SPLASH ICED TEA

GROUP MEMBERS

Safia ShahidShiza AslamAnum NasirFahad Ahmed

OVER VIEW

• LAUNCHING SPLASH ICED TEA

• MARKET RESEARCH

• MARKETING PLAN

• OPERATIONS PLAN

• FINANCIAL PLAN

• PROJECT EVALUATION

SAFIA SHAHID

MARKET RESEARCH

TEA INDUSTRY IN PAKISTAN

Unilever enjoys leadership with approximately 54% of Pakistan's tea market. Tapal stands out as the major competitor for Unilever with 28% share. Tetley tea, a joint venture b/w Lakson Group and Tata tea of India, it has approximately 4% share, which is continuously decreasing.

46000

24000

3700

11550

Total Tea Consumption is Pakistan (tons)

UnileverTapalTetleyOthersUnbranded

Source: Pakistan Tea Association (PTA)

BEVERAGE INDUSTRY OVERVIEW

Pakistan has become the 6th largest exporter of Food and Beverages in the world contributing significantly to the country’s economy.

As reported by SMEDA, 24 formal fruit juice and pulp processing facilities, plus a number of small informal factories are operating in Pakistan.

Estimated installed capacity is approximately 400,000 metric tons per year with a growth rate of 20% to 25% based on a total fruit juice market of Rs2.5– Rs2.6 billion.

Currently, of an estimated one million metric tons of cold beverages sold in Pakistan each year, 90% represent carbonated soft drinks (i.e., sodas, of which most of them are colas).

There are two major names in the carbonated soft drink sector of the beverage industry of Pakistan i.e. PepsiCo and Coca Cola.

The remaining 10% of cold beverages purchased and consumed (100,000 tons) are juices, nectars and still water. Of these, 10% (10,000 tons) represent the approximate sales of 100% pure juice.

PRODUCTSPLASH Ice Tea offers instant refreshment

combined with the health preserving properties of lemongrass and honey. Rich in Vitamin C and antioxidants, it is non-carbonated, contains no preservatives and is honey sweetened.

Lemongrass has many health benefits including weight loss, prevention against heart diseases, and is also used as an anti-depressant. It’s a healthy and trendy choice, for both the young and the young at heart

Mission StatementTo offer healthy and natural product that nurture

consumers’ bodies and uplift their spirits by focusing on quality, value and health benefits.

Vision StatementTo be the leading name in Iced Tea market in

Pakistan and influencing peoples’ attitude towards tea in next five year. We are committed to provide superior quality in the most environmentally responsible way with natural product. We Strive for Consumer’s health!

Strategic ObjectiveTo develop the existing iced tea market and gain 5%

market share of the beverage industry in Pakistan during the first year of launch.

SWOT ANALYSIS

SWOT

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

STRENGTHS Health association with lemongrass and honey Highly qualified team of the company Research based and Customer Oriented product High investment in Research and Development of the

product Recycling of Cans, environmental friendly operations

WEAKNESSES New in the market Lack of updated Technology

OPPORTUNITIES Product extension Launching new flavors Entering new markets Acquiring latest technology, machines and procedures

THREATS High competition from giants in the industry Consumer may not accept the flavors Competitor launching the same product, Iced Tea Growing trend of CSDs

•

PEST ANALYSIS

POLITICAL AND LEGAL

Political instability has become a serious and threatening problem it is creating massive problems and hindering the development of Pakistan.

The deteriorating law and order situation in Pakistan is also making it impossible for the businesses to operate harmoniously.

ECONOMICAL

Pakistan was also the victim of the recent world’s recession of 2008-09

As the consequence of overall deteriorating economic conditions purchasing power of people is also declining.

In 2012 Pakistan’s GDP was 3.7% and before that it was 3% in 2011, this is showing that economic conditions of Pakistan are not very favorable.

SOCIAL

Pakistan’s society is divided in to two main categories urban and rural.

Pakistan’s society is a mixture of different cultures and every new business which is entering the Pakistani market should be aware of the cultural dynamics and its implications.

TECHNOLOGICAL

Being a developing country Pakistan does not have access to the latest technology and new technological equipments come a little late in Pakistan’s market.

The investment may seem quiet a lot in the beginning but eventually it will start paying off and will cut the cost of production in the long run and the profits would be maximized.

Technology can be used to reduce the cost of raw material and in making the process of production quicker and more effective.

BENEFITS

HEALTH BENEFITS

1. Splash contains useful chemicals 2. Prevents certain disorders 3. Enhances the immune system 4. Cardiovascular Health 5. Contains Zero Calories 6. Lemon grass as diuretic 7. Help in weight reduction 8. Lemongrass as calmative agent

•

ENVIRONMENTAL BENEFITS Splash is available in cans which are easy to recycle

SOCIAL BENEFITSSplash gives a soothing and relaxing effect

PORTER FIVE FORCES MODEL

Industry Rivalry

Intensity of competiton is always high in food

industry as number of other beverages are

available and they keep on introducing new

flavours and packaging. .

Supplier Power

Supplier power will be moderate to low because there are

number of suppliers available for the raw

material we need.

Potential Entrants

there is moderate to high threat of potential

entrants as other established brands can

introduce it too.

Buyer Power

Initially there is low threat of buyer power as its a food industry and

we are offering differentiated product.

Substitute Threat

There is relatively high threat of substitute as

other juices, drinks and beversages are available

in the market .

COMPETITIVE PROFILE MATRIX (CPM)

MARKET RESEARCH

What's your favorite type of tea?

Which flavor would you prefer in Iced Tea?

Do you know about lemon grass?

Would you prefer iced tea over carbonated soft drink?

Where do you usually drink your tea?

Where do you buy your chilled drinks?

You would prefer a bottle or can for Iced Tea?

SPLASH ICED TEA

The Core Product A refreshing healthy chilled drink

The Actual Product A fast moving consumer good (FMCG) which is a canned drink

which is chilled Iced Tea in lemongrass Peach and Lemongrass Ginger flavors.

Brand Personality Energetic Funky and cool Functional Original Healthy Environmental friendly

SHIZA ASLAM

MARKETING PLAN

SEGMENTATION

Geographic Segmentation

World region or country : Karachi , Pakistan City or metro size: 21.2 million (as per records of 2012) Density : Urban Climate : Arid climate, warm and humid, coastal area

Demographic Segmentation

Age: 12-40 years age group (main target), 40+ who are young at heart

Gender: Male, FemaleFamily Size: 1-5+ members in a familyFamily Life Cycle: teenagers, single, married,

married with children, single parentsIncome: Rs. 10,000+Occupation: Student, Business Man, Employee,

House Wife or any other professionEducation: middle, secondary, higher secondary,

graduate, masters, PHD, no educationRace: All (Asian)Generation: Generation Y

Psychographic Segmentation

Social Class: Middle Class, Upper Middle Class, Lower uppers, Upper Uppers,

Life Style: Actualizes, Achievers, Strivers, Fulfilled, Experiences, Makers

Personality: Compulsive, Authoritarian, Gregarious, Ambitious

Behavioral Segmentation

Occasions: Regular and Special Occasions Benefits: Quality, convenience, nutritional, healthy User Status: non-user, regular user, first time user Loyalty Status: switchers, habitual, likers, friends of

the brand, brand loyal Attitude towards product: positive, likeness,

indifferent Readiness stage: Unaware, aware, interested,

intended to buy

PACKAGING

On the bases of market research, the company has decided to launch the product in Can. The Iced Tea will be filled in the Aluminum Cans.

Packaging On The Whole Single cans, no bulk packaging. Distinctive labels with focus on Splash logo. Graphics – Fun, bright, energetic.

Depiction Quirky Modern Independent

Advantages of Aluminum Cans Recycling aluminum cans saves precious natural

resources, energy, time and money. Aluminum cans are unique: Within 60 days, a can is

recycled, turned into a new can and back on store shelves.

Aluminum is a sustainable metal and can be recycled over and over again.

PRICE

An effective pricing strategy will help: Meet company’s profit objectives Meet and beat competitors’ prices Retain and increase market share Match the image and reputation of the business,

product or service Match business’s offer to market demand Help to build perceived quality of the product

MARKET-ORIENTED PRICING

Setting a price based upon analysis and research compiled from the target market.

If the Company charges a price higher than the direct competitors, such as Pepsi and Coca Cola, i.e. higher than Rs. 35, then the customers are likely to avoid purchase

If the Price is lower than the competitors, the perceived quality of the product would be also be low which is not desirable

For this reason the price of SPLASH ICED TEA is market oriented and equal to the competitors

COST OF THE PRODUCT

The cost is incurred during the manufacturing process (supplies), packaging, and advertising and other associated indirect costs including wages, rent, electricity, transport (fuel), etc. the sum of these costs per unit equals to Rs. 14.4.

Product Cost Calculation:

Product Cost 14.4Mark up 15

Cost before GST 29.4GST @ 16% 5.6Retail Price 35

DISTRIBUTION STRATEGY

The market for Splash is divided in two categories:

Business to Consumer Business to Business

BUSINESS TO BUSINESS (B2B)

Business to Business marketing and distribution is based on selling the product to other businesses

These other businesses include restaurants and café. The restaurants and cafés buy the product from the company and offer them in their menu.

The purchase is in bulk and regular based on customer preference. When a customer orders for Splash, the restaurant or café’s management serve them chilled.

The restaurants and cafés usually charged a higher price from the customer than the retail price to keep their profits.

BUSINESS TO CONSUMER (B2C)

MARKET RESEARCH FOR BRAND ACTIVATION AND ADVERTISING

Your preferred flavor?

Where would you like to consume it?

Majority - Home. Significant number - travelling or are at work

(offices or universities).Few - Restaurant or café.

This suggests that customers are willing to consume the product everywhere, irrespective of the place or location.

At what time of the day would you like to drink Iced Tea?

Majority – Evening. When tired and need refreshment. Significant - Afternoon when the temperature is high and

exhausting.

This suggests that the Brand perception is that it will offer refreshment and healthy boost.

Would you like to drink Splash Iced Tea with someone or alone? With whom if not alone?

More than 50% with family and 50% with friends. This indicates how the Brand is perceived by the

customers, i.e. as friendly, trendy and energetic.

In what mood would you like to drink Splash Iced Tea?

Would you like to drink Iced Tea at special events?

Would you like to try Splash in powder form?(Preparing the Iced Tea by just adding chilled water to Splash powder sachet)

Any suggestions to improve or extend the Brand?

What else do you expect the Brand to offer you?

“since it is not introduced yet so I suggest you to keep best quality, because quality matters & it should not be too expensive”

“It would be helpful if they tell about all the benefits and side effects of the product so that the consumer may know whether to have it or not. As i have read about lemongrass and it has amazing benefits but a few negatives also.”

“Quality in reasonable rates”

“Quality taste. It should distinguish itself from those kiddie drinks like tang and the tapal brand of ice tea. It should be as close to the actual ice tea as possible.”

“More flavors like strawberry and pineapple. Campaigns at schools and universities.”

Keeping these suggestions in consideration, the company has designed school and university campaigns to guide potential customers towards the health benefits of SPLASH ICED TEA.

Moreover, the price strategy supports reasonable pricing which is market oriented i.e. Rs. 35 per can

There are strategies to increase the size of the SKU to 1.5 ltr bottles in the 2nd year of launch and launching new flavors soon.

PROMOTION

• Streamers

• Hoarding

• T.V commercials

• Print advertising

• Website

STREAMERSAreas Duration Frequency

• Shahra-e-Faisal

• Defence (near gulf)

• University Road

• Hyderi

• Tariq Road

Pre-Launch (1

week)

5000

• Shahra-e-Faisal

• Defence (near gulf)

• University Road

• Hyderi

• Tariq Road

 

Launch (Month) 5000 (Pre-launch

replaced)

HOARDINGSAreas Duration Frequency

Shahrah-e-Faisal

University Road

Gulf

Hyderi

Zamzama

Tariq Road/Bahadurabad

 

Pre-launch (1 weeks) 24 (4 hoardings at each

location)

1 bridge advertising on both

sides at Shahra e Faisal

Shahrah-e-Faisal

University Road

Gulf

Hyderi

Zamzama

Tariq Road/Bahadurabad

 

Launch (month) 24 (Pre-launch replaced)

TV COMMERCIAL

Channels Frequency Timing

Geo Entertainment, ARY

Digital, Hum TV

150 per week- after 1 week

frequency will drop to 100 per week

and in 3rd week it will reduce to 75.

From 4th week the frequency will

drop to 50 per week

7 pm -10 pm and during

repeat shows

PRINT ADVERTISEMENT  Frequency Size

Newspapers

(Dawn, The

News , Jang)

Dawn (Images, twice

weekly on front page), The

News (twice a week on

page 2), Jang (twice a week

on front page)

Quarter page (27*4) in weekdays

and half page coverage on Sunday

newspaper

Magazines (Home

Express, Aurora,

Fashion Mag)

In every edition for 3

months

Home Express (quarter page),

others (Full Page),

WEBSITE

All essential information about the product, Splash, Flavor information, health benefits and nutrients, health management tips.

Contact information and complaint formsCompany description/historyVision and missionCorporate governance and sustainability strategyEnvironmental friendly policies

FACEBOOK PAGE

Product informationSharing product news and updatesTVC and print ads sharedExpert advice for health management using

lemongrass

SHOP FLOOR ADVERTISING

Splash Can’s” cutouts hanging from roof

Bamboo displays – Help Differentiating.

Banners on the walls and windows of the shops

UNIVERSITY CAMPAIGN

Universities: Karachi University, Iqra University, SZABIST, CBM,

Behria University

Seminars:

Stressing upon the importance of eating healthy food in

daily routine

Guiding towards the health benefits of Splash Iced Tea.

Distributing free samples and brochures

10,000 students targeted through this campaign

ANUM NASIR

OPERATIONS PLAN

OPERATION PLAN

• Location

• Supply and inventory

• Production

• Machinery

• Product quality

LAND

• Korangi industrial area

• Houses approximately 3000 facilities

• Major contributor to the economy and generates employment opportunities

• Malir area area for production of lime grass

• Easy transportation

RAW MATERIAL AND RESOURCES NEEDED

• Ingredients

• Aluminum cans

• Machinery

• 15,000 cartons per month

• Transporting vans (15)

• Human Capital

INVENTORY MANAGEMENT SYSTEM

PRODUCTION

Tea with Ginger and Peach’s

syrup

Cooked in water

Sweeteners

MACHINERY

• Production plant• Assembly line• Conveyer belt system for packaging• 2 containers (Tea and Juices)

PRODUCT QUALITY

• Performance Quality• The drink must be consumed chill.

• Conformance Quality • To minimize the number of defects so that standard

quality is delivered to all customers.

CERTIFICATIONS

• KAIZEN – Zero defects in 1000 units

• ISO

• HACCP

ORAGNIZATIONAL STRUCTURE

Partners

Department Heads

Workers

• Partners will be the decision makers and strategists for the busniess.

Partners

• The executives will be namely:• Marketing Head• HR Head• Finance Head• Operational Head

Department Heads

• Workers will be the individuals working under the department heads for daily operations of the business.

Workers

LEGAL STRUCTURE

• Name of the partnership. • Splash

• Contributions to the partnership. • Syeda Shiza Aslam: Rs. 10260989 • Anum Nasir: Rs. 10260989• Syed Fahad Ahmed: Rs. 10260989• Safia Shahid: Rs. 10260989

• Allocation of profits, losses and draws. • Each partner entitled to withdrawals• P&L at each year end

• Partners’ authority.• Not bound to seek consent in backing off.

• Partnership decision-making.• Unanimous decision shall be pursued.

• Management duties.• S. Fahad Ahmed ------- Financial Books• S. Shiza Aslam --------- Marketing and PR• Anum Nasir ------------ Production Management • Safia Shahid ----------- Human Resource Management

• Admitting new partners. • Unanimous decision • Free and fair polling

• Withdrawal or death of a partner• Death – Vote by remaining partners• Withdrawal – Nominate the successor for voting

SYED FAHAD AHMED

Financial Plan

Financial Plan

• Balance Sheet

• Income Statement

• Statement of Cash Flows

• Product Cost

• Payback Period

• Net Present Value

• Internal Rate of Return

Balance Sheet

• Financial statement that summarizes company's assets, liabilities and equity.

• “Snapshot" of the company's financial position at a point.

• All of the company’s assets are financed by shareholder’s capital.

• No liability incurred as it hard for new business to get loan.

Initial 2014 2015 2016 2017 2018AssetsCurrent AssetsCash 27,500,000PKR 37,296,229PKR 52,663,328PKR 71,800,002PKR 95,385,569PKR 124,291,613PKR Account Receivables -PKR -PKR -PKR -PKR -PKR -PKR Inventory 543,956PKR 598,352PKR 658,187PKR 724,005PKR 796,406PKR 876,047PKR Total Current Assets 28,043,956PKR 37,894,581PKR 53,321,515PKR 72,524,008PKR 96,181,975PKR 125,167,659PKR

Fixed AssetsLand 8,000,000PKR 8,000,000PKR 8,000,000PKR 8,000,000PKR 8,000,000PKR 8,000,000PKR Plant and Equipment 4,000,000PKR 3,600,000PKR 3,240,000PKR 2,916,000PKR 2,624,400PKR 2,361,960PKR Office Supplies 500,000PKR 450,000PKR 405,000PKR 364,500PKR 328,050PKR 295,245PKR Furniture 500,000PKR 450,000PKR 405,000PKR 364,500PKR 328,050PKR 295,245PKR Total Fixed Asset 13,000,000PKR 12,500,000PKR 12,050,000PKR 11,645,000PKR 11,280,500PKR 10,952,450PKR

Total Assets 41,043,956PKR 50,394,581PKR 65,371,515PKR 84,169,008PKR 107,462,475PKR 136,120,109PKR

LiabilitiesCurrent LiabilitiesAccounts Payable -PKR -PKR -PKR -PKR -PKR -PKR Notes Payable -PKR -PKR -PKR -PKR -PKR -PKR Accrued Expenses -PKR -PKR -PKR -PKR -PKR -PKR Total Current Liabilities -PKR -PKR -PKR -PKR -PKR -PKR

Long-term LiabilitiesLong-term Debt -PKR -PKR -PKR -PKR -PKR -PKR Bonds Payable -PKR -PKR -PKR -PKR -PKR -PKR Total Long-term Liabilities -PKR -PKR -PKR -PKR -PKR -PKR

Partner's CapitalA's Capital 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR B's Capital 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR C's Capital 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR D' Capital 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR 10,260,989PKR Total Partners Capital 41,043,956PKR 41,043,956PKR 41,043,956PKR 41,043,956PKR 41,043,956PKR 41,043,956PKR Retained Earnings -PKR 9,350,625PKR 24,327,559PKR 43,125,052PKR 66,418,519PKR 95,076,153PKR

Total Equity and Liabilities 41,043,956PKR 50,394,581PKR 65,371,515PKR 84,169,008PKR 107,462,475PKR 136,120,109PKR

Balance SheetAs on December 2014-15-16-17-18

Income Statement

• Financial statement that the revenues, gains, expenses, losses, net income and other totals for the period of time.

• Summarizes revenues and expenses from both operating and non-operating activities.

• Sales are forecasted at 7300 units per day at a price of PKR 35/-.

• Sales are growing at the beverage-industry growth rate.

• On each unit PKR 15/- is profit.

Statement of Cash Flows

• Statement reports the cash generated and used during the time interval.

• Operating activities – converts the items reported on the income statement from the accrual basis of accounting to cash.

• Investing activities – Reports the purchase and sale of long term investments/plant assets.

• Financing activities – Reports the issuance and repurchase of the company’s own bonds and stock and the payment of dividends.

Product Cost

• Product is manufactured at 14.4 Rupees per unit.• A Mark-up of 15 Rupees is saved.• The total product-cost becomes 29.4 Rupees.• The selling price of the product is 35 Rupees per

unit.• A GST of 16% is charged on the product.

Payback Period, Net Present Value and Internal Rate of Return

• The length of time required to recover the cost of an investment.

• The Payback Period of our project is a few months less than 4 years.

• The difference between the present value of cash inflows and the present value of cash outflows is NPV.

• NPV is calculated when interest rate is 18%

• The IRR of this project is 29%

• Since IRR > NPV

• The project will be accepted.

PROJECT EVALUATION

ANUM NASIR

PROJECT EVALUATION

• PERT CHART a representation of project schedule which

shows sequence of tasks to be performed allows the tasks in a particular project to be

analyzed, with particular attention to the time required to complete each task, and the minimum time required to finish the entire project

• CPM a project-management technique that lays out

all the activities needed to complete a task time it will take to complete each activity relationships between the activities

PERT CHART

• Where,

to= optimistic time

tm= realistic time

tp= pessimistic time

te= expected time

CPM

C

Red arrows show the critical path.

CRITICAL PATH

The CPM analysis shows that this project will take 25 months to be completed.

CONCLUSION

• launch our product in Karachi

• targeting youth

• recruit talented and capable workforce

• latest technology

• achieving our goals