 and they work 25 days in a month and per day wage of a worker is Rs. 250. Therefore annual expense of wages is 750,000 in 2012.

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9.2) INCOME STATEMENT:Marvelous Bread

Projected Income statementAs of year ended Dec 31, 2012

2012 2013Sales 29,328,000 57,484,800Less: Cost of goods sold 24,440,000 47,904,100Gross Profit 4,888,000 9,580,800Less: Selling administrative expenses Salaries 3,600,000 3,960,000 Depreciation: Plant and machinery 440,000 484,000 Office expense 60,000 4,100,000 66,000 4,510,000Income before taxes 788,000 5,070,800

EXPLANATION:As we describe that currently we are producing 2,500 units of bread in a year and total cost is Rs. 24,440,000. As we will increase production, total cost will be Rs. 47,904,100 in the year2013. By deducting overall cost from sales we get gross profit. In projected statement gross profit increase from 4,888,000 to 9,580,800 in 2013 because when we will increase production we would take advantage of economies of scale.

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9.3) BALANCE SHEETMarvelous Bread

Balance SheetAs on Dec, 31

2012 2013AssetsCash 4,001,500 8,603,150Stock 25,000 30,000Furniture and Fixture 200,000 220,000Less: Depreciation (10,000) 190,000 (11,000) 209,000Plant and Machinery 7,001,500 7,701,650Less: Depreciation (430,000) 6,571,500 (473,000) 7,228,650Total Assets 10,788,000 16,070,800 Liabilities & Owner EquityCapital 10,000,000 11,000,000Net Profit 788,000 5,070,800Total liabilities and owner's equity 10,788,000 16,070,800

Our machinery includes dough moulder, spiral mixer, commercial refrigerator and

contray oven. Their total costing is Rs. 541,500. While costing of plant is Rs. 6,460,000.

After the demand is generated in the market through our initial efforts and concerns;

additional finance will be required to expand our production. We will also expand our

business in coming years for this purpose additional machinery would be required and

this will also increase the requirement of human resource and other costs. Vehicles have

not shown in the balance sheet because we have hired the vehicles on rent. Net profit is

calculated through the preparation of Income statement.

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10) REFERENCES

http://www.ehow.com/way_5768152_small-business-inventory-methods.htmlhttp://mimstc.wetpaint.com/page/Operation+Plan%2FBakeryhttp://www.lahoresnob.com/bakeries_lahore.htmhttp://www.smallbusinessnotes.com/managing-your-business/sample-partnership-agreement.htmlhttp://www.mslawyer.com/businesr.htm

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http://www.mslawyer.com/businesr.htm

http://www.smallbusinessnotes.com/managing-your-business/sample-partnership-agreement.html

http://www.smallbusinessnotes.com/managing-your-business/sample-partnership-agreement.html

http://www.lahoresnob.com/bakeries_lahore.htm

http://mimstc.wetpaint.com/page/Operation+Plan%2FBakery

http://www.ehow.com/way_5768152_small-business-inventory-methods.html

business plan of marvelous bread

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