The marketing plan for ABC Foods Pvt. Ltd - Essay Example

?Marketing Plan ABC Foods Pvt. Ltd. Table of Content Introduction 4 Marketing Objectives 4 Mission 6 Product 6 Market Situation 7 Potential Market 7 Potentiality and Acceptance of the product 8 SWOT Analysis 8 Strengths 8 Weakness 9 Opportunity 10 Threats 10 Competitor Analysis 11 Marketing Strategies 11 Pricing Strategy 12 Promotion Strategy 12 Distribution Strategy 13 STPD Analysis 13 Segmentation 13 Targeting 14 Positioning 14 Differentiating 14 Financial Summary 15 Financial Assumptions 15 Financial Projection 16 Referencing 17 Introduction ABC Foods Pvt. Ltd. is a 10 years young US based food processing company which has been continuous supplying processed food to the major supermarkets and community based departmental stores and grocery shops in Unite States. The company was established and incorporated in 2001. The company has decided to make forward diversification into the Indian food market with the launch of a new category of product line i.e. “Ready-To-Eat” (RTE) food. This ready to eat food is very much popular in the developed countries and it has a saturated market in US. So the company has decided to make brand extension as well as diversification of business simultaneously. India has a very good potential market for ready to eat food and very few food companies are there who have this type of product differentiation in the market. Only the people of urban areas of the country have the food habit of processed food like ready to eat food and maximum family member in the urban areas are working people and they generally need a time consumed processing of the food for their breakfast and as well for making Tiffin for launch. These all are driving forces which influence the company to make the brand extension in a potential foreign country like India where the food habit of people is changing from home cooked food to ready to eat food (Goudar, 2008, p.13) Marketing Objectives A SMAETER objectives need to follow for getting competitive advantage. Specific: The Company needs to reach in its break even in 2.5 year so that it can start brand extension i.e. it can invest some percentage of its profit in another brand or product diversification to expand the business in the form of higher market share. The company supply their products to supermarkets as well as the small and medium grocery shops in the in the community area for getting a final customer based apart from the third party retail clients. For this type of sales objectives, distributor acquisition and development is required who will be responsible for generating channel sales by supplying products to the small shops in semi urban or community based countryside areas. Measurable: Measurable objective is the result of quantitative analysis of pre-measured sales target for achieving the small steps in the away of break even. For growth measurement achieving sales growth of 5% over first five years is needed which will simultaneously expand the market beyond the targeted market. Achievable: A substantial market position is one of the important achievable marketing objectives. Exploitation of gap in demand for the product and efficient supply is major achievable objective. For this a effective distribution channel is needed so that product can reach in place where the other competitors didn’t think of ever and it will be beneficial for capturing the rural market which is a substantial part of Indian market and a possibility of available potential consumer may also there. And sometimes this presence of the product will influence their willingness to buy a new product. Realistic: A product sample testing from the final consumer is needed to understand the demand of the competitors’ existing customers and it will be clear that how much percentage of the total consumer of this category of product may shift to its brand. Like 30% of the potential consumer from the retail supermarket is needed for better confidence in the start up. Time bound and Extending: Initial time bound is one year and then if the strategies and the objectives simultaneously results to each other and the measurable growth is achieved then the time period can be extended for longer (MAPA Task Group, 2009). Rewarding: Quarterly sales target achievement reward will motivate the sales department for increasing the target for the next quarter. As a result overall specific yearly sales target as well as the growth rate will increase. On the other hand rewarding is an important part of maintaining a good organizational culture which will retain and as well as attract best talent from the market. Mission To drive a sustainable growth by concentrating on the customers taste and preferences, the company is dedicated to provide best quality food. To become an indispensable companion with the working people beyond kitchen but in a span of 5 minutes of working break. Its values are excellence, innovation and inclusiveness (Kaplan, Nortan & Barroes Jr., 2008) Product Noodles, a Ready-To-Eat (RTE) food category are very much popular in developed countries and as well as it is having a good market presence in developing countries also. This processed food does not require cooking or rehydration and straightway from the pouch it can be consumed. Sometimes it depends on the user to warming it or not depending on the weather condition. This food item is becoming very popular now days as breakfast, launch-Tiffin food. It is one of the congenital foods available in the market. Market Situation Concentrating on the to the package ingredients for the home cooked food since long years have been passed and now the time came to provide quick food processing and its marketing environment for Indian food industries to provide good quality hygienic food like ready to eat food. It has opened a new strategic window in the developed countries like US, Japan and as well as in the worldwide scenario as quality, taste and acceptance is concerned (USDA, 2005, P.5). For this reason Indian Govt. is investing more in this sector like 0% excise duty and 100% tax deduction for the initial 10 years of the a new production units for the domestic as well as foreign investors. These strategies will help a company to minimize operational cost which will affect on price minimizing and better penetration in the market. Ready-to-eat foods market in India is highly expected to touch $55 cr. to $60 cr. by 2015. The current market size of this category of food market is Rs. $6 cr. This category of food market is not totally penetrated in all over the country because of the factors like franchise acquisition in new sector, low household income to purchase ready food from the market especially in the semi urban and the rural area and for the hygiene factor Indian housewives generally prefer home cooked food for the family members (GAIN, 2011, P.10). Potential Market It is the fastest growing food category in the total food market in India. There is a big opportunity in the untapped market because of increasing family income in different demographic segment, willingness of urbanization of rural people and growing percentage of working women in urban or semi urban areas in India. This industry requires an increasing penetration in the Indian consumers. Ready to eat food has not only the popularity at a special occasion but it has a increasing demand for daily consumption because now a day’s people are concentrating on the value for the time and they don’t want to spent more time in processing of food. Processed food industry is one of the largest industries in India. In terms of consumption, production and availability of raw material and expected growth it has been ranked fifth in all over industry review (MOFPI, 2007). Potentiality and Acceptance of the product Popularization of noodles, a ready to eat food is increasing due to the globalization in the Indian food industry. Retail outlets i.e. supermarkets, departmental stores are spreading in urban and semi urban areas the consumer’s buying patterns for grocery products have been changing from community based grocery shops to the retail outlets which influence the distribution and the market presence of this type of product. Product self life is 12 to 18 months with good quality, taste and hygiene factor till the expiry. Another two product potentiality are housewives willing to spent time out of kitchen more and more employed bachelor staying away from homes and make food by their won. Finally, a growing change in people’s eating habits especially in the younger generation like school and college goers is catalyzing the potentiality and the demand of this product SWOT Analysis Strengths Cost of production is not very high as availability of the raw materials of domestic production with low price. It is a US based company and it has a saturated market presence in the developed market like US and Japan which maintains its international brand loyalty. In India foreign are easily acceptable with a positive perception of comparatively better quality and rather than the domestic brand. The company is having a good experience in international distribution network which help them to become the priority supplier of prospective foreign retail outlets in India and the domestic supermarkets as well. It has reputed promotional strategies and activities in the global market which will help it for the initial consumer awareness and can increase market demand. Globally accepted quality and taste of its processed food product which catalyze the brand value in quality concerned. Weakness Products are typically high fat and calories which may be the challenges for the health concern people and especially for the old people. This percentage of people are not so less and they can create bad quality reputation for the product which will negatively affect the market penetration. Processing of these foods is time consuming and consumer may think it will affect the hygiene factor of this food. According to the physician the nutritional content associated with this food may specifically cause obesity. Typically Indian people always prefer to have hot food i.e. just cooked. So if heat processing is done before having then vitamins are lost. Lack of product differentiation and like different ingredients and flavor might not attract consumers of all types of food habit especially the taste of a food and force them to shift towards different brand of variety of flavors. Opportunity Large dimension of unexploited or untapped rural and semi-urban market represent a high level of market presence opportunity. Increasing no of working bachelors having high demand of ready to eat food for their breakfast and launch during the working hours. Indian FMCG market has low foreign brand presence which will help this brand to enter into the market easily and getting attraction of the brand conscious consumers. High availability of raw materials of domestic production with cheap price can help to lower the production cost and increase the unit profit. This scenario will help the company to further penetrate into the potential market of neighbor countries (GAIN, 2011, P.12). Threats Strong presence of domestic brands in the urban market makes a wall to enter even in the potential market of the country. Domestic brands force the new foreign brands to come into the price war at the initial stage of market presence and which results a huge initial loss until the market demand is increasing (GAIN, 2011, P.12). Competitor Analysis The ready to eat food market in India is not much competitive as only few players are there who very recreantly have started this business. For this reason a huge potential market are there and this the perfect time to launch this product category in India. Moreover Indian consumers are brand conscious especially urban people and in this sector of rte food, no other foreign brand are there except Top Ramen and Maggi. These two seems to be the market leader for any new company coming in the market and according to the market share Maggi is the market leader and first brand who brought this type of product category in the Indian food market. Even though these two top brand has been able to capture only 60% of the urban consumer. So if the company can create a sales force to the rest percentage by something unique key benefit of the product which the other top brands don’t have then will also get a good market share and there is a huge semi urban and rural market are there which is potential but there is likely zero competition any6 company will face. Marketing Strategies A flanking marketing strategy need to implement for this new product line up or the new brand extension of the company in a new market especially in a foreign market where local domestic players always gets extra benefit from the government and the authority. In flanking strategy a sample testing is done in a broad sample area but not in size. According to the geographic and demographic segmentation product sample testing is done by giving free sample to the consumer and a feedback form or telephonic feedback collecting is done. This part of flanking marketing strategy is very essential for a new brand in new market before starting production and making a substantial initial investment. This is risk minimizing strategy by which the company can understand the product acceptance and the potential market and the optimum flow of production and distribution. Pricing Strategy The result of value addition by the producer is reflected in the pricing strategy with an ultimate goal of making the product comparatively lower than the other competitors. As typical Indian consumer behaviour shows that customer shift to a new brand if the price is comparatively low and the quality and other key features like flavour and taste are better than the existing products in the market. Pricing is the most sensitive part of marketing mix because it only gives lives to a new born materialistic product. A new brand can’t use discounting strategy as other existing players can but the company need not make price below than the discounted price of others’ product because by this way it may fall into the price war which is negatively influence the brand value. Pricing should be made by making average price of the top brands in the market and stick to that for few months until the total targeted market presence in complete and the targeted consumers are aware of the product. Promotion Strategy Pre launching sample testing feedback from the potential consumers is one of the important promotion strategies especially for the food product like RTE food. By this strategy the company will come to know the feedback directly from the customers whom it is going to sell and can understand the product acceptance ratio of the consumers. Apart from this, other promotional strategies like using popular media sources, campaign, and events etc can be implemented. Distribution Strategy For FMCG product a strong distribution is very essential. As the company is having good experience of business operation in the developed market like US, then it will help to explore in the Indian market. But the Indian channel distribution is little complicated and the middleman between the producers and the retailers are comparatively more than other countries. So it will be a transparent and effective distribution process for the company if they develop channel sales only through distributor and direct supplying to the big retail outlets or the super markets. But the distributors will take the responsibility for supply to the community based departmental stores and the grocery shops in semi urban and the rural areas (Beaman & Johnson, 2006, p.2). STPD Analysis Segmentation For ready to eat food demographic segmentation will be beneficial for market presence and adopting promotional activities for different segments like age, eating habits, lifestyle of urban families and urbanization of rural people etc. For demographic segmentation of age two types of promotional strategies need to implement for targeting the young bachelor by prioritizing the time consuming factor and for targeting family members especially housewives by quality and taste. Segmentation can be done in another way by maintaining the lifestyle of urban people who always try to follow the western culture of clothing and food habits as well (Jha, 2007, slide.10). Targeting Target customer should be very specific like kids, youths, office goers, working women. For kids and youths are the consumers not the customers because they only eat the product but purchase decision are made by their family member like their mom. On the other office goers and the working women consume by their won decision and preferences of quick processing and at the same time different flavor will make the add on to their purchasing behavior (Viswanadham. n.d. p.4) Positioning Market positioning ready to eat food product con be done in different types like good to eat, easy to cook; noodles of 2 minutes etc. this is tool to attract the potential buyers by explaining the benefit of the product and some differentiation from the competitor’s product (Brushett & Frankli, 2001, p.15) Differentiating Product differentiating can be done by few important areas of product or the key point for which the product is made and the key features. For noodles it will be like flavor, taste, packaging etc. Financial Summary Financial Assumptions Interest on Capital investment is 14% per annum. Margin money is 25% of the working capital Full capacity utilization time period is 5 years. Project payback period is 7 years. Financial Projection Referencing Beaman, A, J. & Johnson, J, A. (2006). Food Distribution Channel Overview. [Pdf]. Available at: http://ir.library.oregonstate.edu/xmlui/bitstream/handle/1957/20443/em8921.pdf. [Accessed on March 13, 2012]. Brushett, L. & Franklin, G. (2001). Market Planning for Value-Added Agricultural Product. [Pdf] Available at: http://agmarketing.extension.psu.edu/Business/PDFs/market_planning.pdf. [Accessed on March 15, 2012]. Food Products. [Pdf]. Available at: http://etd.uasd.edu/ft/th9670.pdf. [Accessed on March 15, 2012]. GAIN. (2011). [Online]. Exporter Guid. Available at: http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_New%20Delhi_India_12-29-2011.pdf. [Accessed on March 15, 2012]. Hirekenchanagoudar, R. (2008). Consumer Behaviour Towards Ready-To-Eat J. Alok. (2007). Food Processing Industries in india. [Pdf]. Available at http://www.iiml.ac.in/events/C5_04_Alok_Jha.pdf. [Accessed on March 15, 2012]. Kaplan, R. S. & Norton, D. P. (2010). Developing the Strategy: Vision, Value Gaps, and Analysis. Harvard Business School Publishing. [Pdf]. Available at: http://www.exed.hbs.edu/assets/Documents/developing-strategy.pdf. [Accessed on March 13, 2012]. MAPA Task Group. (2009). Tips for Writing SMART Objective.s [Pdf]. Available at: http://www.dodea.edu/offices/hr/employees/documents/TipsforWritingSMARTObjectives.pdf. [Accessed on March 15, 2012]. MOFPI. (2007). Ready To Eat Food. [Pdf]. Available at: http://mofpi.nic.in/ContentPage.aspx?CategoryId=186. [Accessed on March 15, 2012]. N. Viswanadhan. (n.d.). Can India be the food basket for the world? [Pdf] Available at: http://www.isb.edu/faculty/Working_Papers_pdfs/Can_India_be_the_Food_Basket_for_the_World.pdf. [Accessed on March 15, 2012]. Regmi, G. & Gehlher, M. (2005). New Directions in Global Food Market. [Pdf]. Available at: http://www.ers.usda.gov/publications/aib794/aib794.pdf. [Accessed on March 15, 2012]. Read More