Introduction:
In this report, we have also created a new product of the Pran Food Company’s product line that is newly introduced into the market. For that product, we make a marketing plan including essential marketing strategies.
1.2 Objective of the study:
Objective of the study of the report is to cope with the marketing strategy for launching a new product into the market. The report is showing that how to launch and what strategy should be taken for marketing new product.
1.3 Scope of the study:
We can not cover all the topics of the study in our report. But, we tried to cover as much as possible.
1.4 Limitation of the study:
We have faced many limitations for preparing this report. Time to complete the report is too short. Information is not available enough in our hand and Internet, and Company does not provide enough information at the time of survey.
1.5 Methodology:
The report has been prepared by the help of both primary and secondary data. We have collected primary data by surveying the corporate office of Pran Food Company and secondary data from Internet and the annual report of the company as well.
(Company and Existing product review)
2.1 Company Background
The Pran Foods Company is sister firm of the Agricultural Marketing Co Ltd. It is established first as juice and packaging foods producing company. Recently, it expands its product line in dairy milk.
Corporate office:
Pran Dairy Ltd.
12 R.K Mission Road
Dhaka
Web: www.pranfoods.net
Phone: 880-2-9563126
Factory
Bagerpara,
Palash, Narashingdi.
2.2 Existing Product Review
Now Pran Dairy Limited is producing and marketing various types of juices and other packaging products. It is also producing dairy products. The most of the Pran’s products are instantly usable. Juices and diary products are frozen foods.
We are focusing here juices and dairy products which are frozen and instantly usable.
Juices, that available in the market are as Pran mango juice, Pran lichi drink, Pran fruity, and so one.
Pran Food Company has also introduced packaging pasteurized liquid milk in the market. The packet contains 250mg, 500mg and 1litres. The milk collection system of Pran Dairy Ltd. is unique and best. The company workers are reaching to the thousands of farmers in the country every day to collect fresh milk so that the consumers get pure and fresh milk full of nutrition. The out look of packet of Pran’s milk is given in bellow:
New product Review
Pran Company, the well known juice and packaging foods producing company is going to introduce a new Dairy product with its existing products.
Name of the product: Pran Chocolate Milk.
Product line:
a. Pran Straw berry Chocolate Milk
b. Pran Vanilla Chocolate Milk
Pran Straw berry Chocolate Milk
Ingredients:
Particulars % per 100ml (minimum)
Milk Fat 3.5%
Protein 3.4%
Carbohydrates 4.7%
Minerals 0.7%
Strawberry (Flavor) 4%
Energy 60%
Total 100%
Chart: Ingredients combination
Quantity:
200ml and 500ml Pack for both Strawberry and Vanilla Chocolate Milk.
Pran Vanilla Chocolate Milk
Ingredients:
Particulars % per 100ml (minimum)
Milk Fat 3.5%
Protein 3.4%
Carbohydrates 4.7%
Minerals 0.7%
Vanilla (Flavor) 4%
Energy 60%
Total 100%
Quantity:
200ml Pack and 500ml for both Strawberry and Vanilla Chocolate Milk.
Common features
The back side of the packet will show all the features of the product.
Collection of milk:
The milk collection system of Pran Dairy Ltd. is unique and best. The company workers are reaching to the thousands of farmers in the country every day to collect fresh milk so that the consumers get pure and fresh milk full of nutrition. The Pran Dairy Ltd. is going establish a dairy farm very soon to and ensure produce fresh milk.
Type of the product:
Frozen food that is instantly usable.
Special features for Pran Chocolate:
Full cream HALAL milk with Strawberry and Vanilla flavored and colored.
Process:
Pran Milk is processed by Ultra High Temperature. It needs no boiling before use, and no refrigeration till open.
Durability:
Thus, it is processed by Ultra High Temperature and Tetra Fino pack, will be usable up to three months from the manufacturing date.
Packaging:
Tetra Fino ™ packaging, a packet from Tetra pack ®.
Price of the product:
Same price for Strawberry and Vanilla Chocolate Milk as mentioned in bellow:
200 ml – Tk. 15 and 500 ml – Tk. 35
(Current market Situation Analysis)
4.1 Market Situation Analysis
Diary industries are mainly developed and expand its business in the cities areas. In diary sector, The Pran Company has many competitors in the current market. If we analyze the market share, we find the following scenarios:
4.2 Product Situation Analysis
The current product situation has been shown in the chart. Three year’s financial data are included in the chart in opposite page.
Particulars Rows 2005 2006 2007
1. Industry sales in units
a. 250 ml 30,00,000 32,00,000 35,00,000
b. 500 ml 10,00,000 11,00,000 15,00,000
2. Market Share 12% 12.9% 15%
3. Average cost per unit
a.250 ml 12 14 15
b.500 ml 22 25 26
4. Variable cost per unit
a. 250 ml 6 8 10
b. 500ml 13 15 17
5. Contribution Margin Average 3-4 7.5 8 8
6. Sales revenue 5,80,00,000 7,23,00,000 9,15,00,000
7. Net C.M (Amount) 1*5 3,00,00,000 3,44,00,000 4,00,00,000
8. Marketing Expense 6-7 1,80,50,000 2,05,00,000 2,65,00,000
9. Net operating income 1,19,50,000 1,39,00,000 1,35,00,000
4.3 Competitive Situation Analysis
Competitor’s products available in the current market are as Milk Vita, Arong, R.D and Farm Fresh. Individual description of these products are given in bellow:
Milk Vita
Milk vita is one of the most famous and reputed
Milk producing dairy company in our country. It
has a strong brand image. Milk Vita has normal
dairy milk in 2500ml, 500ml and 1 liter pack. It
has also Chocolate milk in 200ml and 500ml pack.
Milk Vita is the market leader in dairy industries.
Arong
Arong is the sister firm of BRAC. It also has the
reputation among the consumers. Arong is providing
its products through various distribution outlets, and
selling Arong milk in their own super shops. Arong has
also Chocolate milk with normal dairy milk in the
market.
R.D
R.D is marketing normal dairy milk with various
types of fruit milk in the current market.
Farm Fresh
Farm Fresh dairy company is producing milk in
Tetra pack instant drinking.
4.4 Distribution Situation Analysis
All the packaging milk producers are using their special transportation facilities to send the product to the retailers and super shops, and even to the grocery shops. Every company is using faster transportation because of its less durability. The Pran Company has established a faster distribution channel earlier. Because, it is a well known juice producing company. So Pran Company is taking the finest opportunities for distributing the diary product and consumers are getting that benefit. Peoples who are in above to the upper middle class will consume from super shops, and bellow of the middle class will consume from the retailers and grocery shops in general. Super shops 30%, retailers 20% and grocery shops contain 50% distribution outlets that is shown in chart:
Particulars %
Super shops 30%
Retailers 20%
Grocery shops 50%
4.5 Macro environment Situation Analysis
This section of the report describes the broad macro-environment factors that include- demographic, economic, technological, political-legal, socio-cultural factors that can affect the future of the product line. Before entering into the market, marketing manager must have to consider for getting benefit over those factors.
(SOWT & Issue Analysis)
As marketing manager, we must analyze the product’s opportunities and threats, strengths and weaknesses (SWOT) before entering into the market that help us what to do or not to do, and even help whether the product should be launched or not. So the results of our SWOT analysis are enlisted in bellow:
5.1 Opportunities and Threats analysis:
We, the marketers group have identified the main opportunities and threats facing in the business.
5.1.1 Opportunities:
The main opportunities, facing by the Pran Food Company’s product line are as follows:
• Market study shows that consumers are showing huge interest in variety of milk.
• The maximum retailers and super shops are willing to carry the Pran Company’s products.
5.1.2 Threats:
Every company faces threats when they newly enter into market or for the existing company. Threats facing the Pran Food Company are as follows:
• Pran has many competitors which are marketing diary products. It has a strong competitor (Arong) in producing Chocolate Milk.
• Current political unstable situation may affect the new product launching activities.
• Uprising commodity price is also a threat for the product in newly introducing into the market.
• Bangladesh government may establish a stringent product safety law, which would entail product redesign work.
5.2 Strengths and Weaknesses analysis
The product manager of accompany needs to identify product strengths and weaknesses before launching into the market.
5.2.1 Strengths:
The Pran Food Company has some strong sides. The main strengths of Pran Company are as follows:
• The Pran Company has excellent brand awareness and a high quality image as juice and packaging product producing company.
• Dealers and sale personnel who sell the Pran’s product are knowledgeable and well trained in selling.
• The Pran Company has an efficient service network and strong distribution channel to reach the product to the consumers quickly.
• Pran is introducing its Chocolate Milk with two well known and well excepted flavors (Strawberry & Vanilla).
5.2.2 Weaknesses:
The Pran Food Company has some weaknesses for “Pran Chocolate Milk”. The main weaknesses of Pran’s product line are as follows:
• Pran’s line is not clearly positioned in diary product compared with Arong and Milk Vita.
• The current advertising campaign for the diary product is not particularly creative and exciting.
• The quality of core product (Milk) is as same as the competitor’s product.
• The budget of advertising and promotion is lower than its competitors’.
5.3 Issue analysis
In this section of marketing plan, as product manager, we use the strengths and weaknesses analysis to define the main issues that the plan must address. Pran Company must consider the following basic issue:
• Should Pran stay in the diary business?
• Can it compete effectively with its current market competitors? Should it divest this product line?
• If Pran stays in the business, should it continue with its products, distribution channels, and price promotion policies?
• Should Pran increase its advertising and promotion expenditures to match competitor’s expenditures?
• Should Pran pour money into R&D to develop advanced features, and packaging style?
(Financial & Marketing Objective)
6.1 Financial Objectives
Pran management wants each business unit to deliver a good financial performance. The product manager sets the following financial objectives:
• Earn an annual rate of return on investment over the next 5 years of 3 percent after taxes
• Produce net profits of Tk.50,00,000 in 2009.
6.2 Marketing Objectives
In this section of the plan, marketing objectives must convert the financial objectives into marketing objectives. We want to earn Tk.50,00,000 profits and its target margin is 10 percent on sales, then it must set a goal of Tk.5,00,00,000 of sales revenue. We set an average price tk.15 for 200ml and Tk.35 for 500ml. The company expects the total sales of Chocolate Milk are 20,00,000 units of 200ml and 5,72,000 units of 500ml pack that include 6,86,000 liters of prepared milk. For achieving this market share, the will have to set certain goals for consumer awareness, distribution coverage, and so on.
(Marketing Strategy for “Pran Chocolate Milk”)
7.1 Market Segment:
The market has been segmented on the basis of geographic and demographic factors. People who live in the Dhaka city, aged 6 to 25 years and high income generated, do not prefer normal milk are our primary segmentation for “Pran Chocolate Milk”. It is an effective segmentation; because it is accessible, substantial, and actionable.
7.2 Target Market:
In evaluating different market segments, we set our target market as 6 to 25 years old people who live in Dhaka city considering the selective specialization.
7.3 Market Positioning:
The product strategy is also based on quality. In this case, we have positioned our product as full cream HALAL Proved milk with Strawberry and Vanilla flavor that can differentiate it from the competitors’ products.
7.4 Product line:
a. Pran Strawberry Chocolate Milk
b. Pran Vanilla Chocolate Milk
7.5 Quantity:
We have planned to launch Chocolate Milk in 200ml and 500ml pack for both Strawberry and Vanilla Chocolate Milk.
7.6 Price of the product:
We set the price for our valued consumers for 200 ml @ tk.15 & 500 ml @ tk. 35.
7.7 Distribution Outlets:
To distribute our new product to consumers, we will emphasize on Retail stores and super shops, and even the grocery shops as well which are already involved in selling our existing products and also allow new one in which frozen foods storage equipments are available.
7.8 Service:
Basically, Pran Chocolate Milk is a packaging and instantly useable frozen food; we will provide our product in time to the sellers so that consumer can get it timely. We will open complain box in where consumer will put their complains and suggestions that will be helpful to the company for further improvement of the product.
7.9 Sales Promotion:
Sales promotion consists of short term incentives to encourage the purchase or the sales of a product or service. Now, Sales promotion offers reason to buy product or service. The main objective of this Sales promotion is to increase short term sales or help to build long term market share. We will use this Sales promotion strategy in the following cases:
1. When inside the company, product manager faces greater pressures to increase the current sales, and Sales promotion is viewed as an effective short term sales tool.
2. When externally, the company will face more competition, we will use Sales promotion to differentiate our offer from the competitors.
3. When advertising efficiency will decline because of rising cost, media clutter, and legal restraints.
7.9.1 Sales promotion tools
We will use the best one among the following Sales promotion tools.
7.9.1.1 Coupon
Coupon is certificate that gives the buyers a saving when they purchase specified product.
7.9.1.2 Rebates
Cash refund offers or rebates are like coupons except that the price reduction occurs after the purchase. Consumer will show the proof of purchase and get the refund part of the purchase price.
7.9.1.3 Price pack
Price packs offer consumers saving off the regular price of a product. The company will mark the reduced prices directly on the label or package. Price packs can be single packages sold at a reduced price such as three for the price of two.
7.10 Advertising:
We have taken some specific strategies for advertising.
7.10.1 Advertising objectives
Advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time. Firstly, we will use advertising to achieve three aims, such as inform, persuade, and remind.
7.10.1.1 Informative advertising
Informative advertising is used heavily when introducing a new product category. In this case, the objective is to build primary demand, and create the awareness among the consumers about the product. The company will use the Informative advertising at the initial time when they run their new business.
7.10.1.2 Persuasive advertising
Persuasive advertising become more important as competition increases. Here, the company’s objective is to build the selective demand. They will use this Persuasive advertising at the time when face heavy intensity of competition is existed in the market.
7.10.1.3 Reminder advertising
Reminder advertising is important for the mature company. We will use it when our product will be matured.
7.10.2 Advertising message
No matter how big the budget, advertising can succeed only if commercials gain attention and communicate well. Good advertising message are especially important in today’s costly and cluttered advertising environment. The purpose of advertising is to get consumers to think about or react to the product or the company in a certain way. In order to attract the consumers we will focus on low price of our product than the competitors, attractive features that is full cream and strawberry and Vanilla flavor. These offers will give the health conscious consumers physical and financial benefits.
7.10.3 Advertising media
Thus our business will be limited within the Dhaka city first; we will use news papers; satellite TVs and bill boards as advertising media for newly introducing product.
7.11 Research and Development:
The research & development team is involved in continuous research for developing the product quality, packaging style, and other features as the consumers demand. The marketer’s hawk eye on the consumer’s response helps the researcher to develop the product. “Pran Chocolate Milk” with Strawberry and Vanilla flavor is the successful creation of that department.
7.12 Marketing Research:
Due to the market segmentation that the Pran Food Company has established, will require a constant updates in terms of the potential size, distributions, and purchasing patterns of the quality conscious executives markets. The company will evaluate the performance on the basis of the sales units, and send a survey team to measure the consumer satisfaction
Action Program
8.1 Available Action Program for the new product
In this stage of the marketing plan, we have tried to show how Pran Food Company will carry out its marketing strategy:
December:
Thus, we will launch our product into the market from the early January; some advertisement will be given in news papers, satellite TV channels and bill boards as well in December to attract the prospects. This project may cost about tk. 7,00,000.
January:
Heavy advertisement will be continued that our products are available in the market. We will organize an open concert for promoting “Pran Chocolate Milk”. It may cost tk.10,00,000
March:
A consumer contest will be conducted, which award ten winners to the St. Martine will trip for three days. The planned cost for the project is tk. 5,00,000.
June:
Best sellers will be awarded on the basis of sales revenue. The company will take decision about terms and conditions. The planned cost is 10,00,000.
8.2 Contingency Action Program
The contingency action program will be applied after evaluating the sales in August, if it will be found that sales are not satisfactory then a sales promotion will be held. The consumers will be allowed to “buy two get one free” offer for some specific period of time.
Financial projection
9.1 Sales forecast
Since our sales increased over two years, for 2009 we have planned to internally develop a new product that is Pran Chocolate Milk. The company will buy fresher milk from various diary firms than competitors and introduce a diary firm to produce milk as well.
Although the company is not a major player in diary sector compared with the competitors, we are spending huge money in that sector achieve more market share.
The company depends on our dominance of the latest in technology of ergonomics and must remain on the top of new technologies in display, input and output, and communication and distribution.
4.2 Expense forecast
Our expense will occur as the result of both historically successful marketing endeavors and projected marketing programs designed to take advantage of expanding market share and improved product lines. The initial costs are high relative to the maintain costs. Similarly, publishing department will incur higher start-up expense than maintenance costs after initial publication.
4.3 Marketing Expense Budget
Thus we are newly introducing in the market, we will emphasize our marketing expense on advertising and sales promotion activities.
Conclusion
We have also created a new product of the Pran Food Company’s product line that is newly introduced into the market. For that product, we make a marketing plan including essential marketing strategies.We have faced many limitations for preparing this report. Time to complete the report is too short. Information is not available enough in our hand and Internet, and Company does not provide enough information at the time of survey.
Diary industries are mainly developed and expand its business in the cities areas. In diary sector, The Pran Company has many competitors in the current market.
Pran management wants each business unit to deliver a good financial performance. The product manager sets the following financial objectives: Earn an annual rate of return on investment over the next 5 years of 3 percent after taxes and produce net profits of Tk.50,00,000 in 2009. In plan, marketing objectives must convert the financial objectives into marketing objectives. We want to earn Tk.50,00,000 profits and its target margin is 10 percent on sales, then it must set a goal of Tk.5,00,00,000 of sales revenue. We set an average price tk.15 for 200ml and Tk.35 for 500ml. The company expects the total sales of Chocolate Milk are 20,00,000 units of 200ml and 5,72,000 units of 500ml pack that include 6,86,000 liters of prepared milk. For achieving this market share, the will have to set certain goals for consumer awareness, distribution coverage, and so on.
In finally we can conclude that we will be successful in marketing our new product “Pran Chocolate Milk” through our marketing strategies and plan.
