Thandaaaaa®

Marketing PlanFor

THANDAAAAAAAAAA®

Salman JakaNojeba HaiderZeeshan Bakar

Sumayra Ashfaq KhanMBA III (Executive)

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UNITED COLORS OF CHILLER TOWN

Thandaaaaa®

ACKNOWLEDGEMENT

Firstly, we would like to thank Almighty God for giving us the strength and

courage to accomplish the entire task. And the will power and patience in

making this product launch and report possible

Developing this marketing plan was a tedious job for all the group member and we could not have accomplish this without the help and support of our friends, family, and other colleagues. We would also like to thank our marketing teacher Ms. Salma Mirza who guided us in making this report. We are grateful for her support.

We hope that this report meet the expectations that we were ask to adhere to.

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EXECUTIVE SUMMARY

UNITED COLORS OF CHILLER TOWN is a company that Focuses on making and selling frozen desert items. The first of it’s kind being THANDAAAAAAAAAA® which is a gola ganda. Our target market comprises of the students of IBA who are mostly “Expereincers” and are fond of fun activities especially those involving food. We have also analyzed the situational factors relevant to our product and conducted consumer research to analyze the preferences and awareness of our target audience about gola ganda.

We have segmented our market using different segmenting variables like lifestyle, benefits sought, user status etc. We have hired a supplier from Dhoraji(a place famous for gola ganda). The pricing strategy that we are using is markup pricing (66% markup on sales). Our consumers will perceive THANDAAAAAAAAAA® as a value product because they will not only get high quality and taste as a nominal price but the also a chance to enjoy and have fun with friends.

The product will be launched at IBA City campus for only two days on 22nd and 23rd of October 2003. The sales target is 200 units in two days and we have to sell only 32 units to break even because the cost that we are incurring is fixed cost.

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TABLE OF CONTENT

INTRODUCTION.............................................................5MISSION STATEMENT.................................................6GOALS...............................................................................6MARKETING OBJECTIVE...........................................7SITUATIONAL FACTORS.............................................8LAUNCH DATE...............................................................8SALES TARGET..............................................................8MARKET STRUCTURE.................................................9SEGMENTING VARIABLES.......................................10PATTERN FOR SEGMENTATION............................12TARGET SEGMENT.....................................................12COMPETITIVE ANALYSIS.........................................13PORTER’S COMPETITIVE FORCES........................14PRODUCT POSITIONING...........................................15STAGES IN PRODUCT DEVELOPMENT.................16PRODUCT LIFE CYCLE..............................................18CONSUMER ANALYSIS..............................................19FINAL DECISION..........................................................23PRODUCT.......................................................................24PROMOTION.................................................................26PLACEMENT.................................................................29

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PRICING..........................................................................30FINANCIAL ANALYSIS...............................................30

PERFORMA INCOME STATEMENT..........................................................................................30BREAK-EVEN ANALYSIS.......................................................................................................30PROJECTED PROFIT AND LOSS STATEMENT AT DIFFERENT SALES UNIT.............................30

ACTION PROGRAM.......................................................30

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Thandaaaaa®

INTRODUCTION

THANDAAAAAAAAAA® is the brand name that we have chosen for our product since “thand” not only is synonymous to “chill” but this is a very frequently used word due to its colloquial meanings by the young generation that’s our main target. The product comprises of ice, colored flavored juices. Toppings (condensed milk, coconut, pineapple) will also be used to add value and attraction to the product.

The launch of THANDAAAAAAAAAA® Gola Ganda is planned to be a two day event at the IBA premises that will be start on Wednesday, Oct.22nd, 2003. The launch dates have been strategically chosen, 7 days before Ramadan. We believe that our target market-IBA students especially would want to hang out the café in the afternoon and enjoy with their friends as much as they can before Ramadan because the café closes then. Through market research, it has been identified that there is a demand for a fun food like THANDAAAAAAAAAA® at IBA where presently no frozen dessert item is available. Based on this, we aim to make THANDAAAAAAAAAA® talk of the town at IBA with heavy promotional campaign that will start at least 8 days before the launch.

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Thandaaaaa®

MISSION STATEMENT

“We will endeavor to provide full customer satisfaction by offering them a high quality frozen dessert (GOLA GANDA) that they will enjoy. We want their experience to be a memorable one.”

GOALS

LONG TERM GOALS:Although there are number of vendors selling Gola Ganda, but it is being sold without any proper marketing or promotional strategies. SnoBiz is the only franchise operating in Karachi with proper backing. Therefore we see a lot of potential in the market- base on this we plan to launch THANDAAAAAAAAAA® all over Karachi. We intend to do that in mobile vehicles that will travel all over Karachi (like Mela restaurant). The vehicle will be very trendy and colorful hence attracting customer. The product sold will be of high quality.

SHORT TERM GOAL:A successful launch at IBA is our immediate goal, after which we intend to convenience the cafeteria owner to start selling THANDAAAAAAAAAA® officially at the Café. Since the café owner will get the idea from the product and us at a cheaper rate as well we’ll be partner in profit.

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MARKETING OBJECTIVE

The core objective is to deliver a good quality frozen dessert to our target market at nominal price.

FINANCIAL OBJECTIVEFrom financial point of view our main concern is the fixed cost that we will incur due to promotional activities (flyers as teasers etc, posters, shop decorations etc) and logistic. The variable cost because is dependent on the amount of units sold which is equivalent to 60% of sales revenue.

Our prime concern is to sell off around 50 cups of Gola’s because it will enable us to recover the fixed cost incurred by us. Any units sold in addition to this will lead to the profits. We are expecting to sell more than hundred per day.

CONTRACT DETAILWe have hired a professional gola gonda maker who has a shop at Dhoraji- an area that is very famous for gola ganda all over Karachi because of it’s quality and taste.

The contract that has been finalized is that they will get the money based on the number of units sold in two days on a markup that will be charged by him from. There is no commitment that we will have to pay for certain units whether it’s sold or not. We just have to pay fare of the logistic that will be used by him.

REASON FOR HIRINGWe hired the person from Dhoraji to make the gola ganda because they are very reliable in terms of quality and commitment, so there is less chance that any of our customers gets sick by eating our product. Health consciousness is on the rise therefore we want our product to be of superior quality, besides, we believe it is unethical to sell anything that can harm the customer’s health in any way.

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SITUATIONAL FACTORSFollowing are the situational factors that have been considered for our product launch:

CLIMATENow a day the climate is very hot and people want to consume food that will help them to chill in this scorching heat hence, giving them a soothing feeling. So we think it’s the right time for us to launch our product because the climatic conditions are absolutely in favor of launching a product like gola ganda that is an ideal frozen dessert.

SEASONALThe seasonal factor that is of concern for us is the arrival of the month of Ramadan. Ramadan is expected to start from 28th of October and will probably end by 27th of November so we have to launch our product before that time in order to attain all the targets that we have set for us. Besides, as mentioned before, we believe that people tend to get inclined to hang around with their pals in the afternoon more before Ramadan since they know that once the season starts they won’t be able to enjoy their afternoons since most people would be fasting.

LAUNCH DATE

Considering the above-mentioned situational factor we have decided to launch our product on 22nd of October- that is, around five or six days ahead of Ramadan season. The product will be made available for two days only.

SALES TARGET

Considering the above-mentioned situational factors, we have set a target of selling around 200 units in 2 days. We can end up with good profits if we meet our sales target because we need to sell just 50 units to break even.

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MARKET STRUCTUREInstitute of Business Administration right now is running following programs,

Executive program CCS Program. Morning Program. Evening Program

These programs are conducted at two different campuses. The BBA (Morning) and MBA (Morning) programs at the main campus located at Karachi University. The rest of the programs are conducted at the City Campus located on Garden road.

TOTAL MARKET SIZEThe total number of students studying in six different programs at two different campuses are 1600 hundred approximately.

MARKET SPLITThe graph below shows the market split that we are targeting:

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SEGMENTING VARIABLESWe have considered following variables to segment the market,

OccupationThe market that we have selected comprises of students belonging from educated

noble families.

EconomicAll the students of the IBA are more or less from the same economic background

because most of them belong from the upper middle class.

Life styleMarket that we analyzing comprised of Experiencers. People who are young,

energetic and like to spend money on food, entertainment and other such activities.

Benefits sought Benefit sought by majority of the consumers is quality because they all are literate

and health conscious people. Because of this expectation of our consumers, we decided to hire supplier from Dhoraji since they carry high credibility.

Buyer Readiness:Almost all of consumers are aware of what gola ganda and have been told via

flyers, WOM about it being launched at IBA shortly so they are aware and to an extent ready to try it out.

User StatusAll of our consumers i.e. our target market – are our potential customers since

most of them have already tried goal ganda several times, but still we have a few who have either heard of gola ganda but not tried it or even those who have heard the word “gola ganda” for the first time at IBA under our brand name THANDAAAAAAAAAA®”.

CampusThe consumers are split in two campuses of IBA- main campus located at KU and

the other one is City Campus situated at Garden Road. On the day of our launch there is a seminar at the city campus in which attendance is compulsory for all MBA students

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Thandaaaaa®therefore we are expecting all MBA students from morning campus at our venue. This way we can cater to all students of IBA no matter what campus, they belong to.

AttitudeConsidering the climatic condition, we expect to have favorable response from

customers towards THANDAAAAAAAAAA®. Besides, gola ganda is a fun food and Ibians are very fond of fun & novelty. THANDAAAAAAAAAA® is definitely a unique & exciting product.

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PATTERN FOR SEGMENTATIONAfter analyzing the above-mentioned variables, the market exhibits the homogenous preference because the consumers have conformity in more or less every aspect that we have identified and analyzed. This is based on a survey that was conducted by us throughout the campus by questionnaires (sample attached in appendix) and one-to one chats with the students.

TARGET SEGMENTAs mentioned earlier that the market has homogenous preference but facing time and resource constraints we have to segment the market. The variable that we used to segment the market is the IBA campus.

The campus that we have decided to target is city campus because of the following factors,

MEASURABLE It is quiet easy for us to conduct the research and estimate potential customers, their wants and their expectations from THANDAAAAAAAAAA®.

SUSTAINABLEThere are more students at City Campus as compare to University campus, so there is chance for us to meet our sales target or exceed it and end up making high profits. Besides, as mentioned before, we are expecting most of the students of the morning campus to be present at our venue due to a compulsory seminar.

ACCESSIBLEThe students at city campus are in our reach and we can easily carry out all the arrangements required to sell product that might be difficult for us to do at main campus since, we have more familiarity at the city campus.

ACTIONABLEWe can carry out all the promotional activities that we have planned to do at this campus. We need the support of our classmates and other colleagues to carry out the promotional activities that we have planned. We can get that support easily at this campus.

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COMPETITIVE ANALYSISCompanies usually face two types of competition,

Direct Competition Indirect Competition.

Our product doesn’t have any direct competitor at campus because no body else is launching a frozen dessert that offers the same value or features that we offer. However, we do have indirect competitors.

INDIRECT COMPETITORSWe have following indirect competitors,

Soft drink sold at the canteen. Launch of Food item (sweet n sour chicken/rice, chola chaat) by our classmates on

nearly the same dates. Launch of Food Item

A group of students from our class is launching a Chinese food from 20 th until 25th October at IBA canteen.

TYPE OF COMPETITIONWe are facing Budget Competition from our competitors because we will have to fight for the same customer money. The students who are our target market have limited amount of pocket money therefore, they will have to choose on which product to spend since they are being bombarded by a variety of products in the entire month of October due to the marketing project (product launch). Whichever product they feel is the best and offers them most value for their money will obviously win.

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PORTER’S COMPETITIVE FORCES

Following competitive forces are applicable to our project,

BARGAINING POWER OF SUPPLIER:The first force that we encounter was the supplier power because we had to bring some one from Dhoraji because of quality. They wanted us to pay them for 200 units of Gola’ each day either it’s sold or not but we managed to convince them by stating that it’s an institute where large number of students are studying and they will not have to make efforts to make sales.

BARGAINING POWER OF CUSTOMER:The bargaining power of customers is high because of the indirect competitors available. We expecting fierce competition by Soft drink and it’s available at Rs.10 so after conducting research we have decided to sell our product at Rs.15 because most of our customers are ready to pay this amount (as surveyed).

THREATS OF NEW ENTRANTS:It’s quiet possible that any other group might plan it’s launch at the same date so in order to create a sort of barrier for new entrants we have designed a very effective and aggressive promotional campaign through which we will create hype for our product in the target market and this will arouse interest and excitement (flyers sample attached in appendix)

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PRODUCT POSITIONING

We are using the benefit positioning strategy to gain distinctive position in the minds of the consumer and to pull customers towards our product because we will aggressively promote the product by using different appeals.

REASON FOR BENEFIT POSITIONING:

We are using benefit Positioning strategy because the purpose of the launch is not just to supply gola ganda but also to take time out of their hectic schedule and have fun and enjoyment with their classmates and institute colleagues.

We using this Promotion Strategy because the Products that have short PLC needs to promote it’s self as a fun activity to allure large chunk of the target segment to meet targets.

Because students at IBA have hectic study schedule and sometimes when they get tired of their tedious lives, they look for any fun activity at the campus where they can enjoy with their classmates. It’s very profitable for us to promote this aspect of our product because it will enable us to entice large number of customers and we can easily meet our set targets and will end up earning substantial profit.

The price that we charging for our product is very affordable to customers as compare to the benefits delivered to them. They will get more ingredients in products that they wouldn’t get at that price in the market and more over the fun and enjoyment.

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STAGES IN PRODUCT DEVELOPMENT

Usually companies follow seven stages while developing new product but all those seven steps are no applicable to our product because the product that we opted for already exist in the market and we just have to check whether it will be feasible and profitable to launch this product at IBA.

We follow the following product development stages, IDEA GENERATION:

When the project was assigned, we thought of three different ideas including this one. To generate the ideas we conducted group brainstorming and interact with other people to figure out the products that have been launched so far at the campus.

IDEA SCREENING:Our aim was to launch such a product that has never been launched before at IBA and doesn’t require lots of capital investment. Among three ideas Gola Ganda was the only that has never been launched at IBA and it required the less capital investment than other ideas we had.

CONCEPT TESTING:To check whether the idea we have opted is attractive to others as well, we share that idea with our classmates and other friends at IBA and they all found it very attractive. The reason for finding it attractive is Gola Ganda is not readily available outside like ice cream so many who like to have Gola Ganda can’t eat it facing this constraint.

BUSINESS ANALYSIS:In business analysis, we figure out how much it will cost to us, the amount that we need to spend on our promotional activity the price at which we can sell it at the campus and the profit that we end up with. After analyzing all aspects we find out it’s profitable to go for this project.

COMMERCIALIZATION:

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Thandaaaaa®We have designed an effective promotional strategy to launch our product as a fun product. The product will be launched 22nd of October. We will create a curiosity by first informing Class representative of different classes to choose a color for their class on 22nd October and then flyers were placed and distributed everywhere at IBA.

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PRODUCT LIFE CYCLE

Our product is being launched at IBA for just two days so it has very short Life cycle. It is expected that the consumers will accept it with zeal because of the limited time availability and the lack of availability outside.

INTRODUCTION:The product has only one flavor. The objective in this phase is to create awareness of the product and trial but it’s not feasible for us to generate trial because we can’t go for sampling, so our main concern is to create awareness. The introduction phase of our product will start as we start the promotional campaign of the product and here we will incur the cost to carry out the promotional activity.

GROWTH:Our product will enter it’s growth stage as it will be made available to the customers because our customer are young and gets attracted to such products very easily. Here target customers would be early majority. We expect high sales, which will lead to high profits.

MATURITY:Our product will enter it’s maturity next day of it’s launch and most of the sales in this phase will be due to repeat purchases made by only satisfied customers and those who don’t get hold of it outside. The customers would be late majority and laggards. Laggards would be the people who are health conscious and might not try product first day but they will hear good things about the product from their friends they might try it out.

DECLINE:Our product will be divested next day of our campaign but if we get the expected response we have plan to continue it for one more day.

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CONSUMER ANALYSIS

To analyze the target market we conducted a research.

RESEARCH OBJECTIVEFinding out the perception of the consumers about the Gola Ganda.

INFORMATION NEEDSo To check awareness of the consumers.o People who have tried it before.o Topping they would prefer to have.o Price willing to pay.

DATA COLLECTION METHOD:We used the survey method to gather desired information from the target audience and the data collection instrument that we using is questionnaire.

SAMPLING CONSIDERATIONS

Population:All the students at city campus including male and female belonging from different programs conducted at this campus.

Sampling Size:We are going to target 50 students to carry out this study.

Sampling Method:The sampling method that we have used is non-probability method means we will get out questionnaire filled on the convenience basis from the prescribed number of respondent.

FINDINGS

Awareness:Out of the total sample size all of them have heard of the Gola Ganda.

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Thandaaaaa® Trial

Out of the total target respondent only 60 had tried it before where, as 40 have never try it before, as shown below:

TasteThose who have tried the product before following like the taste because of the color and condensed milk, as shown below:

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Thandaaaaa® Trial Location:Market size assumed to be 90 equivalents to 100%.

Toppings Preferred:All the audience opted to have a topping on the Gola Ganda but the Kind of Topping they marked varies,

Out of 9072 opt for fruit and coconut topping=72\90=80%

8 opt for jelly and fruits=8\90Chocolate syrup with fruit=10\90

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Pricing:

Out of 72 for Fruit and coconut topping 65 opt for Rs.15=90.27%

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FINAL DECISION

Market Potential:Out of 100, 40 has never tried so it will be an opportunity for them to try and those who have tried it before 50 of them like the product so the market potential is 90%.

Topping Selection:Out of the 100 respondents 80 opt for fruits and coconut so we decided to use that toping on our Gola Ganda.

Pricing:72 Respondents opt for fruit and coconut and 65 are willing to pay Rs.15 and 7 respondents marked forRs.20. So based on the finding we decided to charge Rs.15 for the Gola and those who willing to pay premium price for product will also purchase the product.

Demand for product:Out 90 who like Gola ganda 72 respondents opt for Fruit and coconut topping and and 65 are willing to pay Rs.15 and 7 respondents are willing to pay Rs. 20. So based on this finding the estimated demand of our product is 80% of total market potential.

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PRODUCT

GENERAL ELECTRIC MATRIXATTRACTIVENESS:We decided to launch this product because there is a huge market for it seasonal conditions are absolutely in favor no direct competitor and we incurring less cost to launch the product.

STRENGTHS:There is great awareness of the product in the market and many people who have not get chance to try the Gola before. We are offering best quality Gola to the consumers and can capture the huge share of the market.

LEVEL OF PRODUCT:The core product that we are offering to the consumer is the thanda and tasty Gola Ganda. The actual product includes the value that is being offered to our consumers in the form of topping because the Gola with the topping offered by us is available in the market at higher price.

QUALITY:We have promised to deliver good value product as well as fun to our consumers. To deliver good value product we have hired a supplier from place renowned for Gola Ganda, which is Dhora jee, and for fun we have planned to hold color day at the campus.

FEATURES:

Our product has the following features, Quality ice being used. Condensed Milk Pine apple and coconut topping. Different colors that are used in the Gola Ganda.

BRAND NAME:

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Thandaaaaa®Rather using the generic name, we have used a brand name for the Gola Ganda by keeping in view the positioning and feature of the product. The Brand name is,

“THANDAAAAAAAAAA®”

REASON?We selected this brand name due to following reasons.

THANDAAAAAAAAAA® gives impression of something relaxing and fun. This brand name will be easier to remember because the students are using the word

“thand marr yaarr” frequently which means “have fun or relax” This word is highlighting the main ingredient of our product, which is ice.

BRANDING STRATEGY:The brand name that we using is not being used by any one selling outside as far our information is concerned, so it is an original name that is owned by UNITED COLOR OF CHILLER TOWN which is our company.We are using the new brand name strategy because this brand name has been kept, keeping in mind our positioning (beat the heat) and target market (young IBAIAN).

PACKAGING:Our product has only primary package, which is the plastic cup that contains 250 ml of ice and the plastic spoon as well.

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PROMOTIONWe have tried to use humor in all our promotional methods-since our product itself is very colorful and in a way funny due to it’s novelty. Therefore, even the brand name that we have chosen THANDAAAAAAAAAA® sounds humorous because of the “desi” touch although our company name is very sophisticated “UNITED COLORS OF CHILLER TOWN” (inspired by Benetton).

PROMOTIONAL OBJECTIVE: The objective of our promotion is, Create awareness about THANDAAAAAAAAAA®. Create curiosity among consumers. Arouse interest in the Product. Visibility and promotion of Point Of sales.

PROMOTIONAL TOOLTo achieve above-mentioned objective we are using the most effective promotional tool, which is advertising.

ADVERTISING OBJECTIVE:The objective is to inform consumers about the features of the product, the emotional value that we are selling in order to create primary demand of our product.

COMMUNICATION METHOD:We here are using non-personal communication method in order to promote our product. We have created such atmosphere that will create curiosity and interest among consumers about the product through catchy promotional themes and other activity that we have planned.

MEDIA:The media we have selected to communicate to our consumers is print media because no other media is feasible or can be used.

STRATEGY:

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Thandaaaaa®In order to achieve our goals, we are using the following to create hype and market our product:

Teasers:To create curiosity of the product among consumers, we designed teasers with three different themes but all focusing on “THANDAAAAAAAAAA®” which is the brand name. This will create a lot of excitement and hype about the product with everyone thinking-“what is thanda?” .The teasers will launched two days ahead of the actual promo flyer. They will say stuff like:

“LICENSED TO CHILL!!” “REDEFINING cooooooooooool..!” “Pyaar ka naya funda…!!”

flyers are attached in appendix.

THEMATIC:On Monday two days a head of the launch of product we publicized the thematic promo/ad of our product that contains the information about launch like date, place and product features.

COLOR DAY:We have also communicated with the Class Representatives of different classes in order to hold color day on 22nd of October, which is the launch day of our product. The class representatives have been told to select a color for their class and inform us. The purpose here is to make it a fun activity for our consumers and that how their interest can be aroused in the product.

REACH:To ensure that all of our target consumers must see out teasers and thematic ads once we placed our ads on all notice boards, on cafeteria and the railings in the corridors.

ADVERTISING POSITIONING STATEMENT:

“Beat The Heat”

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POINT OF SALES PROMOTION:To promote our point of sale we have decided to use posters and will decorate the cafeteria with buntings, ribbons and balloons to create the atmosphere of fun and enjoyment. We also plan to hold bells in our hands and ring them to attract people to the café on the day of the launch when THANDAAAAAAAAAA® is actually being sold. This will also act as a reminder to most people that it’s time to “beat the heat”-as our APS says.

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PLACEMENT

Once a product or service has been made and priced it has to be made available to customers, in such a way that customers have easy access to the product. It includes company or firm activities, which make the product or service available to its target customers. For this a proper location has to be selected as well as a proper channel.The decision of a proper location for our product is very critical, since it has to be in an area in IBA which is noticable and easily accesible.

LOCATION:We have decided that the location for our product launch will be the IBA cafeteria on the executive side. We have taken permission from the cafeteria owner, to allow us to use a separate portion of the canteen, as we will need place for placement of the ice crushing machine, as well as promotion for THANDAAAAAAAAAA®.

We have selected the cafeteria because:

Most people who come to the cafeteria come for the purpose of eating, and since gola ganda is food item, we will directly hit the target market.

The cafeteria is also more of a social gathering area after college hours, so it will capture the attention of the majority of students who normally hang around with their friends at the café.

Since our target market is not only the executive side but also the CCS side, this is the ideal location, because the CCS canteen closes after regular college hours and even the BCS and MIS students use the executive cafeteria.

The cafeteria allows us the required space we need for making, promoting, and selling the product.

COVERAGE:Gola Ganda is a product, which is not just limited to the younger generation. It’s coolness especially in the hot scorching weather of Karachi appeals to people of all ages and classes. Our main target market wills be the students of IBA, but also teachers and faculty

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Thandaaaaa®members, as well as our college chowkidars and peons. since the product is priced quite low, it will be affordable for everyone.

We will not only target the executive students but also students of BCS and MIS. We have therefore decided that the cafeteria is the best location as all students mostly come there after class hours, since the CCS canteen closes at that time.

CHANNEL:A channel is a set of interdependent organization or people involved in the process of making a product available for use or consumption by the consumer or business user. In most cases a channel is when the manufacturer supplies to the wholesaler, who buys from the manufacturer in bulk primarily for the purpose of resale or further production. The wholesaler then sells to the retailer, who basically supplies and makes the product available to the final end user for ultimate consumption.In our case of Gola Gandas, we will be buying directly from the manufacturer that is the Dhoraji Gola Ganda person, and supplying to the IBA students, who are the end consumers. Therefore we will be playing the role of a middleman, who brings the manufacturer and consumers together. So we are basically playing the role of a retailer.

TRANSPORTATION:For the purpose of making a product or service available to its consumers, the product has to be transported from the area of production to the area of distribution. In our case of Gola Gandas, the manufacturer has agreed to come to IBA himself, and will bring along the machinery and required raw materials such as ice, and food colours. The cost of transportation has already been included in the per unit cost we will be paying to the Gola Ganda person.We will therefore have to undertake no responsibility for transportation.

INVENTORY:

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MANUFACTURER

MIDDLEMAN (RETAILER)

FINAL CONSUMER

Thandaaaaa®Since Gola Ganda is a product made of ice, and will melt if made before, it will be made at that time in IBA only. It will not be made before, and kept in the form of inventory, as it is something, which appeals only to the taste buds if it’s made fresh. The Gola Ganda person will be providing us with the ice, toppings, as well as food colours, and nothing will be stored overnight in the cafeteria.

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PRICING

Pricing is one of the major tools that can be used to overcome competition in the market. It has an impact on the variable contribution margin of a product and, thus, is a major influence on profitability. Price is one of the tools that will help us to meet our objectives as they have a sufficient margin to incur expenses on marketing and promotional activities.

We made a contract with our supplier, that he is going to manufactures and supplies us the product on per unit basis at the cost of Rs. 8 per unit, thus we use Markup Pricing Method to set our selling price i.e. Rs. 15, by which we earn 46.67 % markup on sales.

We are also using Value Pricing Strategy as giving our customer same high-quality product which is available in the market at Rs. 20, i.e. charging low price on high-quality offering. Before reaching to this price we consider following factors, which will help us to provide competitive advantage:

PRICING OBJECTIVESAs our product life cycle is only two days, so our main objective is achieve maximum current profit, cash flow or rate of return on Investment (ROI). After analyzing our target market, we position our product as fun, and relaxation tool for our product consumers, thus we are expecting a very high demand of our product.

Competitive advantage is another objective that we considered before setting this price because as our product is for short period of time (i.e. two days), we need to setup the price that not only help us to gain maximum short-term profit but also capture large market in a very short time.

DETERMINE DEMANDThe general relationship between price and demand are inversely related, but there are many price sensitivities, which make buyer less sensitive to the product price, thus changing relationship between price and demand positively/directly related. Gola Ganda gives their customer two types price sensitivity:

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Thandaaaaa®UNIQUE-VALUE EFFECT:As Gola Ganda will be launch for the very first time in IBA, thus our target market the product is unique and distinctive so they are fewer prices sensitive. It also provides our target market one of the unique ways to get relaxes, cool and entertains themselves after the hectic schedule of their studies.

PRICE-QUALITY EFFECT: As mention earlier that we are offering high-quality product on less price, this not only give us an advantage on our competitors but also make our target customer less price sensitive to our offers. ESTIMATING COST:Demand sets ceiling on a price of a product and costs set the floor. Price is set in a way that covers cost of producing, distributing, and selling the product, including a fair return for its effort and risk. Cost on product is divided into main forms:

VARIABLE COST: These costs tend to be constant per unit produced. As mention earlier we received the final product on per unit basis (i.e. Rs.8) from our supplier, which include Rs. 3 per unit profit earn by our supplier. Other variable cost includes:

Ice cost Rs 1 per unit. Disposable spoon and glass costs Rs. 1.25 per unit Comelle cost Rs. 1.5 per unit Other flavors cost Rs. 1.25 per unit.

Fixed Cost: are the costs that do not vary with the production or sales revenue. Our fixed cost is sub-divided into three parts: Promotion cost, supplies cost and value-added material cost.

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Thandaaaaa®ANALYZES COMPETITORS COSTS, PRICE, AND OFFERS:

We can categorize our competitors in to two distinct classes.

DIRECT COMPETITORS: Includes Gola Ganda available at Dhuraji. Our brand has two competitive advantages over this competitor. First, Gola with added pineapple and coconut topping is Rs.20 and we are offering the same product in less pricing (i.e. Rs.15); second we are providing/supplies the product to our target market in comparison with our competitor, also we are focusing very niche market, which is the part of the market of competitor so it is easy to capture the market.

INDIRECT COMPETITORS: Includes sweet n sour chicken/rice, chola chaat launch from 20th of Oct 2003. As this brand also doing the promotion of their product to the same target market, and prices is nearly equal what we charge for our product, this may affect our market share.

Another indirect competitors is Cold Drink available in the IBA city campus, provide three different flavor each cost Rs.9 per bottle. But positioning the product, as symbol of fun and coolness is an offer, which makes our product as premium and provides opportunity to charge more than the competitor.

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Thandaaaaa®

FINANCIAL ANALYSIS

Performa Income Statement

SalesEstimated Unit Sold 200Selling price per unit Rs. 15Estimated Total Sales in dollars Rs. 3000

Cost of Good SoldEstimated Unit Sold 200Cost price per unit

Ice 1.00Spoon and Glass 1.25Comelle 1.50Other Flavors 1.25

*Profit 3.00 Rs. 8

Estimated Total CoGS in dollars (1600)

Total Gross Margin Rs. 1400

Other ExpensesValue-Added Material

Pineapple Rs. 66

SuppliesStamp 20Coupon Book 32

Advertising and Promotion CostFlyers 55Charts 45

Total other expenses (218)

Net Profit Rs. 1182

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Thandaaaaa®

Break-Even Analysis

Break-even units = ___ Total Fixed Cost___________ Selling price – Variable Cost per unit

Break-even units = ___218___ = 218 15 - 8 7

Break-even units = 32 units

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Thandaaaaa®

Projected Profit and Loss Statement At Different Sales Unit

Sales in units 100 200 300 400Selling price per unit 15 15 15 15Total Sales in dollar 1500 3000 4500 6000

Less: Variable Cost (800) (1600) (2400) (3200)Contribution Margin 700 1400 2100 2800

Less: Total Fixed Cost (218) (218) (218) (218)Net Profit on Sales 482 1182 1882 2582

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Thandaaaaa®

ACTION PROGRAM

The group members have been assigned responsibilities for the launch of Thanda Gola GANDA on the 22nd and 23rd October 2003 from 12:50p.m-2: 30p.m. The teams are as follows:

Logistics: Supplier himself is responsible for the logistic and will bring the equipment and the ingredients along him.

Selling: Zeeshan and Salman will be responsible for selling and cash handling.

Promotion: Sumayra Ashfaq and Nojeba will handle the advertising and publicity programs for the launch of Thanda Gola Ganda from the 17 th

October 2003.

The promotional campaign shall include the following: 

DATE CAMPAIGN17th Teasers with three different themes.18th The distribution and pasting of three

different teasers.20th Full Thematic ad highlighting the fun and

chill the students will get.21st

Classes Representatives will be

contacted to confirm the color for their class on launch day.

22nd Launch of the product.

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