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STRATEGIC MANAGEMENT

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  • 1. MASTERS OF BUSINESS ADMINISTRATION 2012 Assignment Record FormStudent Name: ESHANK GARGUniversity of Derby Index Number: 100272311Learning Centre: OLYMPIA COLLEGE, KUALALUMPUR MALAYSIACourse: MBATerm: 4 (SEMESTER 3)Module Title: STRATEGIC MARKETING MANAGEMENTModule Leader: DR. SANKARAN RAMANATHANAssignment Submission Due Date: 23 SEPT 2012Status: ActiveI confirm that I have read and understood the University regulations with regard to referencingand plagiarism. YES NONote: Please read the “Instruction to Upload the Assignment on OCTAL Study Portal” before uploading your assignment.Module Leader’s Comments:Module Leader’s Comments on Citing & ReferencingESHANK GARG_J8806167_100272311_KUKL00370_SM Page 1
  • 2. MASTERS OF BUSINESS ADMINISTRATION 2012ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 2
  • 3. MASTERS OF BUSINESS ADMINISTRATION 2012EXECUTIVE SUMMARYCompanies spend a lot of revenue to create a product that meet the customer’s demand, butdue to lack of effective marketing strategy companies faces failure. Marketing is theimportant process for every organisation’s to create value and build a strong relationship withcustomers, Market is not like 60s and 70s where marketers were the kings and products staylast long today market it’s more complex and more globalised and its tougher for marketersto develop an effective marketing plan.McLeod Russel is purely tea Plantation Company. McLeod Russel India (MRIL), the largestintegrated tea company in the world with a 102 million kg annual production, companyengage in cultivation, processing and sale of tea. The Internal and External analysis of theorganization, competitive environment enables the team to propose dynamic & competitivestrategy for company. M c L e o d T e a i s n a t u r a l a n d powerful means of promotingthe healthy elimination of potentially harmful toxins and waste while opening thepathway to superior assimilation of important nutrients. Tea, in India is very commonbeverage around 74% of adults drink daily. Market is changed, people are more confidenttoward the benefits of tea; customers demand more packaged branded tea.Plantation industry dependent upon the climatic conditions that’s the company faces a pricedownfall in 2011 aside from climatic company affects due to political, social, economical andtechnological factors. Recently, due to production shortfall in Kenya brings an opportunityfor MRIL to develop a new geographical market as well as plan to develop new product indomestic market. McLeod plans to achieve 100% growth through develop new packagebrand market in Black and Green tea.Company plans to come out with a new marketing plan of four years in order to achieve 25%growth per year and moving to target a new geographical and demographic market segmentas well adopt a new dynamic pricing strategy in order to achieve and meet customer demandand need and for the control and success of plan company plan to hire more marketing andfinancial expertise that can audit the revenue effectively and helps to the success of marketingplan.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 3
  • 4. MASTERS OF BUSINESS ADMINISTRATION 2012 TABLE OF CONTENTS1.0 INTRODUCTION............................................................................................................ 062.0 COMPANY PROFILE .................................................................................................... 07 2.1 MCLEOD ACQUISITION…………………………………………………………....073.0 SITUATIONAL ANALYSIS .......................................................................................... 08 3.1 MARKET SUMMARY……………………………………………………………….08 3.1.1 GLOBAL AND DOMESTIC SCENARIO…………………………………………09 3.1.2 MARKET NEED AND TREND……………………………………………………11 3.2 MACRO ENVIORNMENT (PEST ANALYSIS)…………………………………….12 3.3 SWOT ANALYSIS……………………………………………………………………14 3.4 COMPETITION……………………………………………………………………….154.0 MARKETING STRATEGY .......................................................................................... 16 4.1 MARKETING OBJECTIVE ......................................................................................... 17 4.2 MARKET SEGMENTATION………………………………………………………...18 4.3 TARGET MARKET…………………………………………………………………..19 4.4 POSITIONING………………………………………………………………………..19 4.5 MARKETING MIX…………………………………………………………………...20 4.5.1 PRODUCT…………………………………………………………………………..20 4.5.2 PROMOTION……………………………………………………………………….20 4.5.3 PRICING…………………………………………………………………………….20 4.5.4 PLACE………………………………………………………………………………21 4.6 FINANCIAL OBJECTIVE……………………………………………………………21 4.6.1 BREAK EVEN ANALYSIS………………………………………………………...21ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 4
  • 5. MASTERS OF BUSINESS ADMINISTRATION 2012 4.6.2 EXPENSE FORECAST…………………………………………………….……….225.0 IMPLEMENTATION AND CONTROL ..................................................................... 22 CONCLUSION ............................................................................................................ 24 LIST OF FIGURES ..................................................................................................... 25 FIGURE 1 ............................................................................................................ 09 FIGURE 2 ............................................................................................................ 10 FIGURE 3……………………………………………………………………....10 FIGURE 4………………………………………………………………………11 FIGURE 5………………………………………………………………………15 FIGURE 6………………………………………………………………………16 FIGURE 7……………………………………………………………………....17 FIGURE 8………………………………………………………………………19 LIST OF REFERENCES ............................................................................................ 26 LIST OF APPENDIX .................................................................................................. 32 APPENDIX 1 ..................................................................................................... 32 APPENDIX 2 ..................................................................................................... 34 APPENDIX 3………………………………………………………………….35 APPENDIX 4………………………………………………………………….36ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 5
  • 6. MASTERS OF BUSINESS ADMINISTRATION 20121.0 INTRODUCTIONStrategic Management is a management that provides a comprehensive examination of allmajor component of marketing strategy and their integration. The Chartered Institute ofMarketing defined marketing as the management process responsible for identifying,anticipating and satisfying customer requirement profitability (Kamarulzaman and Abu2012).“Marketing as the process by which companies create value for customers and build strongcustomer relationship in order to capture value from customers in return” (Kotler andArmstrong 2012, pp. 29).Every organisation operates in a dynamic marketplace-competition, technology, consumerand market force, redefine industry every day. Staying competitive means continuouslyadjusting and adopting customer approach to meet changing needs and expectation.Marketing must be understood not in the old sense of making a sale-‘telling and selling’- butin the new sense of satisfying customer needs. According to management guru Peter Drucker,‘The aim of marketing is to make selling unnecessary’. Broadly, marketing is social andmanagerial process by which individuals and organisations obtain what they need and wantthrough creating and exchanging values with others. (Kotler and Armstrong 2012).Marketing is simply to shorten the sales cycle. Strategic Marketing is doing this, well,strategically. Far too often, organisations try to develop product to meet customer demandwithout verifying what the customer actually wants, then they make a strenuous effort to‘sell’, through advertising, promotion and publicity- through ‘outbound marketing’.Experienced organisations have learned that it’s not their opinion whether the product isneeded or not, the opinion that matters most is that of the customers. These organisationshave learned what they don’t know about their customers and this precious knowledge comesfrom ‘inbound marketing’ (Namara 2012).This paper shows the strategic marketing plan of McLeod Russel in order to achievecompany’s 100% growth for upcoming 4 years on tea industry. This plan includes currentmarket positioning of company and their competitors and affects of financial meltdown overcompany and helps to move on 25% growth per year.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 6
  • 7. MASTERS OF BUSINESS ADMINISTRATION 20122.0 COMPANY PROFILEMcLeod Russel India Limited (MRIL), has been growingtea in India since 1869, and is today the world’s largest teaplantation company. McLeod Russel producesapproximately 100 million kilos of high quality tea from 61 estates in Assam and WestBengal (India), 3 estates in Vietnam and 5 estates in Uganda and recently taken over themanagement control of Gisovu Tea estate in Rwanda. The company was start in May 5 1869,when Captain J.H Williamson and Richard Boycott Magor, two Englishmen based inCalcutta, formed a partnership firm, Williamson Magor and Company, to service in Assam(The Economic Times 2012).McLeod Russel India Limited (MRIL) was originally incorporated as Eveready CompanyIndia Private Limited. The company’s tea is marketed under the registered Elephant trademark, Company offers a wide range of retailing options for clients. Many of tea factories have thefacility to pack tea in a Vacuum form, resulting in clients receiving a uniquely fresh product. McLeodRussel produces high quality Orthodox and CTC varieties of black tea. The group has a state-of-the-art blending facility that accommodates all of the clients blending requirements which receivedHACCP certification in 2008 (UK Tea Council 2012).2.1 McLeod AcquisitionThe bulk Tea Division of Eveready Industries India Limited with all assets (including 28estates), Liabilities and Rights has been transferred in the company with retrospective effectfrom April 1 2004. The name of company was changed to McLeod Russel India Private Ltd.In July of 2005, McLeod Russel had acquired Borelli Tea Holdings Ltd from the Magorfamily based in England and took over the 17 gardens of its Indian Subsidiary WilliamsonTea Assam Ltd, with further acquisition of Doom Dooma Tea Company and Moran TeaCompany in 2006-2007 respectively. In Oct, 2007, Moran tea company (India) became as asubsidiary of the company. The BOD of the company had approved the scheme ofamalgamation of The Moran Tea Company India with McLeod Russel India during Februaryof the year 2008 with requisite majority (IIFL 2012).Recently, the company plan to fund the acquisition of two Rwanda tea plantations via internalaccruals. This deal will give 7 million kg out of 20 million kg in Rwanda which is 25-30% ofthe market share (Money Control 2012).ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 7
  • 8. MASTERS OF BUSINESS ADMINISTRATION 20123.0 SITUATION ANALYSISAccording to D. Power (2012), a situation refers to the general position or context that aperson or organisation is operating within at a specific point in time. A situation analysisdefines and interprets the state of the environmental of a person or organisation.From a strategy-making standpoint, the purpose of situation analysis is to determine thefeature in a company’s internal/external environment that will most directly affect itsstrategic options and opportunities (Chaneta 2012). The situation analysis or audit, describedas the ‘where are we now’, is the means by which a company can identify its own strengthand weakness as they relate to external opportunities and threats (Vrontis and Thrassou2006).The financial year 2008-2009 saw a great economic depression worldwide, affects Indianexport, economy and finance. Consequently, the rate of inflation, interest rates and the stockmarket indices which had touched their peaks had started declining rapidly. The stock offoreign exchange declined from $330 billion some six months before to 245 billion by thefirst week of December 2008 and the BSE index declined from over 20000 during the earlymonths of 2008 to 9000 during the last week of November 2008 (Kumar 2012).The year 2008 registering a decline of 5.61 million kgs over the production level of 986.43million kgs achieved finally during 2007. The year 2008, the Indian tea industry recorded itsfinest performance in a decade with price realizations first achieving and the sustaining newheights (Tea board 2009). During the year MRIL reach 26% higher compared to the turnoverrecorded in the previous year (Annual report 2008).3.1 Market SummaryIndia produced 966 million kg of tea in 2010, of which 76 percent is produced in the North-Eastern states. Being the largest consumer of tea, it consumes 837 million kg in 2010. About203.86 million kg tea is exported from India which brings about US $ 413 million as foreignexchange for the country per annum (Hazarika 2011).MRIL is engaged in the cultivation processing and sale of tea. The company primarilyproduces Crush, Torn and Curve (CTC) tea, which accounts for more than 90% of itsESHANK GARG_J8806167_100272311_KUKL00370_SM Page 8
  • 9. MASTERS OF BUSINESS ADMINISTRATION 2012production; the rest of the tea manufactured by the company comprises the orthodox variety.McLeod has 39,358 hectares under tea cultivation globally (McLeod Report 2012).Over the last 2 to 3 yrs, McLeod Russel has followed the inorganic route and doubled theplantation capacity to 87mn Kg domestically and has further consolidated its positionglobally by adding 20.2mn Kg. Through a series of acquisition plantations in North Indian(Assam) belt. The company expects operating 30% on the back of crop shortfall with groupconsolidate production of 104.5mn Kg (Mehra and Doshi 2012). Vietnam India 5% 77% Africa 18%Figure 1: Mix of Consolidate Group Production Source: (Mehra and Doshi 2012).3.1.1 Global and Domestic ScenarioGlobal ScenarioCultivation of tea is spread over all the continents except North America with wide range ofagro-climatic conditions. More than 30 countries grow tea. The estimated global productionis 3800 million kg of which 43% is exported, with the world consumption around 3700million kg, the global production and absorption remain finely balanced with production littleahead of demand (Tea board 2009).ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 9
  • 10. MASTERS OF BUSINESS ADMINISTRATION 2012Figure 2: Tea production in key tea exporting countries (million kgs) Source: (ICICI direct2009).Amongst all tea producing countries, the major producers are India, China, Sri Lanka andKenya. These five countries contribute 77% of the total world population and 80% of globalexports, while India and China ranks the second largest respectively, in tea production as wellas consumption. They export about a quarter of their production. In global trade India’scontribution is 17% while that of china is 17.6% and the production contributes of 30% and23% respectively (Majumdar et al 2010).Figure 3: Global Productivity of tea Source: (Majumdar 2010)ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 10
  • 11. MASTERS OF BUSINESS ADMINISTRATION 2012Domestic ScenarioIndia is the largest consumer and second largest producer of tea in the world. Accounting foraround 40% of the world’s black tea production, has been lagging behind consumption duringthe last few years. This has resulted in shrinkage of tea inventories from 306.9 million kg in2006 to 220.7 million kg in 2009. It is expected to be 206.5 million kg in 2010E, which is just2.9 months of consumption (lower than the five months of consumption in 2006). Thecountry has witnessed sluggish production growth of around 2.4% CAGR over 2002-2009. Itis unlikely to register any significant growth in the near term. This is due to thecomparatively lengthy gestation period of a tea plant and the lack of any new land under teaplantation in the last few years (ICICI direct 2009).Figure 4: Domestic tea carryover stocks (million kg) Source: (Tea board: ICICI direct 2009)3.1.2 Market Need and TrendNeedThe most basic concept underlying marketing is that of human needs. Human needs are statesof felt deprivation (Kotler and Armstrong 2012). All marketing should be based onunderlying needs. For each market segment included in strategy, explain the market need thatlead the group to buy product or service (Berry 2006).India is the largest consumer of the beverage in the world consuming nearly 25% of globaltea production, about 74 percent of Indian adult population drinks tea regularly. The healthconsciousness among Indians is increasing and they have started to recognise the benefits ofESHANK GARG_J8806167_100272311_KUKL00370_SM Page 11
  • 12. MASTERS OF BUSINESS ADMINISTRATION 2012tea which is highly anti-oxidant, customers are willing to upgrade to upgrade to enjoy a betterquality product at all levels, entering into a branded segment or upgrading quality and flavourwithin the branded offer (Jain 2012).TrendThe tea is not just a drink the trend gets change now tea is a kind of one drink-for all reasons-all seasons. There was a time when Indians used to think drinking coffee was cool andsophisticated but, now the trend is changing, the Indian youth is getting more confident andthey don’t mind ordering the kind of beverage they want to have (Jain 2012). Green tea isone of the fastest growing categories driven by its health benefits. This fast moving of markettrend gives rise of some factors for market, in 2005, the per capita consumption was 691 gmwhile in 2008 it increased to 701 gms. Thus domestic market demand is going strong, thoughgradually. Packaged tea is gaining grounds as people start favouring it over unpackaged ones.Unpackaged tea, which is generally cheaper, is largely sold in rural India. (Research pedia2011)3.2 Macro environment (PEST Analysis)The external (macro) environment or external analysis is to identify strategic opportunitiesand threats in the organisation’s operating environment that will affect how it pursues itsmission (Hill and Jones 2009). The aim of this analysis is to identify the critical issues onenvironmental that may affect organisation (Drummond and Ensor 2005).PoliticalThe tea industry in India is highly regulated, while the Tea Act 1953, and control productionand distribution activities (Arm Research 2007).In addition to this central cess, states taxes, sales taxes, changes in laws regulations, poorprice realization, regulation towards labour, increase in cost of production, global warming,climatic challenges, financial crises are the factors that affects the organisations macroESHANK GARG_J8806167_100272311_KUKL00370_SM Page 12
  • 13. MASTERS OF BUSINESS ADMINISTRATION 2012environment. However, the policies will include subsidies, price controls or guarantees,import/export controls, quotas and tariffs, exchange rates etc. If a government facilitatingfavourable policies there will be more opportunity to expand business for company (Das2009).EconomicalWhen the price of a commodity falls, it becomes relatively cheaper than other substitutecommodities. This induces the consumer to substitute the commodity whose price has fallenfor other commodities, which have now become relatively expensive. As a result of thissubstitution effect, the quantity demanded of the commodity, whose price has fallen, rises.Income effect: When the price of a commodity falls, the consumer can buy more quantity ofthe commodity with his given income, as a result of a fall in the price of the commodity,consumer’s real income or purchasing power increases.Number of consumers: When price of a commodity is relatively high, only few consumerscan afford to buy it, and when its price falls, more numbers of consumers would start buyingit because some of those who previously could not afford to buy may now afford to buy.SocialProvide free accommodation and sanitation facilities to all employees. Provide free primaryeducation for employee’s children it achieved thorough construction of school in each teagarden. Central Hospital provides advance facilities and good number of staff apart from themedical facilities in every garden. Company has also initiated health care programme called‘Mothers Club’ which provide guidance and awareness on health and hygiene related mattersin the region. Freedom of Association: Allows every employee the right to form and join aTrade Union (Kadavil 2012).TechnologicalThe distributors and consumers are terribly concerned about demand, pricing and marketingAvailability of new genotypes, machinery, availability of Information, communicationstechnology, rotorvane feeders, rotorvanes, CTC machines, CFMs, twelve VFBDs, coalstoves, boilers, milling machines, lathe machines. Not only technology, but also available ofESHANK GARG_J8806167_100272311_KUKL00370_SM Page 13
  • 14. MASTERS OF BUSINESS ADMINISTRATION 2012 more reliable information will also has an effect to the structure of the industry. (Brunett 2008). 3.3 SWOT Analysis SWOT analysis is a device that helps business managers to evaluate the strength, weaknesses, opportunity and threats involving in any business enterprise. Specially, SWOT is a basic and candid model that assesses what a business can and can’t do, as well its potential opportunities and threats (Ommani 2011). INTERNAL ANALYSIS STRENGTH WEAKNESSES Single largest private sector company McLeod is purely plantation oriented in the world with 39,358 hectare with no revenues from packaging globally under plantation (McLeod (Annual Report 2012). This low 2012). diversification and increased demand McLeod accounts for 7.8% of India’s supply gap can lead the weakness of total tea production and 2% of global company. tea production (Techn 2012). In introduction of mechanization of fields operations, remote location of the The Company manages to provide plantation and transportation of teas improved/innovative products to the over long distance from tea garden to consumers through research and sale points (IIFT 2009). development.EXTERNAL OPPORTUNITY THREATSANALYSIS India is largest consumer of Tea with 3% growth on annual consumption, Indian exports fell by 5 million kgs, which increases gradually (Arm during 2010 on the back of strong domestic demand and production Research 2007). shortfall. Domestic consumption is Narrowing down of the gap between estimated to be around 860 million kgs, supply and demand due to increased during 2010 (Baheti 2012). growth rate of consumption in the Fast moving market trend, consumers major producing countries(IIFT 2009) are willing to buy brand, they knows the benefits of tea now the market trends Demand for Orthodox teas by CIS and moves fast towards the green, organic, Middle East countries during2010 was herbal tea, and low cost of production of very strong. However, financial teas from Kenya, Vietnam, Indonesia imbargo on Iran may affect the export etc, makes a threaten in Indian market of orthodox teas in coming years (Jain 2012). The production is largely dependent upon vagaries of nature, high labour and is also subject to follow labour laws, exchange rate fluctuations, external changes (government, politics, taxes etc), price downfall brings threats for the company ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 14
  • 15. MASTERS OF BUSINESS ADMINISTRATION 2012 Stagnant production in India and carry forward shortage should lead to firmer prices in the country.3.4 CompetitionMcLeod Russel is principally a CTC variety producer, accounting for 92% of its product mix.The company is the largest producer, exporter of black tea from India.India has dual manufacturing base India produces both CTC and orthodox teas in addition togreen tea. The weightage lies due to domestic consumer preferences. Orthodox tea productionis balanced with export demand and production of green tea is small. The competition toIndia is Sri Lanka, China, Kenya, Indonesia and Vietnam (Thakur 2010). Aside from globalmarket Tata Global Beverage, Unilever, Bombay Burmah, Jayshree tea, Warren Tea etc, arethe vast domestic competitors of McLeod (Money Control 2012). Figure 5: 1 Year Price Performance Source: (Fulletron 2012)McLeod is purely Plantation Company, with largest production of CTC and black, while themarket competition demand more packaged, branded teas as well as the customers are moreinfluence towards green and organic tea and in order to achieve growth in market competitionthe company must have to be diversified. The company plans to market its tea aggressively inthe domestic market through strategic tie-ups with renowned national packers (BSEIndia2005). (APPENDIX 1)ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 15
  • 16. MASTERS OF BUSINESS ADMINISTRATION 2012Figure 6: BSE Market Shares Comparison Source: (CNBC Money Control, 2012)4.0 MARKETING STRATEGYThe strategic planning process represents a set of steps a marketer goes through to develop astrategic marketing plan (Grewar and Levy 2008).With the brand MRIL, largest producer of tea but still Tata Tea, Unilever are the dominantplayers in the market (John and Chandran 2008). MRIL has to introduce innovativeproducts in an existing market and focus on market development as well company hasadvantage of market development and export to the new market of Afghanistan, Pakistan,Russia and Egypt with the existing product. It is proposed that MRIL embarks on marketdevelopment strategy. Lifestyle of customers is changing who emphasize on health, brand,and packaging. McLeod can capture this market by focusing on packaging and marketdevelopment (Kaushik 2010).ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 16
  • 17. MASTERS OF BUSINESS ADMINISTRATION 2012 McLeod can take advantage of the positive press on the health benefits of tea. More and more tea makers are adding green tea in their portfolio as customers in India are developing a taste for the beverage of its many health promoting effects (Kumar 2009). EXISTING PRODUCT NEW PRODUCTS .EXISTING MARKET PRODUCTMARKETS PENETRATION DEVELOPMENTNEW MARKETMARKETS DIVERSIFICATION DEVELOPMENT Figure 7: Market Expansion Grid Source: (Kotler and Armstrong 2012) 4.1 Market Objective The company expects to increase the cumulative proportion of teas marketed through export and private network and intends to create new packaging especially for institutional sales. The company believe production would be stable, which would result in recovery in production and realisation to increase by 10% in FY13E (ICICI direct 2012). The company can enlarge capital in order to diversify into tea plantation such as green and organic tea towards globally, particularly in the value added tea segment. Hence, marketers also realise that exports are essential for the sustenance of industry but, Indian tea exports have been losing to competition from Kenya, Sri Lanka, China and other new age tea exporting nations. In this case it is extremely to search out new markets (IIFT 2009). Diversification towards green tea- Green tea consumption in India is rising at a rate of more than 10% annually. Traditionally, people drink black tea with sugar and milk. But, green tea consumption will grow in the future because of its health benefits and awareness (Dassgupta 2012). ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 17
  • 18. MASTERS OF BUSINESS ADMINISTRATION 2012Retail Brand Image- Tea is the most common selling product in India. Small retail storesdominant as the sales channel for tea. Brands like Tata Tea, Unilever and others are dominantbecause of their strong retail market image. McLeod can easily penetrate in the marketbecause of large production of black tea in the world. Like green tea, tea bags are also agrowing category. Tea bags also command higher prices as compare to other categories, socompany can achieve that new market (Researchpedia, 2012). (APPENDIX 2)4.2 Market SegmentationThe market share of product can’t get protected by serving the commodity market alone,branding requires segmentation.Geographical SegmentationGeographical segmentation, call for dividing the market into different geographical units suchas nations, regions, countries. The company has annual production of approx 70.12 million,in which the half is sold through auction and other half is divided equally for domestic aswell as for export. Recently, production has dropped in all tea producing nations of the worldwhile demand remains steady. Shortfall in Kenya works to advantage and CTC consumingmarket will open up, export to Afghanistan and Egypt is on increase and volume to Pakistanmay pick up. An export to Egypt is likely to increase by more than 50%. Even Russia alsowitness a growth in spite of economic crisis, people may shift from premium variety to lesscostly varieties (Ravi 2009). However, the segmentation towards Asian countries as well asUAE and Russia can brings opportunity for the company after a market decline in big exportmarkets of Russia and UAE (Dutt 2007).Demographic SegmentDemographic market segment divided the market into groups, on the basis of age, gender,income, social, religion, race, generation etc, clearly, a marketing war is brewing betweenmajor players in the branded tea segment in India. Companies are offering wide range andrecently premium tea is quite common in marketing which costs, (approx, MRP 280+) isESHANK GARG_J8806167_100272311_KUKL00370_SM Page 18
  • 19. MASTERS OF BUSINESS ADMINISTRATION 2012expensive, as Tea is a fast moving goods are very common beverage in India, hencecustomers may shift from premium to cheap economy brand (Financial Express 2012).In India there are more than 5000 towns and over 6, 38,000 villages. Nearly 87% of thesevillages have a population around 2000 people per village. However, branding is demandedbut if the company has segmented market than it may helps to achieve the big market ofeconomy segment.Figure 8: Economy Segment of Branded Market Source: (FAO 2010)4.3 Target MarketAs the largest tea exporter McLeod maintains strong connection with buyers in Europe,Middle Ease, and North America, which are target positioning market as well as the keycustomers of the company If the company move towards the segmentation then a big marketof Russia, Egypt as well as target the domestic, economy, social market through develop newproducts and new packaging market which can brings a better opportunity of 100% growthfor the company in upcoming four years.4.4 PositioningMRIL, world largest producer of black tea, company enjoys the strong position of tea exportmarket. McLeod exports to a number of countries and the premium markets of Germany,Ireland, Netherlands and UK, which accounted for around 40 per cent of total exports inFY2009. UAE was the largest export market for McLeod’s in FY09, accounting foraround 33 per cent of its export sales, followed by UK, which accounted for around 28percent of its exports (ICRA 2012). In order to further diversify its exports market companyplans to position in new geographical markets of Russia, Egypt, Pakistan and Afghanistan.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 19
  • 20. MASTERS OF BUSINESS ADMINISTRATION 20124.5 Marketing MixMarketing Mix is not a scientific theory, but merely a conceptual framework that identifiesthe principal decision making. This tool can be used to develop both long term strategies andshort term tactical programmes (Goi 2009).The world of market today is not as same as before in 60s or 70s, where marketers were king.Product difference can last months, minute not years. Companies can successfully embracethe new model of 4Es (Experience, Everyplace, Exchange and Evangelism) in their marketmix (Fetherstonhaugh 2009).4.5.1 Product (Experience)Product includes all features and combination of goods and related services that a companyoffer to its customers (Kotler and Armstrong, 2012). The business has to produce a productthat people wants to buy and for this company has to decide which segment they are aimingat, MRIL a leading black and orthodox tea and CTC tea production company, in such case ifthe company opens a tea café or tea bars at their tea estate as well as other parts of city then ifwill gives a nostalgic experience to customers which bring the customer loyalty for theproduct as well plan to develop new product such as, green tea, herbal tea in the existingdomestic market in order to stable the domestic market position.4.5.2 Promotion (Evangelism)Promotional strategies include all means through which a company communicates thebenefits and values of its products and persuades target customers to buy. It is a marketer’sbag of tool for communicating with customers and other stakeholders (Kotler and Armstrong2004). Company plan to promote their product through press release, promotion campaigns,T.V, radio advertisement and leaflets etc. Indians are more confident to buy value, cheapproducts and free gifts, MRIL, can promote by offering free gifts with every purchase forinstance free pack of 250gm with the purchase of every 1 kg pack.4.5.3 Pricing (Exchange)Price is the one element of the marketing that produce revenue. In a simplest way it is aconcept of money that customers have to pay to obtain the product (Kotler and Keller 2012).The price must be high to cover costs and make a profit but low enough to attract customer.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 20
  • 21. MASTERS OF BUSINESS ADMINISTRATION 2012In tea export, the prices are mainly set by tea board, auctioneers, government policies and itwould be noted gain in prices from 2008 after a recession, company plan to adopt dynamicpricing so that they can meet the characteristic and demand of customers.4.2.4 Place (Everyplace)Placement involves all companies that make the products available to the targeted customer.Fertherstonhaugh (2009) said that now the trend is change customers create their own path,we can’t interrupt people, so marketers need to understand the concept of everyplace, whichmeans full range of possibility in reaching people. McLeod is a tea plantation company, asidefor tea shops or tea markets, company uses virtual personal assistant system, so that theircustomers can choose their tea as well as they can watch the plantation and brewing of tea onwebcam, mobile and plan to adopt effective distribution channel for hotels, restaurants,institutional cafeterias this can helps the company to reach full range of possibility inreaching people.4.6 Financial ObjectiveThe plan calls 100% growth for coming 4 years by the last plan with 21% net profitabilityrate. Currently the target price of company is 370INR (4traders 2012). This plan assumes twoimportant trends:First, a steady decline growth in gross margin percentage, which means company, has to takemore risk and implement the plan step by step.Second, increase the total revenue growth of 7.1% Y-O-Y, by both sales volume andmarginal risk in tea price (ICRA 2012). (APPENDIX 3)4.6.1 Break-Even AnalysisBreak-Even analysis is a useful tool to study the relationship between fixed cost, variable costand returns. A break-even point defines when an investment will generate a positive returnESHANK GARG_J8806167_100272311_KUKL00370_SM Page 21
  • 22. MASTERS OF BUSINESS ADMINISTRATION 2012and can be determined graphically or with simple mathematics (Gutierrez P H 2012). Oncethe break-even point is met, assuming no change in selling price, fixed and variable cost, aprofit in the amount of the difference in the selling price and the variable costs will berecognized (Kotler and Armstrong 2012). (APPENDIX 4) FIXED COST BREAK EVEN = PRICE - VARIABLE COST4.6.2 Expense ForecastEffective marketing requires a very high percentage of sales and marketing expenses to salesduring the early years, Expenses divided over four main categories: advertising, publicrelations, travel and website, a smaller budget is included for graphics and printing expenses,and a substantial additional budget for contingencies. (APPENDIX 5).5.0 IMPLEMENTATION AND CONTROLTight control measures to closely monitor quality and customer service satisfaction. This willenable to react very quickly to monitor correct problem that may occur.The Company has in place adequate systems of internal control commensurate with its sizeand the nature of its operations. These have been designed to provide reasonable assurancewith regard to recording and providing reliable financial and operational information,complying with applicable statutes, safe guarding assets from unauthorized use or losses,executing transactions with proper authorization and ensuring compliance of corporatepolicies.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 22
  • 23. MASTERS OF BUSINESS ADMINISTRATION 2012The Company has an Audit Committee, the details of which have been provided in theCorporate Governance Report. The Audit Committee reviews Audit Reports submitted by theInternal Auditors. Suggestions for improvement are considered and the Audit Committeefollows up the implementation of corrective actions. The Committee also meets theCompanys statutory auditors to ascertain, their views on the adequacy of internal controlsystems in the Company and keeps the Board of Directors informed of its major observationsfrom time to time. The Risk Management Policy adopted by the Company has furtherstrengthened the internal control system (Baheti K 2012).Human ResourceTea Industry is highly labour intensive. The Company employs over 80,000 personnel at itsTea Estates and other establishments in India. Employee relations remained satisfactoryduring the period under review. The Company would like to record appreciation of thewholehearted support and dedication from employees at all levels in maintaining smoothproduction and manufacture of tea from all the Tea Estates during the year.Operations and ResearchCompany needs continuous market research to understand brand awareness and brandattitude among their target market as well as an effective operation, lean management andlong term procurement policiesFinanceFinancial ratios have improved substantially over last couple of years. Gross debt(consolidated) as on 31st March 2011 amounted to Rs. 316 crores as comparedto Rs. 402crores as on 31st March, 2010. Internal generations have been used to reduce thedebt byRs.86 cores during the year.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 23
  • 24. MASTERS OF BUSINESS ADMINISTRATION 2012CONCLUSIONMarketing plan is a process that leads the marketing strategies towards achieving themarketing objectives. The lifestyles of Indians are such that convenience has become more ofa necessity rather than luxury. Any product which has the matter to fulfil consumer’s need forconvenience, are more successful than any other product in the subject market. The positiveenvironment for tea publicity and the need for convenience have made the tea industry asuccessful one. It’s been the whole decade now that tea industry is getting more popular due to itsadvertised health benefits. Researches show that the advantages of tea range from low energylevel to the improvisation of major fitness and declining chance of cancerous disease. Manytea products have come up with innovative features to have an advantage of the booming andgrowing market. The R&D department of MRIL is focused on branding and the innovationsof Black as well Green tea. Effectively step by step implementation and control of marketingplan not only helps the company to achieve objectives but also helps to retain customer’sloyalty. In India people are very much loyal towards their brands, is tough for competitors tomove them. Proper value of their money and attractive marketing promotions leads theMcLeod to achieve their targets.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 24
  • 25. MASTERS OF BUSINESS ADMINISTRATION 2012LIST OF FIGURESFIGURE 1 Mix of Consolidate Group Production………………………………………………..09FIGURE 2 Tea production in key tea exporting countries (million kgs)………………………….10FIGURE 3 Global Productivity of tea………………………………………………………………. 10FIGURE 4 Domestic tea carryover stocks (million kgs)……………………………………………11FIGURE 5 1 Year Price Performance………………………………………………………………15FIGURE 6 BSE Market Shares Comparison……………………………………………………….16FIGURE 7 Market Expansion Grid………………………………………………………………….17FIGURE 8 Economy Segment of Branded Market………………………………………………...19ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 25
  • 26. MASTERS OF BUSINESS ADMINISTRATION 2012LIST OF REFERENCESBOOKBerry, T 2006, Your Target Market Forecast, in Liabrary of Congress Catalog(ed.), Business Planning, 6st ed, Plato Alto Software Inc, USA, pp.12.5.Burnett J 2008. Core Concept of Marketing, 1st ed, Global Text, Switzerland.Drummond, G & Ensor, J 2005, Environmental Factor, in British Library Cataloguing inPublication Data (ed.), Introduction to Marketing Concept, 1st ed, Elsevier Butterworth-Heinemann, Great Britain, pp.33.Grewal & Levy 2008, Developing Marketing Strategy, Marketing, 8th ed, McGraw-HillCompanies, Singapore, pp.30-53.Hill, C & Jones, G 2009 , Introduction to Strategic Management, in Cengage Learning(ed.), Strategic Management an integrated approach, 9th ed, South- Western CengageLearning, USA, pp.17-19.Kotler, P & Armstrong, G 2012, Principles of Marketing, 14th ed, Pearson EducationLimited, EnglandKamarulzaman, Y & Abu, KN 2012, Marketing Management, 2nd ed, Oxford Fajar Sdn.Bhd, Malaysia.Kotler, P & Armstrong, G 2012, Marketing Creating and Capture Customer Value,Principles of Marketing, 14th ed, Pearson Education Limited, England, pp.29-30Kotler, P & Armstrong, G 2004, Principles of Marketing, 10th ed, Pearson EducationLimited, New Jersey.Kotler & Keller 2012, Developing Pricing Strategy, in British Library Cataloguing inPublication Data (ed.), Marketing Management, 14th ed, Pearson Education Limited,England, pp.405-435.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 26
  • 27. MASTERS OF BUSINESS ADMINISTRATION 2012ELECTRONICArm Research 2007, Tea Industry, [ONLINE] Available at:http://www.armresearch.in/investment2/TEA%20%20Mcleod%20Russel%20&%20Harrison%20Malayalam.pdf. [Last Accessed August 25 2012].McLeod Russel, 2008, Annual Report, [ONLINE] Available at:http://www.google.com.my/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&cad=rja&ved=0CF0QFjAH&url=http%3A%2F%2Fwww.reportjunction.com%2FPreview%2FMcleod-Russel-India-Limited-200976317.htm&ei=NzZbUILOIsmmrAfy0YGwCA&usg=AFQjCNHiWycR7zhe_8v62-aQYwM_fEpxeA&sig2=m_b-iG6MIgQf2dvMMkSlBA. [Last Accessed August 15 2012].Baheti, K 2012, McLeod Russel India Ltd, [ONLINE] Available at:http://www.indiainfoline.com/Markets/Company/Fundamentals/Management-Discussions/Mcleod-Russel-India-Ltd/532654. [Last Accessed August 27 2012].BSEIndia 2005, McLeod Russel India Ltd, [ONLINE] Available at:http://www.bseindia.com/BSEdata/ipo_downloads/Mcleod%20Russel.pdf. [Last AccessedAugust 27 2012].CNBC Money Control, 2012, McLeod Russel India Ltd, [ONLINE] Available at:http://www.moneycontrol.com/stock-charts/mcleodrusselindia/charts/MRI02#MRI02. [LastAccessed August 27 2012].D Power 2012, What is Situation Analysis, [ONLINE] Available at:http://planningskills.com/askdan/20.php. [Last Accessed August 15 2012].Das, A 2009, SUSTAINABILITY IN TEA INDUSTRY: An Indian Perspective, [ONLINE]Available at:http://www.google.com.my/url?sa=t&rct=j&q=&esrc=s&source=web&cd=10&cad=rja&ved=0CG4QFjAJ&url=http%3A%2F%2Fwww.nits.ac.in%2Fdepartment%2FHumanities%2520new%2Fnew_hum%2Fsocial_scanner%2F2.doc&ei=q9c8UJ2BO4HwrQfRtoCQBQ&usg=AFQjCNE1PiElasa7fmc0ODWpUk_fGboytA&sig2=-KODAdHvtxkwsqu5AwigCw.[LastAccessed August 27 2012].Dassgupta, M 2012, Green tea business grows in India amid health awareness, [ONLINE]Available at:http://in.news.yahoo.com/green-tea-business-grows-india-amid-health-awareness-094902787.html. [Last Accessed August 30 2012].ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 27
  • 28. MASTERS OF BUSINESS ADMINISTRATION 2012Fullerton 2012, Investment Idea, [ONLINE] Available at:http://www.fullertonsecurities.co.in/equity/markets/rsch_reports/1_0_18022012Fullerton%20Mcleod%20Russel%2017th%20Feb%202012.pdf. [Last Accessed August 27 2012].Financial Express 2012, Marketing War Brewing In Branded Tea Segment, [ONLINE]Available at: http://www.financialexpress.com/news/marketing-war-brewing-in-branded-tea-segment/63671/1. [Last Accessed Sept 1 2012].Fetherstonhaugh, B 2009, The 4Ps Are Out, the 4Es Are In, [ONLINE] Available at:http://www.ogilvy.com/On-Our-Minds/Articles/the_4E_-are_in.aspx. [Last Accessed Sept 42012].Graves, C 2008, The Evolution of Marketing, [ONLINE] Available at:http://www.slideshare.net/theopenroom/the-4-es-of-marketing-ogilvy-pr. [Last Accessed Sept4 2012].Gondhali, P 2012, Tea Export, [ONLINE] Available at:http://www.authorstream.com/Presentation/aSGuest124527-1309413-tea/. [Last AccessedSept 4 2012].Gutierrez, PH 2012, Break-Even Method of Investment Analysis, [ONLINE] Available at:http://www.ext.colostate.edu/pubs/farmmgt/03759.html. [Last Accessed Sept 6 2012].IIFL 2012, McLeod Russel India Ltd, [ONLINE] Available at:http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/Mcleod-Russel-India-Ltd/532654. [Last Accessed August 15 2012].ICICI direct 2009, Indian Tea Sector, [ONLINE] Available at:http://www.icicidirect.com/mailimages/ICICIdirect_TeaSector_InitiatingCoverage.pdf. [LastAccessed August 17 2012].IIFT 2009, TEA INDUSTRY, [ONLINE] Available at:http://agritrade.iift.ac.in/html/Training/ASEAN%20%E2%80%93%20India%20FTA%20%20Emerging%20Issues%20for%20Trade%20in%20Agriculture/Tea%20Export.pdf. [LastAccessed August 25 2012].ICICI direct 2012, McLeod Russel, [ONLINE] Available at:http://breport.myiris.com/ICICISL/MCLRUSND_20120731.pdf. [Last Accessed August 302012]ICRA 2012, McLeod Russel India Ltd, [ONLINE] Available at:ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 28
  • 29. MASTERS OF BUSINESS ADMINISTRATION 2012http://www.bseindia.com/Research_Report/Report/532654/201112/3QFY12McleodRussel.pdf. [Last Accessed Sept 6 2012].Jain, V 2012, Cover Story Tea Time, [ONLINE] Available at:http://www.waghbakritea.com/cover-story-tea-time.pdf. [Last Accessed August 22 2012].John, S & Chandran, A 2008, Market war brewing as HUL closes gap with Tata Tea,[ONLINE] Available at:http://www.livemint.com/2008/10/02002337/Market-war-brewing-as-HUL-clo.html. [LastAccessed August 30 2012].Kumar, V 2009, Green tea business grows in India amid health awareness, [ONLINE]Available at: http://zeenews.india.com/ayurveda/green-tea-business-grows-in-india-amid-health-awareness_1070.html. [Last Accessed August 30 2012].Kaushik, J 2010, TEA, [ONLINE] Available at:http://www.scribd.com/doc/27493922/Marketing-Plan-of-Tea. [Last Accessed August 302012].Kadavil, M, 2012, Indian Tea Research, [ONLINE] Available at:http://www.google.com.my/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&cad=rja&ved=0CFgQFjAG&url=http%3A%2F%2Fsomo.nl%2Fpublications-en%2FPublication_3092%2Fat_download%2Ffullfile&ei=wJ5cUJ2rKobPrQeNuoGYCg&usg=AFQjCNEuGXcA3LF1f9vBvX2Vsw_MY12hVw&sig2=Fu6ySHn5_pyn86mT7LSPQA.[Last Accessed August 27 2012].MCNamara, C 2012, How Marketing is So Misunderstood, [ONLINE] Available at:http://mlabs.co/blog/2012/07/19/how-marketing-is-so-misunderstood/. [Last AccessedAugust 10 2012].Money Control 2012, Internal accruals to fund Rwanda acquisition: McLeod Russel,[ONLINE] Available at: http://www.moneycontrol.com/news/business/internal-accruals-to-fund-rwanda-acquisition-mcleod-russel_674804.html. [Last Accessed August 15 2012].McLeod Russel 2012, Annual Report, [ONLINE] Available at:http://www.mcleodrusselindia.com/investors/pdf/AR-2011-12.pdf. [Last Accessed August 172012].Mehra, S & Doshi, N 2012, McLeod Russel India Research, [ONLINE] Available at:http://www.valuenotes.com/uploads/article_pdf/Way2wealth_Mcleod%20Russel_3rd%20July%202012.pdf. [Last Accessed August 17 2012].Money Control 2012, McLeod Russel India Ltd, [ONLINE] Available at:http://www.moneycontrol.com/competition/mcleodrusselindia/comparison/MRI02. [LastAccessed August 27 2012].ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 29
  • 30. MASTERS OF BUSINESS ADMINISTRATION 2012Paper4you 2009, What is Marketing Mix Analysis, [ONLINE] Available at:http://www.coursework4you.co.uk/essays-and-dissertations/marketing-mix.php. [LastAccessed Sept 4 2012].Researchpedia 2012, Indian Tea Market: Facts and Trends, [ONLINE] Available at:http://www.theresearchpedia.com/research-articles/indian-tea-market-facts-and-trends. [LastAccessed August 22 2012].Ravi, R 2009, Domestic demand boosts tea industry despite dip in exports, [ONLINE]Available at: http://www.financialexpress.com/news/domestic-demand-boosts-tea-industry-despite-dip-in-exports/468838/5. [Last Accessed Sept 1 2012].The Economic Times, 2012, McLeod Russel (India) Ltd, [ONLINE] Available at:http://economictimes.indiatimes.com/mcleod-russel-(india)-ltd/infocompanyhistory/companyid-13438.cms. [Last Accessed August 15 2012].Tea Board 2009, 56TH ANNUAL REPORT, [ONLINE] Available at:http://www.teaboard.gov.in/pdf/56th-annual-report.pdf. [Last Accessed August 17 2012].TECHN 2012, Indian Tea Research, [ONLINE] Available at:http://www.valuenotes.com/uploads/article_pdf/Way2wealth_Mcleod%20Russel_3rd%20July%202012.pdf. [Last Accessed August 25 2012].Thakur, S 2010, Indian Industry Tracker, [ONLINE] Available at:http://industrytracker.wordpress.com/2010/06/30/tea-industry-in-india/. [Last AccessedAugust 27 2012].UK Tea Council 2012, Tea Directory Listings: McLeod Russel India Limited, [ONLINE]Available at: http://www.tea.co.uk/tea-directory/mcleod-russel-india-limited. [Last AccessedAugust 15 2012].4traders 2012, McLeod Russel India Ltd, [ONLINE] Available at:http://www.4-traders.com/MCLEOD-RUSSEL-INDIA-LIMIT-9059577/strategies-strategies/A-well-established-uptrend-31277/. [Last Accessed Sept 6 2012].ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 30
  • 31. MASTERS OF BUSINESS ADMINISTRATION 2012JOURNALSChaneta, I 2010, ‘Role of situation analysis in strategy-making’, Journal of ComprehensiveResearch, vol. 6, no. (n.d), pp.39-46Dutt, H 2007, ‘The turnaround of Indian tea sector’, Delhi Business Review, vol.8, no. 1,pp.117-120Goi, LC 2009, ‘A Review of Marketing Mix: 4Ps or More’, International Journal ofMarketing Studies, vol. 1, no.1, pp.2-15Hazarika, K 2011, ‘Changing Market Scenario for Indian Tea’, International Journal ofTrade, Economics and Finance, vol.2, no. 4, pp. 285-287Kumar, A 2012, ‘Global Financial Crisis and Impact on Indian Economy’, THAVAN IJREB,vol. 1, no. 2, pp. (n.d)Majumder, BA, Bera, B & Rajan, A 2010, ‘Tea Statistics’, Global Scenario. Inc. J. Tea Sci,vol. 8, no. 1, pp.121-124Ommani, RA 2011, ‘Strengths, weaknesses, opportunities and threats (SWOT) analysis forfarming system businesses management’, Strengths, weaknesses, opportunities and threats(SWOT) analysis for farming system businesses management, vol. 5, no. 22, pp.9748-9751Vrontis, D & Thrassou, A 2006, ’Situation Analysis of Strategic Planning’, InnovativeMarketing, vol. 2, no. 2, pp.135-136Valentin, KE 2005, ‘Away with SWOT Analysis: Use Defensive/Offensive Evaluation Intea’, The Journal of Applied Business Research, vol. 21, no. 2, pp.91-105ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 31
  • 32. MASTERS OF BUSINESS ADMINISTRATION 2012 LIST OF APPENDIX Appendix 1: CPM (Competitive Profile matrix) MATRIX CFS McLeod Russel Tata Tea Hindustan Unilever WEIGHT RATING SCORE RATING SCORE RATING SCOREADVERTISING 0.2 1 0.2 3 0.6 3 0.6PRODUCT QUALITY 0.1 3 0.3 2 0.2 4 0.4PRICE 0.1 2 0.2 3 0.3 4 0.4COMPETITIVENESSMANAGEMENT 0.1 2.5 0.25 3 0.3 3.5 0.35FINANCIAL POSITION 0.15 3 0.45 2 0.3 3 0.45CUSTOMER LOYALTY 0.1 2 0.2 4 0.4 3 0.3GLOBAL EXPANSION 0.2 3 0.6 2 0.4 3 0.6MARKET 0.05 2 0.1 3 0.15 4 0.2TOTAL 1 2.3 2.6 3.3 1= major weakness, 2=minor weakness, 3=minor strength, 4=major strength ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 32
  • 33. MASTERS OF BUSINESS ADMINISTRATION 2012Steps of Preparing CPM MatrixList key external factors as identified in the external audit process. Include 6-10 factors,including both opportunities and threats, that affect the firm and its industryAssign to each factor a weight that ranges from 0.0 (not important) to 1.0 (very important).The weight indicates the relative importance of that factor to being successful in the industry.Weights are industry-based. Sum of all weights must equal 1.0Assign a 1 to 4 rating to each key external factor to indicate how effectively the firm’scurrent strategies respond to the factor, where 4 = the response is superior, 3 = the response isabove average, 2 = the response is average, and 1 = the response is poor. Ratings arecompany-based.Multiply each factor’s weight by its rating to determine a weighted scoreSum the weighted scores for each variable to determine the total weighted score for theorganisationESHANK GARG_J8806167_100272311_KUKL00370_SM Page 33
  • 34. MASTERS OF BUSINESS ADMINISTRATION 2012Appendix 2: SMART MATRIXSPECIFIC The Objective have to be clear, the company of ‘McLeod Tea’, must achieve the selling objectives. The turnover to reach will not be the same in the different market because company make the selling objectives according to the size of the target market, the frequentation, the type of the clients.MEASURABLE Company has to follow the different targets in the sales outlets and if each shop allowed to reach the objectives. The measures the sales company can calculate the sales by weekly or monthly, in order to understand how the client bought the product. With these data company can improve the strategy and the sales. The commercials can ask to the supermarkets to put the product in different way or to make more promotionACHIEVABLE The targets have to be realist. If company reach to win clients from main competitors (in a first time) and from the other tea brand (in a second time), the sales would be grow increase. The firm should have a long term’s vision and should be reactive in front of decisions or problems which can occur.RELEVANT The objectives have to be founded on fact and not on supposition. The company has to respect its general strategy and its image. The firm should take into consideration the sales of its competitors in order to be based on relevant objectives.TIME Each objective should have a deadline. It can allow measuring theTARGETED different sales of the day, week, month, according to these data, the firm can change objectives or make promotions to reach these objectives.ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 34
  • 35. MASTERS OF BUSINESS ADMINISTRATION 2012APPENDIX 3: REVENUE FORECAST (Y13) 01/15 03/06 04/25 06/14 08/03 09/22 11/11 Corporate Identity Revision PR Development Quotes Website Online Standard Page Brouchers Personal Speaking Campaign Targeted Advertising Press Release 1 PressRelease 2ACTION START DATE END DATE BUDGET(INR)Corporate identity 15-01-2013 15-04-2013 50,000revisionPR development 01-02-2013 29-09-2013 1,00000quotesWebsite online 01-01-2013 28-02-2013 80,000Standard page 15-02-2013 21-04-2013 25,000broachersPersonal speaking 20-04-2013 06-11-2013 80,000campaignTargeted 15-06-2013 18-09-2013 40,000advertisingPress release 1 15-09-2013 16-09-2013 30,000Press release 2 15-11-2013 16-11-2013 30,000TOTAL 4,35,000ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 35
  • 36. MASTERS OF BUSINESS ADMINISTRATION 2012 Appendix 4: ACTION PLAN (2013-2016) (FOR FIRST YEAR)MARKETING ACTION RESPONSIBILITY CONTROL TIME COSTSTRATEGY (INR)Marketing Start with an integrated Marketing managers Monthly sales It will done 1,500,000communication advertisement on T.V, figure in twocampaign radio, internet, print shifts from newspaper campaign Jan-May ads on supermarkets 2013 and and streets. Sept-Nov 2013Marketing Sales promotion Marketing managers, Count Nov 2013- 25,000promotion campaign and exhibit at Sales Personnel, customers and Marchcampaign the major industry trade Counter staff monitor Sales 2014 shows to educate Supervisors per month customers, dealers and generate channel support for the existing product. It will create a buzz by providing samples to selected dealers, super markets Organise promotional Marketing managers, Count Feb 2013 50,000 events and it will add Supervisors, Hostesses participants sales promotions such as a contents in which customers post their experience their feedback on company website and company will also distribute new point of purchase Hold a trade sales Marketing managers, Produced Oct 2013- 20,000 contest offering prizes Promotional Output figures Jan 2014 for the salesperson and managers. retail or organisations as well as promotional offers in terms of free gifts with every purchase ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 36
  • 37. MASTERS OF BUSINESS ADMINISTRATION 2012 Organize sweepstake Marketing managers Jan 2013- 50,000 “Holiday trip” Feb 2014 Loyalty scheme “Point Marketing managers, Customers Whole year 10,000 system” Customer service taking use of point system Distribution of free Marketing managers, Count First week 10,000 samples to customers at Cashier, Supervisors customers of Nov cash point 2013 –Dec 2013 Plan to roll out a new Marketing managers, Customer Aug 2013- 50,000 national advertising Promotional count Oct 2013 campaign, the radio and managers. T.V ads will feature celebrity voice telling the quality and effects of product ACTION PLAN (FOR SECOND, THIRD and FOURTH YEAR)MARKETING ACTION RESPONSIBILITY CONTROL TIME COSTSTRATEGY (INR)Product Launch Plan to roll out a Marketing managers, Customer 1st (Jan-Apr) 25,000campaign campaign for the Sales personnel, count and and 2nd promotion of new Counter staff count (May- product launch and to Supervisors participants Aug)Quarter educate dealers and of 2013 customers to generate a channel support for new products Product launch Marketing managers, Monitor sales 3rd (Sept- 50,00000 Sales personnel per month Dec)Quarter of 2013Marketing Start with an Marketing managers Monthly sales 1st (Jan- 1,500,000communication integrated figure Apr) andcampaign advertisement on T.V, 3rd (Sept- radio, internet, print Dec) newspaper campaign Quarter of ads on supermarkets 2015 and streets. Plan to add more new Marketing, Sales and Count and 2nd (May- 50,000,000 products in existing operation personnel monitor Sept) product line monthly sales Quarter of 2015Branding and Organise promotional Marketing managers, Count 1st (Jan-Apr) 50,000Marketing events and it will add Supervisors, Hostesses participants Quarter ofpromotion sales promotions such 2016 as a contents in which ESHANK GARG_J8806167_100272311_KUKL00370_SM Page 37
  • 38. MASTERS OF BUSINESS ADMINISTRATION 2012 customers post their experience their feedback on company website and company will also distribute new point of purchase Plan to roll out for Marketing managers, Customer 3rd (Sept- 50,000 more attractive Public relationship participations Dec) packaging and managers and Quarter of maintain public supervisors 2015 and relationship 2nd (May- Aug) Quarter of 2016 Marketing Research Marketing and Sales Count Jan-Mar and 20,000 personnel participation Nov-Dec of every four yearESHANK GARG_J8806167_100272311_KUKL00370_SM Page 38