Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Marketing Plan for Potato Chips

2,595 views

Published on

Current Market Situation

  • Be the first to comment

Marketing Plan for Potato Chips

  1. 1. FLAKES 1 ACKNOWLEDGEMENT Above all we are thankful to Allah Almighty. The project of Flakes (launching a new product and its marketing plan) is the result of our hard work, which we have made, to complete this extensive and informative project. Certainly we have been able to complete this project with the help of numerous factors, which played a key role in it. We deem it with an honor and privilege to record sense of gratitude to the respected resource person Sir.Waqar- ul-Qayyum for his constructive style of teaching and maintaining very open and competitive atmosphere within the class. We really liked our respected resource person for his full command on the subject and unconventional style of teaching. This made the subject very comprehensive and understandable. We feel, it a liability to offer heartiest thanks to all our respondents who helped us in completing this project.
  2. 2. FLAKES 2 ROUP EMBERS M. Rehman Shabbir B/A-Fal10-005 0321-4513716 Faizan Anjum B/A-Fal10-101 0336-4184816 M. Umer Awan B/A-Fal10-159 0307-4156841 Ali Saeed B/A-Fal10-065 0313-4105768 Mazhar Mubarik B/A-Fal10-085 0324-4200654
  3. 3. FLAKES WELCOME TO POTATO VILLAGE WHERE ALL POTATOES ARE WELCOMED AND LOVED 3
  4. 4. FLAKES 4 Contents Executive Summary ..................................................................................6 I. Current Market Situation .................................................................9 A. Flakes.......................................................................................9 B. Competitors ...............................................................................9 C. Market Description .......................................................................9 1. Competitors Product and Activates .................................................9 2. Competitors Market.................................................................. 10 D. Product Review ......................................................................... 11 1. Product ................................................................................ 11 2. Price ................................................................................... 11 3. Placement............................................................................. 11 4. Promotion ............................................................................. 11 E. Competitive Review .................................................................... 12 F. Channels and Logistics Review........................................................ 12 II. Analyzing buyer behavior ................................................................ 15 A. Initiating buying behavior ............................................................. 15 1. Customer internal stimuli........................................................... 15 2. Customer external stimuli .......................................................... 15 B. Distributors and retailers role in buying process................................... 15 C. Factors that stimuli to purchase this product ...................................... 15 III. SWOT Analysis ............................................................................. 18 A. Strengths................................................................................. 18 1. Quality Conscious .................................................................... 18 2. Health factor ......................................................................... 18 3. Low for more strategy............................................................... 18 4. Packaging with tin as unique differentiated product packaging .............. 18 5. New flavors ........................................................................... 18 6. Halaal products....................................................................... 18 B. Weakness ................................................................................ 19 1. Low capital to invest more ......................................................... 19 2. Storage ability........................................................................ 19 C. Opportunities............................................................................ 19
  5. 5. FLAKES 5 1. A large segment we are going to invest .......................................... 19 2. Low barrier to entry ................................................................. 19 3. Growing industry ..................................................................... 19 4. Body builder’s segment ............................................................. 19 5. Limited options in potato chips brands ........................................... 20 D. Threats ................................................................................... 20 1. Electricity, Gas for Plant ........................................................... 20 2. Low barrier to enter in market .................................................... 20 3. Lays as large competitor against chips in packets .............................. 20 4. Consumption pattern ................................................................ 20 IV. PESTLE Analysis............................................................................ 22 A. Political instability ..................................................................... 22 B. Environmental protection Laws....................................................... 22 C. Taxation Law ............................................................................ 22 D. Labor Laws............................................................................... 22 E. Foreign trade Regulations ............................................................. 22 F. Attitudes towards foreign companies................................................ 22 V. Objectives and Issues ..................................................................... 24 A. First year Objectives ................................................................... 24 B. Second Year Objectives................................................................ 24 C. Issues ..................................................................................... 24 VI. Marketing Strategy ........................................................................ 26 A. Positioning ............................................................................... 26 B. Product Strategy........................................................................ 26 C. Pricing Strategy ......................................................................... 26 D. Distribution Strategy ................................................................... 26 E. Marketing Research..................................................................... 27 F. Marketing Orientation.................................................................. 27 VII. Action Program ............................................................................ 29 VIII. Budgets ..................................................................................... 29 IX. Control ...................................................................................... 30 X. Conclusion.................................................................................. 31
  6. 6. FLAKES 6 Executive Summary “Flakes” is preparing to launch new crunchy and spicy potato chips in a mature market. Our product offers a competitively unique combination of new packaging and flavor at value added price. We are targeting specific segments in the consumer market taking advantage of opportunities indicated by higher unique packaging with expanded health factor and consumer favorite’s flavors. The primary marketing objective is to achieve first year Lahore, Karachi and Islamabad minimum sales of about 500,000 units. The primary financial objective is to achieve first- year sales revenue of minimum Rs.45 million, keep first year losses less than Rs.5 million, and break even early in the second year.
  7. 7. FLAKES 7 Brand Name FLAKES Mission Statement “Providing natural taste to customer by providing quality product through god gifted resources and skilled employee” Positioning Statement “Com pleted ! Hung er w ith T hund er” Products Tin can packaging Polythene small bags packaging Two flavors in one family packaging Family two flavors packaging in the Card-board packaging like “cirilake” Competitors Lays Kolsons Super crisps Nirrala Smith Bunny Sherry Pace Golden
  8. 8. FLAKES 8 Current Market Situation Market Description Product Review Competitive Review Channels and Logistics Review
  9. 9. FLAKES 9 I. Current Market Situation To start any business a business man should study first the market situation, competitor’s analysis e.t.c A. Flakes Flakes, this firm will start by the investment and joining group members with first experience in the potato chips industry. Potato chips are the confectionery item which is the dish for taste, in the riding or picnic party and in the hunger. B. Competitors Competition is therefore more intense even as demand aspects, industry consolidation continues, and pricing pressure squeeze profitability. C. Market Description Flakes market consist on the segments of kids, young & co- operate level business man, who prefer the potato chips at their office time during break and to satisfy their hunger. Along our products there are other direct and indirect competitors. 1. Competitors Product and Activates Following competitor’s product is being sold in the market but their product availability is not that good except the multinational company lays and local industry Super Crisps ad direct competitors. For other indirect or weak competitors’ reason for their presence is the credit facility and margins. Lays Worldwide the big competitor to the firms of every country where it is present, Lay’s is the brand name for a number of potato chip varieties as well as the name of the company that founded the chip brand in 1938. Lay's chips are marketed as a division of Frito-Lay, a company owned by PepsiCo Inc. since 1965. Lays brand IN Pakistan are Kurkre, Lays, and Cheetos. Kolson Another big competitor in this type of industry is Kolson. Ever Since its inception in 1942, as on today, Kolson enjoys the
  10. 10. FLAKES 10 distinction of being one of the Pioneer food manufacturing and processing industries in Pakistan. The name of Kolson is synonymous with dynamic and innovative food products. Kolson (Pasta products such as Snakes, Spaghetti, Macaroni, Lasagne, Noodles and Vermicelli), Bravo biscuits and Friend Chips. Supper crisps Back in 1982 a business firm was created with the vision to cater to the culinary requirements of the taste buds of the Pakistani nation and at the same time to uphold the qualifications, preconditions and specifications set internationally by the ISO 9001. Nirrala Smith Bunny Sherry Pace Golden 2. Competitors Market Tripple Em Kolson Golden Smith Lays Others Percentage 45 15 8 5 15 12 0 5 10 15 20 25 30 35 40 45 50 Percentage
  11. 11. FLAKES 11 D. Product Review 1. Product Our products are Tin Canes, which can save chips from air, moisture and external air. Our second product is the packaging with plastic bags of potato chaps. 2. Price We are using the pay low for more quantity strategy. Because our other competitors have chips in bags packing have low price but more quantity. Means Good- value pricing which offers the right combination of quality and good service at a fair price relative to product. à As lays and other firms or companies have products with medium price strategy So, For packet chips For Tin packing 3. Placement Our placement will be easily available in the market everywhere including all kind of general grocery stores to big retail stores even in small roadside shops like canteens in colleges and university and hotel of dinners etc in Lahore, Karachi & Islamabad. 4. Promotion We will start promotion after coming to the breakeven point and having profit. We will adopt different promotions methods like Packing(gm) Price 8 5 20 10 45 20 170 40 Tin Bags(gm) Price 55 50 70 60 130 100
  12. 12. FLAKES 12 Social media TV ads Radio channels Newspapers Sign boards Online websites promotional ads * As our innovators from the youth segment are mostly net surfers. So, promotional ads and campaigns will on that segment. E. Competitive Review Despite this strong competition, Flakes can carve out a definite image and gain recognition among the targeted segments. Our tin cane packaging is the critical point of differentiation for competitive advantage. Also offering two-in-one flavors” offer for family packaging of potato chips in the tin can of long box type, gives us a competitive edge compared with similarly priced potato chips of the competitors. Moreover our product is fresh and original to taste. Table shows a sample of competitive products and prices. Competitor Product Weight Prices Lays Salted Potato chips 10 5 Super Crisp Mr.Crisp Salty 12 5 Kolson Friend Chips 15 10 F. Channels and Logistics Review Flakes-branded products will be distributed through a network of retailers in the cities (Lahore, Karachi & Islamabad) markets. We will hire suitable distributors at agreed profit margins who will bought potato chips in bulk form the distributive channels and then sell to the retailer who final sale to the end consumers. Among the most important channel partners being contacted are to distribute at Canteens at universities and colleges to capture young segment Bar cafés at the road sides to capture employees segment Local shops to capture kids segment
  13. 13. FLAKES 13 Initially our channel will focus on the Lahore; according to the demand, we will plan to expand into Karachi & Islamabad and other cities of Pakistan, with appropriate logistical support.
  14. 14. FLAKES 14 Analyzing Buyer Behavior Initiating buying behavior Factors those stimuli to purchase this product Distributors and retailers role in buying process
  15. 15. FLAKES 15 II. Analyzing buyer behavior A. Initiating buying behavior There are two stimuli that insist the consumer to purchase the product that are 1) Consumer internal stimuli 2) Consumer external stimuli 1. Customer internal stimuli A person also insist itself to eat potato chips due to its internal desire to eat the potatoes in flavors. Group of same age people like young generation, group of friends then any of one or more than two people can insist to eat it and we already have the family pack potato chips with two-in-one offer. 2. Customer external stimuli There are following types of people groups include in the internal stimuli Family of children Reference group So children, Individual and member in a group or family are the person who may initiate the buying process. Usually young generation and families initiate the buying process. B. Distributors and retailers role in buying process We have the cycle through which customer will get final goods. ¨ Suppliers ¨ Retailers ¨ Merchants ¨ Small shop owners/ Bar cafés ¨ Customers/ consumers C. Factors that stimuli to purchase this product There are the following factors that insist the person to buy the chips. These are
  16. 16. FLAKES 16 1-Appetite/ Hunger 2-Taste & Flavor 3-Health factor Most persons eat the potato chips due to taste and different flavors. Similarly now a day’s people are more health conscious so due to this factor they desired to full fill their needs and so they will eat our chips rather than other.
  17. 17. FLAKES 17 SWOT Analysis Strengths Weaknesses Opportunities Threats
  18. 18. FLAKES 18 III. SWOT Analysis As companies and firms have some SWOT analysis to overcome the future problems and opportunities. So, here below are the SWOT analysis related to our market and company. A. Strengths Inner strengths of company have are the supports the firm or any business. 1. Quality Conscious We will produce good quality products. We cannot compromise on quality. 2. Health factor Today, with health concerns becoming a growing priority for many consumers, evolving demographics and a changing retail environment, our firm will realize the health nutrition in the potatoes. We want our customers to know that they can feel good about eating potato chips. 3. Low for more strategy According to consumer behavior at a large scale, most consumers prefer more quantity for a moderate or low price. According to the “Low for More” Strategy we will prefer to give more quantity of chips in packs. 4. Packaging with tin as unique differentiated product packaging As most companies and small firms are selling chips in the plastic small greaseproof paper bags even for the Elite, upper middle and lower middle class but our packing for these classes will be in the tin can long box. 5. New flavors We have the new flavors; “lemon” & “Achari” of delicious urban taste and for health conscious the “LITE” flavor. 6. Halaal products Our products will be made by the original ghee and oil; it is our one from the strengths as our segment is Islamic Republic with the core
  19. 19. FLAKES 19 concept of halaal. We will also testify our products from “South African National Halaal Authority”. B. Weakness As our company have the inner strengths but company has inner weakness as well which are: 1. Low capital to invest more We have not the enough capital to invest in our all products but after earning revenue from sales in the future we will invest as soon as it is possible. 2. Storage ability We can’t store stock of raw material for long time. C. Opportunities The external opportunities which are available to firm will be: 1. A large segment we are going to invest The youth is the total 40% of the population of Pakistan, at the other hand we are going to introduce our product to co-operate level. Hence we have a large segment of youth and medium segments of kids and co-operate level business men’s & employees. 2. Low barrier to entry We have the low barrier to enter in the market because § We are investing low money § Few competitors § Low differentiated product range 3. Growing industry We will need the new technology and plants to increase industry in products and for their differentiation we should to have a range of differentiated products of one industry make image in customers. 4. Body builder’s segment We will launch the product in the form of potato chips which will have the high protein ratio and extra vitamins.
  20. 20. FLAKES 20 5. Limited options in potato chips brands Customer has limited options choosing between different potato chips companies and brands. D. Threats The external forces which can come to firm, which can decrease production, sales & consumers. 1. Electricity, Gas for Plant The economical problems and issues relating to energy (gas, electricity) which most industries are facing and they can’t produce enough orders. It’s an economical threat to industry. To become compatible to demand or orders we need energy and that energy will be from generators of diesel or gas. 2. Low barrier to enter in market As there are few firms and companies producing potato chips, it causes many firms to enter to market due to profit and low barriers. 3. Lays as large competitor against chips in packets We have not revenue and resources yet to compete the Lays because we cannot face the breakeven point in the earlier 3-4 months to invest heavily in the promotion and campaigns. 4. Consumption pattern The consumption pattern of people can be changed due to the economical situations or value of money which is decreasing gradually.
  21. 21. FLAKES 21 PESTLE Analysis Taxation Law Labor Laws Environmental protection Laws Foreign trade Regulations Political instability Attitudes towards foreign companies
  22. 22. FLAKES 22 IV. PESTLE Analysis PESTLE analysis helps a business to ensure about its six forces which have impact on any type of business for overall industry . A. Political instability The government stability also plays a great role for any industry. In Pakistan government face lot of difficulty from the side of terrorism and also its activity that badly effect environment of the country which is totally very upset. B. Environmental protection Laws They do concern for environment and contribute more and more for the betterment of environment. C. Taxation Law Government imposed heavy taxes on the industry then it badly affected the industry growth. The taxes imposition is from government side and it varies from industry to industry. Potato chips industry has no tax except sales tax D. Labor Laws Labor is being privileged here having all the laws. For example to hire Employee Company also follow these law like government announce minimum salaries of an employ Rs 6000. E. Foreign trade Regulations Foreign trade regulation does not affect the overall policy and the working of the operating as nationally. F. Attitudes towards foreign companies They have no any agreement with any foreign company but if any company will offer the business to them related / unrelated they would think about it according to terms and conditions.
  23. 23. FLAKES 23 Objectives and Issues First year Objectives Second Year Objectives Issues
  24. 24. FLAKES 24 V. Objectives and Issues We have set aggressive but achievable objectives for the first and second years of market entry. A. First year Objectives During the initial year on the market, we are aiming for unit sales volume of 500,000. B. Second Year Objectives Our second year objectives are to sell a combined total of 700,000 units of our two products (Tin & Bag packaging), and to achieve breakeven early in this period. C. Issues In relation to the product launch, our major issue is the ability to establish a well-regarded brand name linked to meaningful achievements & positioning. We will have to invest heavily in marketing to create a memorable and distinctive brand image projecting new products (flavors), Quality (fresh), and price value. We also must measure awareness and response so we can adjust our marketing efforts as necessary.
  25. 25. FLAKES 25 Marketing Strategy Positioning Product Strategy Pricing Strategy Distribution Strategy Marketing Communication Strategy Marketing Research Marketing Orientation
  26. 26. FLAKES VI. Marketing Strategy Business needs a powerful strategy to plan to follow a rout for running business. A. Positioning Where our product does stands according to the market we studied the position of product. We are positioning our product as more crisp, Prepared with pure oil quality and freshness having unique packaging. B. Product Strategy Flakes with Tin Packaging can be categorized as a new brand with differentiation among the different selected segments in the Lahore & Islamabad, which needs intensified marketing efforts. Although has this in the product range but at not right placement and lack of promotional efforts. C. Pricing Strategy We have to set that price for our product which gives us maximum possible profits in the initial stage of our organization. desirable move we want to make is to made awareness initially. D. Distribution Strategy Our channel strategy is to use selective distribution, marketing Flakes through lunch and dinner hotels an and colleges canteens and cafes with special payment terms retailers that place volume orders or purchase in bulk quantities. Business needs a powerful strategy to plan to follow a Where our product does stands according we studied the position of We are positioning our product as more crisp, Prepared with pure oil, with quality and freshness having unique can be and with different in the Lahore, Karachi Islamabad, which needs intensified Although Super Crisp has this in the product range but at not right placement and lack of promotional e have to set that price for our product which gives us maximum profits in the initial stage of our organization. But the most desirable move we want to make is to made awareness initially. Distribution Strategy Our channel strategy is to use selective distribution, marketing Flakes through lunch and dinner hotels and with other places like university and colleges canteens and cafes with special payment terms for that place volume orders or purchase in bulk quantities. 26
  27. 27. FLAKES E. Marketing Research We will identify the specific features and benefits that our target market value. Will take feedback from focus groups will help us to develop our products F. Marketing Orientation Flakes’s chief marketing officer responsibility for all of the company’s the chart of the six-person Chief Marketing Officer Faizan Anjum Regional Sales M.Umer Awan Regional Sales Advertising Manager/ Marketing Research We will identify the specific features and benefits that our target feedback from market tests, surveys, and focus groups will help us to develop our products. Marketing Orientation Flakes’s chief marketing officer, M.Rehman Shabeer, will hold overall responsibility for all of the company’s marketing activities. Below is person marketing organization. M.Reman Shabbir Chief Marketing Officer Ali Saeed Advertising Manager/ Analyst Mazhar Mubarik Promotion Manager/ Analyst 27 Mazhar Mubarik Promotion Manager/
  28. 28. FLAKES 28 Action Program Budgets Control
  29. 29. FLAKES 29 VII. Action Program The Flakes will be introduced in the February. Average per month is .4167million units per month as we will face break even after short time of start 3-4months. After facing the breakeven afterward months will be in the profit and we will be able to launch new products and to do promotions. Followings are summaries of the action programs we will use during the first six months of the next year to achieve our stated objectives Start launching our new products and flavors Promotion on the social media (FaceBook, Twitter, MySpace, FanBox e.t.c) as our large segment of youth is using it. à Advertisements relating to consumers e.g. à For kids (carton ads) à For youth (celebrities and health conscious ads) à For Co-operate level (at the lunch and dinner hotels, e.t.c) à We will start concerts at colleges and universities and start prizes lucky draw offers VIII. Budgets Total first-year sales revenue for the Flakes is projected at Rs.45millions, with an average price of Rs.90 per unit and variable cost Rs.65 per unit for a unit sales volume of 500000. We anticipate a first-year loss of up to Rs.5 millions on the products. Breakeven calculations indicate that the Flakes will become profitable after the sales volume exceeds 1,200,000 units early in the product first-year. Our breakeven point analyses of Flakes products assumes per unit wholesale revenue of per unit is 90 rupees, variable costs of 65 per unit and estimated first year fixed cost of Rs.30,000,000. Based on these assumptions, the break even calculation is Fixed cost= 60 x 5,000,000 =Rs.30, 000,000 Average Units Months 416666 February 833332 March 1249998 April 1666664 May 2083330 June 2083330 Average total units
  30. 30. FLAKES 30 Average revenue per unit= 45,000,000/ 500,000= Rs.90, Average cost per unit =Rs.65 勀ො,ොොො,ොොොො ො痰 Units Then our average production will be as shown in table. So, we will face the breakeven point between the April and May month of the year after the production of 1.2million units. IX. Control We are planning tight control measures to closely monitor quality and customer services satisfaction. This will enable us to react very quickly in correcting any problems that may occur. We will develop contingency plan to address fast moving environmental changes such as new products with different tastes and competition with other firms. 416666 833332 1249998 1666664 2083330 February March April May June Production & Break even
  31. 31. FLAKES 31 X. Conclusion We conclude on the basis of field work and survey of chips manufacturing unit that the demand of chips increasing day by day and its profit motive, with reasonable gross profit and low margin of loss business. So, we have to invest more to get a product variety range to capture the market share of large segments of Pakistan (youth, co-operate level) which are not in the target of others large or small companies and firms.

×