Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Phunkyjeans
1
Chocobite
By
Continental Biscuits Limited
2
INTRODUCTION
Continental Biscuits Limited (CBL) was founded in 1984
following a Joint Venture between the family of Hasan Ali
Khan and the Group Danone, the French food giants. In the
year 2007 Danone sold their biscuits category to Kraft Foods of
USA. Today the company has a joint venture with Kraft Foods with a shareholding of
50.5% and 49.5% respectively.
For more than two decades CBL is engaged in the manufacturing and marketing of the
brand LU. They have an array of products which are pre-eminent in the branded biscuit
business both in Pakistan and abroad. CBL's unrivalled portfolio of brands has been meeting
consumer needs for well over two decades and includes such favourites as TUC, Candi,
Prince and Tiger. The CBL produces some of the best known crackers, cream variants, plain
and ingredient-based biscuits. The manufacturing location based in Sukkur is a centre of
excellence which provides employment to 2200 people in the region. The marketing, sales,
finance, commercial, IT and the human resources functions are located in the head office in
Karachi employing a total of 180 employees. As a part of the leading FMCG, CBL's head
office has close links both with the Regional Offices of Kraft in UAE and our
manufacturing plant in Sukkur1
CBL'S STRATEGY
CBL's strategy is to be a leader in the biscuit business driving long-term sustainability and
delivering sustainable performance for the company, environment and the community. This
includes delivering consistently on our promise to consumers, serving their customers,
developing and engaging actively with the employees, delivering superior financial results
to the shareholders and minimizing our impact on the environment and interacting
constructively with the communities in in which CBL operate.
1
http://www.continentalbiscuits.com.pk/introduction.html
3
COMPANY'S HISTORY
Incorporated in 1984, the success story of LU in Pakistan began with the initiative of Hasan
Ali Khan (the founder of Continental Biscuits), who signed a joint venture agreement with
Generale Biscuits, the global manufacturers of the LU range, which was subsequently
acquired by the Danone Group. Expansive investments were made including the import of
technology and professional expertise from abroad. The first undertaking was to set up a
factory and establish distribution centers in the country with the ultimate objective of
commencing operations and marketing our products in Pakistan. CBL thus started its'
operations in the country since September 1986 with an initial strength of 200 employees. 2
The company first introduced its' innovative brands - TUC, Prince and Candi which proved
to be an instant success. With global merger of Generale Biscuit and the Danone Group, a
more comprehensive range of products and technical know-how became available to CBL.
The company at present has an outstanding portfolio, under its power brands of TUC,
Prince, Tiger and Candi. These brands have an array of products that falls into the category
of plain biscuits, cream variants, crackers and ingredients based. 3
PRODUCTS
Bakery Classic
Bakery Coconut
Bakery Butter
Bakery bistiks
Candi Original
Candi chocolate chip
Tiger
Prince Chocolate
Prince Choco Orange
Wheatables
Wheatables Sugar free
Tuc
Zeera plus
50 50
Gala4
2
http://www.continentalbiscuits.com.pk/strategy.html
3
http://www.continentalbiscuits.com.pk/history.html
4
http://www.continentalbiscuits.com.pk/products.html
4
NET SALES
2009 US$
MILLIONS
SOURCE:
CANDY BRANDS
INDUSTRY AVAILA AVAILABILITY
NO. OF PUBLICATI BLE IN OF BRANDS IN
NO. OF EMPLO ON JAN PAKISTA PAKISTAN
RANK COMPANY PLANTS YEES 2009 N (OUTLET CLASS)
Mars,
Snickers,
Twix,
Mars Inc Galaxy, Selective
McClean, M&M, Key Accounts, A
1 Va USA 1,353 65,000 16,500 Bounty & B+ outlets
Kit Kat,
Nestle SA Polo, Fox, Selective, Key
Vevey,Swit After Accounts, A and B
2 zerland 4,563 283,000 11,393 Eight class outlets
Ferrero
Group Ferrero Selective, Key
3 Alba, Italy 18 21,600 8,997 Rocher Accounts, A class
Dairy
Milk,
Perk, Local production
Velvet, facility, Excellent
Cadbury Crunchie, availability, Key
PLC Flakes, Accounts, A ,B
4 London 64 50,000 8,819 Occasions and C
Kraft
Foods Inc. Very Selective,
Northfield, Premium, A and
5 III. USA 1,683 98,000 8,332 Toblerone selective B
The
Hershey
Co.
Hershey,P Limited, available
a, Chocolate at Premium, A and
USA bars, selective B class
6 8 12,800 5,319 Kisses outlets
Perfetti Alpenlieb
Van Melle e, Fruit- Good,
SpA tella Key Accounts, A
7 Italy(Lain 31 17,000 2,882 Mentos, & B class outlets
5
ate) Happyden
The t,
Netherlan Centre
d(Breda) Fresh,
Chupa
Chups
Lindt &
Sprungli
AG Lindt
Switzerlan Chocolate Very Selective
8 d 8 6,788 2,569 Bars Key Accounts
* Meiji
Seika
Kaisha
9 Ltd.,Tokyo 6 45,313 1,560 - Nil
Ezaki
10 Glico Co 43 48,623 1,567 - nil
Total 67,938
The industry as a whole can be divided between two broader sectors namely organized
sector (branded segment) and un-organized sectors (generic segment). The branded segment
is more of monopolistic in nature where there are nine prominent, active players in the
competitive landscape of this sector. However 80% of the industry’s share is being enjoyed
by the five companies listed below. A brief overview of major companies’ estimated annual
sales in PKR (1 US$= 83 PKR) is as follows:
6
Estimated annual
turn-over
Company Major PKR.(1US$=83PKR Shar
name Major Product lines brands ) e%
Ding
Dong
Bubble,
Fresh up
bubble,
Tulsi,
Candy, Bubble, AamRus,
Jellies, Chocolates, Kopra
Beans, powder candy
Hilal Drinks, Supari Limopani 3.5 billion 26%
Chillimili,
Fanty
candy,
Now,
Bisconi
Chocolito,
Ismail Jellies, candies, Cocomo,
Industries lollypops, Snack
Ltd.(Candyland Chocolates, Biscuits, city,
) Snacks etc. Sonnet 2.8 billion 21%
Spacer,
Dolphin
Jellies,
B.P
Jellies, candies, Lollies,
lollypops, Dream
Chocolates, Biscuits, Chocolate
B.P sweets Bread, Snacks etc. s etc. 1.7 billion 13%
Dairy
Milk
Chocolates(Countline Chocolate,
s and Moulded) Éclairs,
Toffees, Chewable Softmint,
Cadbury’s mint candies Velvet 1.5 billion 11%
Bubbles candies, 4ever,
Kidco lollypops, Chocolates Centro- 1.20 billion 9%
7
etc. bubble,
Lollies,
Punch
candy,
Chox
Creamers,
Amrood
candy,
Éclair,
Cafe
Mayfair Candies, Toffees, biscuit 0.8 billion 6%
Milk
Toffee,
Fruit
BonBon,
Groceries ( Squashes, Butter
Jams, sauces, Scotch,
Mitchell’s(only Chocolates- Moulded Jubilee,
Confectionery and Countlines , Golden
& Chocolates) Toffees and candies Hearts 0.70 billion 5%
Chini
mini,
Fresh’ O
bubble,
Choco
Bubble Gum, Lolly Bisco,
DanPak Pops, Candies Milko Sip 0.70 billion 5%
Dr. Milk,
NutKut,
Love
candy ,
Sweet Hills Candies, Toffees Cow 0.50 billion 4%
TOTAL 13.4 Billion PKR
8
CONFECTIONERY AND CHOCOLATE MARKET – AN OVERVIEW
Characteristics: The branded confectionery and chocolate market is
highly price elastic and growing with the bulk of sales concentrated in
mid-price range products. Urban markets account for the major share
and also for a higher penetration rate. Various retail price points exist
within the mass market segment of chocolates between the range of
PKR 3-25. In Sugar Confectionery major running confectionery items
fall into the retail price segment of Rs. 0.50-1.00. The efforts made for the induction of Rs.2
Confectionery unit by industry giants have gone into vain so far. However Rs. 2 and 3 are
popular price points for lolly pops and chocolates range. The industry has faced “coin-
barrier” issue in sugar confectionery products at least three times during last three decades
when all key players unanimously agreed to increase their products’ price due to escalating
prices of raw materials (first from 25 paisa to 50 paisa- in mid 80’s, than 50 paisa to Rs. 1 –
in mid 90’s and lastly from Rs.1 to Rs.2-in late 2008) whereby the active players of the
industry were compelled to raise their prices not less than any thing but 100% because next
jump to coin / price denomination was such that they had no way out. It would be interesting
for the readers to learn that such moves however have always been proved to be a “bitter
9
pill” for the industry as it brought immense resistance from consumers and trade. In some of
the cases decline in sales as a reaction of price increase was so huge that it forced to leading
brands to take their decision back yet they were not able to retrieve their original volumes
again. Mitchell’s Milk Toffees and Kidco 4ever are classic examples. To avoid and defer
this situation (up to last extend) pro-active companies in Pakistani confectionery industry
adopt three kinds of strategies , without reducing or with slightly reducing trade margins,
namely
Reduce the no. of units per pack, unit size, and packaging ( in an endeavour to
reduce cost)
Compromising in product quality by reducing qty and/or quality of expensive raw
material
By using close substitute that is available relatively at cheaper price as a replacement
of expensive raw materials
Distribution and Selling strategy: About (70-80) % sugar confectionery and chocolate sales
generate through wholesale channel depending upon the nature of product and strategies of
manufacturing companies. Almost all but precisely Hilal and B.P rely much on wholesale
channel to generate bulk chunk of their total sales. To support their sales through this
channel they advertise heavily on electronic media to create brand pull for their brands and
subsequently it force retailers to buy these brands from whole sale. The underlying reason
behind limited coverage in retail sector by these two companies is they do not have
premium priced items that could yield sufficient revenues to make retail distribution viable
for their distribution partners so they do a limited coverage in retail sector. Since these
companies themselves do not emphasize on retail penetration so their distributors also take
an escape route and adopt the way of easy selling through WS. However there are
companies like Cadbury, Candyland, Mitchell’s and Mayfair that are fully aware of the
importance of retail penetration .Hence these companies pay due importance and attention to
retail coverage and subsequently allocate resources for retail sector. As stated earlier the
emphasis of Hilal and B.P has always been on building consumer pull through mass media
advertising ( mostly through television) and pushing their brands through wide-spread
network of distributors and wholesalers throughout the nation . This combination of “Push
10
& Pull “ has proved to be a successful tool in their cases because the nature of their brands
also support this strategy as they produce products of mass market with as low price as Rs.1
, 2 and beyond. Because of this pricing strategy their products are equally popular in rural
and urban towns among middle and lower middle class. B.P and Hilal having this advantage
enjoy the benefits of a wide-spread distribution network in 300+ towns and over 350
distributors nation wide (as they have more than one distributors in some towns). They
always try to adopt cost leadership strategy and generate revenues through high volumes of
sales. Frequent launches, re-launches, re-introduction of old brands with slight
modifications, withdrawals, adjustments in packaging, product designing and even recipe
changes are common phenomenon in the brands of these two major companies. Contrary to
this Cadbury’s , Candyland and Mitchell’s believe on establishing brands and brand equity
and therefore protection of quality up to last possible extend remains their top priority.
Popular Brands:
In hard-boiled (candy) category: Price range 0.50 paisa-Re.1: Fanty (Candyland), AamRus
(Hilal), Choran Chatni (Hilal), Kopra candy (Hilal), 4ever (Kidco), Butter Scotch
(Candyland) and (Mitchell’s), Amrood (Mayfair), Creamers (Mayfair) and
Fruit Bonbons (Mitchell’s) are famous brands.
11
worth over 250 million PKR and Éclairs (Cadbury’s) can be ranked top three among others
in this category.
As of today, there hardly exist any 50 paisa confectionery unit, those that were available,
have been switched to Rs.1 price point.
In Lolly Pops: Price range Re.2- Rs.3/- : twin-lolly (B.P), Paint n Pop (B.P), Kidco Pop
(Kidco), Funny Bunny (Candyland) are popular among consumers.
In Enrobed Chocolate category: Price range Re.1- Rs.5/- : Jubilee (Mitchell’s), 5 Star (
Cadbury) Perk (Cadbury’s), Now (Candyland), Dream (B.P), Choco Dip (B.P), Kat Kat
(B.P) Unitee (Mitchell’s), Sonnet (Candyland), Luxuree (Mitchell’s), Chox (Kidco) and
Paradise (Candyland) enjoy major share in the market.
In Moulded Chocolate category: Price range Re.2- Rs.10/- :Dairy Milk (Cadbury’s), Cone
(B.P), Mr. Bear (B.P) Twin Rabbit (B.P), Golden Hearts ( Mitchell’s), Velvet (Cadbury’s)
are famous among other brands.
In Bubble: Rs.1: Ding Dong (Hilal) in Rs. 1 and recently launched in Rs. 2 as well. The
brand has worth about 1000 million PKR, Fresh Up (Hilal) – retail Rs.5/-, Tiger (Mayfair)
and Kidco Bubble, Centro (Kidco) are leading brands.
Though retailer’s margin varies from companies to companies and product to product but
generally acceptable margin in local items for retail trade is between 15-25%. It is lower for
fast-moving brands and higher in the case of slow-moving items.
Drivers:
Until mid 80’s chocolates were supposed to be the product of upper and upper middle class
segment. In 1983 Mitchell’s Jubilee was launched first time in Pakistani market at Rs.3.50
per bar. Due to its attractive packaging, quality, affordable price and an intact media support
the brand received un-matched reception and became a success story in Pakistani industry.
The brand is still very popular among masses and available in three different price points at
12
Rs.2, Rs.5 and Rs.10. In early 2000 Cadbury’s introduced quality products with affordable
price. The launch of Dairy Milk (Rs.5/-), 5 Star (Rs.5/-), Velvet (Rs.5/-) and Perk (Rs.3)
with attractive dispensing-chillers was the turning and revolutionary point for making
chocolates the choice for every one. The role of Cadbury’s for expansion of chocolate
market in Pakistan will always be written in golden words.
CHALLENGES:
The most common challenges to this industry are soaring prices of raw material, high excise
and import duties on raw material, high entry barrier because of strong monopolistic
competition and influx of cheap imported brand through gray-Channels.
TRENDS:
Driven by marketing initiatives, consumer preferences are speedily changing in the favour
of chocolates. Independent retailers and wholesalers are still the largest channel contributors
however the role of International modern trade (Makro, Metro and HyperStar) is growing at
the increasing rate. Foreign or imported brands are successfully targeting the
Lucrative premium segments in urban population. Nestle has recently revamp their sales and
distribution management system through appointment of one of the leading distribution
house in Pakistan. Large retailers and wholesalers have already started private imports by
paying less import duties through tax evasions. The largest bakery and confectionery chain
of Lahore is also considering for launching their own chocolate brands in a bid to grow their
private label sales. Keeping these positive signs in mind one could expect that future of
Chocolate and Confectionery market of Pakistan is promising.5
5
http://saifdewan.wordpress.com/2009/10/05/branded-chocolate-and-confectionery-industry-of-pakistan/
13
CBL ENTERS INTO A
NEW MARKET
Ever since its' inception the company has been playing a major role in the process of
modernizing and upgrading the Pakistan Biscuit Industry, producing healthy, innovative and
quality products for our consumers. We currently enjoy a market share of over 30 percent in
Pakistan, and our supremacy in the biscuit industry is due to our prime emphasis on quality
products coupled with an excellent distribution network.
Quality and innovation are the hallmarks of CBL. Our brands are among the leaders within
the country and at international levels as they are manufactured to the highest quality
standards bringing nutritional goodness of natural produce to our consumers. We at all times
ensure the selection of finest ingredients and hygienic conditions for the manufacture of our
products. This has created a tremendous demand for our products not only in Pakistan but
also in various AFME countries.
Having a succesful experience in the biscuit industry, CBL is now launching a chocolate
product called 'Chocoline'. We aim at sound planning and bold vision having us seen to
regional leaders a decade later.
Our objective is simple: to give you the best chocolate ever. The recipe consists of the
following ingredients: determination, maintaining the highest standards in production,
delivery and service, constantly keeping our customer's suggestions in mind, insisting on the
freshest and highest quality ingredients and blending them all together for your pleasure.
MISSION STATEMENT
Our mission is to lead the Pakistani market providing the best chocolate ever. We will
ensure a commitment to continuous improvement enhancing the taste buds of chocolate
eaters.
14
TAG LINE
After a survey conducted, it was concluded that majority of the people consume chocolate at
least twice a week, and in Lahore, there is a demand for it all the time which is usually
increased at the time of different occasions. People want to eat quality chocolates at the
prevalent prices that are available easily. These are the requirements for its success. So there
is a potential for growth.
OBJECTIVES
Profitability Objectives
Maximize Quantity
One of our pricing objectives is to maximize the number of units sold or the
number of customer served in order to maximize long-term profits by increasing market share
and lowering costs.
Our goal is to stabilize our prices in order to avoid price wars. So, we have
emphasized more on non-price competition. So, our strategy is that our product competes in the
market by other components of marketing mix, for this reason we have strongly be
emphasized on our product line and mainly on its promotion.
15
Another important objective of our company is to make sure that our product is of good
quality and is easily available to the customers. This is important as we want to maintain a long-
term relationship with the customer. For which aggressive distribution of chocobite will be
ensured.
MARKET SEGMENTATION
a. Demographic
We will consider the following demographic variables for market segmentation
Age: all age groups(above 2 years kid)
Family life cycle: young single; young married no children;
young married, youngest children above 2, older married with
children; older single; other
Gender: Male, Female
Income: above PKR 20, 000
Occupation: Professionals, managers, officials, students, land
lords, medium & high business class, ambassador
Education: graduates and above generally
Religion: All religions
Race: White, Black, Asian, Hispanic
b. Geographic
We will consider the following geographic variables for market
segmentation:
Region: Asia
Country: Pakistan
Province: Punjab
City: Lahore
16
c. Psychographics
d. Behavioral:
We will consider the following behavioral variables for market
segmentation.
e. Media graphic
The target customer will prefer the following media:
TV
Billboards
Newspaper
Magazines
Radio
School, college, universities
internet
17
TARGET MARKET ANALYSIS
Upper Class
Middle Class
This Decision is made on the basis of the buying power of the customers and for good brand
image.
Product positioning
The basic purpose to enter in a market is not to maximize the profit only rather to enter in
the lives and heart of customer. We basically want to promote our brand name. So we are
designing our product to create an excellent image just to occupy the distinctive place in the
mind of the target market. We are positioning our product on the basis of following
characteristics;
18
PRODUCT
PRODUCT CLASSIFICATION
Idea generation
Chocolates are one of the most popular and yummiest types of foods
that will likely stay at the top of most people’s favorite food lists. A resent survey shows
that Chocolate has great health benefits. It helps with depression, high blood pressure and
heart problems. It was also found that each person consumes 12 pounds of chocolate in 1
year. One ounce of baking chocolate or cocoa contains 10% of the daily recommended
intake of iron which is very important for children. With people becoming aware of these
facts the idea generated was to launch a chocolate.
Idea screening
After screening through the current market and collecting all information and
observing the interest of customers we came to the conclusion to launch Chocolate. We
have decided to provide our customers something in addition with chocolates unlike our
competitors.
The concept was further developed after observing that the people not only ate
chocolates but also gave as gifts on different occasions. Survey conducted shows that 80%
of people are interested in trying new product. We associate 'love'
with our chocobite. Where ever love exists, whether its amongst
19
families, friends,spouse etc chocobite is going to be present there and let the consumers
cherish the great taste and value their time with their loved ones. For this interesting
packaging designs and ideas have been sort out.
Market strategy
Business analysis
The results of the questionnaire show that 80% people are interested in
trying the newly launched product. Then we can predict that are sales will be high in future
as the product contains the features wanted by the consumers.
Product development
Test marketing
Taste test was conducted in malls, schools and colleges showed that
people liked the chocolate .They were satisfied by its taste and the variety of flavors.
Commercialization
20
BRAND NAME
The brand name is linked with the excitement of love for family and friends. We want
people to experience chocolate in a fun, loving and exciting way.
Logo
PRODUCT FEATURES
21
PRODUCT LIFE CYCLE
The four stages of PLC are clear in the above diagram. Our product is now at introduction
stage. We have developed different promotional strategies and campaigns to perform best at
this introductory stage only then we can perform well in growing stage. For our company
we are planning to launch different chocolate flavors time by time. In this way we can
attract more customers by giving them more flavors, so maturity period of one product
would be small. We aim at reaching the maturity stage in the period of 18 months.
PRODUCT ADAPTABILITY
By understanding how adaptable your product is, you can incorporate the necessary
elements into your marketing strategy. There are five factors for measuring how
"adaptable" a new product is: so by discussing them one by one we can evaluate the
adaptability of chocobite.
22
Relative advantage of the product
How superior is the innovation to the product or other problem-solving methods it was
designed to compete against? So we can get relative advantage by giving Sugar free
chocolates and chocolate syrups.
Compatibility
Does it fit with current product usage and customer activity? Yes our product absolutely fit
with it. *A chocolate a day……with new health claims and the latest technology
backing it up, chocolate is becoming more popular than ever. So keeping this thing in
mind our customers are quite flexible to adapt this.
Complexity
Will difficulty or confusion arise in understanding the innovation’s basic idea? No there is
no complexity which may be hurdle to understand “chocobite”. As the concept of chocolate
is in market through many years so probably customers would not face any complexity.
Moreover we are offering sugar free and chocolate syrup and this concept is so simple.
Divisibility
How easily can trial portions of the product be purchased? We are actually giving trial test
to our customers. So our teams would go to universities, colleges, schools, shopping malls
etc for test marketing, to check the response of consumers.
Communicability
How likely is the product to appear in public places where it is easily seen and studied by
potential users? As promotion is the main “P” among marketing mix. So hopefully we
would not face problem. Because for better communicability we are giving T.V and radio
advertisement, putting teasers to attract customer’s attention, billboards, skimmers on
different places according to target market.
23
Value chain model is applicable to our product as we are following all the activities:
Secondary Activities
Primary Activities
24
Marketing and Sales: Team of professionals has been hired to work on the product
marketing.
Service: To ensure quality and customer suggestions we plan to place a toll free
number on every packet. 24/7 a team will be there to take customer complaints and
suggestions.
25
PRICE
The pricing is the most important step in the development of the product. The price of the
product should be such that it may cover the cost and provide some profit per unit.
The following table shows the prices for the chocolate bars of different sizes based on the
survey that was done in which most of the respondents were willing to pay Rs.30 for the
small sized bar.
The different sizes of the chocolate bars and their respective prices are given:
PRICING OBJECTIVES
As we are introducing a product for which a well saturated market already exists, so in order
to get market share we are keeping prices lower than the other competitors and using the
“Market-Penetration pricing” strategy for our product.
The objective is to maximize market share and providing higher sales volume with lower
unit costs and higher long-run profits.
26
The demand is relatively elastic so it will have some effect for the customers, and they will
at least try it once and once they like our product, we can have some of the market share. As
the market share of our product increases, we can increase our prices accordingly.
The curve shows that the demand of our product is relatively elastic. So keeping prices less
than the others can increase the customer share in the saturated market even.
PRICE DISCOUNTS
We are already selling at price lower than the competitors so we are not providing any
discounts to the customers but in order to get the shelf space and managing intermediaries,
we will use a Push Strategy in which various forms of communications such as advertising
and promotion will be used to entice the retailers to carry the product and sell to consumers.
To ensure that retailers demand our product and give us good shelf space in their store we
will also give them special deals such as quota discounts.
COST ESTIMATION
The price of the product covers all the variable and fixed cost per unit. Initially this price
will yield less profits as the business is in starting stage and in order to get market share, we
are keeping the prices as low as possible but enough to cover our costs.
27
Overall Prices are kept lower in the initial stage, but we are providing good quality to the
customers even at lower prices. Value pricing strategy is being used.
Special event pricing is being used in case of events where a box of chocolate containing
15-50 chocolates is being offered at a price ranges Rs.300 to Rs 1000.
28
PLACE
SELECTION OF THE LOCATION
Choosing the right location is of the utmost importance as the success of the product is
dependant upon it. We want to make sure that “Chocobite” should be distributed in a way so
that it is easily available to all its customers therefore; perfect physical distribution is
required for this purpose. It has to be ensured that when deciding on the place from where
the chocolate will be physically distributed and sold several factors are considered.
1. To select places that draws a large customer base to ensure larger sales.
2. To select places based on their sales effectiveness.
Marketing channel consists of the intermediaries that act as the middle agent in providing
the product to the customer. Since we are a new company, we will be using existing
intermediaries. This will include several established retailers and a few trucking companies.
This will allow us to make our products widely available and accessible to the customers,
which we cannot achieve on our own. As the market that we are catering to is a small
market therefore, we will use both direct and indirect marketing channels. In managing our
intermediaries we will use a Push Strategy in which various forms of communications such
as advertising and promotion will be used to entice the retailers to carry the product and sell
to consumers. To ensure that retailers demand our product and give us good shelf space in
their store we will also give them special deals such as quota discounts.
We will mainly sell through the retailers. As for CBL, this will be the most efficient way to
deliver value, in the desired time. Another advantage of selling through retailers is that it
will allow us to reduce the overall logistics costs. Selling through a large number of
intermediaries will be too costly for us. As we are a new company this strategy is most
29
suitable, and will allow us to gain adequate market coverage with more control and less cost
compared to intensive distribution.
PRODUCER
RETAILERS
CUSTOMERS
TYPES OF RETAILERS
1. Super stores
2. Super markets
3. Shopping centers
5. Departmental stores
6. Convenience stores
7. Chain stores
Super stores
HKB
Alfatah
ARY cash carry
30
Potpourri
CSD
Shopping Areas
Liberty
Mall
Fortress
Shopping Centers
City Tower
PACE
Sadique Trade Centre
Chain Stores
Gourmet
Shezan
Fresh Inn
Good luck
Cakes & Bakes
Utility Stores
CONVENIENCE STORES
Convenience stores are the small shops situated in colonies and residential areas that sell
small grocery items such as bread, eggs, soft drinks and candies etc. we will also supply our
chocolate bars to these convenience stores around the city.
31
We will also use direct marketing channels to sell directly to the consumers. This will
involve delivery of the chocolates to different schools, colleges and universities. The
company will use its own delivery vans that will supply chocolates to the canteen owners.
The reason for selling directly to these institutions is that children and teenagers are our
biggest purchasers and consume chocolates and candies on a regular basis. They are a
permanent source of revenue generation.
CBL
CUSTOMERS
Examples are
City school
Army public school
Convent school
Lahore college
Garrison college
Kinnaird College
Punjab University
LUMS
FAST
MARKET COVERAGE
As chocolates are a type of snack food, those consumers seek to buy frequently or in a
variety of locations, therefore, it would be appropriate to opt for intensive distribution. This
will allow us to increase coverage and sales. It will also increase the product availability. As
32
our target market is Lahore, intensive distribution of the product will allow us to compete
with other manufacturers especially the local chocolate brands.
CHANNEL MEMBERS
Each member of our distribution channel will be treated with respect, and will be given the
opportunity to be profitable. For the distribution of our product we have chosen retailers that
have lot of experience in the retailing business, the size and quality of the sales force, are
financially strong, cooperative, and have good service reputation. This is very important
because to customers the channels are the company, and the retailer’s image has a
significant impact on the sale of the product. We will also evaluate our channel member’s
performance on a regular basis against standards such as sales quota attainment, customer
delivery time, treatment of damaged and lost goods, and cooperation in promotional and
training programs. This will allow us to decide which retailers to continue doing business
with and which to drop from the distribution channel.
1. Inventory Management
We have developed a computerized inventory management system that will allow us to keep
track of our inventory. Most of our retailers except convenience store and canteen owners of
schools and colleges all have computerized data bases that allow them to keep track of there
inventory. We, in collaboration with our retailers will ensure that whenever, the retailers are
in need to replenish their stock of chocobite, they can communicate the exact quantity
needed on time. This will reduce lags in the delivery process and ensue that we meet
customer demand.
2. Warehousing
33
Another important issue is that of warehousing. In order to store our finished goods we will
rent a warehouse and use our fast transportation system to deliver the orders. This decision
to decentralize the inventory has been made because during our initial stage we will only be
catering to a restricted target audience that is based in Lahore. Therefore, there is no need
for purchasing expensive warehouses, as this will just add to the expenses and the final cost
of the product.
3. Transportation
We have will purchase trucks and a few delivery vans that will be used to transport the
finished goods to the retailers. This is to ensure speedy delivery, and also because if the
goods are being transferred by road they are less likely to get damaged.
34
PROMOTION
IDENTIFYING A TARGET AUDIENCE
We as a marketing communicator have started out with a clear target audience in mind. We
are targeting the Upper and middle class. This includes all age groups.
DESIGNING A MESSAGE
Message Content
35
Our message content is based on a rational appeal. It refers to the audience’s
self-interests. It focuses on getting a chocolaty lifestyle that could be related with a funky
and trendy attitude.
Message Structure
Message Format
For conveying our message effectively we are using all the media i.e. radio, print
and TV. We are very vigilant regarding the announcer’s voice, the headlines that will appear
in the print ad, and gestures and emotions for the TV ad.
Choosing Media
Electronic Media
Print Media
Online
Advertising
Advertising Objectives
36
Advertising Strategy
PERSUASIVE ADVERTISING is the form of advertising that we are using. The company’s
objective is to build selective demand. We aim at persuading consumers that our product
offers the best quality and value for money.
Our message focuses on developing a trendy and chic lifestyle, so the basic theme that our
message would convey will be LIFETSYLE.
Selecting Media
REACH: our aim would be to reach a large percentage of the target market that is exposed to
the ad campaign during a given period of time.
FREQUECY: launching our product for the first time we want a high frequency.
IMPACT: the ad campaign would be run most widely on Television and Billboards because
these two sources are most reliable and easily accessible in Lahore where we are launching
our product.
The media used for our ad campaign are given below in order of their preference:
TV
Outdoors
Newspapers, magazines
Radio
37
Internet
Media Vehicles
Once we will be able to cover our costs and be profitable, we will use other sites like
www.yahoo.com and www.hotmail.com
PUBLIC RELATIONS
Sponsorship
For our business development, we are also into giving sponsors. As one of our target
markets is youth, we arrange some events for them. These events can be concerts, musical
nights and certain other events. We will sponsor such events. This also helps us in the
development of our business through publicity.
Awareness seminars
We will organize seminars to create a positive image of our product for example a seminar
on a topic like to clear up the myth that eating too much chocolates causes acne.
Similarly, we will also organize seminar to tell our target audience that sugar free chocolates
are good for health conscious people.
38
SALES PROMOTION
People always look for free stuff. Nothing can make them come running as fast as when we
offer them something they can have with no costs. We have decided to give our retailers
some discount to place the product in their stores. Once they see that we are serious in our
purpose, they will realize how we value our business. It will make them want to do business
with us.
Point of purchase displays are used as a part of the sales promotion tool. PoDs will be
displayed at all the major retail stores which we have considered in the PLACING of our
product.
Giving special chocolate boxes to match various occasions and festivals are also a part of
our sales promotion. For instance right after the launch Friendship Day would be
approaching and for this we will be giving out special Friendship Day box.
Say it on Chocolate
Lucky draws
We conduct lucky draws of our consumers and a prize is given to the winner. The purpose
of this type of lucky draws is also the promotion of consumer sales.
39
DIRECT MARKETING
The company is going for Direct Marketing. We have planned to introduce chocolate cycles
just like the ice-cream cycles are there. These cycles will be a source of providing
chocolates most conveniently, saving the consumers the trouble of actually going and
buying chocolates. This will enhance the sales of the product in turn.
PACKAGING
We have decided to associate chotobite with love. It is going to give the consumers a chance
to enjoy love in the flavor of chocolates. We are going to make chocobite an ideal gift to be
given on any occasion. For which we have planned out various packging according to
occasions.
NEW BORN : Every newborn brings a new beginning, dreams, hopes and
possibilities abound. Celebrate those unique moments: first word, first steps, first
day of school, with that special gift. At Chocobite we offer various chocolates as
well as gift arrangements for all occasions
CHRISTMAS/ NEW YEAR: When you are selecting that special gift or looking
for the perfect centerpiece, think of Chocobite. We offer a full assortment of
chocolate delights specially wrapped for the winter festivities. Smooth and creamy
or dense and crunchy, we have something to soothe your chocolate passion. At
Chocobite we offer various chocolates as well as gift arrangements for all occasions.
40
EID: From year to year the Eid gathers
together friends and family to celebrate
and observe the holidays. Chocobite is there
to provide traditional favorites or spark
the fun of the occasion with new family-pleasers. Whether searching for that special
gift or gracing your own table, Chocobite is there with years of experience and
understanding of your requirements. Relax, enjoy, you have given them the best. At
Chocobite we offer various chocolates as well as gift arrangements for all occasion.
VALENTINE'S DAY: Days of celebration mark the milestones of our lives. Each
day never equaled. Chocobite maintains its pledge to deliver the freshest and richest
taste sensation everyday to make sure we are there for you on your special day.
Hearts, flowers, chocolates simple yet so sublime.
WEDDINGS: A dream fulfilled, two hearts joined as one, the start of a new life
together. Chocobite has created masterpieces of elegance and style to match the
beauty of the occasion. Each piece, is an accent for the evening and a keepsake to
live on in memories for years to come.
41
GIFTS: Last minute invitation? Surprise visit from the in-laws? Corporate gifts? Or
simply can't make up your mind? Chocobite is always there for you with a wide
range of wrappings and an even wider range of chocolates, and the expertise to
present both beautifully. Rest assured, the gift to suit your tastes, budget, and the
occasion is waiting for you. Say it sweetly, say it with Chocobite.
In order to have review and control process formulation our company would be using the
technique given in our text book and they are broadly used by companies worldwide. There
are four steps which describe the marketing control process. Those steps are as follow;
42
ANNUAL PLAN CONTROL
Annual plan control aims to ensure that the company achieves the sales, profit, and other
goals established in its annual plan. For this purpose, first our company’s top management
would set monthly, quarterly or annual goals as per company policy. In second phase,
middle management would monitor its performance regarding market output results. In third
phase, middle management will figure out any deviation regarding the achievement of
performance goals. In fourth and last phase, top and middle management would take
corrective action in order to close the gap between set goals and performance.
For the evaluation of these four phases, top and middle management can adopt approaches
like sales analysis (sales in each period of time), market share analysis (% of market
capturing along with competitors position), sales to expense ratio (expense in relation with
revenues) and financial analysis (balance sheet, income statement etc) which would portrait
the clear picture of the company performance in view of established or defined goals.
PROFITABILITY CONTROL
Profitability control aims to ensure that where the company is making and losing money. So,
it’s all about managing its revenues and expenses because both of them have direct
relationship. In our company, marketing controller is appointed to do the required work for
the company. All this activity is based upon internal sourcing which is related to cost
attached to the cost of goods sold, operating activities and admin expenses. He/she would
also gave recommendation to formulate the pricing of the product keeping in view the price
fluctuation of raw material, maintenance cost of equipment or other regular occurring
operations.
To measure the profitability control process, our company’s marketing controller would
adopt the approaches like product cost (cost attached with inventory making), territory (cost
attached with purchase and maintenance of fixed assets), order size (revenue generation
calculation from size of order placed) and trade channel (cost attached with the shipment or
distribution channel) as per company policy.
43
EFFICIENCY CONTROL
If company’s profitability analysis describes that the company is having poor earning profits
in certain product, territories or markets along with the customer feedback about the
product. So, to allocate more efficient ways to manage the sales force, advertising, sales
promotion and distribution in relation to the marketing entities efficiency control process
would be in practiced under the supervision of marketing controller along with line and staff
management. Purpose of this process is to evaluate and improve the spending efficiency and
impact of marketing expenditures.
In efficiency control process, major emphasis would be firstly on sales force efficiency
because may be sales team would be performing activities which would have attached high
cost with it. Which would be in shape of making contact with buyer in expensive way.
Secondly, would keep an close eye on advertising efficiency because may be company
spending too much in advertising campaign with ignoring the fact that product or company
don’t need that much advertising. It can also work by doing better positioning of product,
proper guidance for the media selection and defining advertising objectives clearly. Thirdly,
sales promotions can also be the factor to consider in order reviewing the efficiency.
Management would record the cost and sales impact of each promotion. Whereas sale
promotion manager would analyze the result of different promotions and advice the product
manger about the most cost effective promotion to be used. Fourthly, management would
also have a glance on distribution channel cost which consists of transportation of inventory
from warehouse to display centre or outlet.
STRATEGIC CONTROL
Company with the passage of time would have a critical review of overall marketing goals
and effectiveness. This review would be done or handle by top management along with
marketing auditors. In this control process company will reassess its strategically approach
to the marketplace. For this purpose company would first consider marketing effectiveness
review which would reflect five major attributes. That would include customer philosophy,
integrated marketing organization, adequate marketing information, strategic orientation and
44
operational efficiency. Secondly, marketing audit whose work would be to examine
comprehensively, systematic, independent and periodic evaluation for the company with a
view to point out the areas having problem and opportunities along with recommending a
plan of action to improve the company’s marketing performance. Thirdly, marketing
excellence review which would describes the standing of the company in relation to the best
practices of high performing business. It would clear the company standing in the market.
Lastly, company can review on the base of fulfilling the role related to the ethical and social
responsibilities.
Control
OBJECTIVES
Financial planning is the process of assessing a firm’s financial goals, taking an inventory of
the money and other assets which a firm will reach and estimating what the firm will need in
the future.
A good financial plan is much more than a simple investment strategy that takes into
account a firm’s tolerance for investment risk. A financial plan should offer a
comprehensive overview of a firm’s short- and long-term financial objectives, and sources
of income – both present and future. Once complete, a financial plan should provide a
45
snapshot of a firm’s current financial situation and give the firm a roadmap that shows the
firm how to achieve its future goals.
Key Assumptions
46
(e) Revenue Assumptions
Sale price of chocolate packs vary from Rs.30 to Rs.70 depending upon size of pack.
Sales growth rate in first year 15% and in second year 20%.
Equity 100%..
Minimum Cash Balance approximately Rs.2,000,000
To start this business our initial capital will be Rs. 8 million and we have decided to finance
our project with 100% equity (i.e. Rs. 8 million). The equity will be equally put in by all the
eight group members.
We desire that we must have a warehouse of our own but an economic base rule, that, “Our
wants are unlimited but our resources are scarce”. In start we will not have enough capital to
build our own warehouse so initially we will start our business through hiring a warehouse
on rent. Our proposed locality for warehouse will be “Peco Road near Ittefaq Foundry,
Lahore”. For 8 production machines setup we require approximately 8-10 Marlas. We will
47
get land on rent of approximately Rs. 20,000/month for one Kanal by depositing a security
of Rs. 200,000. This land is very inexpensive and is best suited for our purpose.
We will acquire PTCL wireless telephone connections keeping in view that we will need
them for carrying out our business operations successfully. It will cost us near Rs. 2000 per
telephone set plus connection charges.
For doing shipment of the orders at specific places of the city along with the
buying/purchasing of raw material which would include ingredients and packaging mostly.
Company would buy mini tracks/mini pick vans. Which would be four in figure initially.
The term Trade Mark means any mark capable of being represented graphically which is
capable of distinguishing goods or services of one undertaking from those of other
undertaking. A trade mark is a distinctive sign which identifies certain goods or services as
those produced or provided by a specific person or enterprise. Trade Mark enables
consumers to identify a product of a particular company so as to distinguish it from other
identical or similar products provided by other companies and also trade mark enables
companies to differentiate their products from their competitors’ products.
Under Trade Mark Ordinance, 2001, An application for registration of trademark is required
to be made in duplicate in Form TM-1 to the registrar of trademark along with the
prescribed fee i.e. Rs.1000/-. Registrar shall on payment of the registration fee of Rs. 3000
enter trade mark in the register and issue a certificate of registration to the applicant.
48
Partnership Registration & Its Cost
A partnership is a relation between two or more persons who have agreed to share the
profits/losses of a business carried out by all or any of them acting for them on the basis of
certain terms and conditions. Persons who have entered into partnership with one another
are called individually “partners” and collectively a “firm” and the name under which their
business is carried on is called the “firm name”. A partnership is regulated under the
provision of the Partnership Act, 1932.
Cost: We will start business in partnership, under the status of AOP (Association of Person)
which will cost us Rs. 1000. We are eight partners in total.
Note: Some important documents such as the partnership form, the flow chart for
registration of partnership and the trade mark registration form (TM-1) are also included in
this project.
= 500 packs
49
Sale Forecast
Sales forecast is actually an estimate of the market demand for the product and to estimate
the total volume of the product that would be bought by customers. Sales forecast can be
estimated on the basis of research questionnaires analysis.
People of middle, upper middle and elite class. The sample is selected randomly in
which both the males and females had the chance to be selected. The sample
contains people in the age bracket of less than 15-above 75 years.
The size of sampling unit was 150 people selected randomly.
Sampling procedure included convenience sampling. The researcher selected the
most accessible population members.
Sales can be estimated on the basis of:
As is evident from the survey that the greater number of students fall into the income/pocket
money of 30,000-50,000 and most of the respondents are willing to pay a price of Rs.20-30
for a small size, and greater number of respondents said that they purchase chocolates ½
time a week; so this data can be useful for the pricing of the product and its sales.
The demand for chocolate does not vary seasonally; it remains constant and fluctuates very
rarely. So any seasonal influence is not estimated for our product but we can’t ignore it as
well.
Consider the sample of 150 people buying this chocolate. Out of these people 66 said that
they purchase chocolate 1/ 2 times a week, so the numbers of units for sale are estimated
accordingly. If the price of small sized bar is kept Rs.30 and if it is assumed that the people
buy it 1 / 2 times a week.
50
The sales forecast would be:
Price per unit NO. of units Total sales Total sale Total sale
for sale /week /month /year
30
70
CONTINGENCY PLAN
All the marketing activities are planned after careful analysis of the market and
environmental trends, but there maybe some specific environmental developments which
may prevent the proper functioning of the above mentioned plan. A contingency plan in our
case would be careful monitoring of the product, its price, its place and the promotional
strategies. Based on customer feedback and profitability, it will be analyzed where the actual
problem is arising from. Whether it’s the products quality, its packaging, its taste, its
accessibility, its price or its promotional campaign that is not giving the desired results, that
area will be monitored and reviewed again and the respective steps to overcome such
pressures will be taken by conducting a meeting and discussing the issue.
51
CONCLUSION
The marketing plan has been made after a careful analysis of the market trends. First a few
of the product categories will be introduced and then coming up with all the varieties. It is
first being launched only in Lahore and then will move to different cities of Pakistan.
It is very strongly hoped that CBL is going to achieve its goal and will well penetrate into
52