Marketing plan on a new product in Bangladesh Sugarcane juice

Executive Summary

We want to market sugarcane. We have prepared this feasibility plan on that basis. We have assigned a
name for the product as sugarcane Juice. Since the raw materials are very much available in our
country, we have decided to give the product an indigenous image.

Sugar juice is a kind of soft drink that provides the consumers with processed sugarcane in container. For
the marketing purpose of the product we have decided to launch three product lines. The sugarcane Juice
would be launched in the market at 250 ml. 500 ml. and 1 Liter bottle.

We have set a reasonable price for the product so that all kinds of people can afford to buy this soft drink.
We have followed the Target Costing pricing approach. We would gain a competitive advantage, as this is
a first hit in the market.

We have targeted a huge market segment for the product. Bangladesh is a large populated country. Lots
of people are looking for such a product. Green Coconuts are not available all the time. For example: a
person walking on the street. Suddenly he feels thirsty. Now if he wishes to drink green coconut water he
cannot find it easily. It is not always found in the right place at the right time. If we launch our product in
the market, a person willing to drink green coconut water can have it from a nearby shop. At present this
is not possible. Our target market includes health conscious people, sick people, sportsperson & many
other consumers, which we have segmented from the Demographical, Geographical, Psycho graphical &
Behavioral point of view.

We have prepared a financial documentation for this feasibility plan of a new product. As we are
introducing the product in three categories at 250 ml, 500 ml and 1 Liter bottles, we have prepared the
Break-Even-Analysis for each of the product line. We have prepared the feasibility plan for five-year
basis.

We have given an elaborate discussion on financial summary at the later stage of the feasibility plan. We
have followed the Target Costing Pricing Policy; which means an ideal price is set first based on
customer considerations, then target costs will ensure that the price is met. We decided the market price
before. Then we calculated the estimated unit price & fixed price. Then we decided how much profit
margin is possible on each of the product line. We have assigned three different profit margins for three
product lines. This price setting is based on the current market research.

1. Product Description

Sugarcane juice is a product that serve different segment of customer. The product is sugarcane, which is
unique in the current market. The green coconut water will be processed and sold in glass bottle of
convenient sizes of 250 ml, 500 ml and 1 liter. The sugarcane juice will be very much refreshing and
provide great support to the sick and health conscious people. Our target market is very large with
different segments. Our expected sales are very high. The development cost is tk.2.5 million approx.

1.2 Product Profile

Name of the Product: Sugarcane juice

Type of Product: sugarcane

Ingredients: Pure natures energy drink

Sugar, mineral salts, vitamins C.

Container: Stylish container

Container size 250 ml, 500 ml, 1 Liter

Product Price: 250 ml Tk. 17

500 ml for Tk. 32

1 liter for Tk. 60

Estimated Durability: 3 Months from date of manufactured

2. Market Research and Analysis

Our company wants to develop and introduce a new Product. So, we have gathered information through
in-depth interviews. We made a survey of the market to have a clear idea about our market, our customer
demand, needs and wants. This information helps us to know about the current market and prospects of
our new product.

2.1 Market Description

Bangladesh is a country of about 150 million people.. The total market size of the soft drink industry is
about 20 million and day by day it is increasing. We have a spread nationwide market of different
convenient product. People are nowadays very much concerned about the market and product conditions.
So we have a growing prospect of customers of sugarcane Juice. Among the population we worked out
few segments of customers who will prefer our product most.

2.2 Market Segmentation and Targeting

Market Segments

We have observed and analyzed the market and based on the nature of the market we segmented the
market in the following sectors:

Geographic Segmentation:

Sylhet, Rajshahi, Khulna & Barishal, Chittagong, Dhaka

Demographics:

Individuals, Family, Sportsman, Business buyer

Psycho graphics:

Higher class, Higher mid class, Middle class

Behavioral:

Sick people, Health conscious and Sophisticated who take the new product from the market
Marketing Strategy

Brand strategy is at the heart of marketing strategy. It is the act of designing the company offer and image
so that it occupies a distinct and valued place in the target customer mind.

Sugarcane juice is very beneficial for health and provides refreshment. As we are launching sugar cane
juice in tetra pack, so we want to create positive and long lasting image in the minds of customers that we
are providing hygienic juice because we are also introducing new flavors like mint and ginger etc. Core
benefit means the services and benefits the customer is really buying. Our customer fulfills its need of
thrust and refreshment by buying our Sugarcane juice.

3. Target market and projections:

Analyzing all the segments, we decided our target market according to our product category. The target
customers of Sugarcane Juice are sick people, health conscious people, sportsmen and tourists. The
company decided to charge Tk. 17 for 250 ml bottles, Tk. 32 for 500 ml bottles and Tk. 60 for 1 Littre
bottles, if we consider price versus taste received then we can see that taste received is more in value.
Therefore charging the mentioned prices are justified. The following graph gives a clear idea of our target
market.

Target Market:

Health Conscious - 32%

Sick people - 43%

Tourist - 3%

General people - 22%

We separate our target market into four different segment based on their geographic, demographic,
psychographic and behavioral characteristics.

Health conscious: Health conscious people basically the sports person are one of our largest target
markets. In this segment, we get a lot of potential customer. One third of our total population is young.
This is a significant number that we have to concern about them and provide product, which is fit for
them. About 5 million people of this total number are health conscious. They spend about Tk. 500 in a
month in average.
Sick people: Sick people are one of our major considerations. More than 1 million children suffer from
diarrhea that needs liquid food. Not only child but also the adult might suffer from those types of
problems.

Tourists: Every year a huge number of tourists visit Bangladesh. We want to provide them with
sugarcane Juice.

General Customers: Besides the above segments, the general customers will acquire a significant
portion of our target market.

4. Market Needs:

Sugarcane juice wants to satisfy its customers need. Thats why it is important to identify the market
needs. Our first consideration is to provide the best product to its customers. Thats why we offer three
different sizes of bottle with different prices for its different segment of customers.

250 ml: The lowest price for the rural mid social class and individuals.

500 ml: Its target the sick people and tourist

1 liter: For a small family.

5. Competitive Analysis

The Soft drink industry is very much competitive. Many soft drink companies have acquired a significant
portion of the market. But the unique features of Sugarcane Juice. will take it far beyond the reach of
the competitor. Because, no one has yet thought about selling sugarcane juice in such a specialized way.
To evaluate our prospect of sugarcane Juice. in the current market, we have analyzed the market
situation in various ways. Following are some demonstration of the analysis:

6. SWOT analysis:

The product existence in the future is depending on its strengths, weakness, opportunities and threats
analysis:

Strengths:

Available input materials

Low production cost

 Technological and marketing knowledge

Strong distribution channel

Easy manufacturing process

Reasonable price

Weaknesses:

It is easy to copy the idea by others

Taste differ from the natural sugarcane

cannot be preserved for longer period

Opportunities:

Monopoly market

Large market

High demand

Might have a chance to get subsidies by Govt. to export

Threats:

High competition in future by copying the idea

Entrance of new product

Alternatives are avoidable in some segment

Uncertainty of launching a new product.

7. Competitor Analysis

The major soft drinks and juice companies of current market are:

Pran Groups

Starship
 Uro Cola

RC Cola

Coca cola

Pepsi

Acme

Danish

8. Distinct Competency:

These companies can try to entrance our market by launching new product lines to compete us. Yet, we
have distinct competitive advantage. That is our product is still brand new. The other companies will take
sometimes to enter into the market. Till then we can have a monopoly market condition. The other
advantage that we have is lower price. We will sell products in reasonably lower price than other
competitors do.

Strategies against competitors:

To compete with the major competitors we can adopt the following measures:

Providing the best service to create high customer satisfaction

Reasonable and acceptable pricing

Promising and providing top quality product

Launching highly effective mass promotional activities

Continuous innovation and modification of the products

Creating and maintaining long term customer relationship

Creating Brand Loyalty among the target consumers

9. Market Plan

Pricing Strategies

We have decided to set a reasonable price for our product when we will develop it. We considered many
factors in setting the pricing policy. We will describe a six-step procedure:

10. Setting the pricing objectives:

Our company has decided where it wants to position its market offering. We have chosen our objective to
maximize market share. We believe that a higher sales volume will lead to lower unit costs and higher
long-run profit. We have set the lower price because we assume that the market is price sensitive. Our
overall objective is to capture the maximum market share by setting lower price.

Determining Demand:

Each price will lead to different level of demand and therefore have a different impact on companys
marketing objectives.

Estimating costs:

We have estimated the cost and want to charge a price that covers the cost of production, distribution and
selling the product, including a fair return for its effort and risk.

Types of cost and level of production:

There are two types of cost: a) fixed and b) variable. In our new product development project fixed cost is
2,00,00,000 taka. Fixed cost includes- machinery, monthly bills, and salaries of employees and so on,
regardless of output.

There are some variable costs like-cost of bottle, packaging and so on. These costs tend to be constant per
unit production. We have estimated that per unit variable cost is Tk. 6.3 for 250ml, Tk. 12.6 for 500 ml
Tk. 24.4 for 1 liter .

Analyzing competitors costs, prices and offer:

We have analyzed our competitors price and found that Pran charges tk.22 for 250 ml bottle, Starship
charges tk. 36 for 500ml Pac.

Selecting a pricing method:

We have chosen the target costing method to set price for our product; pricing that starts with an ideal
selling price based on customer considerations, then target cost will ensure that the price is met.

Promotional Strategies:

To acquire a strong position in the market, we need to give special emphasis on effective promotional
activities. In order to get the maximum market share we will have to use all four tools of marketing
promotion. Specially, advertising through mass media will support us a lot.

Marketing Mix:

Product:

Products that include deign, features and packaging that go beyond consumer expectations and
differentiate the product from competitors. Our juice taste and flavor is according to the customer
expectations because we provide100% pure juice. We have no compromise with quality. The design of
sugarcane juice that it will be in attractive and stylish container in following size,

250ml

500ml

1 liter

Price:

The price of the product can also influence the buying behavior of the consumers because in Bangladesh
there are different level of classes based on the income difference so price is the one of the important
factor, some of the consumer can afford the price and others cant, so we must set the price of the product
that is afforded by all the social classes of the region.

So we use penetration pricing strategy.

250ml- 17Tk

500ml- 32Tk

1litre- 60Tk
Place:

The place of the distribution and availability of the product also influence the buying behavior because if
the product is in reach of the consumer he will prefer it and if it is hard to find the product in the market
he will never buy that product. So we provided our product to all the all the distributors and they will
provided it to famous retailers of Dhaka, Chittagong and Rajshahi. Because of this our product will be
available at more shops and our sales will increase.

Promotion:

The promotion of the product i.e. the advertisement, sales promotion and other promotional tools can
change the buying behavior because some of the individuals highly influenced by the advertisement of the
product.

Opportunities:

New flavor:

We can introduce flavored sugarcane juices. E.g., mint and ginger flavor etc.

Export:

We can export our product to foreign country in order to earn more profit.

Support foreign investors:

Government support foreign investors to invest in Bangladesh.

Advertising:

We initially will give more emphasis on paper ads and TV commercials. Because, advertising through
these media is the most effective way to reach the customers and position our product in their mind. We
are anticipating that this will have a massive impact on the teenagers and other enthusiasts. Few neon
signs and bill boards of sugarcane juice also can be set up in some core points of the city. We hope to
reach 75% of our customers through effective advertising.

Personal Selling:

Though personal selling skill is not that much effective for convenient products like sugarcane juice we
will inspire and train the sales persons of the retail stores to convince people to buy our product when
they will come to buy any drinks item. The sales persons will inform the consumers about the cool
refreshing taste of sugarcane juice and about the nutritious aspects. We hope that will play a significant
role to increase our sales.

Promotional Tools:

We have also planned to apply some promotional tools. Initially for sometimes we will distribute our
product at 50% discount just make our new product familiar with the customers. This will be the market-
testing period for our product. Later, we may apply the strategy of giving gifts, lucky coupons, tour
tickets depending on the market and competitive situations.

Public Relations:

We have future plans to hold seminars, commit social development, supporting social activities, to
arrange cultural functions and mobile game shows for publicity purpose.

Distribution Channel

In the initial stage, we will distribute the products with our sole distribution channel. When our market
will spread out, we will distribute our products through dealers. We will set our own outlets in few core
market positions. When we will go for mass marketing, we will supply our product nationwide through
dealers. Our dealers will take the products to every district of the country. Sugarcane Juice will be
available in all retail stores of the country.

Services

As we are targeting to the top most customer satisfaction and building long-term customer relationships,
there is no alternative for us rather than providing top quality service. Giving the customers timely and
instant quality service is our primary concern. We even planned to open few customer service centers
where will response to customers interactions. We will collect information, suggestions, ideas and
opinions of the customers through these centers and will innovate and modify our product accordingly.
We also will change any defected product.

11. Manufacturing and Operations

Locations

We will set our manufacturing and other working areas in convenient locations. We will prefer the
locations to set up our manufacturing firms, warehouses and inventories in different core business points
of the country where it will be easier to both collect the raw materials and transport the final goods to the
market.

Human Resource

The board of directors will be responsible for the recruiting activities. Recruiting will be done through
written tests followed by interviews.

Technological Aspects

To create and innovate new quality products we need to use advanced technology. We need high tech
machineries imported from the foreign countries. Not to mention, skilled people to operate them. We have
already studied all the technical aspects and prepared a list of instruments and their costs. The machinery
will be collected when required.

12. Financial Analysis and Documentation

Sales Forecasting

The following Table and graph show our expected sales for the coming five years:

Expected Sales(Per year) 250 ml. Bottle 500 ml. bottle 1 Liter bottle

First Year 450,000 120,000 130,000

Second Year 600,000 180,000 200,000

Third Year 700,000 200,000 220,000

Profit and Loss Projection

Sales Revenue over the period

FY:2015 FY:2016 FY:2017
Product Cateregory
Qnty Price Amount Qnty Price Amount Qnty Price Amount

250 ml 450,000 17 7,650,000 600,000 17 10,200,000 700,000 17 11,900,000

500 ml 120,000 32 3,840,000 180,000 32 5,760,000 200,000 32 6,400,000

1 Liter 130,000 60 7,800,000 200,000 60 12,000,000 220,000 60 13,200,000

Total Sale 19,290,000 27,960,000 31,500,000

Variable Cost 7,519,000

Contribution
Margin 25,650,000
Fixed Cost 20,000,000

Total Cost 27,519,000

Profit Margin 5,650,000

Review and Control:

We will have simple, decision friendly, monthly, quarterly, and annual reports focusing on

Revenue and sales

Expenses

Customer feedback

Market log (self and competitive major activities).

Control is mainly concerned about monitoring the performances and taking corrective action to the
respective task, if needed. This control process is said to be very vital task for preparing any sort of
planning. As we are preparing a marketing plan for launching our product so we have to also take an
effective Control plan. We will follow Budgetary Control to implement our marketing plan. That means
for each every sector like Advertisement, Distribution, Sales, Position in the market and Earning Profit we
have some specific standard and we will compare it with the actual performance. Our controlling strategy
will be like that, if the actual work meet the standard we will accept it and any department fail to obtain
the desire standard we will punish them according to the rules of the organization. On the other hand if
any department fulfill the target and exit the standard limit, we will reward them providing financial
benefit as part of motivating factor. For example: about market positioning our target is to capture the 50
percent of the market share gradually within 5 years (15 percent within 1 years, 30 percent within 3 years
and 50 percent within 5 years and more). After 2 years we will evaluate the actual performance with our
standard and take action. On the other hand we will have some target about advertising like, in which
media we will use for add and how they will be effective to increase our sales volume. If the performance
is ok then we will remain in the same strategy, but if it does not work properly we will quit the media and
chose another effective one. Finally it can be said that our control unit will work to monitor and evaluate
the performances and taking actions against the department, if they find any department that is not
functioning properly or any sector which is not giving adequate profits to the company.

Conclusion:

In conclusion we can see that, the product the company is going to launch has a bright future in its
market. As the product is innovative, the consumers are going to appreciate it. And according to the
R&D (Research and Development) this product will be a strong product mix for our company and
once our Sugarcane Juice will reach to the hand of every of our targeted customers.