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Bahria University Islamabad

MARKETING PLAN

KickSmoke Nicotine Gum

SUBMITTED TO

Naila Masood

Business Communication

SUBMITTED BY

Muhammad Salman Khan, Ahmed Khawar, Ali Waqas, Rashid Iqbal, Faizan Afzal, Arif Ashraf
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TABLE OF CONTENT
1. Executive Summary 2. Current Situation - Microenvironment o economy o legal o government o technology o ecological o socio-cultural o supply chain 3. Current Situation - Market Analysis o market definition o market size o market segmentation o competition and market share 4. Current Situation - Consumer Analysis o participants o demographics o psychographics o buyer motivation and expectations 5. Current Situation - Internal o company resources financial people time skills o objectives mission statement corporate objectives financial objective marketing objectives long term objectives 6. SWOT 7. Marketing research o information requirements o research methodology secondary Data Collection primary Data Collection survey Research experimental Research interviewing o research results 8. Marketing Strategy - Product o product mix Place

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06-07

07-08

08-09

09-10 10-12

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Promotion Packaging Variety Product Item Product

product life cycle management

Market introduction stage Growth stage Mature stage Saturation and decline stage o new product development Idea Generation Idea Screening Concept Development and Testing Marketing Strategy Development Business Analysis Product Development Test marketing Commercialization o Brand name, brand image, and brand equity o product portfolio analysis B.C.G. Analysis 9. Marketing Strategy - segmented marketing actions o by product o by customer segment 10. Marketing Strategy - Price o pricing objectives o pricing method o pricing strategy o price elasticity and customer sensitivity 11. Marketing Strategy - promotion o promotional goals o promotional mix Personal selling Sales promotion Advertising 12. Marketing Strategy - Distribution o geographical coverage o distribution channels o Physical Distribution

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Executive Summary
We are trying to launch KickSmoke nicotine gum in the Pakistani market. KickSmoke nicotine gums are basically gums to help people addicted to the habit of smoking, in getting rid of it. We are targeting teenagers, parents and older people who want to quit smoking and also those who have been prescribed to quit smoking because of its harmful effects. The primary objective is to achieve the break even point in two years time. We want to launch a mass marketing campaign to target the masses. By keeping losses as little as possible we want to achieve 10 million RS. revenue by the end of the second year. Mass advertisement and promotional campaigns will be launched to create awareness in the people.

Current Situation - Microenvironment


Economic
Pakistan, with a population of about 16 million people has undergone a remarkable macro economic growth during the last few years but the main and the core problems of the economy are still unsolved. Inflation is one of the core problems. The inflation in the year 2010 has recorded to be the highest according to the Federal Bureau of Statistic. In April 2010, the Pakistan inflation accelerated at its fast pace and the inflation is still increasing. The consumers are mostly pessimistic about the economic conditions of the country as the economy is going in downward direction these days. People waste large sums of their income on their addiction of smoking. Our product is going to be cheap and will help them do away with this problem.

Legal
The new government has made some changes in the legal and regulatory issues in which firms work like the sales tax on items being increased from 15% to 16% etc but there are no current legal restrictions on the current product that we

want to launch as it is a product made for the social welfare of the people of the country.

Government
The government is trying its best to rid the country of this bad habit and the ministry of health has been creating awareness regarding the hazards of smoking. The cigarette packs are also labeled with warning regarding smoking is injurious to health. It wants to introduce such products in the market which will help the people to quit smoking. It has already applied restriction on the sale of cigarettes to people under the age of 18. The government has banned the advertisement of cigarettes on mass media and also smoking in public places is outlawed. Therefore we expect that the government will support us in the production and promotion of our product and give us added subsides so that KickSmoke costs lesser to the end users.

Socio-cultural
The people of Pakistan are getting health conscious day by day. They are getting aware of their duties in order to maintain the healthy environment. Further more the government is also taking several steps to educate people that how it is important for the people to live in the healthy environment. KickSmoke is a product that will support the social economy of our country because any kind of addiction in our Islamic society is taken in a very negative way and is prohibited. In the current situation every other person in our society smokes. People try to hide this bad habit and in some point of their life want to quit. But the process of quitting is very hard and not for the feeble hearted. The addiction of tobacco is very hard to break as your body starts demanding nicotine and tobacco. This is the main reason why we believe that our product will be effective.

Supply chain
The cigarette industry has a very intensive supply chain that is delivering cigarettes all around Pakistan. They will not allow their distributors to carry our product as our product is basically a major indirect competitor. On the other hand Pakistan has quiet a few companies who are in the distribution business and carry out the distributions for other companies. One of these companies could be a possible option for us when we consider the supply chain and distribution channels of our product.

Current Situation - Market Analysis


Market definition
In a country with the population of 18 billion, both men and women ranging from the age of 16 onwards smoke. The main purpose of our product is to rid the country of this menace of smoking. The market of KickSmoke is both men and women. We want to make this product a house hold product that should be readily available at every home and work place. So are market comprises of people who dont smoke i.e. parents who dont want their children to get addicted to this bad habit. And it also consists of the smoking populations which include both men and women ranging from the age of 16 onwards. Especially the following: People aging from 16 to onwards. Married women prescribed to quit smoking. People prescribed to quit smoking.

Market size
Of the total population of 18 billion people about 22 million people smoke and it would be a safe estimate to say that around 80% percent know and agree that its a bad habit and 50% percent of these say that they want to get rid of it. All these people make up our market size. Pakistans total cigarette market is around 78 billion sticks. Our market size is basically all the people that smoke and these are all people who can be targeted.

Market segmentation
The market is going to be segmented on the bases of Age Gender Income

We want to make three types of chewing gum with the strength of the KickSmoke gum of three potencies to cater for smokers of different usage. Light mild strong 6

Vanilla (Sugar Free) But the major focus of our company is to market KickSmoke in such a way that every household has it and uses.

Competition and market share


We dont have any such competitor as we are basically doing social marketing and cigarettes are not our competitor per say. Our minor competitor could be the gum companies. Market trends show that people want to quit smoking but they dont have an alternative to get rid of the tobacco addiction.

Current Situation - Consumer Analysis


Participants
The participants of the buying are the sole people who smoke. These are the basic target audience. These include teenagers, women and men. Patients prescribed to quit smoking, and parents wanting their children to quit smoking.

Demographics People who smoke


Ages 18-24 25-44 45-64 [greater than or equal to]65 Percentage 28.5% 25.7% 22.7% 9.3%

The product we are going to market basically is for the following personnels. AGE: 18 to 60 Maybe for the old smokers it would be difficult for us to induce nicotine chewing gums as chewing might be a problem for them but convincing is always possible. GENDER: both male and female, especially male. 7

FAMILY LIFE CYCLE: whole of the families would be targeted trying to make our product a household product. INCOME: People having all incomes would be targeted; gum would be produced both for elite class and low class keeping in view the quality of the gum.

Buyer motivation and expectations


The mere fear of death alone is the biggest buyer motivator for the purchase of our product. Our product is a social serving product so higher motivation amongst consumers is required. Expectations are quite normal as the product is unique and awareness created would depend upon the greatness of expectations and motivations. We feel that we have an advantage to motivate people regarding our product.

Current Situation - Internal


Company resources Financial
Financially we are strong as the product is innovative and the investors are quite interested in our products future. Therefore greater investments are available as compared to our requirements.

People
Pakistan is a country filled with cheap labor. All kind of skilled people are available here at a cheaper rate as compared to other countries, therefore we have the advantage of producing our product at a much lower cost as compared to other countries producing the same product hence in the end we have also export advantage.

Skills
Skills are also enough to perform the production process. Once the process of production will be started, it is hopeful that it will run smoothly.

Objectives
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Mission statement
Be the main supplier of anti smoking products.

Corporate objectives
To hold and maintain a monopoly in the anti smoking products market

Financial objective
We want to achieve the break even point by the end of the next year.

Marketing objectives
To bring awareness of the KickSmoke gum to the masses

Long term objectives


Launch other anti smoking products like inhalers, strips etc. We also want to introduce new flavors in the long run.

SWOT Analysis
Strengths

It will be the market leader as its a new product Financially strong very strong Socially attractive / could become a status symbol No side effects Government support Its cheap and affordable Studies have shown that using a nicotine gum can double the chances of stopping smoking Many people do not like to smoke and chew gum at the same time. In this way they will be able to have both benefits from a single gum

Weaknesses
Weak delivery chain You may still be tempted to smoke. People might misunderstand it as being a medicine and not go for it. This method is unsuitable for people who wear dentures.

Opportunity
A large market which can be captured There is a lot of diversification in the potential customers Operational efficiency can be attained once we start

Threats
Its a new product so we have a little bit of risk in the beginning. Maybe people would not quit smoking.

MARKETING RESEARCH:
Marketing research involves the identification, collection, analysis, and dissemination of information.

Information Requirements:
Product market research serves several goals. The required information about the new product is collected. Armed with good information on what the customers actually want is a key to success. Marketing research involves the identification, collection, analysis, and dissemination of information. Through marketing research work we gather, record and analyze various data and information about customers, competitors and markets. Nicotine gum is a type of chewing gum that delivers nicotine to the body. It is used as an aid in smoking cessation and in quitting smokeless tobacco. The nicotine is delivered to the bloodstream via absorption by the tissues of the mouth. Before launching Nicotine gums in Pakistan, the following information is gathered before conducting the marketing research. A whole research plan is developed about the marketing research. 10

Research Methodology: Secondary Data Collection:


Before going through the time and expense of collecting primary data, we check for secondary data that previously may have been collected for other purposes but that can be used in the immediate study. Using online databases, a research can be conducted. We will find about the use of cigarettes in Pakistan and will also get the information about the popular brands. We can analyze from the brand, the class of majority people who are involved in smoking. Pricing can be done according to the class of those people. We will also search for the other quit smoking therapies and their effectiveness in Pakistan for a suitable comparison.

Primary Data Collection:


We need to collect the following data The average of smokers in Pakistan Average of regular and occasional smokers and quitters. What class of people are usually involved in smoking Which cigarette brand is mostly used Attitude of people towards Nicotine replacement therapy

This will be done by: Observational Research: Includes observing the behavior, actions and attitudes of different smokers. Men involved in smoking Women involved in smoking The majority age group that smokes The people that are involved in smoking; businesspersons, students, middle class workers, employees, housewives The pricing of cigarettes The number of people that are trying to quit smoking

Survey Research:
Surveys are carried out in universities, educational institutions, and local people and online.

Experimental Research:

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Experiments are conducted. Free samples of Nicotine gums are then distributed among some regular smokers who are trying hard to quit smoking. [Nicotine inhalers, sprays and sublingual tablets are also given as a sample]

Interviewing:
Marketers and researchers will be having interaction with local people representing smokers. From smoking students in some institution and their willingness to quit

Research Results:
Table: Percent of Various Age Groups Who Currently Smoke Ages 18-24 25-44 45-64 [greater than or equal to]65 Percentage 28.5% 25.7% 22.7% 9.3%

A survey was conducted in Agha Khan Medical University earlier this year according to which nearly 24 percent of male and 16 percent of female college students are regular smokers in Karachi. In Islamabad, the prevalence is even higher, with 28 percent of young people smoking. A majority of middle age men who started smoking in teenage want to quit smoking. In some universities and other organizations, free samples of Nicotine gums and inhalers are distributed. Some people were firstly reluctant because these gums also include nicotine that is the basic reason of addiction. But in contrast to cigarettes, one can get rid of nicotine gum addiction. The user will use nicotine gums as a replacement of cigarettes for several months and then will gradually quit the use of gums. Cigarettes can be viewed as a "dirty" and dangerous method of delivering nicotine, while Nicotine replacement therapy is a "clean" and safe method of delivering nicotine in the body. The order of smoking found from an online survey is:

Students > Employees > Middle class workers > Businesspersons > Housewives & others.
Gold Leaf, Gold Flake, Marlboro and Benson & Hedges are currently best selling brands in Pakistan. 12

Marketing Strategy Product


Our marketing strategy is basically aimed at executing and communicating our value proposition to our intended target market.

Product mix Product


KickSmoke is a chewing gum that is going to be used by users to rid them self of the habit of smoking. The product has three varieties with different flavors. They vary in terms of strength. The varieties are strong, mild, and light. The products have three different flavors chewing gum. Mint, strawberry, chocolate and Vanilla (for sugar patients).

Product Item: KickSmoke Nicotine Gums.

Variety
There are four types of varieties Mint Chocolate Strawberry Vanilla (Sugar Free)

Packaging

The L-Pack is a packaging breakthrough significantly improving portability, convenience, and product protection and consumer information while lowering 13

environmental impact in comparison to existing solutions. Its unique design combining primary and secondary packaging provides optimum product protection as well as a quick and easy access to the product thanks to a dynamic blister flip motion during L-Pack opening. A leaflet attached inside the pack ensures continual availability of information to consumers.

Place
KickSmoke will be available at all the medical stores. We want it to be available in all the stores that have cigarettes available at them. We want to build our distribution channels and our long term aim is to make have a distribution channel as large as these tobacco companies.

Promotion
We have a new product and it is in the stage of where we need to create awareness in of the product in the people. We will be launching a mass promotion campaign so that we can make the maximum of people aware of our product. We are in awareness stage of the AIDA and we want to target all the people of the country. It needs to be kept in mind that most of our population is illiterate so we can not just restrict our promotion campaign to the news paper. We want to use advertisement on TV to capture these people. Our message is going to be simple to understand and will not require too much of thinking in order to understand it. People usually watch news channels. This is why GEO is best medium for people who have cable at home. But it also needs to be kept in mind that not many people have cable at home so we want to run our commercials on PTV too.

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We want to promote our products at hospital and medical stores. We will be putting up posters at all the major stores of the country. Doctors will be given free samples of the product so that the can prescribe it to their patients.

Product Life Cycle Management and New Product Development Process:

Product Life Cycle Management:

Market introduction stage

The new product will be introduced in the market. Cost will be normal because the concept is new in Pakistan and such kind of gum was not available before. Sales may be low because the product is new and people do not have much awareness about nicotine quit smoking gums but hopes are high. The marketer will have monopoly because these gums are not introduced before in the country. Demand is to be created.

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Customers will be prompted to buy the new product. Awareness will be created by advertising.

Growth stage

Costs will be reduced to increase the sales of the product. People interested in quitting smoking will become aware of nicotine replacement therapy and will buy and suggest the product. Profits will increase. There will be danger of competition with some new players in establishing market. Prices to maximize market share will be created by advertising.

Mature stage

Costs will become low the market will be well established and there will be no need for publicity. Sales volume will rise. There will be increase in competitive offerings. Prices will tend to drop due to the proliferation of competing products Brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered. Industrial profits will go down because of competitors.

Saturation and decline stage

Costs become counter-optimal.

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Sales volume decline or stabilize. Prices, profitability diminish. Profit becomes more a challenge of production/distribution efficiency than increased sales.

New Product Development Process:

Idea Generation:

Ideas for new products can be obtained from basic research using a SWOT analysis (OPPORTUNITY ANALYSIS), Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods . The idea about nicotine replacement therapy is generated. Nicotine cause addiction and it is difficult for a smoker to quit smoking due to this addiction. If Nicotine is introduced into the body by any way other than smoking, it can fulfill the users requirement of nicotine and will keep him away from the hazardous effects of smoking.

Idea Screening:

The following questions are to be kept in mind during idea screening:

Is the customer in the target market having benefit from the product?

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Nicotine gums will be introduced in Pakistani market for the first time. The number of smokers is increasing every year and is a cause of many health problems. People are becoming aware and are interested in quitting smoking. Nicotine replacement therapy is the easiest way to quit smoking if the person using it has some will power too.

Is it technically feasible to manufacture the product?

It is feasible to manufacture the products because the techniques of production are available.

Will the product be profitable when manufactured and delivered to the customer at the target price?

The product will be profitable due to its uniqueness and benefits.

Concept Development and Testing:

The target market is detected i.e. smokers in Pakistan. The benefits are analyzed. The reaction of the consumers is kept in mind. The costs for the manufacture of the product are known. Testing the Concept by asking a sample of prospective customers what they think of the idea. Some people might question against the nicotine therapy. The solutions and answers to their queries are kept in mind.

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Marketing Strategy Development:

The target market is mostly comprised of men and a few women. Majority of smokers are young people aging from 15 35. Middle class and lower class people are mostly dependant upon cigarettes while upper class people smoke cigars as well as cigarettes. The product planned price is determined for nicotine gums. The budgeting, sales and profit goals are determined.

Business Analysis:

The prices of currently sold cigarettes in Pakistan would be compared. Estimation of sales and profit will be done.

Product Development:

The concept of the product is converted into the final product. After going through all the previous stages Nicotine Gums are launched.

Test marketing:

The product before getting introduced in the market is firstly tested. Sample of Nicotine gums are distributed among some people who want to quit smoking. The effects and results are analyzed by test marketing.

Commercialization:

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Launch the product: The new product is introduced in the market. Product advertisements and other promotions: Product advertisement and promotion is done in order to enhance the sales.

Branding:
Brand Name
KickSmoke is the name that we have chosen for our product. The philosophy behind choosing this name was that smoking is a habit that is very hard to give up. Once you start smoking this habit sticks and you have to force yourself / kick it out of your life. KickSmoke is a name which we feel is easily recallable and will stick in the minds of the people.

Brand image
The brand is new and there is need to build the brand name of image of KickSmoke. We will be showing big celebrities like Shoaib Akhtar using KickSmoke and saying how this product helped him get rid of his cigarette addiction etc.

Marketing Strategy Segmented Marketing Actions:


By Product:
Nicotine gums are available in the following flavors: Mint Flavor Chocolate Flavor Strawberry Flavor Vanilla (Sugar Free)

The KickSmoke Nicotine gums are available in two potency levels 2 and 4 mg.

By Customer Segment:
Target smokers Aging 18+ Mostly men as among smokers 80% men smoke in Pakistan KickSmoke Nicotine Gum is available in 2 milligram (mg) and 4 mg strengths. Usually, the 4 mg strength is recommended if you smoke 20

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cigarettes or more in a day or are a smoker who has not been able to quit smoking using the 2 mg strength. Otherwise you should use the 2 mg strength. Advertising: Advertising will be done by keeping the smokers in mind. A small promotion campaign can be launched to create awareness about the use of nicotine gums for quitting smoking. Advertisements will be made in a way to attract young customers.

Marketing Strategy - Price


Pricing objectives
The pricing objectives are that the nicotine gums should be affordable and cheaper then the cigarettes. maximize long-run profit maximize short-run profit increase sales volume (quantity) increase market share discourage new entrants into the industry match competitors prices obtain or maintain the loyalty of customers enhance the image of the firm, brand, or product create interest and excitement about a product discourage competitors from cutting prices social, ethical, or ideological objectives get competitive advantage

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Pricing method
(eg: cost plus, demand based, or competitor indexing) When it comes to buying our product the buyer is going to compare the price of having to buy a pack of cigarette to by the KickSmoke nicotine chewing gum. We want to set out price lower then that of cigarettes. This is why we want to use competitor indexing method. We want to use the competitor indexing method using the cigarettes as a standard and then pricing our product lower then these products.

Pricing strategy
Initially we want to use the penetration pricing strategy because we have to capture a segment and want to market the product to the masses. The product has two potencies. The price is set according to the potency and the flavors are of the same price. Product KickSmoke 2mg with 10 pieces each(strong,mild,lite) KickSmoke 4mg with 10 pieces each(strong,mild,lite) Price 80 120

If a person smokes 10 cigarettes a day he can eat one piece of the chewing gum which is why we have kept the values as such keeping in consideration the price of cigarettes.

Price elasticity and customer sensitivity


Price elasticity is the variation of the price to the quantity demanded to the various in price. This is a cheap product and the variation in price would obviously affect the customer demand. Making the price too less will give the customers think that the product is a cheap one and its quality is inferior. If the price is too high then the customers will not by it.

Marketing Strategy - promotion


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Promotional goals
KickSmoke is in the introductory stage of the product life cycle. At this stage KickSmoke needs a massive promotional campaign to bring awareness, develop interest and make the potential buyers make the buying decision. Our product is in the awareness stage which is why we want to use heavy promotion to create awareness in the people and interest in these people.

Promotional mix Advertising


Advertisement is going to be making in three basic channels target three different audiences. We will be running our advertisement on GEO and PTV to target most of the target market is above the age of 25. These are people who presumably like watching news channels. The other half of our market is teenagers who like to watch movie and music channels. For this segment we will be running our advertisement on MTV Pakistan.

Sales promotion
We will be giving incentives to the middle men. These middle men are actually the channel members. By doing so, these sales people will promote our product over the other products. These sales men will be given commission on the number of packs of KickSmoke sold.

Personal selling
We want do personal selling to the doctors and to the hospitals.

Marketing Strategy - Distribution


Distribution (or place) is one of the four elements of marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user.

Geographical coverage
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We want start by introducing our product in the four capital cities of Pakistan and then increasing our geographical coverage from there onwards. The product will be initially available in the major cities of the country Islamabad, Karachi, Lahore, Peshawar and Quetta. The product will be available at places like Malls, Medical stores, Shell Tuck Shops, small shops, bakeries etc under the brand name of KickSmoke.

Distribution Channels:
Companies can sell through a single channel or through multiple channels that may include: Direct/sales team: Nicotine gums will be directly sold to the people who are interested in getting them. Direct/internet: A website would be launched with all the information regarding price, usage, packaging and other things about nicotine gums.

Physical Distribution:
Physical distribution is the actual movement of products from a producer to consumers. It includes customer service and order processing. It is giving the right product to the right consumer at right place at right time. Targeted costumers will be attracted, and will be provided the services by the sales team.

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