mps market plan
TRANSCRIPT
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MARKETING PLAN
FOR
UNITED BREWERIES GROUP VENTURING
INTO
SOFT DRINK BEVERAGE SEGMENT
Submitted To:
Submitted ByProf. Sujit Sen Gupta
Shruti Mawkin
Sonakshi Mahajan
Simran Kaur
Sris
hti Garg
Su
mit Bhatria
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Swa
r Rishabh
S
hwetra Verma
Shw
eta Kohli
Ric
ha Khanna
Sunita Mukherjee
Gr
oup no.-8
T ABLE OF CONTENT
S.NO.
TOPIC
1. INTRODUCTION
COMPANYS MISSION
COMPANYS VISION STATEMENT
GOALS
OBJECTIVES
2. EXTERNAL ENVIRONMENT ANALYSIS
PESTLE ANALYSIS
INDUSTRY OVERVIEW
PORTERS FIVE FORCES ANALYSIS OF AERATED
DRINK INDUSTRY:
COMPETITOR ANALYSIS
3. INTERNAL ENVIRONMENT
SWOT ANALYSIS
BCG MATRIX
GE MATRIX
ANSOFFS MATRIX
4. Financial Pay Off
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5. Marketing Mix:
Product
Place Price
Promotion
People6. Organizational Structure
INTRODUCTION
United Breweries Group or UB group is a conglomerate of different
companies with major focus on Alcoholic Beverages Industry. The company
markets Alcoholic beverages under the Kingfisher brand and also have
launch Kingfisher Airlines an Airline services in India with international flights
operating recently. United Breweries is largest producer of beer with a
market share of around 48% by volume. It is owned by Vijay Mallya. UB
group has now greater than a 40% share of the Indian Brewing market with
79 distilleries and bottling units across the world.
The company has assumed an undisputed market leadership with a national
market share in excess of 50%. Through a process of aggressive acquisition
and market penetration, UB Group today controls 60% of the total
manufacturing capacity for beer in India. The flagship brand, kingfisher is
now sold in over 52 countries worldwide, having received many accolades for
its quality. It has achieved international recognition consistently and has won
many awards in international beer festivals. It has also been ranked among
the 10 fastest growing brands in UK.
With plans to become a global player, United Spirits Ltd. (USL), the flagship
of the UB group has purchased Scottish distiller, Whyte and Mackney in May
2007 for Rs. 4,800 crores. This would bring the brands of W&M like The
Dalmore, Isle of Jura, Glayva, Fettercairn, Vladiyar vodka, and Whyte &
Mackay Scotch under its portfolio.
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The UB group is also into manufacture of fertilizers. The group company hasMangalor chemicals and fertilizers have a factory at districts of Karnataka.
UB Engineering Limited is the group's engineering business arm. Itundertakes EPC Projects, Infrastructure, on-site fabrication of structures,installation, testing and commissioning of Electrical etc. The company was
initially established as Western India Erectors in 1963 and came under theUB Group in 1988.
As per the companies latest plans it wants to enter the non-alcoholic
beverage segment in the Indian Market. For the start, they plan to launch
Refresh, a soft drink which would be made available in five flavors. Their
future plans include diversifying their product line into the Juice segment
under the same flagship.
The company would go for full market coverage, attempt to serve allcustomer groups with all the soft drink variants they are offering.
It would position itself as a low calorie soft drink targeting towardsHealth conscious customers.
Differentiation on the basis of endorsement young sports celebrities.
Position the soft drinks as a value based offering that is premium in
nature due to its high quality.
COMPANYS MISSIONOur mission is to be the premier soft-drinks company in India
providing customers the finest quality of beverages.
COMPANYS VISION STATEMENTOur vision is to assumed an undisputed market leadership position in
the soft-drink segment.
GOALSOur goal for establishing the brand would be to Use the brand power
of UB group for introducing & establishing Refresh as being the most
popular soft drink in India.
OBJECTIVESThe company has established four objectives which it plans to achieve in the
next three years
1) Pan India Coverage by 2014
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2) Gross margin of atleast 45% by 2014
3) Net after tax profit above 15% of the sales by 2014
4) Market share of 30%
EXTERNAL ENVIRONMENT ANALYSIS
INDUSTRY OVERVIEW
Soft Drinks have become worlds leading beverage sector. The Indian soft
drink industry stands at around 175000 billion liters per annum and is likely
to surpass 350000 billion liters by 2015. Indian non-alcoholic market is
expected to grow by 20% per annum by 2013, according to report by The
Associated chamber of Commerce &Industry of India. The leading players in
the Indian soft drinks market include coca-cola co., PepsiCo. Parle-agro,
Dabur and Godrej.
India has proved to be perhaps the toughest battle ground for Coca-cola and
Pepsi. Coca-cola was the first international brand to enter India in early
1970s. Until 1990s, domestic players like Parle Group (Thumps up, Limca,
Gold spot) dominated the soft drink market in India. However MNC players
like Pepsi (1991) and Coke re-entered in 1993 shift the control towards them.The market of Soft drinks can be segmented on the basis of types of
products Cola products and Non-cola products.
Cola products account for nearly 61-62% of the total soft drinks market. The
brand fall under this category is Pepsi, Coca-cola, Thumps-up, Diet-coke,
Diet-Pepsi.
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Non-cola products which constitute 36% can be divided into different flavors
such as Orange, Cloudy lime, Clear lime, Mango.
PESTLE ANALYSIS
Political factors:-
The beverage industry in largely affected by the Political factors prevailing
in the country. The sales tax & central sales tax affect the rates for soft
drinks form region to region.But , Vijay Mallya and Roy are famed for their
skills in managing relationships with governments. Those skills come handy
for their diversified businesses sprawling different states with different tax
rules and when they come head-to-head with rivals.
Economic factors:-The rising per capita income has lead to an increasing consumption of soft
drinks. Soft drink business provides attractive profit margins due to the
consolidated nature of the industry. The Nation Council of Applied Economic
Research has projected that Indias very rich, consuming & climbers
classes are growing at a CAGR of 15%, 10%, 2% respectively. Thus, there is
huge potential for growth of the Refresh in India.
Social factors:-
The changing lifestyle, social habits, eating habits has all led to an increase
in the growth of the beverage industry. With increasing urbanization, this
acceptance of soft drink is only going to rise. Also a large proportion of
Indian population is the age group of 20-35 years, which comprises of the
age group where soft drinks are found to be most popular. Thus, the
changing demographics and social trends are favorable for Refresh.
Technological:-
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The beverage industry is not very technological specific. Technology is
mainly used for developing new packaging, to reduce costs and curtail
counterfeiting etc.UB group has huge financial muscle power, it can use its
finance to procure latest technology, and necessary R&D.
PORTERS FIVE FORCES ANALYSIS OF AERATED DRINK
INDUSTRY:
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Threat of Existing Competitors:
A fierce competition exists among the very few dominating players of this
Industry. There is a duopoly in the industry and intense rivalry can be seen
amongst Pepsi and Coke.
Threat of Substitute Products:
There is threat of substitutes, as there are many alternative beverages
present in the market like juices and teas proven to be healthier options.
Bargaining Power of Suppliers:
The Suppliers have less bargaining power as the company has achieved a
strong hold on its raw material and packaging suppliers over the years. The
company has established good relations with suppliers for raw materials
such as sugar corn syrup, sweeteners etc.
Bargaining Power of Buyers:
The buyers exercise a high bargaining power as the switching cost for the
product is almost nil and they have many options to select from when it
comes to the beverage industry.
Threat of New Entrants:
Even though the aerated market is growing fast pace, but still there are
strong barriers for new entrants in the soft drink industry as amount of
capital investment required is high and also exclusive territorization is
required for distribution channel which makes its in whole a cumbersome
and difficult process. A new brand would need a huge muscle power to
compete with the existing big players Coca Cola & Pepsi, but UB group is
expected to doing well in this segment as it has already established itself in
the beverage industry.
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COMPETITOR ANALYSIS
COMPETITORS MARKET SHARECOCA COLA 42.7%PEPSI 56%RC COLA 4%
The soft drink Industry is dominated by Coca-Cola whose market share is
42.7 % (2011) across the globe. Pepsi and Rc Cola together have a market
share of 34.8 % (2011). Hence Refresh has to face stiff competition from
Coca-Cola who is the market leader at this point of time.
INTERNAL ENVIRONMENT
SWOT ANALYSIS
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BCG MATRIX
QUESTION MARK (OR PROBLEM CHILD)
Here, business unit has a small market share in a high growth market. These
business units require resources to grow market share, but whether they will
succeed and become stars is unknown. UB fertilizers come in this quadrant.
STAR
In this quadrant, business unit has a large market share in a fast growingindustry. Stars may generate cash, but because the market is growing
rapidly they require investment to maintain their lead. If successful, a star
will become a cash cow whenits industry matures.
CASH COW
Kingfisher
airlines
UB Breweries
UB
Fertilizers
UB Spirit
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In this quadrant, a business unit has a large market share in a mature, slow
growing industry. Cash cows require little investment and generate cash that
can be used to invest in other business units. Kingfisher Breweries falls
under this quadrant.
DOG
Here, business unit that has a small market share in a mature industry. A
dog may not require substantial cash, but it ties up capital that could better
be deployed elsewhere. Unless a dog has some other strategic purpose, it
should be liquidated if there is little prospect for it to gain market share.
Kingfisher airlines fall under this quadrant.
GE MATRIX
GE MATRIX FOR UB GROUP
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(+) high
(-) low
Based on the analysis of the GE Matrix we can say that UB group is high in
industry strength and high in market attractiveness in the breweries
segment (as it has maximum + in this segment). They lie in the green
section of the matrix, in the grow penetrate section. The companys
decision to invest in this segment is correct. Thus, the companys new
venture to enter into soft drink segment has great growth potential.
ANSOFFS MATRIX
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The Ansoffs matrix provides four different growth strategies:-
1. Market Penetration2. Product Development3. Market Development
4. Diversification
The new product Refresh features in the second quadrant of the Ansoffs
matrix where UB group is offering a new low Calorie soft drink product in an
existing the market. The strategy for growth that they have used is the
Product Development Strategy, where they have come up with a new
product which they offer to a market who is already consuming soft drinks.
This strategy would help them differentiate their product from other
competitors.
FINANCIAL PAY OFF
Profitability Analysis Of Refresh:
We have analyzed the projection of Refresh Brand by the following:
Expenses in the production to the sales
Revenues
Profit
1. Expenses in the production to the sales:
1) Manufacturing Costs- Theirmanufacturing cost is divided into
two:
i. Variable Cost: They have the expenses incurred in the
purchasing the raw materials, manufacturing the bottles,
making the soft drink.
ii. Fixed Cost: Buying the machineries to make the soft
drinks and bottles
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1) Administrative Cost: Hiring of the employees, providing the
salaries to them
2) Selling Cost: Variable Cost and the fixed cost. Salary to the
sales people, incentives (variable)
3) Advertising and marketing Budget: There will be the fixed
cost in which we will decide how much budget to spend on TV
advertisement, print media and the online media, hoardings etc.
1. Revenues for Refreshing Brand: The revenues of the products can
be achieved by 300 ml bottles targeting the whole India and the cans
specifically in the tier-1 and Tier-2 cities. The market for the soft drinks
or the carbonated drinks are approximately Rs 8000 crore and recent
data shows that Pepsi has earned 56% market share of this market.
So, we have planned to get at least 3- 4% of the share to start, thenwe grow according to that.
Projection Analysis In detail
2012 2013 2014Revenues Rs 1.5 Crore Rs 1.8 Crore Rs 2.2 CroreManufacturing
Costs
Rs 38 Crore Rs 41 Crore Rs 43 Crore
Advertising
Costs
Rs 58 Crore Rs 54 Crore Rs 53 Crore
Distribution Rs 39 Crore Rs 41 Crore Rs 43 CroreAdministration Rs 19 Crore Rs 19 Crore Rs 19 CroreDepreciation Rs 2 Crore Rs 2Crore Rs 2 CroreOperating
Income
Rs 8.75 Crore Rs 2.1 Crore Rs 12.66 Crore
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We have analyzed that our 2013 would be the breakeven year for us
and payback period is the mid of the year of 2014.
Our Assumptions:
Initial Sales 3 % of marketGrowth of sales 10%Advertising
Assumptions
Trial Rate 0.05
Frequency 10.00Rate per 30 sec spot
ad
1,00,000
Reach to target
audience
0.10
Target Audience 0.03
Print Ads andHoardings
Rs. 5 Crore
Distribution Rs. 3 per can and 2
per bottle + fixed
cost of Rs. 2CroreOther promotion
activities
Rs. 25 Crore
MARKETING MIX
1) PRODUCT -
The UB GROUP has a variety of products available in their kitty. They have a
wide range of product line to attract the customers and to have a major
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share of the market. So the new product line of Refresh would be available
in the following flavors:-
Refresh Cola: This beverage would be in regular cola flavor, but with astrong fizz, black color, available in 335 ml for its Can and Plastic bottle sizes250ml, 600ml , 2 Lt & 200ml in glass bottles.
Refresh Lemonie: This thirst-quenching beverage features a fresh, lightlemon-lime taste, cloudy white color, available in sizes 335 ml for its Can andPlastic bottle sizes 250ml, 600ml, 2 Lt & 200ml in glass bottles.
Refresh Orange: This beverage is driven by the brand's fun and playfulpersonality, which goes hand in hand with its bright orange colour, bold fruittaste and tingly carbonation, bright orange color, available in sizes 335 ml
for its Can and Plastic bottle sizes 250ml, 600ml, 2 Lt & 200ml in glassbottles.
Refresh Mango: This beverage would be mango flavored, available ingolden yellow color, in sizes 335 ml for its Can and Plastic bottle sizes 250ml,600ml, 2 Lt & 200ml in glass bottles.
Refresh Apple: This beverage would be apple flavored, in reddish browncolor, in sizes 335 ml for its Can and Plastic bottle sizes 250ml, 600ml, 2 Lt &200ml in glass bottles.
Main USP of the product is that it has calories as low as 8.0 kcal. Thesedrinks are for people who want no calories, but plenty of taste. Its a healthybeverage for weight conscious people, which has calories as low found in acup of tea
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Main USP of the product is that it has calories as low as 8.0 kcal. Thesedrinks are for people who want no calories, but taste like the carbonateddrinks. Its a healthy beverage for weight conscious people, which hascalories as low found in a cup of tea.
2) PLACE- distribution channel, institutional sales,
DISTRIBUTION CHANNEL IN URBAN AREAS:
The UB group can adopted a model DSD that is Direct Store Distribution. In
this company directly supplies its product to the retailers which helps them
to save the margin, which they give to the wholesalers and it also ensuresquick availability of the product to the retailer. Also, it can generate the sale
by distributing to the various cafes and youth restaurants where most of the
youth can come and get the taste of it.
Based on various distribution models they can offer its products and services
to customers in other countries also. But in the initial year they should focus
on Indian population. They can use Direct Store Delivery (DSD), Broker
Warehouse Distribution (BWD) and Vending & Food service (V&FS) systems.
Distributors: 3 to 5 % is the profit marginRetailers: 10 % to 16 % is the profit margin
Thus, we i.e. the UB Group can have two ways of hierarchy:
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1) Direct to the retailers:
2) Distribution to the wholesalers first:
1) PRICE-
PRICE STRATEGY:
The pricing strategy of our product would be different from the other
carbonated drinks. There are two reasons behind it:
To differentiate the product from other soft drinks
Making it a high range product because our product has a same
flavor like Pepsi, fanta etc but it is a healthy drink.
As we have categorized the drink as per the sizes of the bottles and cans. So,
we have different pricing for different bottles. For bottles, we are taking the
price of Rs. 13 for 200 ml and Rs. 25 for cans.
Trade Promotions:
Incentives to the retailers: We will provide the special margins and
discounts to our retailers so that they can show case our products in front in
their store and people can view and buy our product via impulse buying.
Also we will provide the discounts to our distributors as well.
1) PROMOTIONS:
Promotion Strategy
Since the product is new the following promotional strategies would be
followed by UBS:
1. Push & Pull promotion strategy
Extensive distribution:
Push Strategy:
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Refresh of UB Group would use this strategy by using its sales force
and promotion money to induce intermediaries to carry, promote and
sell it to end customers.
Pull Strategy:
Example for the pull strategy: UB/ Refresh cooling tools like fridge and
deep freezer in super market and hyper markets
2. Create attractiveness from advertising
Placing adds on bill boards/ hoardings:
TV Advertisements:
Press Releases:
Cost- Effective Promotion:
As UB Group is a much known brand, so we believe that there should
be a press conference after the launch and should spread in all over
the news channels.Free trial of the drink in shopping malls /local shops
Sponsor too many events such as cricket matches award functions
trade fairs.
Social media marketing: They should make the separate official on
Facebook etc for Refreshing brand.
Internet Marketing: Spreading the awareness through various
websites search engines etc.
Other strategies
Getting Shelves: They get or purchase shelves in big departmental
stores and display their products in the front side of shelves so that to
attract the customers.
Eye Catchy Position: Salesman of Refresh Company positions their
freezers and their products in eye-catching positions. Normally they
keep their freezers near the entrance of the stores.
Sale Promotion: Company can also do sponsorships with different
college and school's cafes and sponsors their sports events and otherextra curriculum activities for getting market share.
B2B promotions
Hosting many functions
The group can have tie-ups with schools, offices and restaurants to
adhere to its target audience.
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Region
Vice
President
AGM/AOD
Unit 1
AGM/AOD
Unit 2
AGM/AO
D
Unit 3
AGM/AO
D
Unit4
Region
Finance
Region Human
Resource
Region Customer
Service
Region External
Affairs
Region Cold
Drink
Region
Legal
Region
BSG
Region Director/Manager Market
Execution
Region Capability
Management
Region
Channel
1) PEOPLE-
The organization Structure will be a vertical hierarchical one, since almost
equal number of personnel is involved in production and in management.
There are 5 main functioning groups within this SBU of UB group: Production,
Sales and Marketing, HR and finance.
Production involves the actual manufacturing of the drink & bottling and
packaging it. Sales and Marketing will handle the promotion and scheduling
of drink newly launched Refresh drink under the UB banner .Hr would cater
and manage facilities like recruitments payroll training & development and
other HR functions. Finance / accounts will manage functions like profit
calculation , investment needed, preparing balance sheets and profit n loss
account to know where does the unit stand today and where will it go in
future.
Organization Structure :
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ORGANIZATION STRUCTURE OF THE SALES DEPARTMENT
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AGM/AO
D
Plant
Manage
r
Route
to
Market
Human
Resourc
e
Manage
r
Finance
Manage
r
General
Sales
Manage
r
Area
Sales
Manager
Channe
l
Manage
r
Area
Capabilit
y
Manager
Sales
Executiv
e
Sales
Trainer
s
Market
Develope
r
Distributors
AndSalesmen
Marketin
g
Key
Account
s
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REFERENCE
www.ubgroup.com
www.financialtimes.com
HRM by TN Chabhra
http://www.ubgroup.com/http://www.financialtimes.com/http://www.financialtimes.com/http://www.ubgroup.com/