Report on National Chemical Industry

01: Situation Analysis

“NCI” is a chemical company that is moving to its second year of operation to produce different chemical products beside its already existing products such as dish washer, and tiles cleaner. Now the company wants to expand the market share through satisfying its customer by a new air freshener. Therefore, we are going to launch “Cigar Freshener”, which will have some distinctive features rather than other fresheners available in the market.

01.1 The Market

Our main vision is to satisfy the customers and run profitably. Based on our R&D department we have identified that our new product has a good demand. Most health conscious people are liking to consume this product to save themselves from the bad effect of second hand smoking as this is ease to consume and time and cost effective. We are going to launch an air freshener with a very new idea for the whole market.

01.1 [1] Market Segmentation

Geographic:

• Our immediate geographic market will be six metropolitan cities.
• Our total targeted area population is estimated at 2 million.

Psychographic:

• Social class: Middle Class, Upper Middle Class, and Upper Class.

Behavioral:

• Benefits : Quality
• User status: Potential user, first-time user, and regular user.

1.1 [02] Market Needs 

Our marketing research department found the opportunity to provide our customers a new fragrance through air freshener. The chemical industry already contains a wide range of air fresheners. But we found that there is no air freshener in the market like “Cigar Freshener” which can take away the hampering smoke and smell of cigarettes with all the benefits and features of regular fresheners. Our marketing research department surveyed the market and found that there are potential buyers for our product. So, we have the opportunity to enter the market and satisfy the needs. We are going to offer a very reasonable price so that customer can easily buy the product.

1.1 [03] Marketing Trends

We are going to introduce our new product “Cigar Freshener” initially in 300 ml. It will be launched in cans. According to the survey the target market growth rate is increasing. Our company estimates that the future market will be satisfied with more diversified and segmented product. Our target to make new market segments according to customers needs and wants.

1.1 [04] Macro Environment

We know that the present situation or the macro environment situation of our country is not good for any business because of the present national issues like terrorism, extortion, rising crimes, student unrest, labor unrest, unemployment, official extortion.

01.2 SWOT Analysis

R&D department has found the company’s strengths, weakness, opportunities, and threats for this product.

01.2 [01] Strengths:

•   Strong brand name that suggests the features of the product.
•   Completely new in the industry.
•   Strong distribution channel
•   Efficient and productive worker
•   Strong merchandising and product presentation.
•   High quality machineries.
•  Chemical ingredients without side effects.

01.2 [02] Weakness         

•   Limited Financial resources
•  Less product Classification
•   New in the Market

01.2 [03] Opportunities

•  No significant competitors in the market
•  We can export this product in future operation
•   Existing distribution channel will be used
•   Increasing demand in markets.
•   Change in container or product classification can be our opportunity.

01.2 [04] Threats

•    Competitor can produce the same product
•   Downward pressure on pricing
•   Political instability, economy etc

01.3 Competition

‘Cigar Freshener’ freshener will come out as a regular product with innovative ideas and features. As it will be a low involvement product and consumers will show habitual buying behavior so pricing is going to be a big factor here. Within product line this product is not entirely new but its features will make the differences in the market.

01.4 Product Offering

01.4. [01] Description of the Product

The list of ingredients that may be found in this air freshener is given as follows used by National Chemical Industries.      

•   CSR
•   ethyl or isopropyl alcohol
•   glycol ethers
•   surfactant (quaternary ammonium salts)
•   perfume
•   water
•   propellants
•   metazene (4.0%)
•   petroleum distillates (6.0%)
•   aluminum chlorhydrol
•   bromsalicylanilide 2,3,4,5-BIS(2-butylene) tetrahydrofural
•  cellosolve acetate
•   dichlorodifluoromethanol
•   ethanol
•   fatty esters
•   lauryl methacrylate
•   methoxychlor
•   methylene chloride
•   o-phenylphenol
•   p-dichlorobenzene
•   pine oil (toxicity like turpentine)
•   piperonyl butoxide
•   pyrethrin
•  synthetic surfactants
•   trichloromonofluoromethane
•   wax
•   zinc phenolsulfonate

01.4 [02] Our Offerings to the Customer Trough Our Product is –

•   High quality
•  Prompt capture of cigarette smoke and smell
•   Environment friendly
•   Reasonable price
•   Attractive can
•   Acceptability to the customers.
•   Available through out the country.

01.5 Key to Success

•   Proper channel distribution.
•   Proper Customer Relationship Management (CRM).
•   Proper Supply Chain Management (SCM)
•   Experienced and eye catching advertisement on the important areas of the DhakaCity.
•  Online News and Advertisement.

01.6 Critical Issue:

•   Our product is new therefore it will face some critical issues.
•  As the product is new in the market, it will take too much time to stay in the heart of the consumer and the beginning consumers will be innovators. Thus attractive and effective marketing will be needed to attract, grow, and retain the customers.
•   In introduction level of product life cycle the products sales growth will be slow and our company may face loss in the very first year of their operation.
•   The marketing objectives will be to create product awareness and trial.
•   We will use TQM (Total Quality Management) so that we can have customers that are more loyal.

01.7 Environment

Micro and Macro environment is going to affect the success of “Cigar Freshener”

01.7 [01] Micro environment

The company’s microenvironment includes- customers, suppliers, competitors, Marketing intermediaries, employees, public, and partners which have great influences in the success of the product. So, the company will has to maintain its CRM (Customer Relationship Management), PRM (Partner Relationship Management), ERM (Enterprise Resource Management), and SCM (Supply Chain Management) effectively and efficiently so that we can ensure innovative features, quality and a great first coming image on the mind of the customers.

01.7 [02] Macro environment

We know that the present situation or the macro environment situation of our country is not good for any business because of the present national issues like terrorism, extortion, rising crimes, student unrest, labor unrest, unemployment, official extortion.

 02: Market Strategy

Our marketing strategy is based on becoming the potential choice for consumers. Our marketing strategy is based on superior performance in the following areas-

•  Product Quality.
•   Product Price.
•  Superior Features.

02.1. [01] Mission

As people always want to keep themselves free from the evil effects of smoking, this product might be able to create an image in the mind of them. Our main mission is creating brand image, brand loyalty in the mind of the consumers through better addressing their need and making them satisfied. We would like to spread out the product within the country and also to export through the world especially in south Asia.

02.1 [02] Marketing Objectives

This product will provide a lot of marketing and financial gains. It will help the company to increase total sales volume. So, our main objective is to satisfy our customers and to maximize the profit. At the same time it will enable the company to capture greater market share.

02.2 Financial objectives

The product will have only one container or can. The can will contain 300 ml of spray.

Four main factors will help us to decide what to charge for our product or service –

i.            Our fixed and variable costs;

ii.            The profit we want to make;

iii.            Our market research data on competitors’ prices;

iv.            To reach the breakeven point within 15 months.

02.3 Target markets

Our target markets are separated into four segments. The segments are home users, office users, young generation and public places. The segment details are as follows –

Home Users: People can use this product at home as a regular air freshener as well as to remove the smoke and smell if any member or guest smokes.

Office Users: Office rooms those are air conditioned, there are no place for the smoke to get out. In such cases a nonsmoker gets affected by second hand smoking, where our product can remove the smoke and smell as soon as it is sprayed.

Young Generation: Most young people now involved with smoking. They can’t smoke in their rooms for the sake of their parents. This product may help them as well as help us to make profit. But, we are not attracting young people to smoke. It’s only for those who are smokers.

Public Places: Public places are often full of smokers who disturb other’s breathing. In such cases our product will be really effective.

02.4 Positioning

We are trying to differentiate our product to achieve the highest competitive advantage. That is why; we are going to use product differentiation (very much different from other similar products available in the market), Channel differentiation, and image differentiation.

We will use short advertisement so that people can consistently see the advertisement so the product will occupy a clear, distinctive, and desirable place in the mind of the consumer.

We will use USP (Unique Selling Proposition) for our product. To do brand differences that males a better differentiator that has the potential to create company costs as well as customer benefits. A difference is worth establishing to the extent that it satisfies the following criteria –

•   Important
•   Distinctive
•   Superior
•   Communicable
•   Affordable and
•   Profitable

Cigar Freshener _ Harmless Solution

02.5 Strategies

Our major objective is to establish a strong position for our new product and brand in the industry. The marketing strategy will seek to create customer awareness regarding the product and establishing connections with targeted markets and work toward building customer loyalty and referrals.

The major marketing strategies are-

•   Increase awareness and image
•   Cross selling
•   Quality and market leadership
•   Mass distribution

•   Increase awareness and Image: Informing the consumers about our new product “Cigar Freshener” through advertisements, leaflets etc
•   Cross Selling: We can use our existing distributors to distribute our new product. We will also be able to cross sell our new product with our existing products. This will help us promoting our new product to the market.

02 .6 Marketing Mix Elements

The marketing mix for our new product is given below –

Price:

NCI established the price of “Cigar Freshener” with the concept from cost plus pricing. According to our calculation the cost of our product is Tk.112 taka, and we set Tk.125 for our product.

Distribution:

We will primarily use our existing distributors for distributing our new product. Then we will go for some new channels and assign some distributors to promote our new product to all over the country. We will use the large number of cigarette shops available allover the cities and towns to aware at least the smokers about the product. The company is sure that this new product will be able to create interest in the consumer’s mind within a very short period and will have good business.

Promotion:

Short advertisements through popular TV channels [BTV, NTV, RTV, ATN etc] will be our first step. We will also leaflets and we will hold a music event (Concert) for the young generation to avoid smoking to promote the product. We will also use the experience of our marketing managers so that we can create attention to the customers.

02.7 [01] Product marketing

This product will give the customers a completely new idea of air freshener. They will be able to differentiate our product in quality and effectiveness which are unique in the freshener market. They shall feel the differences and importance to use the product.

•   Quality and market leadership: We are the first producer of this different type of air freshener. We will ensure the TQM (Total Quality Management) and by value delivery network so that we can be the leadership position in freshener market.
•   Mass distribution: We will also go for mass distribution as the product is low involvement and people will show habitual buying behavior. We want to distribute our product each and every corner of the country. We hope to export the product in India, Pakistan, and other south Asian countries.

02.7 [02] Pricing

There is rarely an exact “right” price but rather an acceptable price range within which we shall want to fall. We shall avoid the common mistakes made by many new business owners–charging too much or too little. We have to use several approaches to arrive at a cost and “test” the price. If our ego is too involved, our price may be too high. On the other hand, if we have the attitude that “this is just a little something we do in our spare time” or “anybody could do this,” then our price may be too low. We will fix the price that will be very reasonable prices with the view keeping in mind that all people will be able to afford the new products.

We shall charge based on “Overhead Expenses” and “Cost Plus”. Overhead Expenses include rent, gas and electricity, business telephone calls, packing and shipping supplies, delivery and freight charges, cleaning, insurance, office supplies, postage, payroll taxes, repairs, and maintenance. The accuracy of our costing will depend on estimating logical amounts for all categories of expenses. We have to list all overhead expense items and total they divide the total overhead figure by the number of items per month (or time period we used above).

The answer is our overhead per item

Overhead + Materials + Labor = Total Cost/Item

From the market research we received the following –

02.7 [03] Product Service

We are using general stores, one stop malls, cigarette shops, so that people can purchase the product easily. We will use effective distribution channel and energetic sales people so that the consumer can learn about the product’s innovative features and affectivity, and can get the product wherever they are.

In this section we will have the financial overview of the marketing activities involved with our new product “Cigar Freshener” –

03.1 Break-even Analysis

When we will start, we want to produce 1, 50,000 cans of air freshener at a producing price of TK. 112\can.

Our fixed cost is, TK. 1500000

So, our total cost is = 1500000 + (97*150000) TK

= 16050000 TK

We will sell the product at TK. 125

Break even quantity = 16050000 / 125

= 128400 cans

Sales Revenue = (128400 * 125) TK

= 16050000 TK

03.2 Sales Forecasts

We are forecasting to sale out product mainly on direct sales. The company will set some dealers through out the country for selling allover the country. We assume that our growth rate will increase directly through direct selling. Company will supply the product directly to the retailers by its own transportation in Dhaka city. Finally consumers will get the product from the retail shops. The company has a plan to sell the product using the company’s website.

04 Marketing Organization

National Chemical Industry’s marketing department consists of chief marketing officer, Sales Manager, advertising manager, promotion manager, and brand manager.

05: Action Programs

The new “Cigar Freshener” will be introduced in November. We make an action program for the next six months. We believe that; if our six month action programs run well, then we will be able achieve our goals easily. It will enable us to continue our business with this product.

November:

Without advertisement no product can reach the customer’s mind. That is why at the very beginning of November we will go through a big deal of advertisement at different Medias such as, television, radio, newspapers, magazines etc. As our product is low involvement and buyers will show habitual buying behavior therefore we will advertise on different TV channels so that we can develop unique position to the customers. Then we will collect their information of different dealers allover the country. At the end of November, we will start production of our exclusive air freshener.

December:

At the beginning of the month will arrange a meeting with the dealers and some specific customers. For advertising campaign we will go to different offices, hospitals, and public places. We will provide leaflets through which they can inform their opinion.

January:

From the experience gathered from the meeting we will take several steps and during the month we will advertise of our new product in the Television, Radio, Bill Board, Banners, and in the Poster. Then it’s the time to launch our product in to the market.

February:

After successful operations of three months, at the beginning of February, we will provide extra benefits to the dealers and sellers to improve our sales. We will give stickers showing all the negative steps of smoking.

March:

Observing the market situations, we will try to produce our product at different fragrances for the consumers in March. From this month our product will be available almost in every shop.

April:

This is the period to develop the product sales and increase our profit. We can easily understand the marketing position of our product from the market functions of the last five months. If we can consider the market condition in our favor then we will make divisional dealers to distribute to the whole country. Side by side we will try to take control over it if necessary. In this way we will continue our production and give a particular image to the mind of every customer.

06: Control 

NCI’s honorable board of directors and administrative members are preparing themselves to monitor the quality and customer satisfaction to achieve the huge success of the product. This preparation might enable us to have prompt corrections of any problems that may rise.

07: Conclusion

Finally we can say that, ‘Cigar Freshener’ that the National Chemical Industry is going to launch will achieve a huge success and acceptability. The product will have massive appreciation because of the idea of the product is relatively new and the product is innovative. ‘Cigar Freshener’ will rapidly reach to the homes, offices, and all the institutions and capture a big portion of market share of the air freshener market of Bangladesh.