Table of ContentsExecutive Summary.........................................................................................................................2

Mission and Current Market Situation.............................................................................................3

About Herbal Cigarettes...................................................................................................................4

The History of Herbal Cigarettes.....................................................................................................5

Some basic features of Herbal Cigarettes........................................................................................5

Raw Materials……………………………………………………………………………………...6

SWOT Analysis...............................................................................................................................6

Strength:.......................................................................................................................................6

Weaknesses:.................................................................................................................................7

Opportunities:...............................................................................................................................7

Threats:.........................................................................................................................................7

Objectives and Issues.......................................................................................................................8

Marketing Strategy...........................................................................................................................9

Market Segmentation...................................................................................................................9

Target Marketing..........................................................................................................................9

Market Positioning.....................................................................................................................10

Product Line of Herbal Cigarettes..................................................................................................11

Pricing............................................................................................................................................12

Advertisement and Sales Promotion..............................................................................................12

o Newspaper Advertisement:.................................................................................................12

o Television:...........................................................................................................................13

o Billboards, Neon Signs, Large TV Screens:.......................................................................13

o Car and Vehicle Advertisements:........................................................................................13

o Mobile team/ Mobile meeting:............................................................................................13

o Awareness Messages:..........................................................................................................14

Action Programs.............................................................................................................................14

Recruitment of Sales Force........................................................................................................14

Channels of Distribution:...........................................................................................................15

Strategy and Implementation Summary.........................................................................................17

Break-Even Analysis……………………………………………………………………………..18

Pro Forma Cash Flow…………………………………………………………………………….19Pro Forma Profit and Loss………………………………………………………………………..20Future support from various organizations………………………………………………………22Conclusion……………………………………………………………………………………….24

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Executive Summary

Herbal Garden Bangladesh Limited is a new company in Bangladesh with a new product,

Herbal Cigarette that will be offered to the customers as substitute of Real Cigarette. The

benefit of this product is it will be give the smoker real satisfaction of smoking without

health hazard. We will import this Herbal Cigarette as an importer and distributor from

National Botanical Institute of India and market to the six divisional cities. Our ultimate

target is to capture 25% of targeted market share within 2 years, 50% within 4 years and

70% within 5 years and more.

As we know that smoking is injurious to health and environment. So the government is

always against the companies to give advertisement in the mass media and offering the

products to the underage or young people. But our products are examined and certified, by

the medical personalities. They have recommended that Herbal Cigarettes are beneficial for

health rather than causing any health hazards.

We are not only focused on profit but also aware of societal marketing. So our main

objective is to earn profit providing satisfaction and value to customers. To reach our goal,

we have taken lots of plan like evaluating current market situation, SWOT analysis,

marketing strategies, including segmentation, targeting and positioning, advertising in

different medias, channels of distribution, pricing, etc. moreover we will have a control

team to monitor, evaluate and recognize the actual performance. Through these activities if

they are properly implemented, we can achieve our goals.

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Mission:

To offer smokers a health-friendly, tobacco-free alternative

Current Market Situation

At present there are few companies that are producing good quality tobacco and cigarettes.

Among the companies British American Tobacco Company (BATB), Akij Tobacco, Vorosha

Tobacco, etc producing the maximum quantity of cigarettes. They have a wide range of

products or we can say that they have a wide product lines. For example in case of BATB,

their product lines include Benson & Hedges, Star, etc are some of the brands.

When it comes to the smokers, they choose between the brands as they feel soothing in

particular brands. In the last decade or so, the company expanded and they give a high

proportion of their sales revenue as tax to the local government.

As it is also seen that the number of smokers in Bangladesh increased dramatically,

especially the young people and those who are middle aged, indulge into smoking habits.

Although the cigarette manufacturing companies gave the message on their products label

or the packets and in other advertisements that “Cigarette smoking is injurious to health”

but still the number of smokers kept on increasing.

The government already passed an act that smoking cigarettes in public places must be

banned and if anyone was caught smoking, the person should be fined or incur penalty. The

government became cautious about the health hazard that cigarette smoking causes.

So, to reduce the effects of smoking there are some alternative ways to reduce the number

of smoking tobacco and nicotine based cigarettes.

Since the development in medical science proved that, Herbal Cigarettes can be a possible

way to reduce the affects of smoking.

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About Herbal Cigarettes

So, to contribute towards the society and to the environment, our company “Herbal Green

Bangladesh Limited” took the opportunity to import Herbal Cigarettes, from* and market

Herbal Cigarettes in our country.

As we all know that cigarette smoking is a controversial issue and the government usually

does not support it, but in case of Herbal Cigarettes as the product is certified by the

government and they gave the permission to launch Herbal Cigarettes in the local market.

Due to absence of technology of manufacturing Herbal Cigarettes and lack of raw materials

required to produce such cigarettes, importing from the companies who are producing

Herbal Cigarettes are seen as the best possible option. Since the Herbal Cigarettes are

produced from the natural herbs, thus it enables the consumption of real tobacco cigarettes

to reduce down and it does not take into account the bad effects of smoking cigarettes.

Now about the product that Herbal Green Bangladesh Limited is going to launch, we named

the cigarettes as the “Herbal Cigarettes” itself, as the brand.

More about Herbal Cigarettes are elaborated below:

Herbal Cigarettes are nicotine and tobacco free — a reassuring way to help a person to stop

smoking naturally. Smokers have been turning to Herbal Cigarettes for more than thirty

years to help them stop smoking.

Smoking Herbal Cigarettes and herbal smoking mixtures is a trusted method of giving up

while avoiding the harmful effects of tobacco and nicotine.

Each time a person smoke an Herbal Cigarette or use the Smoking Mixtures, the person can

reduce the intake of nicotine, making the next tobacco cigarette seem less attractive. The

person will soon lose the desire to smoke tobacco altogether.

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The History of Herbal Cigarettes

Herbal Cigarettes were the inspiration of herbalist David Watkins. The first herbal cigarette

he smoked looked like a battered firework, with a cardboard tip and twisted paper end. But

unperturbed by the sparks and crackling noises, David found them pleasant enough, though

he believed they could be improved upon.

It was to take two years of experimentation and study before he could produce his own

smoking mixture, using only natural ingredients and processes. Finally, in 1960, David

developed a recipe which he began rolling and marketing both as a smoking mixture and as

cigarettes.

Over the next five years, the recipe was honed and improved until finally perfected. The

result is a range of cigarettes and smoking mixtures with improved qualities which delight

even the most discerning smokers.

Originating from the U.K. in 1947, the seemingly oldest brand of herbal cigarettes are

Honeyrose; they are presently sold worldwide. Ecstacy Cigarettes, which were invented by

Shaahin Cheyene, were first sold in the late 1990's and became the first mainstream brand of

herbal cigarettes on the American market. These cigarettes are legal for ages 14 and up in the

state of California.

Some basic features of Herbal Cigarettes

Herbal Cigarettes are made only from the pure natural ingredients, such as rose

petals, marshmallow leaves, and Red Clover flowers, Passion Flower, Jasmine,

Ginseng, Honey and Apple Juice.

Herbal Cigarettes are made from the manufacturer’s own special recipes. In fact, the

recipes have evolved over thirty years to improve and refine the herbal mix.

Herbal Cigarettes can be used by many thousands of smokers, who are trying to help

them stop smoking tobacco cigarettes. Herbal Cigarettes offer a nicotine free and

tobacco free alternative for quitters.

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An independent clinical trial report showed that, no adverse effect on heart rate or

blood circulation as a result of smoking Herbal Cigarettes. They contain no

stimulants, chemical additives or other non-natural substances.

Since, Herbal Cigarettes has no addictive substance or ingredients, so there is no

possible way for any person to get addicted to the cigarettes.

If a person does not like the Herbal Cigarettes, then there are five different varieties

including, Menthol, Clove, Vanilla, Special and Classic (Ginseng), to ensure that there

is as flavor, the consumer of Herbal Cigarettes will definitely enjoy.

The main feature of Herbal Cigarettes is that, it is tobacco and nicotine free.

Raw Materials:

Corn Silk – ChinaMint – Available locallyCinnamon – Available locallyLemongrass – Available locallyMarshmallow (Not the chocolate) – England, Denmark, Central RussiaRed Clover – ChinaRose Petals - India

SWOT Analysis

Under current market situation we need to do SWOT (Strength, Weakness, Opportunity,

Threats) analysis of our product. SWOT analysis is a key feature of marketing plan.

Strength:

1. Our main strength is, our Herbal cigarette is Nicotine & Tobacco free. We know that

Nicotine & Tobacco does a tremendous hazard to our health.

2. Our second strength is that, this cigarette can reduce the habit of smoking which

means those who want to get rid off smoking can reduce their smoking habit if they

smoke our Herbal Cigarette.

3. Our third strength is that, Herbal Cigarette is health friendly.

4. Our fourth strength is that, consumption of Herbal Cigarette will increase the

thinking ability of a person.

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5. Herbal Cigarette can reduce depression & tiredness.

6. One of our product lines is Herbal Menthol. So, it can use as a mind refresher.

7. If anybody takes Herbal Cigarette he/she can able to reduce his/her weight by a

natural method.

8. We all know that doctor don’t give permission for smoking. But our advantage is that

this product is certified by local and foreign doctor and health officials, which means

that our product is approved by medical science.

9. Our last strength is, as our product lines are more so there is a chance for the

customer to choose among different flavor.

10. No side effect of our product.

Weaknesses:

1. Our first weakness is those who are chain smoker initially they may not accept it.

Because they are very much reliable on existing real cigarette.

2. People may not understand the value of it.

3. Some people may get the allergic problem, as Herbal Cigarettes are made from

different herbs, therefore it can be allergic to particular individuals, those who are

not used to such herbs.

4. Excessive consumption may result health hazard. As excess of any consumption and

taking will likely to affect the health.

5. Supply may not be proportional to demand due to many reasons like political unrest,

scarcity of resource etc.

Opportunities:

1. We are launching this product for first time in Bangladesh. So, we are the sole

distributor of this product.

2. Bangladesh Standard Testing Institute (BSTI) certified.

3. Health & Environment ministry approved.

4. Government is giving some benefits like they are giving our company, subsidies.

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5. We are government licensed distributor, so consumers will rely on our company.

6. We can easily give advertisement to the mass media that other cigarettes cannot

give.

Threats:

1. Herbal Cigarette got a formula so if this formula is misplaced by other competitor &

the production is not rightly done then this can eventually cause health hazard.

2. Now for us we are not the manufacturer that’s why if the manufacturer can’t mix the

ingredients in right proportion. That can be a threat for us.

3. Some people can make fake herbal cigarette, and can sell it to the market and if

people smoke that they can a get a serious type of disease.

Objectives and Issues

The main objective of our company is to earn profit and do some social welfare as well, by

providing an actual solution (real taste of smoking with herbal ingredients) to the

customers. The solution of our product is it will lessen the habit of smoking in a natural way.

Although it will be a very hard work for us, but we think we will be able to do this. As we will

offer our products to the smokers of different levels it that will give them more satisfaction

from the real cigarettes without any health hazarding affect.

We will import our product (Herbal Cigarette) from abroad and market (Instead of real

smoking) it in our domestic market. As we are the new company in the market so, we have

taken a 5 years plan to reach to our objectives. We segmented the market and chosen the

targeted one to enter. Our ultimate objective is we will capture the 25 percent of market

share with in 2 years, 50 percent within 4 years and finally in 5 years we will capture near

about 70 percent of the targeted market.

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To achieve our objective we have taken a lot of plans to attain the goal gradually. We will

take the Trade licenses, Import licenses, Health and Environment Ministry approval for

launching our product in this country. To make proper financing, already we will take

sufficient loan from the Bank and our bonus facility is we will get some subsidy from the

government of Bangladesh, as we are concern to social welfare at a time.

Besides these paper works we negotiated with the leading distributor agencies in six

divisional cities of the country and made contacts wit them to market our products. They

also chosen required amount of retailers and gave them registration. Suitable Places for

making outlets also have been found. Finally, we are prepared to distribute the product

with a nice channel of distribution.

Marketing Strategy

Market Segmentation

Basically we have segmented the whole market in two ways, firstly geographic

segmentation and secondly demographic segmentation. First of all we segmented the

country into two parts; they are the rural or the areas outside the major cities and the urban

cities. Among the rural and urban areas we segmented the market based on age, education

level, occupation, etc. so at the time of segmentation we put emphasis on literacy rate,

working class, smoking habits of the smokers (new or chain), etc. the reason for segmenting

in this way is that we want to identify the customer’s needs, wants and demands, in order

to give them with the best possible solution.

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Target Marketing

After segmenting the total market and evaluating each of them we have decided to market

and enter into 6 divisional major cities of Bangladesh such as Dhaka, Chittagong, Khulna,

Rajshahi, Sylhet and Barisal. More or less we will cover the urban areas initially and then we

can make our products available to other towns and other rural areas.

As a new company with a new dimensional product, we will not cover the rural areas at this

particular stage. Among these urban areas or the cities; educated, uneducated, young and

middle aged and people of different professionals, students those who smoke are seen as

our target market. So we present and offer our product to them at this stage. After

evaluating performance and based on the marketing research, we will then cover the other

areas of the country which includes each and every villages, later on.

Market Positioning

As we are the new company in Bangladesh with a complete new idea and new product our

position in the consumer’s mind will be slightly difficult. According to the marketing plan we

will enter to the market with the position of niche marketing and after some years will be

able to capture the cigarette market and lead the market. We all know that British

American Tobacco Bangladesh (BATB) is the leading cigarette manufacturer of Bangladesh,

with a large product line at present. Our goal is, within 5 years we will be able to targeted

area. According to our projection we will capture:

25% of the target market share within 2 years

50% of the target market share within 4 years

70% of the target market share within 5 years or more.

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Herbal Special: Our 'classic' herbal cigarette, made from a blend of herbs including Marshmallow, Red Clover and Rose. Guaranteed tobacco and nicotine free. 

Herbal Menthol: A specially blended herbal cigarette with a cool, refreshing menthol taste. Guaranteed tobacco and nicotine free.

Herbal Classic: Made from a specially selected blend of herbs including Marshmallow, Red Clover and Rose, with the addition of Ginseng. Guaranteed

Tobacco and Nicotine free.

Herbal Vanilla: A specially blended herbal cigarette infused with a subtle vanilla flavor. Guaranteed

tobacco and nicotine free.

Herbal Clove: A specially blended herbal cigarette with a dark and spicy clove flavor. Guaranteed tobacco and nicotine free.

Product Line of Herbal Cigarettes

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Pricing

Pricing of a product is a crucial part of marketing strategy, so when it is a new product in a

new market it seems more difficult. As of product is new in Bangladeshi market, so it is

difficult to set the price. If the price is so high customers may refuse the product and if it is

cheap, company will not be able to pick up the investment and make profit from it. So for

the pricing strategy, Herbal Green Bangladesh Limited will follow two pricing strategy, like:

1. Competition Based Pricing

2. Market Penetration Pricing

That means, we will set the price of our product based on the prices that competitors

charge from similar products, it will be also be reasonable and low, so that we can attract a

large number of buyers or consumers and also capture the large market share.

We will charge Tk 4 for each cigarette and Tk 80 for one packet, which consist 20 pieces of

cigarettes. The extra benefit for the customer is that they will find different flavors and can

choose between the options, at a same price.

Advertisement and Sales Promotion

o Newspaper Advertisement: To make “Herbal Cigarettes” introduce to the

general public, consumers or to the smokers who are trying to give up

smoking but are not able to do so, the best possible way is to advertise

through newspaper, as the coverage of newspaper is well distributed. Since,

we are marketing our product in the major cities at the initial stage; we give

advertisement in the major national or regional dailies. The advertisement

will give the message about the benefits of smoking Herbal Cigarettes and to

make the advertisement attractive we emphasize basically on green color as it

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signifies youth and environment friendly. Through the advertisements we

want to signify that smoking makes our life like a dry leaf, but smoking Herbal

Cigarettes we can once again make the life of a smoker, fresh and youthful,

which can be compared to a fresh green leaf.

o Television: After giving advertisements in the national dailies, we can now

give visual advertisements on the Televisions. In the commercials we can

again demonstrate the benefits of Herbal Cigarettes. When compared to the

newspaper ad., TV ads are more effective and attractive since people can see

and visualize the demonstrating, they can be easily motivated to consume

and try the products. Therefore TV advertisements are seen as one of the

best possible Medias to promote products such as Herbal Cigarettes.

o Billboards, Neon Signs, Large TV Screens: In the modern concept of

advertisement we see that businesses now days use the high technology

equipped billboards, neon signs, large TV Screens, posturing, banners, etc. so

that the moving people can easily be attracted to the advertisements that are

displayed along the road sides and high rise buildings. So taking the concept

of such modern ideas, we try to introduce our product “Herbal Cigarettes” to

the mass people, in such manner.

o Car and Vehicle Advertisements: People of the cities now days are quite

familiar with the Car and Vehicle advertisement. We will use this media to

advertise our product. For example: we will make a contact with some taxi

Cab company and BRTC to present some highlighted message on the body of

the vehicles , so that the people can easily be attracted to our Herbal

Cigarettes.

o Mobile team/ Mobile meeting: As part of personal selling we will train and

send some team to the public places like colleges and university campuses,

markets, rail and bus station and others common places so that they can

explain about the product to the mass people and encourage them to take

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our product. They will give some free samples to the people to justify the

quality and effectiveness of the product.

o Awareness Messages: Besides of telecasting our formal advertisement on

the television, we will telecast some awareness message about the harms of

using tobacco and benefit of using our product. For this part we will use some

familiar and attractive people to give the messages like popular actors-

actress, players, doctors, singers and models.

Action Programs

Recruitment of Sales Force

To recruit distributors, executives, sales officers, sales representatives etc, it is supposed to

be the main task for any new company, when they go for launching any new products. Such

is the case for our Company. To make the free flow of our product distribution, such

effective human resource personalities are very much required.

So, being the sole distributor, it is one of the main tasks to employ and monitor the human

resource team. As, we target the market only the 6 major cities; it requires agents and sub

agents to properly market our products. To reach the final consumers or the buyers of

herbal cigarettes, such agents and sub agents are very much needed.

Being the distributor, it requires 6 agents or wholesaler for the 6 major cities. Operations of

the 6 major cities are distributed among the agents, as the monitor the operation and take

correctives actions. Under the agents, 15-20 sub agents are the given the task to distribute

the products to the different retailers, who are located at different location in the cities.

Through proper distribution channels and effective employees, such plan can be

implemented properly.

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Importer & Head Distributor

Wholesaler

Jobber

Retailers

Consumers

Channels of Distribution:

To market our products to the targeted customers, we will follow the level 3 of consumer

marketing channel. Our channel will be like follows:

Manufacturer: Actually this Herbal Cigarette is not produced in Bangladesh. So the

manufacturer will not directly involve to our marketing policy that we apply in this

country. In this country we will act like the distributor partner of our principal

company. The main manufacturer of Herbal Cigarettes will act only as a supplier of

Herbal Cigarettes.

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Manufacturer

Importer and Head Distributor: Our Company, Herbal Garden Bangladesh limited

will perform as this part. In Bangladesh we are the only importer, so we are the only

and head authorized distributor of our products manufacturer. Our main target is to

market Herbal Cigarettes and by promotion which include lots of advertisement,

packaging, storing, distribution and other promotional activities as the acting agent

of the principal company.

Wholesaler: We will have six authorized wholesaler, as the agents in the six

divisional cities to where we will offer our products. These wholesalers will represent

our products with the help of different retailer and also advertise, store, distribute

and do other promotional activities as well.

Jobber: Under the six authorized wholesalers, we will have around 15-20 jobbers to

each divisional wholesaler, who will act as the sub- agents of the wholesaler and

influence the market and retailers to use and present the product. These jobbers will

be appointed on commission basis.

Retailers: Our retailers will actually offer our products to the actual and potential

customers. They will collect the cigarettes from the wholesaler and market them

frequently. In each an every public places like market, rail and bus station and river

ports and air ports, besides colleges, university campuses and near the commercial

areas, we will have retailer shop and outlets so that the can easily collect our product

and use it. By this way we will reach to the customers.

Consumers: At the final level of the process come the consumers who will consume

Herbal Cigarettes. They are the target customers for our company and reaching

them, should be our main goal in order to market our products. They will give the

final and overall performance of our product and according to their demands the

company must set their objectives and strategies.

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Strategy and Implementation Summary

Herbal Garden Bangladesh Ltd. possesses a number of competitive advantages to its immediate

rivals. These include established supply channels and its various cost advantages that are

difficult to replicate, multiple locations in the Dhaka City area, and our future combined cafe

and herbal cigarette store that will create more volume and greater client loyalty. This facility

will act as a pilot project to determine the long-term profitability of this concept. If it proves

popular, we plan to expand all of our facilities to include this unique customer experience. In

addition, we are targeting a number of local magazines that cater to upper-income people. We

are also in the process of creating partnerships with other Internet firms to create Internet links

to our informational website. When we launch our online ordering features we will intensify

these efforts.

As every patron is critical in a shrinking market, Herbal Garden Bangladesh Ltd. seeks to create

long-term salesperson-to-customer relationships. This we see as the necessary step in repeat

sales that will sustain our business. Promotions, specialty items and other such standard sales

strategies will be used when possible.

Control

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

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market positioning our target is to capture the 70 percent of the market share gradually

within 5 years (25 percent within 2years, 50 percent within 4 years and 70 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.

Product support:

Distribution of free samples Emphasizing the health benefits Make the product more visible using low cost advertising medium eg.

Newspapers, posters, magazines, door-to-door selling, radio

General AssumptionsFY 2013 FY 2014 FY 2015

Plan Month 1 2 3Current Interest Rate 10.00% 10.00% 10.00%Long-term Interest Rate 10.00% 10.00% 10.00%Tax Rate 200.00% 100.00% 100.00%Other 0 0 0

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Break-even Analysis (Taking $ as means of international transactions)

Our break-even analysis is based on average monthly fixed costs, which is based on historical figures, plus our

average price per product. This estimate is also based on experience, however because of our wide range of

products, its accuracy is somewhat less. The average variable costs are based on industry standards.

Pro Forma Cash FlowFY 2013 FY 2014 FY 2015

Cash ReceivedCash from OperationsCash Sales $650,052 $689,555 $721,395Subtotal Cash from Operations $650,052 $689,555 $721,395Additional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0New Long-term Liabilities $0 $0 $0Sales of Other Current Assets $0 $0 $0Sales of Long-term Assets $0 $0 $0New Investment Received $0 $0 $0Subtotal Cash Received $650,052 $689,555 $721,395Expenditures FY 2004 FY 2005 FY 2006Expenditures from OperationsCash Spending $130,400 $137,600 $137,600Bill Payments $476,163 $532,556 $562,327Subtotal Spent on Operations $606,563 $670,156 $699,927

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Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $0 $1,000 $1,000Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $1,200 $1,000 $1,000Purchase Other Current Assets $30,000 $2,000 $5,000Purchase Long-term Assets $15,000 $7,000 $9,000Dividends $0 $0 $0Subtotal Cash Spent $652,763 $681,156 $715,927Net Cash Flow ($2,711) $8,399 $5,468Cash Balance $40,971 $49,371 $54,839

Pro Forma Profit and LossFY 2004 FY 2005 FY 2006

Sales $650,052 $689,555 $721,395Direct Cost of Sales $451,461 $462,140 $483,479Other Costs of Goods $0 $2,000 $2,000Total Cost of Sales $451,461 $464,140 $485,479Gross Margin $198,591 $225,415 $235,916Gross Margin % 30.55% 32.69% 32.70%ExpensesPayroll $130,400 $137,600 $137,600Sales and Marketing and Other Expenses $6,000 $12,000 $14,000

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Depreciation $0 $2,000 $4,000Rent $9,600 $9,900 $10,400Utilities $1,320 $1,320 $1,600Insurance $3,600 $3,800 $4,200Payroll Taxes $19,560 $20,640 $20,640Other $6,000 $11,000 $14,000Total Operating Expenses $176,480 $198,260 $206,440Profit Before Interest and Taxes $22,111 $27,155 $29,476EBITDA $22,111 $29,155 $33,476Interest Expense $5,493 $5,338 $5,138Taxes Incurred $4,985 $6,545 $7,301Net Profit $11,633 $15,272 $17,037Net Profit/Sales 1.79% 2.21% 2.36%

Pro Forma Balance SheetFY 2004 FY 2005 FY 2006

AssetsCurrent AssetsCash $40,971 $49,371 $54,839Inventory $41,384 $42,363 $44,319Other Current Assets $41,558 $43,558 $48,558Total Current Assets $123,913 $135,292 $147,716Long-term AssetsLong-term Assets $71,820 $78,820 $87,820Accumulated Depreciation $12,000 $14,000 $18,000Total Long-term Assets $59,820 $64,820 $69,820Total Assets $183,733 $200,112 $217,536Liabilities and Capital FY 2004 FY 2005 FY 2006Current LiabilitiesAccounts Payable $40,921 $44,027 $46,415Current Borrowing $24,820 $23,820 $22,820Other Current Liabilities $5,600 $5,600 $5,600Subtotal Current Liabilities $71,341 $73,447 $74,835Long-term Liabilities $29,561 $28,561 $27,561Total Liabilities $100,902 $102,008 $102,396Paid-in Capital $0 $0 $0Retained Earnings $71,199 $82,832 $98,104Earnings $11,633 $15,272 $17,037Total Capital $82,832 $98,104 $115,140Total Liabilities and Capital $183,733 $200,112 $217,536Net Worth $82,832 $98,104 $115,140

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Further support from various organizations:

Honeyrose:According to Honeyrose each time you smoke a Honeyrose Herbal Cigarette or use the Smoking Mixtures, you lessen your intake of nicotine, and less likely to smoke a tobacco cigarette the next time you light up. You will soon lose the desire to smoke tobacco and that there is no risk of developing a long-term chemical dependency.

Sun Coast Organics:

“Question: Can herbal smoke help someone quit smoking tobacco or marijuana?

Answer: Yes, they can and have for many people. For tobacco smokers herbal smoking blends provide a great alternative. They need to smoke less and less often. Quitting is very hard. Finding a legal herb or blend to smoke can be a big help in many ways. Same for marijuana smokers. If someone is serious about quitting tobacco or marijuana they should try to find an herb or blend of herbs they enjoy smoking to get them through the hard times and go back to if they feel like having a smoke. There is no evidence that smoking the same amount of herbal smoke is better than the same amount of marijuana or tobacco. Most herbal smoke is not addicting and can help people stop smoking other substances habitually. We are not saying it is not possible to become addicted to herbal smoke. All we can speak for is the 6 years we have been in business. No one has become dependent on any of our products.”

http://www.notosmoke.com/

Advantages of Herbal Smoking

Herbal blends are free from unwanted antioxidants and do not contain any nicotine at all, thus making it safer to smoke.

The main benefit of herbal blends is that they are targeted mainly towards those people who are ready to do anything to quit smoking, and yet still want to feel the physical act of having it in hand and blowing it out. The other benefits of herbal blends are affordable, do not require that much medical attention, and has a wide varieties of flavours to select from.

Legal highs have gained popularity as an alternative to smoking illegal drugs such as cannabis, which means cannabis smokers no longer have to break the law or be worried about drug testing for work. It facilitates to cut down the usage of tobacco by combining legal smoking blends with some of the herbal flavors listed below.

Mint

The preferred flavour among lot of smokers is Mint. The reason for herbal smokers to choose

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mint is its odour. Mint contains methanol and so care should be taken while smoking herbal mint blends. Excessive usage will cause bad symptoms, whereas using in limited portions will provide soothe to your body and mind and helps a lot in bettering the whole body s health. ′Mint will help you in breathing easily and clears the throat. Some flavours in mint are peppermint, spearmint and ornamental.

Mugwort

The good thing about this herb is its soothing smell, but don t underestimate it with its soothing′ smell, as some smokers have got addicted just to its smell alone. Herbal blends made up of Mugwort were causing some side effects and so you must use it only after consulting with your doctor. On the other hand, the smell takes you to a pleasant dream and you can stay in that forever.

Sagebrush

Famous shrubs that originate in the regions of desert in USA are called as Sagebrush. This flavour is considered to be moderately popular. The shrubs are known for its anti bacterial characteristics and thus it is good for your health. Sagebrush can also be used in cooking for health purposes.

Salvia Sages

These herbs come from the mint species, but are different from them. Few varieties of Salvia are available in different sages like white, blue, purple sages, etc. They have got a mediocre flavour that becomes unpleasant sometime, but though the herbal blends are harmless to health. During rituals conducted in USA, these herbs are used for cleansing.

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Conclusion

Herbal cigarettes are manufactured with a variety of herbs, including corn silk, rose petals,

banana skins, and more. Herbal cigarettes do not contain nicotine and thousands of

chemicals that regular cigarettes made with tobacco do, they should not be considered a

healthy smoking alternative. Inhaled smoke of any kind can be damaging to delicate lung

tissue, and herbal cigarettes expose smokers to tar and carbon monoxide, both of which

are hazardous to human health as well.Herbal cigarettes (also called tobacco-free cigarettes

or nicotine-free cigarettes) are cigarettes that do not contain any tobacco or nicotine.Our

main objective is to earn profit providing satisfaction and value to customers. To reach our

goal, we have taken lots of plan which we have mentioned in our Marketing Plan Report.

We will have a control team to monitor, evaluate and recognize the actual performance.

Through these activities if they are properly implemented, we hope we can achieve our

goals. In our Term paper we have already discussed everything about herbal cigarette. If we

do all these things then the launch of Herbal Cigarette in our country will be a success.

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