securefoods_report final draft 2 word 2003

8/3/2019 Securefoods_Report Final Draft 2 Word 2003

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Group Members:

1. Danish Raza Khan2. Muhammad Ahsen Raza3. Adeel Anwer Shahzad4. Faizan Amjad5. Muhammad Faizan6. Asif Sheikh

Topic: Launching a New Product (Choco Bread)

Report Submitted to:Ahsan Ali ShahMarketing Management

Company Profile:


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Secure foods & Company is a Pakistani company, committed toproviding nutritious and superior quality products. Beginning with theplant in Karachi, Secure Foods & Co. promises to build-up a reputationfor freshness, quality and innovative taste. Creating awareness anddemand for Choc Bread in the market. All secure food plants boast

the latest machinery used in the Choc bread making process and aremanaged by senior food technologists with decades of experience. Wehave provided edge to the market by introducing Choc Bread We are1st to take this step in Pakistani Market and we are highly confidentabout the success of the product our as our market is perfect for this,as our report shows. We are going to launch our company first inKarachi with distribution by Kamran Distributors Pvt Ltd.

Our Headoffice and Plant is located at Plot No. 33, Sector No. 24,Korangi Industrial Area Karachi.

Employees:Total 500 Employees are working for Secure Foods & Co. at initial stagewhich includes Direct Labor and Administrative Employees.

Vision:We want to be the preferred choice in bread now and in the future. Weprovide fresh bread with good taste and quality.

MissionTo provide superior and innovative products, quality management &customized service by achieving consistency & reliability in all facets of

our business while promoting an atmosphere of mutual trust, respect,honesty & integrity in a clean and comfortable environment.

Why Choc Bread?

Pakistani nation contains187 million peoples in whichmore than half population isless than 15 years. Ourmain target are those 15years old young guns, we

are willing to provide themnutritious with vitamins tobuild our future strong andhealthy.We identified opportunitygap in the bread marketbecause bread is availableonly in traditional flavors


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and we have tried to differentiate ourselves by offering Chocolatebread. It is just a start so we are focusing on quality with single productbut by time passes we will launch more chocolate flavor products. As anation we love food and we love more n more options in our fooditems. Chocolate is a craze of our young stars that is the reason we

gave our brand name CHOCO BREAD, it is easily to pronounced andcan easily remembered.

Demographics Of Pakistan:Pakistan's estimated population in 2011 is over 187 million making itthe world's sixth most-populous country. The population growth ratenow stands at 1.6%.

Capital: IslamabadLargest City: KarachiCurrency: Pakistani Rupees

Population: 187 millionPopulation growth rate: 1.6%

Distribution of population:

Population Distribution by Age Group0-14 43.4%15-6453.09%65+ 3.5%

Pakistani market is divided in difference segments and on the basis ofdifferent factors we divide our product accordingly

Youngsters (Age group of 15 or below):

As big part of our Pakistani population is consist of youngsters age ofbelow 15 thats our plus point, we are going to target Kids marketspecially and by time passes every individual who want to eatchocolate items. In current scenario our main target is school kids whomainly hate breakfasts but love to eat chocolate.

Our product will make them eat breakfast and keep them healthy.

Market Segmentation:

The Market is divided in different segments on the following factors:

Demographic Segmentation:

Figure 1.1: Population Pyramid of Pakistan,1998

Population* 145.5MillionWorld

Ranking**6

Growth Rate 2.1%

< 15 years 43.4%

15-64 years 53.09%

> 65 3.5%

PopulationDoubling

Time33 years


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Age: Especially kids from 4 to 15 years old and for every chocolatelovers.

Classes: This product is targeted to Middle Class and for those whoare health conscious about their children.

Income: This product is easily affordable for those who are earningapprox 30K or above.

Geographic Segmentation:

This product is initially introduced in the largest city of Pakistan(Karachi) and then after the successful launch, this product will beavailable in all the major cities of Pakistan.

Psychographic Segmentation:

Those people who appreciate changes for betterment of taste andhealth. People need readymade launches and prefer to have bread onbreak time.

Target Market:

Our target market is huge as it contains people from middle incomeand above, children, youngsters, hotels & restaurants. Our product isgenerally for all categories of people having average and aboveincome and especially for children and youngsters who love Chocolate.

Positioning:

This product has a competitive advantage upon which to build aposition. That tastes great and different from ordinary bread. Ourpositioning in the market will be strong as we are the pioneers in themarket of bread taking bold step to change the traditional flavour into

chocolate.

Competitive Advantage:Our main competitors are Dawn Bread & Bake Parlor Bread. But theyare only providing the same traditional flavors of bread. Therefore, wehave a competitive edge over them. We will be providing good tasteand best quality bread.


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The competitive advantage that we have is:

Pioneer Advantage Price Control High Quality

Low Cost Passion of management team

Pioneer advantage:We are introducing a new concept within the existing industry; thename recognition will be a source of competitive advantage for us.

Price Control:As we are the first one to introduce Chocolate bread, we have controlover the price to set.

High Quality:Our focus is on providing high quality product with an affordable price.We cannot compromise on quality.

Low Cost:We are operating at very low cost and the services provided by most ofour members are not charged or are charging us very low because ofthe good relations and acquaintance.

Passion of management team:

Our management team is very much dedicated and passionate. We arewilling to work hard and with devotion.

Marketing Plan

Marketing objectives:

To make the consumer aware about the product. To promote the sales. Maintain the growth. Revise the strategies.

Product Feasibility:Product feasibility is an assessment of overall appeal of the productbeing proposed. Before launching any product, a firm should beconfident that what customers want and that the product will have anadequate market.


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Product Strategy:We have adopted differentiation strategy as we have presented breadin a new and innovative way. Our target market is broad and we areserving it in a different way.

Expected Market Share:Based on our surveys and interviews with the people, we expect togain some market share within some period of time. As 75% of theresults were positive.

Marketing Mix

Marketing Mix is the combination of four Ps; Product, Price, Place,Promotion.

Product:

Our product is new and innovative. We will make sure that our bread isavailable to the customers and it will provide the desired result to theend-user. Our product is different and this will help us to keep usahead of the competitors. The marketing effort in this regard will befocused on taste, quality and hygienic factor.


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Price:

Price plays a vital role in our market because of many factors. Peopleare very conscious about price. We have kept a very reasonable price

The price of our product is Rs. 40.

Year 1 Year 2 Year 3 Year 4 Year 5 year

Material price/kggms per loaf Cost per loaf Cost per loafCost per loafCost per loafCost per loafCos

W heat Flour per kg 25 20 0.5 0.5625 0.63281250.7119140630.800903320.9

W heat bran per kg 35 10 0.35 0.39375 0.442968750.4983398440.5606323240.6

M ultigrain per kg 45 5 0.225 0.2531250.2847656250.3203613280.3604064940.4

Yeast per kg 55 0.02 0.0011 0.00123750.0013921880.0015662110.0017619870.0

Salt per kg 15 0.02 0.0003 0.00033750.0003796880.0004271480.0004805420.0

vegetable oil per kg 90 0.001 0.00009 0.000101250.0001139060.0001281450.0001441630.0

Chocolate per kg 225 3 1 1.125 1.2656251.4238281251.6018066411.8

Place (Distribution):

Initially business will be started from Karachi so that we canconveniently manage the operations and different activities of thebusiness. In future we plan to spread our product all over Pakistan. Wewill also be placing our product in renowned bakeries.

The distribution will be outsourced. The contract will be given toKamran Distributors (Pvt) Ltd.

Promotion:

The promotional plan to be adopted by Secure Food & Company (Pvt)Ltd. has some key objectives. First of all to establish the brand imagein the eyes of the customers. To make the customer aware about theproduct is an important task. Promotion of Secure Foods will mainlyinvolve above-the-line promotion techniques including advertising innewspaper, hoarding campaigns, brochures, internet promotion and toa more limited extent; television.

The purpose of promotional techniques is to gain the market share ofexisting bread companies.

Moreover, one of our team members has links with differentnewspapers so we can give advertisement in newspaper at minimumrate. We will also advertise through cable channels. The rates will befrom Rs. 1175k to 1800k per annum.

Questionnaire Survey:


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The bread industry in Pakistan is flourishing very quickly and breadproducts are gaining much popularity. Bread has been accepted apopular substitute for nan, chappati, paratha etc. We conducted asmall survey in which we asked the customers some questions.

QuestionsViewsPositive Negativ

eWould you like to have new flavor of bread? 75% 25%

Do you like Chocolate? 70% 30%

Are you satisfied with the same taste of bread? 30% 60%

Is your bread healthy? 55% 45%

Do you take bread daily? 77% 23%

Swot Analysis:SWOT analysis is an important tool for auditing the overall strategicposition of a business and its environment.

Strengths:

First mover advantage

Strong management team

Huge market potential

Brand name and image

Weaknesses:

Availability of skilled labour

Distribution problems

Opportunities: Changing consumer tastes

Demand for new flavour

Growing bread industry

Catering to health conscious people


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Threats:

Strong competition in industry

Economic changes

Political instability

Unstable prices

Analysis of 4 Cs

Competitors

Our main competitors are Dawn, Bake Parlour, Gourmet, Cakes &Bakes etc. But if we consider the competitors for this particularproduct, we dont really have any competitor because no otherbread company provides chocolate flavoured bread. For thisreason we also have a competitive advantage in the breadindustry.

Collaborators

Secure Foods supplies its product to Alfatah, Cakes and Bakes,

whom we have set business deals with. They also benefit fromselling our product because it is innovative and unavailableanywhere else. So it will increase their customer life time equity.For the raw material we are having partnership with somesuppliers.

Channel

We try our best to make our product available all the time to ourconsumers. We ourselves are our whole sellers and our retailers

are lots of bakeries, convenient stores, etc. Consumers can alsopurchase our product from the factory.

Customers

Our corporate customers include restaurants, hotels, etc. Peerus


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Caf and Espresso are some restaurants that serve our productregularly. We are negotiating with Shaheen Airlines to serve ourproduct. This will be settled soon. Our domestic consumers arepeople of average income and above.

Porters Five Forces Model:

Mainly following factors can influence industry environment of ourproduct:

Threats of new entrants: (High)

The growing industry is like a magnet for others and bread industry asit is growing very fast has a threat of new entrants. We have createdsome barriers to entry to minimize this threat:

1. Product Differentiation:

We are manufacturing a new flavour of bread which is not available inthe market.

2. First Mover Advantage:As the idea of Chocolate flavoured bread is initiated by us so we arehaving the advantage of first mover.

3. Management Team:

Our management team is very skilled and experienced and has a goodknowledge of this industry.


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Rivalry among existing firms: (High)

Rivalry among the firms who are already in the market is high. Themain players in the market are:

1. Dawn Bread

2. Bake Parlour Bread

3. Gourmet

4. Cakes and Bakes

Threat of Substitutes: (Low)

At present there is no direct substitute for our bread because we arethe first ones to introduce Chocolate bread. The indirect substitutes aremilky or plain breads available but we will make sure that our qualityand price attract people towards our bread.

Bargaining Power of buyer: (Low)

Bargaining power of buyer is low as the price of our product is alreadyvery competitive and is fixed and our product is different from ourcompetitors.

Bargaining Power of suppliers: (Low)

Bargaining power of suppliers is low in this industry as raw material iseasily available and there are lots of suppliers.


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Financial Analysis & Feasibility Report:

Plant annual production capacity in loafs Rs. 20, 00,000

D e s c r i p t i o

F o o d I n f l a

E s t i m a t e d A

L a b o u r

D e s c r i p t i o n Y e a Y e a Y e a r 3Y e a Y e a r

P a c k i n g m a t e r i a l (p e r u n i t s u b j e c t t o 1 0 % i n f l a t i o n p0 . 7 5 0 . 8 3 0 . 9 11 . 0 0 1 . 1

A n n u a l i n c r e m e n t i n s a l a r i e s o f a d m i n i s t r a t i v e s t a f f1 0 % 1 0 % 1 0 % 1 0 % 1 0

Assumptions :

Bread will be sold on 15 days credit period.

Price per loaf will be increase by 15% per year in line withaverage inflation rate which is assumed to be the same.

Element of normal loss of 5% during production process isincorporated in material consumption.


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Raw material for 7 days will be held in reserve all the time.

Raw material will be procured on 20 days credit.

Electricity expense is assumed to increase by 15% coveringincrease in rate and units to be consumed.

Gas expense is assumed to increase by 5% covering increase inrate and units to be consumed.

Other expense is assumed to increase by 15% covering increasein rates and units to be consumed.

Financial Assumptions:

-6,000,000

-4,000,000

-2,000,000

0

2,000,000

4,000,000

6,000,000

8,000,000

Year 1 Year 2 Year 3 Year 4 Year 5

Projected Accumulated Profit / (Loss)Amount in PKR '000'

Above mentioned graph indicating that in first two years ourcompany is bearing loss and gradually our company is making profitand increasing year by year.


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-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000


Projected Selling & Distribution CostAmount in PKR '000'

At the initial stages, our expenditures will be very high. we areinvesting very huge amount of money in launching compaigns andthen by the period of time our product becomes successful inmarket, our expenses are going to be slightly at the lower side.

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Projected RevenueAmount in PKR '000'

In the beginning our revenue is at lower side because of highexpenses for promotional give away and other launching expenseslike campaigns, aggressive marketing and spreading awareness toconsumers. By the passage of time our sales increasing andrevenue will also increase.


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0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000


Total Cost Revenue

Projected Total Cost & RevenueAmount in PKR '000'

Starting two years our company bearing losses and third year wewill be at the break-even position, and then we will start makingprofits.

0%

5%

10%

15%

20%

25%

30%

35%


Projected Gross Profit MarginAmount in PKR '000'

As the above graph shows, our company sale product is at low costmargin because the product is at introductory stage and by theperiod of time when a product gets growing stage, we will be on ahigh profit marign track.


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-10,000,000

-5,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

ProjectedNet ProfitAmount in PKR '000'

First two years there will be no profit and from third year we willstart making profit.


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S ecu red Fo od s (P vt.) L

P ro jected S ta tem en t o f

C ash In flo w

Inves tment


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S ecured Fo ods (

P ro jec ted S tate

Revenue


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Secured F ood s (Pv

Projected B alance

securefoods_report final draft 2 word 2003

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