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Marketing Application & Practices

A project on

MARKETING PLAN-

ROYAL MILK

Submitted toProf. Maumita Roy

Submitted by

RAKESH BHOIR 63AMIT GOWINDANI 70

AJITA JOSHI 77KUNHIMUDDIN 84BALAJI NADAR 91

MMS-B

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ACKNOWLEDGEMENT

We are very grateful to Ms Maumita Roy for teaching us curriculum of

Marketing application and practices. Her versatile knowledge in

marketing field and unique teaching style has developed our knowledge

and cleared many marketing concepts.

We are all the most grateful to her for assigning this project, which has

further helped us in evaluating many interrelated dimensions of marketingfield.

Finally we bestow our thanks to ROYAL FOODS LIMITED and all the

people who has directly or indirectly supported us with their assistance and

guidance to compose this report and accomplish broader vision to visualize

things in marketing concepts.

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TABLE OF CONTENTS

TOPICS PAGE NOEXECUTIVE SUMMARY 5

INTRODUCTION 6PRODUCTS 7-8

SITUATION ANALYSIS 9

COMPETITORS 10-11

COMPANY PROFILE 12-13

MARKETING STRATEGIES 14-15

MARKETING MIX 16-18

SWOT ANALYSIS 19-22

PORTERS FIVE FORCES 23-26PROFIT AND LOSS A/C 27

BALANCESHEET 28

BREAK EVEN ANALYSIS 29-30

REVIEW AND CONTROL 31

CONTINGENCY PLAN 32

PREFACE

This Marketing Plan is prepared for the course of Marketing Application

and practices on ROYAL MILK is a product ofRoyal Foods Limited.

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In this marketing plan we have covered the industry analysis, target market

of the product, pricing, product, promotion, and distribution strategies for

the product. We have given the details about the strategy implementation

and details of promotion budget.

We have covered almost all aspects of the marketing plan

EXECUTIVE SUMMARY

Royal Dairy is a brand of dairy products sold all over Maharashtra. It first went on sale in

the Maharashtra of 2010. The marketing plan highlights the marketing strategies, target

markets and their positioning. This marketing plan includes situation and category

analysis of the dairy industry and the major companies at the forefront. Product/Brand

Strategy and Supporting Marketing Programs for dairy products are explained in detail.

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MISSION

Build branded food business to improve quality of life by offering tasty, affordable and

highly nutritional products to our consumers while maximizing share holders value.

VISION

Most innovative and fastest growing food company offering products enjoyed in every

home every day.

OBJECTIVE

Our company aims is to provide remunerative returns to the farmers and also serve the

interest of consumers by providing quality products which have good value for money.

INTRODUCTION

We are pleased to introduce our organization Royal Foods Ltd. (Maharashtra Co-operative Milk Marketing Federation Ltd (MCMMF) as Maharashtras largest food

products marketing organization with annual sales turnover of more than 500 cr. We

manufacture and market a wide range of dairy products in Maharashtra and abroad

under the brand names of Royal Dairy Products. MCMMF has 10 affiliated dairy plants

with a total milk handling capacity of 6 million liters per day. The total milk drying

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capacity is 510 MT per day. MCMMF is also the largest exporter of dairy products from

India.

The product categories are Infant Milk Food, Skimmed Milk Powder, Full Cream Milk

Powder, Table Butter, Cheddar Cheese, Mozzarella Cheese, Cheese Spreads, Ghee,

Sweetened Condensed Milk, Chocolates, Malted Milk Food, Fresh milk, Ice-ream and

ethnic Indian sweets. Each of our products is a market leader in Maharashtra.

MCMMF is the largest exporter of dairy products from India. We have won 9 awards

consecutively from, Govt of India.

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PRODUCTS

RoyalCheese Spread

Milk made Whipping Cheese Cream is made Royal Dairy cheese and can be used as

dessert. The Milk made Whipping Cheese Cream is available under the brand name of

"Naarmann". We offer Milk made Whipping Cheese Cream. We supplies a wide range

of processed food products like cheese, pasta, poultry products and different types of

snacks. The Milk made Whipping Cheese Cream comes in packed form in the quantity

1 kg and retains all the goodness and nutritional value.

RoyalButter

Pure Milk Cream Butter is made by churning fresh or fermented cream or milk and is

packed properly ensuring all the nutritional values remain intact. We offer Pure Milk

Cream Butter. The Pure Milk Cream Butter is widely used as a spread and a condiment

as well as in cooking applications such as baking, sauce making and frying.

Milkand Dairy Products

We manufacture Milk Based Flavoured Drink. We are an ISO 9000 certified company

offering a wide range of dairy products like Milk Powder, Ghee, Cheese, Butter, Dahi

and proprietary foods such as Dairy Whitener and Gulab Jamun Mix powder. The Milk

Based Flavoured Drink, available under the brand name "Chass" is a 100% natural

thirst quencher, made from milk solids, common salt, spices and condiments. The Milk

Based Flavoured Drink comes in 3 exciting flavours of Jeera, Masala and Plain in 200ml

packs.

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RoyalGhee

Royal Dairy manufactures Cows Milk Ghee in Clear and Pleasant Flavor. Royal Dairy

Products supplies milk powder, skimmed milk powder, dry milk powder, diary milk

powder, desi ghee, ghee, pure ghee, cow ghee, cow milk powder, instant milk powder,

and diary whitener. The Cows Milk Ghee in Clear and Pleasant Flavor is a desi ghee

which is pasteurized cream derived from Pure Cows Milk. It is light yellow in color [at 1 -

5 Degree Cel. and is free from particles with a smooth fine grain structure. This ghee

has a clear and pleasant flavor, free from sour, bitter or rancid taints.

RoyalIce Cream

Royal Dairy supplies Ice Cream Cone Sleeves of 50ml Size. We manufactures cone

sleeves with auto rolling mechanism for ice cream cones requirements by ice cream

industry. Ice Cream Cone Sleeves of 50ml Size are used for sugar rolled ice cream

cones. Ice Cream Cone Sleeves of 50ml Size are the cone jackets which provide

effective protective packaging for waffle cones, drumsticks and cornettos. These ice

cream cone sleeves are available in multi color printing. These are available in sizes

ranging from 50 ml to 150 ml.

Badam Milk

Royal Dairy Product Ltd supplies Badam Milks. We manufacture ice-cream, milk

products, dairy ingredients products and beverages. The Badam Milks under the brand

name Aaros is made from pure creamy milk from a high quality dairy. The Badam Milks

are tasty, thick and full of strength.

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http://products.jimtrade.com/20/vanaspati_ghee.Htmhttp://products.jimtrade.com/11/ice_cream.Htmhttp://products.jimtrade.com/17/skimmed_milk_powder.Htmhttp://products.jimtrade.com/20/vanaspati_ghee.Htmhttp://products.jimtrade.com/11/ice_cream.Htmhttp://products.jimtrade.com/17/skimmed_milk_powder.Htm


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SITUATION ANALYSIS

The management analyzed the situation using the 4 C approach. 4C stands for

Customer, Competitors, company and context.

Customers

Market Segmentation

Market segment is a very important function for the market department of the Royal,

because the market consists of buyers different in many ways. They are different in their

wants resources, locating buying practices. Because buyers have unique needs and

wants, each buyer is potentially separate market.

Geographic segmentation

Under these variables, MCMMF has divided market into different geographic units such

as region, states, cities etc. MCMMF sells its products by geographic segment action

like in the north where production of milk is very high the sale of Royals product is not

much. But in the western region it is high. MCMMF identifies this kind of variables and

deals with it.

Demographic Segmentation

Under this variable MCMMF has divided market into several segments such as age,

gender, family, size, income, occupation etc. For each group MCMMF marketing

strategy is different. In milk Royal targets all the class where as in the other products

like butter, ghee, ice-cream etc. it targets to the middle and higher middle class.

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COMPETITORS

The Indian market is dominated by a large number of small local and regional players.

There are an estimated 150 manufacturers in the organized segment, which accountsfor 30-35% of sales and about 1000 units in the unorganized segments of the market. In

the organized segment the significant brands are Kwality Walls, Vadilal, Amul, Havmor,

Mother dairy and Baskins & Robbins. Royal is facing very tough competition from both

in and outside India.

Royal combats competition from its competitors by providing quality products at a price

which its customers value. Along with good quality products and reasonable price the

packaging is also very good. Most of its products are available in many flavors.

Excellent advertising backs its products and helps Royal to leave its competitors a

tough time.

Competitors for various products are

Butter

Britannia

Nestle

Amul

Cheese

Britannia

Amul

Baby Food

Nestle

Amul

Heinz

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Ice creams

Amul

HLL

Curd

Nestle

Mother Dairy

Amul

Ultra High Treated Milk

Amul

Nestle

Britannia

Sweet Condensed milk

Nestle

Amul

Flavored Milk

Amul

Britannia

Nestle

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Company

Company Name : -

Royal Food (Maharashtra Co-operative Milk Marketing Federation Ltd.)

Business Type : - Manufacturer

Product/Service (We Sell):

Fresh milk, Skimmed Milk Powder, Butter, Cheese, Cheese Spreads, Ghee, Condensed

Milk, malted milk food, Ice-cream & Badam Milk.

Number of Employees : 500 - 1000 People

Company Website URL : http://www.Royaldairy.com

Ownership & Capital

Year Established : 2008

Legal Representative/Business Owner: Rakesh Bhoir

Trade & Market

Main Markets in Maharashtra

Mumbai

Gujarat [Kacch]

Nasik

Pune

Satara

Kolhapur

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http://www.royaldairy.com/http://www.royaldairy.com/


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Total Annual Sales Volume : Above 500cr

Factory Information

No. of R&D Staff : Above 100 People

PRODUCT TAKEN

We are concentrating on the rural as well as urban area.

Royal milk [Tetra pack]

PRODUCT QUANTITY PRODUCT [Rs]

250ml 20350ml 30

500ml 45

1ltr 70

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Marketing Strategies

4 MAIN STRATEGIES

What goes into the contract that is a brand name?

First is quality. No brand survives long if its quality does not equal or exceed what the

buyer expects. There simply can be no compromise. Thats the essence of the contract.

In the case of a food product, this means that the brand must always represent the

highest hygienic, bacteriological and organoleptic standards. It must taste good, and it

must be good.

Second is value for money. If our customer buys an Royal product, she gets what shepays for, and more. We have always taken pride in the fact that while we earn a good

income for our owners the dairy farmers of Maharashtra we dont do it at the cost of

exploiting the consumer. Even when adverse conditions have reduced supplies of

products like butter, we have resisted the common practice of raising prices, charging

what the market would bear. Rather, we have kept prices fair and done our best to

ensure that retailers do not gain at the consumers expense.

Third is availability. A brand should be available when and where the customer wants it.

There is no benefit achieved in creating a positive brand image, and then being unable

to supply the customer who wants to buy it. In our case, over the years we have built

what is probably the nations finest distribution network. We reach hundreds of cities

and towns through a cold chain that not only ensures that our products are available,

but they reach the customer at the farthest end of the country with the same quality as

you would find in Mumbai or Satara.

Fourth is service. We have a commitment to total quality. But, occasionally, we may

make a mistake or, our customer may think weve made a mistake, and the customer,

as they say, is always right. That is why, for Royal, every customer complaint must be

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heard not just listened to. And, every customer complaint must be rectified to the

extent humanly possible.

Segmentation

Royal Dairy Segmentation Strategies

Wide range of product categories caters to consumers across all market

segments.

For example, Royal Kool is targeted at children, while teenagers prefer Kool

Caf, as it has a cool imagery associated with it.

Segmentation is not as easy in curd and low fat products, due to mixed

audiences, various culinary applications, eg. Ghee, butter and cheese. In India,

the most used spread is ghee, then butter, cheese, low fat butter,cheese spread.

Target Markets

Royal Dairy Targeting Strategies

Changing retail environment

There are now 400 Royal parlours across the state, which contributed 3% to the

brands total turnover last year.

Positioning

Royal Dairy Positioning Strategies

A mass market player, no premium offerings

USP Quality with affordability

Up against niche players value addition to customers

Sheer size and scale of operation

New offerings for health conscious and vibrant India Health and energy drinks

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Marketing Mix

PRICE: Royal Dairy Pricing Strategies

At the time Royal Dairy was formed, consumers had limited purchasing power, and

modest Consumption levels of milk and other dairy products. Thus Royal Dairy adopted

a low-cost price strategy to make its products affordable and attractive to consumers by

guaranteeing them value for money.

Despite competition in the high value dairy product segments from firms such as

Hindustan Lever, Nestle and Britannia, MCMMF ensures that the product mix and the

sequence in which Royal Dairy introduces its products is consistent with the core

philosophy of providing butter at a basic, affordable price to appeal the common

masses. This helped Royal Dairy to create its brand image in the household sector of

the society.

PLACE: Royal Dairy Place Strategies

MCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading

House" status. MCMMF has received the Award from Government of India for

Excellence in Dairy Product Exports for the last 10 years.

Currently Royal Dairy has 2.41 million producer members with milk collection average of

5.08 million liters/day.

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PROMOTION: Royal Dairy Promotion Strategies

Objectives

To create brand loyalty

To encourage repeat and multiple purchases

To promote sales and increase market share

Strategies

To position various products as an increasingly visible brand within the market.

To gain trust and familiarity from the target market through contests and free

samples.

The butter, which had been launched in 2008, had a staid, boring image, primarily

because the earlier advertising agency which was in charge of the account preferred to

stick to routine, corporate ads. They didnt help in creating a brand image of Royal

butter which was their then motive. The image they presented was, well, boring.

In order to maintain the sales of Royal products, sales promotion is implemented to

generate growth

Sales Promotion Execution

Tactics

Broadcast Television, Radio

Print Newspapers

Packaging- add graphics

In Store Posters, Flyers, Stall

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ADVERTISING: Royal Dairy Advertising Strategies

Its advertising has also started using tongue-in-cheek sketches starring the Royal

baby commenting jovially on the latest news or current events. This formed a large

chunk of the collective memory of us Indians. We grew with them as the ads grew

with us. They are quirky, poke fun at no one in particular and are pure eye-candy! We

almost admire the speed with which the ad-people come up with copy and illustration

for the ads that change every few days!!

From the Nineties, the Royal ads have come a long way. While most people agree

that the Royal ads were at their peak in the Nineties they still maintain that the Royal

ads continue to tease laughter out of them.

The Royal ads are one of the longest running ads based on a theme, now vying for

the Guinness records for being the longest running ad campaign ever.

BRANDING: Royal Dairy Branding Strategies

The first products with the Royal brand name were launched in 2008. Since then, they

have been in use in millions of homes in all parts of India, and beyond. There is

something more, though, that makes the Royal brand special and that something is

the reason for the commitment to quality and value for money. Royal is the brand

name of 2 million farmers, members of 10,000 village dairy cooperative societies

throughout Maharashtra. This is the heart of Royal, it is what gives strength to Royal,

and it is what so is special about the Royal Dairy Products.

The Royal Pattern has established itself as a uniquely appropriate model for rural

development. Royal has made India one of the largest milk producers in the world.

Royal, therefore, is a brand with a difference. That difference manifests itself in a

larger than life purpose. The purpose freedom to farmers by giving total control over

procurement, production and marketing.

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SWOT Analysis

Strengths

Demand profile: Absolutely optimistic. Milk being a necessity product, the

demand will stay and the sales at Royal are bound to increase over a period of time.

Margins: Quite reasonable, even on packed liquid milk. The margins are

enough to limit the entry of potential entrants.

Availability of raw material: Abundant. Presently, more than 80 per cent of

milk produced is flowing into the unorganized sector, which requires properchannelization. Large number of dairy plants in public and cooperative sectors

besides several others coming up in the private sector would result in competition.

Because of this the end consumer would benefit and a good product mix would

emerge.

Technical manpower: Professionally trained, technical human resource pool.

The employees of MCMMF are highly recognized in the industry and have earned

name for themselves as well as the federation.

Transportation: The transportation facilities and the easy availability of the

special trucks have provided a boost. Cold refrigerated trucks are there in place and

the warehouses also have the cold storage facilities that facilitate the

transportation.Increasing purchase power and changing tastes of the consumers: The

purchasing power of the residents is increasing. As a result a lot of products are being

consumed. Moreover, the consuming habits are changing. As a result, the demand

for products such as butter and cheese is increasing at a very rapid rate.

Weaknesses

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Lack of control over yield: Theoretically, there is little control over milk yield.

A lot depends upon the monsoon in the country. This is because of the quality of

cattle feed that would be available will not have the required nutritional content.

Logistics of procurement: Woes of bad roads and inadequate transportation

facility make milk procurement problematic. All these factors lead to perishability of

the procured milk. But with the overall economic improvement in India, these

problems would also get solved.

Erratic power supply: The erratic power supply would cause harm in the

processing of milk.

Lack of proper implementation: Dairy development programmes have not

been fully implemented as per the needs of the region in different agro-climatic zones.

Opportunities

If dairy entrepreneurs are looking for opportunities in India, the following areas must be

tapped:

Competition: With so many newcomers entering this industry, competition is

becoming tougher day by day. But then competition has to be faced as a ground

reality. The market is large enough for many to carve out their niche. Moreover

due to competition, there is a chance to better serve the market with innovative

products.

Value addition: There is a phenomenal scope for innovations in product

development, packaging and presentation. Given below are potential areas of

value addition:

Steps should be taken to introduce value-added products like shrikhand, ice

creams, paneer, flavored milk, dairy sweets, etc. This will lead to a greater

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presence and flexibility in the market place along with opportunities in the field of

brand building.

Addition of cultured products like yoghurt and cheese lend further strength - both

in terms of utilization of resources and presence in the market place.

Yet another aspect can be the addition of infant foods, geriatric foods and

nutritional.

Export potential: Efforts to exploit export potential are already on. Following the

new GATT treaty, opportunities will increase tremendously for the export of agri-

products in general and dairy products in particular. There is a strong basis of

cost efficiency, which MCMMF can leverage in the world market.

IT support: Software is now available for project formulation for dairy enterprise.

It has also computerized its production processes.

Threats

Milk vendors, the un-organized sector: Today milk vendors are occupying the

pride of place in the industry. Organized dissemination of information about the harm

that they are doing to producers and consumers should see a steady decline in their

importance.

Infestation: There are increasing incidents of chemical contaminants as well as

residual antibiotics in milk.

Quality: The quality of the milk is found to be poor as compared to the

international standards. One of the reasons for these according to the EU and America

is the method of milching the milk. In these nations the milk is hands by the farmers

owning the cattle do milched with the help of machines.

Exploitation: The liberalization of the Dairy Industry is likely to be exploited by

the multinationals. They will be interested manufacturing the milk products, which yield

high profits. It will create milk shortage in the country adversely affecting the consumers.

Subsidy by Western Nations: There have been incidences wherein the

Western nations subsidizing the dairy products by a few means like transportation.

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Because of such reasons the final price of the product goes below the prices prevailing

in the Indian Market. Hence it proves a threat to MCMMFs and other Indian dairy

products.

Creation of Non Tariff Barriers by Developed Nations: The Developed

Nations have created Non Tariff Barriers related to Quality of the milk specifically. They

want that the milk be processed with potable Air and Water. They also want that the

milching of cattle be done with the help of machines. However this type if system is yet

to evolve in India.

The study of this SWOT analysis shows that the strengths and opportunities far

outweigh weaknesses and threats. Strengths and opportunities are

fundamental and weaknesses and threats are transitory. Any investment idea

can do well only when you have three essential ingredients: entrepreneurship

(the ability to take risks), innovative approach (in product lines and marketing)

and values (of quality/ethics).

Michael Porters Five-Force Analysis

According to Porter (1980) a firm must be analyzed in relation to its industry.

Factors outside the industry tend to influence all the industrys firms in the same

way and are thus not as important to study.

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To a large extent, industry structure governs the strategies open to the firms. The

profitability and attractiveness of an industry is dependent of the level of

competition. Competition in an industry originates from industry structure and

goes well beyond the behavior of individual competitors.

According to Porter, each industry has a potential profitability and the profitability

for the firms is dependent on the competitive forces in the industry. Porter

identifies five competitive forces that derive from the ambition to obtain as large

share of the profitability as possible. The five forces are the foundation of the

five-force model.

The success of the national and local competitors brands includes effective

distribution system, advertising, good pricing policy etc. The factors ascribed by

porter are:

Threats of new entrants

Bargaining power of suppliers

Bargaining power of buyers

Rivalry among competitors

Threats from substitutes

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These factors can be explained in context to MCMMF as below:

Threats of New Entrants

Economies of Scale: MCMMF enjoys economies of scale, which is difficult to

match by any other competitor. It is because of this reason that no regional

competitor has grown to a national level.

Cost and Resource advantages: Royal dairy is co-operative society. That

means cooperation among competitive is the fundamental principle. Royal dairy

is managed under the norms of MCMMF and market the products under the

brand name Royal, which has a very good reputation at domestic level. Here,

the raw material procurement is very difficult for the new entrants. Consequently

Capital requirement is also high. Still new entrants are emerging such as

domestic and international players. So the threats of new entrants are moderate.

Brand Preferences and Consumer Loyalty: The level of preference specifically

in the liquid milk sector is that they would go to other retailer if the retailer does

not have milk.

Access to Distribution Channels: The distribution channel of MCMMF is a very

planned and perfect one. For any new entrant to enter it would be a very difficult

task.

Capital Requirements: The total investment required in the industry is huge and

is a decision worth considering even for MNCs. The investment decisions cover

the processing costs as well as the marketing costs.

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Bargaining power of supplier

The objective of Royal dairy is not profiting. As it is a part of co-operative society,

it runs for the benefit of farmers those are the suppliers of milk and users of milk

products. According the concept of the cooperative society supplier has

bargaining power to have a good return on his or her supply. However, supplier

has limited rights to bargain with the cooperative society because it is made and

run for the sake of mass and not for individual benefit. But it is made sure that the

supplier gets his fair share of return.

There is appropriate bargaining power of the supplier. In olden days there were

not any kind of cooperative societies as the farmer was exploited. But, nowadaysthe farmers rights are protected under the cooperative rules and regulations,

which ultimately results in moderate power of bargaining from the supplier.

Bargaining power of buyers

Cost of switching to competitor brands: The switching of brands is seen very

much in products such as ice cream, curd, milk powders, milk additives etc. but it

can be seen comparatively less in liquid milk category. Even if the buyers shift to

the other brands of milk, the value that they get is less than they would get from

consuming Royal.

Large no. of buyers: Milk is a necessity product and hence is a mass product. It

has a considerable share of the rupee spent by any Indian. Moreover the buyers

are spread evenly over the country and do not have any bargaining power.

Rivalry among competitors

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Demand for the product: The demand of the products of MCMMF is increasing

at a very healthy rate. To stand against the rivalry MCMMF is coming with a

wide range of products.

Mergers and Acquisitions: As such in the industry there are no mergers or

acquisitions. However if any MNC wishes to enter through this route then the

competition might be severe.

Threats Of Substitute

Availability of attractive priced substitutes: Different substitutes are available

for different category of products. There is ample availability of low priced

substitutes from local vendors and retailers. This is a front where MCMMF is still

finding hard to combat.

Satisfaction level of substitutes: Customers do consider these products as

equal on quality if not better then the products of MCMMF. Hence the rate of

customers switching to the substitutes is very high. Moreover the buyers also can

switch to the customers easily without any hurdles.

Not immediate substitutes: Distant substitutes are present in many of the

categories of business of MCMMF. For example in the Masti Buttermilk category

it faces competition from cold drinks and ice cream.

These 5 forces interact among themselves at different degrees over a period of

time. Moreover it will get intense or loosen up depending upon the moves of its

competitors, buyers, suppliers, etc. However MCMMF has been able to

outperform on almost all fronts excluding a few lines of business.

Estimated Profit and Loss account

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[RS IN CRORE]

PARTICULAR 2011[RS] 2012[RS]SALES TURNOVER 500.00 600.00

Total cost of sales500.00 600.00

EXPENCES

Material Consumed 438.66 480.44

Manufacturing Expenses 7.28 9.44

Personnel Expenses 1.58 2.19

Administrative Expenses 1.30 2.03

New location setup 6.87 7.87Cost of sales 455.69 501.97

Operating profit 44.31 98.03

Other Recurring Income 0.10 0.10

Adjusted PBDIT 44.41 98.13

Depreciation 4.78 11.19

PBT 39.63 86.94

Estimated balance sheet

[RS IN CRORE]

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PARTICULAR 2011[RS] 2012[RS]

SOURCES OF FUNDS

Owned funds 500.00 600.00

Reserve and Surplus 39.63 86.94

TOTAL 539.63 686.94

APPLICATION OF FUNDS

1.Fixed asset

Gross block 111.22 125.23

Less : Revaluation Reserve 0.00 0.00

Net block 111.22 125.23

2.Investment 0.00 0.00

3.Net current assets 480.47 601.31

Less: current liabilities 52.06 39.60

Total net current asset 428.41 561.71

Total 539.63 686.94

BREAK EVEN ANALYSIS

1. 2011 2012

SALES- 500 600

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[-]VARIABLE COST 200 400

_____ _____

CONTRIBUTION 300 200

FIXED COST 100 100

_____ _____

PROFIT 200 100

2. P/V RATIO=CONTIBUTION

____________

SALES

2011 2012

300 200

500 600

=60% =33.33%

3. To determine the break even volume

BEP SALES=FIXED COST

__________

P/V RATIO

2011 2012

100 100

60% 33.33%

=166.67 =300

4. The total cost of 2011 for the annual volume of production-400

units

A. Total cost of 2011=Fixed cost + variable cost * quantity produced

2011

=100+200*400

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=100+80000

=80100

2012

=100+400*400

=100+160000

=160100

Review and Control

Marketing Metrics

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*0 External- to measure the customer satisfaction and the response rates,

customers loyalty, and the quantity of the products being purchase and the time

basis of ones customer in buying the product. Some may be form in survey.

*1 Internal-quantification of the market share and market penetration.

Secondary data:

Internal

Sales record

Stock record

Accounting record

Distribution date

Sales persons opinion

External

Government statistics

Specialist business organizations

Customer database

Primary data

Face to face Observation

Experiment

Research

Contingency Plan

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If we receive negative feedback from our new developed product, we could make

it more affordable or improve flavor.

If new developed products will not be successful globally, we will first focus on

positioning one country at a time.

If we receive negative feedback from our market with extensive health concerns,

we will make a strategy that will promote wellness.

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