Fahad Ramzan (012279)Haji Mahmud bin Haji Mohamed (011774)

Murtaza Amin (012213)Muthuletchumi Lin (012153)

Pudussery Chummar George (011869)

Agenda• Strategy

– Vision/Mission– Core Values

• Business Plan– Business Introduction– Industry Credibility – Value Proposition– Target Market– Sustainable Marketing– Operations and Supply Chain– Workforce Management– Financial Impact on 3BL– Financial Forecast– Corporate Social Responsibility– Conclusion

• References• Appendix

To provide a healthy alternative to gain energy through coffee confectionery instead of tobacco in an environment friendly and sustainable approach

Sustainability, Fairness, Equity, Workers Rights, Justice, Quality, Open Communications & Collaboration

To be recognised as a leading energy coffee confectionery maker in Malaysian retail industry with a premium of LOHAS accreditation

StrategyVision

Mission

Core Values

Business IntroductionCoffee Confectionary Chews

• Model – Energy provider, tobacco substitute, consumable by individuals of all lifestyles, sustainable ingredients and packaging, different flavours

• Target Market – LOHAS, general public, existing smokers and athletes

• Pricing – Low Price Range

• Direct Retail Marketing

Industry Credibility

An Incredible Timing Opportunity!

Health& Wellness

EnergyDirect Sales

Industry Credibility“Direct selling is an investor’s dreamand the “best kept secret” of thebusiness world”

Fortune Magazine

“Energy products are taking the business world by storm. Some say it's the new gold rush! There is a lot of profit in it and even more fun to venture.”

Jorge Olson

“Too many people wait until their health is severely impaired before theytake action.” 

Paul Zane Pilzer 

100

75

50

25

0

93 (24%)

73 (18.9%) 66

(17.1%) 57 (14.8%) 52

(13.5%) 45 (11.7 %)

Follo

w

frie

nds

Feelin

g o

f m

atu

rati

on

Enjo

ym

ent

Follo

w

pare

nts

Rela

xati

on

at

free t

ime

Norm

al

man

behavio

ur

Value Proposition

Figure 1: Reasons for smoking, among smokersSource: Nyi N Naing et al, 2004

• Substitute for Tobacco/ Nicotine Addiction

Value PropositionSubstitute for Tobacco/ Nicotine Addiction

Figure 2: Malaysian Smoking Cessation StatisticsSource: Global Adult Tobacco Survey (GATS) , 2011

CESSATION

PERCENTAGE MEN WOMEN OVERALL

Smokers who made a quit attempt in past 12 months 48.7% 45.7% 48.6%

Current smokers who planned to or were thinking about quitting within the next 12 months

14.3% 14.3% 14.3%

Smokers advised to quit by a care health provider in past 12 months

52.2% - 52.6%

Value Proposition• Substitute for Tobacco/ Nicotine Addiction

Source: Juniper Rosso, 2010

“Coffee can suppress the appetite and stimulate the central nervous system and thus consider adding natural sources of caffeine to your diet as nicotine substitutes.”

Value Proposition• Energy Supplement

• = Coffee + Honey

“Caffeine, which is found naturally in coffee beans, is classified as a drug, as it gives you a burst of energy by stimulating your central nervous system.”

Source: Miller, 2011

Sharpens Mind and Speeds up

Body

Energizes Quicker and Convenient

Increases Metabolism and

Suppresses HungerRich in Antioxidants

Source: Brenna Coleman, 2009

Figure 3: Health Benefits of Honey with Coffee

Target Market

Gen

era

l Pu

blic

Smokers

Athletes

Students

Working Adults

Figure 4: Target Customers for BARISTASCOTCH

Sustainable MarketingAvoid Paper Advertisement, use Social Media and Web.(No Flyers and Broachers)

Advertisements

Promote via effective communication channels such as doctors, gym/fitness instructors and nutritionist.

Expert Recommendation

Free samples distribution to fitness centers, universities and health care centers.

Sales Promotion

Operations and Supply Chain

Farm Growers

Production and Supply

Consumers

• Sustainability programs and labels for sustainable farming of coffee

• Improve the quality of life in coffee farming communities through education, public health and safety

• Traceability system• High quality raw material i.e. high volume at lower cost• Highly trained farmers• Fair Price (Better product and increase standard of

living)

Source: Anim Hosnan, 2013

Operations and Supply ChainFarm

Growers

Production and Supply Consumers

• Conduct training of effective farming practices by Baristascotch Team

• Conduct experiment on farms and plots for demo• Distribution of high yield plants

Operations and Supply ChainFarm

Growers

Production and Supply Consumers

Why Eau Claire Joint Venture?• First Plant in South-East Asia to Obtain National Sanitation

Foundation (NSF) Certified with ISO 9001• Winner of the  SuperBrands Award for year 2003/2004 and

2005• Certified with HACCP • HALAL certified from JAKIM• Clean production technologies

Operations and Supply ChainFarm

Growers

Production and Supply Consumers

Future Sustainable Production and Supply Plan• New Waste Management policy incorporated in production• Internal record on health and safety of employees and labor • Provide incentives on low mileage • Green Sedum Roof on the warehouses for cooling and energy

saving.• Single Distribution Center to minimize cost and energy

consumption. Source: Martin Charter, 2009| Castleton et al, 2002

Operations and Supply Chain

Farm Growers

Manufacturer

Consumers

Sustainable Packaging and Recycled Paper• Packaging paper to be produced using recycled paper waste

and comply to biodegradability policy for packaging.

Workforce ManagementManaging Director

HR Director Marketing and Sales Director

Operations and Supply Chain

Director

Accounting and Finance Director

Organizational Structure (Functional)• Mixed experience staff hiring, Fresh grads for sales job,

Special job Opportunity for housewives and single mothers etc.

• Effective T&D programs for Internal Staff.• Child care center• Take Initiatives to reduce turnover rate• Special sales incentives

Source: Jernigan, 2010

Figure 5: Organisation Structure

Workforce ManagementManaging Director

HR Director Marketing and Sales Director

Operations and Supply Chain

Director

Accounting and Finance Director

Benefits• Skill Development• Efficient Knowledge Sharing / Communication• Expedited Decision Making• Economies of Scale• Leverage with vendors

Source: Lauren Nelson, 2011

Financial Impact on 3BL

Source: Willard, 2002

Financial Forecast (€000)

€1500

€1000

€500

0

Year 2

Year 3

Year 4 Year 5Year 1

Revenue

EBITDA

Net Profit

Figure 6: Projected Profit and Loss Items

Corporate Social Responsibility

Institute Jantung Negara

Ministry of

Education

Ministry Of

Health

Conclusion

Health& Wellness

Energy

Direct Sales

People

PlanetProfit

• Manufacturing Eco-Efficiency

• Green Technology

• Fair Trade Farming

• Educating Farmers and Training

• Sustainable Resources Financing

• Community Events

• Partnership with NGOs (IJN)

• CSR activities with MOH, MOE

Inte

rnal E

xte

rnal

Today

Tomorrow

Source: Hart, S. 1997

Figure 7: BARISTASCOTCH Hart’s Sustainable Framework

Thank You!

Stage Trial (0-3 months) Launch (3-6 months) Growth (6-12 months) Sustain & Defend (12 months onwards)

Product Conduct initial surveys based on focus groups.

Emphasize the quality aspects and the innovation in product development

Maintain the quality Introduce new flavoursReinvest the packaging

Price Surveys the market to identify the price ranges within the coffee confectionary market to be sustainable

Price skimming- Affordable pricing that will set it apart from other economy pack brands

Price skimming with potential for discounts

Maintain the price skimming strategy with flexibility for price changes depending on the customer reaction and sales performance

Promotion Maintain secrecy and speed of the implementation to avoid the retaliatory attacks

Introductory free sample in stores, rehabilitation centers, medical institutionsCost effective advertising through online media

Consistency in messages and monitoring impact on retail stores

Refinement of the brand image of Baristascotch brand in terms of CSR activities

Place/Channel Explore and develop a sustainable distribution channels available in other markets worldwide

Exclusive Distribution- Offer Baristascotch at more retail outlets

Selective Distribution- Offer at “premium” supermarkets

Maintain sustainable distribution channel

Focus KPI-s Time To MarketActual vs. Plan Pilot Trial Costs

Product AwarenessPositive Consumer Online Feedback

Sales Growth Market ShareSustained SalesNew Product Innovation

Appendix 1: Marketing Plan Implementation Strategy Over Time

Appendix 2:Projected Financial Statement

PROJECTED START-UP COSTS Initial lease payment and Deposits

€ 25,000.00

Working Capital € 65,000.00

FF&E € 25,000.00

Leasehold Improvements € 10,000.00

Security Deposits € 2,500.00

Opening Supplies € 10,000.00

Company Vehicles and deposits

€ 35,000.00

Marketing Budget € 10,000.00

Miscellaneous and Unforeseen costs

€ 7,500.00

Total Start up Costs € 190,000.00

13%

34%

13%5%1%

5%

18%5%

4%1 2

3 4

5 6

7 8

9

PROFORMA PROFIT & LOSS  Year 1 Year 2 Year 3 Year 4 Year 5

Revenue

€1,100,000.0

0 €

1,188,000.00 €

1,283,040.00 €

1,385,683.20 €

1,496,537.86

Cost of Goods Sold €

110,000.00 €

118,800.00 €

128,304.00 €

138,568.32 €

149,653.79 Gross Margin 90% 90% 90% 90% 90%           

Operating Income €

990,000.00 €

1,069,200.00 €

1,154,736.00 €

1,247,114.88 €

1,346,884.07          

Expenses           

  Payroll €

327,000.00 €

336,810.00 €

346,914.30 €

357,321.73 €

368,041.38

 General and Administrative

€ 14,400.00

€ 14,832.00

€ 15,276.96

€ 15,735.27

€ 16,207.33

  Marketing Expenses €

20,000.00 €

20,600.00 €

21,218.00 €

21,854.54 €

22,510.18

 Professional Fees, Licenses and certification

€ 25,000.00

€ 25,750.00

€ 26,522.50

€ 27,318.18

€ 28,137.72

  Insurance Costs €

7,500.00 €

7,725.00 €

7,956.75 €

8,195.45 €

8,441.32

  Travel and Vehicle Costs €

15,000.00 €

15,450.00 €

15,913.50 €

16,390.91 €

16,882.63

  Rent and Utilities €

17,500.00 €

18,025.00 €

18,565.75 €

19,122.72 €

19,696.40

  Donations and CSR €

75,000.00 €

75,000.00 €

75,000.00 €

75,000.00 €

75,000.00

  R&D and Innovation €

125,000.00 €

125,000.00 €

125,000.00 €

125,000.00 €

125,000.00

  Training €

100,000.00 €

100,000.00 €

100,000.00 €

100,000.00 €

100,000.00

  Miscellaneous Costs €

4,915.00 €

5,062.45 €

5,214.32 €

5,370.75 €

5,531.88

  Payroll Taxes €

49,050.00 €

50,521.50 €

52,037.15 €

53,598.26 €

55,206.21

Total Operating Costs €

780,365.00 €

794,775.95 €

809,619.23 €

824,907.81 €

840,655.04          

EBITDA €

209,635.00 €

274,424.05 €

345,116.77 €

422,207.07 €

506,229.03

Depreciation Expenses €

5,893.00 €

5,893.00 €

5,893.00 €

5,893.00 €

5,893.00

Corporate Tax (20%) €

41,927.00 €

54,884.81 €

69,023.35 €

84,441.41 €

101,245.81          

Net Profit €

161,815.00 €

213,646.24 €

270,200.42 €

331,872.66 €

399,090.22 Profit Margin 15% 18% 21% 24% 27%

Appendix 3:Projected Financial Statement

Value Proposition

Speciality quality or tastePersonal ethics about fair tradePersonal belief about biodiversityCustomer are asking for itPersonal belief about chemical free Opportunity for differentiation

Better profit margin

Figure 8: Factors That Make Sustainable Coffee Valuable To Business

Source: Daniele, G. 2001

0%

50%

100%

Lists of Figures

• Figure 1: Reasons for smoking, among smokers• Figure 2: Malaysian Smoking Cessation Statistics• Figure 3:Health Benefits of Honey with Coffee• Figure 4:Target Customers for BARISTASCOTCH• Figure 5:Organisation Structure• Figure 6:Projected Profit and Loss Items• Figure 7:BARISTASCOTCH Hart’s Sustainable Framework• Figure 8:Factors That Make Sustainable Coffee Valuable To

Business

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[Accessed 20 March 2013]

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