MARKETING PLAN

Group
Members
SYED RAZA ABBAS
8
MOHAMMAD ALI
41
FAHAD MANNAN
40
MAIMOONA AKHTAR
10
MEHWISH MANZOOR
47
SADIA BALOUCH
45

MAGA Tea

MBA HRM 5th

Semester
Alfalah Institute of Banking
and Finance

Bahauddin Zakariya
University
Multan

Table of
Content
Company Overview......3
History of Engro......4
th

MBA HRM 5

Business Defination...6
Semester
Industry Anaysis..........8
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MAGA Tea
Customer Analysia .......................................9
Competitive Analysis..

13

Marketing Plan..14
Financial Plan...28

Company Overview:

Engro Foods Limited is an 87% owned subsidiary engaged in the manufacturing, processing
and marketing of dairy products, frozen desserts and fruit drinks. The business owns two milk
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processing plants in Sukkur and Sahiwal and operates a dairy farm in Nara, Sindh. In its
continued efforts to elevate consumer delight worldwide, the business has established
several brands that have already become household names in Pakistan such as Olpers (UHT
milk, low-fat milk, cream, desi ghee, lassi and flavored drinks), Omor (frozen desserts),
Tarang (tea whitener), Dairy Omung (UHT dairy liquid and dessert cream) and most recently,
Mabrook (fresh dairy).
Engro Foods is among the biggest and fastest growing companies in Pakistan with a vision to
cater to local needs with products conforming to global standards.
Highly passionate about providing millions of people across the length and breadth of
Pakistan and beyond with the ultimate brand experience, our product portfolio comprises
some of the country's biggest and best selling brands including Olper's, Olper's Lite, Omore,
Dairy Omung, Olper's Lassi and Tarang.
Engro Foods Registration Number :
National Tax Number :

0050184
2285414-2

But whether it is our thick, creamy all-purpose milk, scrumptious ice-cream high on nutrition
content or refreshing range of beverages, our approach remains largely the same as we strive
to keep product innovation at the forefront of our guiding philosophy and consumer
satisfaction at the heart of our operational strategy.

History of Engro Corporation

In 1957, the search for oil by Pak Stanvac, an Esso/Mobil joint venture led to the discovery of
the Mari Gas field near Daharki a small, remote area in Upper Sindh province at the time.
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Esso proposed the establishment of a urea plant in that area which led to a fertilizer plant
agreement signed in 1964. In the subsequent year, Esso Pakistan Fertilizer Company Limited
was incorporated, with 75% of the shares owned by Esso and 25% by the general public.
The construction of a urea plant commenced at Daharki in 1966 and production began in
1968. At US $43 million with an annual production capacity of 173,000 tons, it was the
single largest foreign investment by a multinational corporation in Pakistan at the time.
As part of an international name change program, Esso became Exxon in 1978 and the
Company was renamed Exxon Chemical Pakistan Limited. The Company continued to
prosper as it relentlessly pursued productivity gains and strived to attain professional
excellence.
In 2002, the renowned Dawood Group became the patron shareholder of Engro Chemical
Pakistan Limited. Soon thereafter, the Company started a journey of venturing into other
sectors including foods, energy, industrial control and automation, PVC resin manufacturing
and marketing, and chemical terminal and storage.
Engro Chemical Pakistan Limited then started a journey of venturing into other sectors
including foods, energy, industrial control and automation, PVC resin manufacturing and
marketing, and chemical terminal and storage.
Engro Fertilizers Limited was incorporated in June 2009 to manage the fertilizer business
post demerger. The demerger required the approval of the High Court of Sindh, which was
granted on December 9, 2009 after obtaining the requisite approvals from the creditors and
shareholders of the Company. The demerger became effective from January 1, 2010.

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Consequently, all fertilizer business assets and liabilities have been transferred to Engro
Fertilizers Limited against the issue of shares to the Company.
overseeing the performance of the subsidiaries and affiliates, allocation of capital,
management of talent, leadership development, HR guiding policies, leadership role in public
relations and CSR activities, control structures, legal and IT support.

Vision
Engro Foods will continue to make investments aimed at impacting lives and delighting
consumers each day, every day, in a multitude of ways.

Core Values
At Engro Foods our core values continue to define every aspect of our way of doing business
ensuring that we value the five hats that we wear to guide us in our purpose, principles and
business operations.

Business Definition
Tea is the most popular drink in the world. Every day billions cup of tea consumed by the
consumers. In Pakistan, a morning and evening cup of tea is an essential part of everyday
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culture. This tradition has existed for many years. Every guest in a home in Pakistan is most
likely to ask for a cup of tea to relax after a demanding journey. This trend has always created
a strong demand for tea in Pakistan and made it the world's third largest importer of tea.
Pakistan imports all its tea from abroad and is the second largest tea importer. The per capita
consumption of tea in Pakistan is 1kg/annum. The Government imports about 1,40,000
metric tons of tea costs billions of rupees annually. The demand for tea is increasing year by
year in the come around of high population growth (3% annually) .Pakistan is expected to
become the world largest tea importer in the near future. For future, needs of our product
should be Profitable . In 2012, the tea industry reached the $1.7 billion category and it is
expected to continue growing indefinitely . Market analysts prove that the tea industry will
continue to boom and is not expected to reach saturation level in the near future.
Engro food Ltd. is going to launch its new black tea product in Southern Punjab regions.

Brand Name

MAGA TEA
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Logo

MAGA tea will helps its consumers incorporate confidence, optimism and cheerfulness in
their lives. In the world of tea blending in Pakistan and around the world means only two
things; Quality & Reliability. . In order to ensure a successful product introduction. Firstly we
want to target some regions of Pakistan then establish our product domestically. In order to
ensure a successful product introduction. Firstly we want to target some regions of Pakistan then
establish our product domestically.

Industry Analysis:
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Market Overview of Tea

Tea is included in food and beverage industry. ENGRO food is member of one the famous
and renewed ENGRO group of Pakistan . ENGRO food choose Southern Punjab market for
its new tea brand.
For future, needs of tea products should be Profitable .In 2012, the tea industry reached the
$1.7 billion category and it is expected to continue growing indefinitely . Market analysts
prove that the tea industry will continue to boom and is not expected to reach saturation level
in the near future. The competitive growth requires excellent plan of the business. Include
the new concept, categories and brands will entail a period of continuous investment with
consequent impact on profit. Engro Food will increase the product line of MAGA TEA in
Different tastes of Tea like Ice tea , Danedar tea .
Growth of both, new and existing categories is impacted on our sales increase .we will
continue to focus on our aim of strengthening our market leadership in future through
continuous innovations, increased consumer focus, deepening the distribution .we will
introduce Green tea Bags and Black Tea Bags of MAGA tea and Our people will remain loyal
for the continued growth of the business.
Increase of taxes in tea, remains an issue particularly with the increase in sales tax. Then we
will increase the price of MAGA TEA dramatically. MAGA TEA require promotion to
introduce tea among consumers. From where people get interest in taking MAGA TEA as a
new taste.
For the last decade, the health benefits of tea have gained wide coverage in the media.
Studies continue to show the beneficial properties of tea, with health benefits from lower
cholesterol levels to improve health and decreasing chance of cancer and many other surveys

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conducted related tea advantages ,So i have idealize that tea will be beneficial for people
health and the business of tea will gain profit in Pakistan .

Customer Analysis:
MAGA TEA is Steady growth expected over the forecast period .The hot drinks market is
expected to further develop between 2007 and 2012 as the population of Pakistan increases
The population is increased.People of Multan use tea daily 3 to 4 times in routine.
Customers use open tea and Now people are aware of packet tea is safe and healthy for them.
They rely on brand tea that is fully pack in sachet or packet. So, MAGA Tea Will satisfy their
cutomers to provide them sachet pack tea with great taste.

Target Market
As a whole when we see the market of tea in Pakistan, The target market of tea is the all
ages of the people from 5 to 70. The target of Maga Tea brand is the rural areas of Southern
Punjab and along with the use in some urban areas of Multan offices and business class and
home as well. VITAL TEA is basically the one to one competitor against Lipton yellow label
and us. In this current situation that is clearly shows that potential of each brand in each
segment define by the company. They clearly look at the nature and extent of diversity of
buyers needs and wants in a market. This thing offers a great opportunity for VITAL TEA to
focus its business capabilities on the requirement of one or more groups of buyers.
But in Multan VITAL TEA is used less and VITAL TEA has a less market share in Southern
Punjab. VITAL TEA has 6% market share. VITAL TEA product is also belong to Haroon
Abad city 15-B, AWAMI BAZAR, HAROONABAD of (Bahawalpur Division) Southern
Punjab.

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MAGA TEA is a new tea and our target market will be the Schools, colleges and Universities
of Southern Punjab. Its depend upon the sale and taste of our Tea either people prefer to take
MAGA TEA as compare to the VITAL TEA.

Market Segmentation
There are two clear segments of consumers in the market, branded tea consumers and unbranded tea consumers.
In Punjab, the city dwellers as well as a majority of rural areas are absolutely brand loyal
while unbranded tea is only popular in teashops and hotels. In Khyber Pakhtoonkhawa and
Baluchistan, 90% of the population still prefer the unbranded form as it gives them the
chance of see and smell what they buy before paying for it. In addition, the mindset is such
like that in southernpunjab rural areas.
MAGA TEA segment the Multan market very accurately with
Demographic Segmentation:-

Age

Above 5 years.

Gender

Male, Female

Family size

1-2,3-4,5 above.

Income Level

Almost all people.

Occupation

All categories.

Education

Educated and uneducated.

Religion

All

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Race

Asian

Nationality

Doesnt matter

Geographic Segmentation:World region

Asia

Cities

Multan

Density

Urban-Rural

Climate

Hot & dry

Behavioural Segmentation:
Occasion

Any occasion

Loyalty Status

Not Significantly high

Readiness Stage

Awake & interested

Attitude towards brand

Positive & enthusiastic

Psychographic Segmentation:

Social Class

Every class

Lifestyle

Fulfilled, believers, experience makers

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The main objective of the segmentation is to examine of VITAL TEA differences in needs
and wants and to identify the segments within the product market of interest. Demographic
Segmentation of VITAL TEA product is not bounded to any particular age, gender or
lifecycle stage. This brand is meant for the entire user in higher upper or middle group.
MAGA TEA will also segmented the market as per the Vital tea segmentation after
launching. MAGA TEA will drink by Male & Female of class A, B & C upper ,middle and
lower class families. All hot drink users will also take MAGA TEA as their muscle
relaxation. MAGA TEA will be liked by every age group of people in future.

Certification
VITAL TEA or LIPTON company to be awarded the ISO 9001/2000 Quality Certification.
So as per the MAGA TEA will also register the tea from (PSCS) Pakistan Standard Quality to
run the business legally and complete the registration requirements.

Customer Needs
Market Potential of MAGA TEA is Steady growth expected over the forecast period .The hot
drinks market is expected to further develop between 2007 and 2012 as the population of
Pakistan increases. As Majority of population consists of youth & there is a need to cater this
major segment because with the passage of time their inclination towards tea would be more
& more because studies shows that older consume more than younger. It will also be boosted
MAGA TEA. Its sales volume will be increased.

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Competitive Analysis:
Three big competitors of MAGA TEA are VITAL TEA, TAPAL TEA and Unilever brands
LIPTON and SUPREME .They have a big market share in Pakistan. In Pakistan tea is uses by
150,000 tons and the organized market show 80,000 tons and the unorganized show 70,000
tons. Here organized depicts the market owned by the brands and unorganized depicts that
this portion is owned by the loose tea. The main competitor for organized tea market is the
unorganized tea market present in Pakistan.
Engro food main focus is on unorganized tea market. Where different companies like
UNILEVER and VITAL TEA is holding the less market share. Some other companies also
present in the market but having very low share of the market.

Unilever Pakistan limited has 43% market share.

Tapal private limited has 41% market share.
Vital Tea limited has 3% market share.
Tetley has 4% market share
The remaining 10% belongs to other market share in the organized market.

Direct Competitors of MAGA TEA

Unilever Pakistan limited has 43% market share.
Tapal private limited has 41% market share.

Indirect Competitors of MAGA TEA

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In Multan VITAL TEA is used less. VITAL TEA has 6% market share. VITAL TEA product
is also belong to Haroon Abad city 15-B, AWAMI BAZAR, HAROONABAD MAGA TEA is
a new tea and our target market will be the all ages from rural, Schools, colleges and
Universities of Southern Punjab. Its depend upon the sale and taste of our Tea either people
prefer to take MAGA TEA as compare to the VITAL TEA
Vital Tea limited has 6% market share.
The remaining 10% belongs to other market share in the organized market.

Marketing Plan:
Market Trend:
Trends of market are now changing. If we see the consumers of tea firstly they are using or
you can say addicted of the generic tea which is the black one but now the trend is changing.
Consumers now want something different in taste now as the competition is getting higher.
Consumer of tea wants some new flavours in tea because now their taste is changing as the
time is changing so trend is changing in the market. And VITAL TEA utilize this trend very
accurately as their innovations show us everything.
MAGA TEA will also change the taste to Include the new concept, categories and brands
will entail a period of continuous investment with consequent impact on profit. Engro food
will increase the product line of MAGA TEA in Different tastes of Tea like Ice tea , Danedar
tea etc and give a complete satisfaction to their consumers first.

Product Differentiation:
VITAL TEA Industry is now on the working with full strength as per their investment.
Market growth of VITAL TEA is also increased. Large players has established their brands in
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the market and enjoyed huge profit margins. Now they are looking towards product
differentiation and multi segmentation because consumers are now more taste conscious and
looking for variety available to them in a tea market. MAGA TEA should make a good
marketing strategy to get huge profit margins in future. We have to expand our business and
segmentation to the upper Punjab and Sindh after getting positive response of sale.

Market Research Through R&D:

VITAL is now becoming a research-oriented company. It subscribes to conducts various
researches in the area of retail audits, consumer behavior, media planning and product
development. This research is used for continuous improvement in product quality, brand
positioning and communication according to the changing requirements of the consumers.
Consistency and quality are the two keystones of Eastren VITAL company production policy,
and the Quality Control Department at VITAL ensures that flavor and freshness is never
compromised. MAGA TEA will reserach on tastes and people preferences ,product quality
our brand positioning time by time. Our vast experience in the world of tea blending in
Pakistan and around the world means only two things; Quality & Reliability.

Price Strategy:
TAPAL over VITAL TEA has competitive pricing strategy for its products. In competitive
pricing the price of the product is determined considering the price of competitors. In this
type of pricing strategy, the prices of the competitors are studied . As the price of TAPAL and
VITAL tea is around 300 rupee per Kg, they are introducing the TEA with a price slightly
lower than increasing it.
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200 grams Vital Tea (Flagship Product) Hard Pack R.s 70
400 grams Dawn Classical Dust Tea Pack R.s 155
MAGA TEA will make a strategy to get influence of the people in initial stages of the product
The prices of tea are very costly and mostly people use Kenya Tea or Sri Lankan tea because
of the less income in Southern Punjab as compare to LAHORE and Karachi. Firstly, we
launch our product in Multan region to get positive response from these southern Punjab
people. Why people use loose tea of Sri Lanka and Kenya.
MAGA TEA will provide them less costly tea as per the price of
220 per Kg and
20 rupee sachet
60 rupee sachet
packs will available in starting time of launching. After by adopt this strategy MAGA tea
sale will observe. The main aim of this research study is to analyze the preference of people
(of different age groups) on consumption patterns of tea. If our product is survived in the
market then we will measure the income of Multan people
200 grams MAGA TEA Hard Pack Rs. 55
400 grams MAGA TEA Hard Pack Rs. 120
Study claims as the high percentage of illiterate people does causes a problem for them as
these sort of people does not know about the problems in the loose tea in the market. A major
portion of the market which is a low level class goes for the loose tea as they do not know the
low quality of tea used in it which can be a threat for their health. But due to the less cost of
MAGA TEA people will purchase it and we will aware the people by adding promotion in
Schools and Universities and Bus lorry stand to aware the people about problems in the loose
tea.
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Promotional Plan
We will use the different Mediums to promote our brand name. There are different ways
through which we can create the positive image of our brand in the society. In today high
competitive landscape you cant rely on one medium for the better image. Different
association must be the part of brand and customers so those customers get awareness about
the brand. I think the best advantage of using different media is that different customers are
associated and affiliated with different media. So though their desire media and associations
customer attract to the brand and caused the Brand Equity. So to enhance our MAGA Tea
brand equity we will use the different medias, which are following.

Print Media
Print Media is a medium that disseminates printed matter.

Newspaper
We use Daily Jang for prints add. Which head office in Multan at Adali Chowk. We select
this paper because this well-known newspaper of Pakistan. This is the part of Geo group
which is the Pakistan famous news channels. Geo group has different channel in Pakistan.
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Therefore has great image in the news. So the rating of geo channel in High and circulation of
Jhang newspaper is also high. Large number of people linked with Jhang newspaper and read
it daily. As well as in Multan city the ratio of reading the Jhang is high. So thats why we
select this newspaper for our promotion.

Cost:
Each page of newspaper contains 8 columns. Width of each column is 4.1 cm. So total width
of page is

4.1 8 =33cm.

Length of the single page is 54 cm.

Minimum space for single add is 5cm 1 column.
Rate of add have different cost at different pages. Newspaper consist of 16 pages and just
front 2 have coloured adds and other consist of black & white add.
So we will use the black & white pages for our MAGA Tea advertisement.

Basic rates:

515 Rs. for normal pages (3 to 13).

Inside front: 772.50 per cm per column.
Inside Back: 772.50 per cm per column.
Back page: 1158.75 per cm per column.
Front page 1545 per cm per column.

Magazine
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We also want to publish the print add in the Sunday magazine of express Multan. We select
the sunday magazine because it is very popular as newspaper. There is possibility of discount
to publish the add in both the part of Jang.

Akhbar e Jehan of Jung

This is weekly publish magazine by Jang group. We will use this magazine for advertisement
because this publishes on Sunday and this is the best time to create awareness among the
people.

Page Size
No. Of Columns
Column Width
Column Length
No. Of Pages

40cm * 28cm
06
4.25cm
37cm
68 or more

Rate is different according to page position.

Inside Full Page

Full Page Color

Rs. 1,25,000

Page 36 (White Offset)

Full Page Color

Rs. 1,35,000

Inside Front Cover

Full Page Color

Rs. 1,50,000

Inside Back Cover

Full Page Color

Rs. 1,50,000

Back Cover

Full Page Color

Rs. 2,25,000

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Out of Home Media

Billboard:
We select 4 locations for large billboards in Multan.
1) In Chwk Kumharan. In the middle of Chwk Kumharan look right side billboard to let for
add
2) Another billboard is free which is near to Rashid Abad Chowk. This is situated on the
main road and position of board is perfect to attract the audience.
.
3) Third location which we looking for at Kent. This billboard is near to the Askery Jheel.
Now this is in the use of Army where they display soldiers of Pakistan. After get
permission we can use this place for our Brand promotion.
4) 4th location which we looking for is at some distance from 9 number chuongi. From 9 no.
to Kent on the flyover there is hooding which is under the PepsiCo and they use to
promote the Mountain Dew promotion now days. We thought that this would be the best
one for our outdoor promotion.
Billboard Size is 50 * 20=1,000 sq. ft

Cost
Cost of billboard depends on three things.
i)
ii)
iii)

What type of Add is going to the part of Billboard?

What is the Placement of Billboard (in City or outside City)?
What is the Size of Billboard?

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These are three factors which finalized the cost of Billboard. There are different rate of
billboards in Multan.
Cost of Billboard in City is 50,000 Rs.
Cost of Billboard in Kent is 75000 Rs.
Cost of Billboard outside the City is 50,000-100,000 Rs.

Pena Flex
We also use different type of Pena flex for the publicity of our MAGA Tea. We will use the
different Pena Flex near to our MAGA Tea location. This is so because to create the
awareness among the customers they will play a Vitol role. We will use the Pena Flex in
different Location like, 9 & 6 No., B.Z.U, Gulgast, Husain Agahi and Larry Ada.

Cost
We will use the 20*10 ft Pena Flexes. Par squires foot cost of each Pena Flex is 12 Rs. So
total cost will be,
Total Squire Foot

= 20 * 10= 200 sq. ft.

Total Cost (1 Pena Flex)

= 200 * 12= 2400 Rs

Total Cost (6 Pena Flexes) = 2400 * 6= 14400 Rs

Streamers
Streamers will be placed on that places where people can easily picked and see the message
of our Tea. These would be place roads and colonies etc. these will convey the short but

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effective message about over MAGA Tea. Special offers and discounts information also
provide through the streamers.

Cost
As we are starting the new business then need large amount of promotion to stable the
business and create the positive image in the mind of customers. So we need large amount of
streamers to create awareness among the customers. We discover that per unit amount of
streamers are 120-150 Rs. So for the first month we need 100 streamers in Multan.
Total Cost Streamer=100 * 15 = 15,000 Rs

Transit
Another tool which we will use for promotion will be the transit. we are starting our tea
business just in Multan so we chosen the transit mode which communicates the message in
Multan.
Therefore IB bus service is the best source in this respect. Because this move just in
Multan City , rural ares and salarwan.
Another option may be the Faisal Mover (FM) within in Multan Bus Service. This
service moved from Vehari Chwk to Dera Adda. FM bus service passed through the
crowded areas of Multan. Therefore we select this service as Transit mode.
Our third options in transit mode will the Auto Riksha in Multan. Large numbers of
people like to use auto Rikshaws for convince. Another authentic source of transit
advertisement. Their range is every street, colony, Mohallah and Chwks of Multan.
Large numbers of people like to move toward their desired places through Auto
Rikshaw. So these also help to convey the message to the customers.

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Merits of Transit:

Fast way to convey the message.

Cheaper in Cost.
Cover more audience.
Easy to understand and recognize by the customers.
Caused to increase the Brand Equity.

Demerits of Transit:
Make low quality Brand image in the mind of customer.
Owner of transit vehicles are not property keep the message to the customers.
Dont neat and clean the poster of company. Then cant seen by the audience.
Sometime one vehicle using more than one messages by the different
companies.

Wall Calking
Wall chalking is another source of street furniture. This is an effective way to convey the
message to the customers. We will prefer to those area for wall chalking where people visit
for picnics like Parks, Zoo, Game Houses and Sports grounds Etc. we select these places
because when people go there they also prefer taking food and other household goods and is
the right time to tell the people about our Tea.
Otherwise to promote the product road is also the better place for wall chalking. During the
walk people focuses on the wall chalking message.

Cabin
We also use Cabin to attract the customers. Multan is famous for summers. It is too hot in
summers so we will different type and stylish cabins for customers. Where people can stay
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and enjoy their time this would the effective techniques to attract the customers. So we have
selected different places for the cabins

Larry Adda
9 No. Chungi
B.Z.U Multan
Cowk Kumharan
Dera Adda

Cost We have to built total 5 cabins and total cost of 5 cabins will be 175,000 Rs.
Broadcast Media
TV:
Most effective way to create awareness among the customers Is Broad Cast Media.
Reach:
We have planned to target the following channel.
Waseb Tv Multan , ROHI Tv, Express News
Time Frame:
We will use Prime time for our advertisement most of the time. Because this is the best time
to attract the audience. Large amount of viewer seeing the TV at that time.

Cost:
Each channel has different cost structure.
Cost of TV Ad on Waseb TV Multan, ROHI TV and Express News:
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Timing

Pricing

Basis of Selection

Days to run

Time to run Total

per Day

17:00-19:00

20000.00/m

75000.00/m

per day

While having tea most 1st to 10thday 1 minute ad 200,000.00

of SP people watch and

19:00-20:00

Cost

15th to 10

express,Waseb Tv and 30th day

during

Rohi Tv etc

hour

TV Hour

1st to 20thday

time
this

1 minute ad 2 150,000.00
times a days
in this time

21:00-22:00

260,000.00/m

Mostly executive class All 30 Days 1 minute ad 3 780,000.00

at this time watch TV with
for
information
politics,
national

little time

external time

during

this hour

like variations on
economy, selected
and hours

international

Radio
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Radio is another effective source to attract the customer. In the some part of Multan Radio is
best source to collect information. For our MAGA Tea advertisement we have to select
different channels on radio.

FM 104.6 (B.Z.U)
Must FM 103 (Multan City)
FM 101
FM 93

Cost
Cost of the Radio is less than TV adds. Its Minimum charges are 10,000 Rs. After the
negotiation about Frequency and length of add charges will increase. When frequency and
time frame of add is high then price will be higher than 10,000 Rs.

Electronic Media
In today modern era electronic media is playing Vitol role to educate and increase the brand
equity of brand. Internet is the best source of electronic media.
Internet
A computer network consisting of a worldwide network of computer networks that use the
TCP/IP network protocols to facilitate data transmission and exchange the information. In our
MAGA Tea we have the home delivery service of products. We will start online purchasing
for the relaxation of customers. Customer will place the order through our website then we
deliver the good at their home. This will help us to create the brand equity of the brand.

Distribution Channel
Manufacturer ------ Distributor---------Retailer --------Consumer
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Alfalah Institute of Banking and

Finance BZU

MAGA Tea
Our product MAGA TEA will use 3 types of distribution channel to minimize the cost of our
product in beginning stage. we will use manufacture cost and send our product directly to
retailer and retailer will provide the MAGA TEA to consumers.

Exit Strategy
Disposal of equipment, and furniture, and fixtures would occur at auction. The additional
assets such as the staffs uniforms, table cloths, and cutlery could be sold at auction. Food
inventory because of its quick perishable time would be considered a write-off.

Financial Plan:
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Alfalah Institute of Banking and

Finance BZU

MAGA Tea

Start-Up Costs
Total start up costs will be 35000000 of which will be contributed by the owners and the
remainder will be secured MAGA Tea ough a proposed bank loan.
Start-Up Expenses
Permits Deposit
Contingency urgrent
Promotion expense
Working Capital
Pre Opening Expenses
Salaries expense
Total Start-Up Expenses

Amount in R.s
2,00,000
20,00,000

8,00,000
93,30,000
2,25,00,000
1,70,000
3,50,00,000

Source and Use of Funds

Total start-up costs are estimated to be 35000000. The majority of the costs are associated
with the Tea equipment, inventory and furniture and furnishings for the dining room. Total
costs for these items are reported to be
Owners will contribute 25000000 and are requesting an additional 10000000 in the form of a
bank loan. The loan is expected to be a fully amortizing 5 year term note.
Source and Use of
Source and Use of

Amount in R.s

Funds
Sources of Funds
Owners' and other
investments
Bank loans
Other loans
Total Source of Funds

25000000
10000000
3,50,00,000

Use of Funds
Buildings/real estate
Leasehold improvements

2,00,00,000
25,00,000

Capital equipment
Location/administration

15,00,000
2,00,000

expenses
Opening inventory

8,00,000

Crockery
Advertising/promotional

8,00,000

expenses
Other expenses salaries
Contingency fund

1,70,000
20,00,000
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Alfalah Institute of Banking and

Finance BZU

MAGA Tea
Working capital
Total Use of Funds

70,30,000
3,50,00,000

Projected Profit and Loss

The profit and loss demonstrates modest increases in revenues over the MAGA TEA expected
years with adjustments for inflation.
Pro Forma Profit and Loss
Pro Forma Profit and Loss
Income
Sales (1200000 per month)
Cost of Goods Sold
Gross Profit
Expenses
Accounting / Legal

Year 1
1,44,00,000
36,00,000
1,08,00000
50,000
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Alfalah Institute of Banking and

Finance BZU

MAGA Tea
Bad Debts
Shrinkage
Credit Card Fees
Insurance
Miscellaneous
Payroll Taxes
Permits and Licenses
Rent
Salaries
Wages
Total Expenses
Net Profit

0
40,000
0
40,000
0
20,000
0
171000
0
3,21,000

10,479,000

Projected Cash Flow

The statement of cash flow shows the incoming and outgoing cash of the business.
Pro Forma Cash Flow
Pro Forma Cash Flow
Cash Received
Cash from Operations

Year 1

1,44,00,0
00
Cash from Receivables
Subtotal Cash from Operations

0
1,44,00,0
00

Additional Cash Received

Sales Tax
Owners Investment

0
2, 50, 00,000

Subtotal Cash Received

2,50,00,000

Expenditures
Expenditures from Operations
Cash Spent
Bills Paid
Subtotal Spent on Operations

20,52,000
0
24,00,000
44,52,000
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Alfalah Institute of Banking and

Finance BZU

MAGA Tea
Additional Cash Spent
Sales Tax
Loan Payment
Subtotal Additional Cash Spent

36,00,000

Subtotal Expenditures
Net Cash Flow
Cash Balance

8052000
1,69,48,000
1,69,48,000

0
36,00,000

Projected Balance Sheet

Pro Forma Balance Sheet
Pro Forma Balance Sheet
Assets
Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long Term Assets
Long Term Assets-building
Accumulated Depreciation 10%
Total Long Term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long Term Liabilities
Total Liabilities
Paid In / Invested Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

Year 1

1,42,00,000
0
2,00,000
8,00,000
1,52,00,000
2,00,00,000
2,00,000
1,98,00,000
3,50,00,000

0
0
1,00,00,000
1,00,00,000

2,50,00,000
3,50,00,000
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Alfalah Institute of Banking and

Finance BZU

MAGA Tea
Net Worth

3,50,00,000

32

Alfalah Institute of Banking and

Finance BZU