Marketing Management

Marketing planON

‘Apple Toffee’(A product of Nestlé Bangladesh Ltd)

PREPARED FOR:Dr. Mijanur Rahman

Professor Department of Marketing

University of Dhaka

PREPARED BY:

Hafijur RahmanMBA 9th BatchRoll - 037, Section-A

Department of MarketingUniversity of Dhaka

Department of MarketingUniversity of Dhaka

Date of submission: September 22, 2008

Table of Contents

Subject Page

Executive Summary I

Acknowledgement II

1

Introduction 1

Current Situation (Macro & Micro Environment) 1

Market Summary 2

Target Market, Target Market Segment 2-3

Market Needs 3

SWOT Analysis 4

Competition 5

Marketing Strategy 5

Positioning 5

Marketing Mix Strategy: PRODUCT 6Marketing Mix Strategy: PRICE 6

Marketing Mix Strategy: PLACE 6Marketing Mix Strategy: PROMOTION 7

Marketing Research: 8

Financial Projections 8

Expenses Forecast: 8Sales Forecast: 9

Break-even Analysis: 10Implementation Control 10

Conclusion 11

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Executive Summary

.Nestlé Bangladesh Limited started its first commercial production in Bangladesh in 1994. In 1998. Nestlé S.A. took over the remaining 40% share from our local partner when Nestlé Bangladesh became a fully owned subsidiary of Nestlé S.A.

Nestlé Bangladesh's vision is to be recognized as the most successful food and drink company in Bangladesh, generating sustainable, profitable growth and continuously improving results to the benefit of shareholders and employees. Our factory is situated at Sripur, 55 km north of Dhaka, the factory produces instant noodles, cereals and repacks milks, soups, beverages and infant nutrition products. Today Nestlé Bangladesh Ltd. is a strongly positioned organization. The company will continue to grow through our policy of constant innovation and renovation, concentrating on our core competencies and our commitment to high quality, with the aim of providing the best quality food to the people of Bangladesh.

The company wants to launch a new type of candy in the market. It is totally different from the traditional candies. It is a high quality candy which will be harmless. In that product, there will have some special ingredients which will provide Vitamin-C, and which will be work as a breath refresher and which will be work as digester. So definitely, that product will be an exclusive product in the market. The target market of that product will be those who think that chocolates are harmful for teeth; the current users of Vitamin-C tablets; the current users of fresh breathing tablets or candy; those who have digesting problems; and the current users of the candy.

Our products will be beneficial for the consumers because it will be not only safe for teeth but also good for teeth, it will fulfill the want of Vitamin-C, it will work as mouth refresher, there is a real need for normal digestion and our product will work as digester, and after all it will provide some exceptional tastes which will provide great pleasure.The candy will be sugarless so it will not be harmful for teeth. There will no chemical color in this candy. This is mainly a natural or herbal product which has no bad side effect.

After analyzing the market demand I have seen that there is a demand in the market for this kind of product. And after SWOT analysis I have seen that the company has a great opportunity to enter in this business. Otherwise, there are a few risk involved this business. The product will be a very new product and there is chance of rejection by the market. The competition will also high. And if we succeed any large company can easily enter this market. Considering all the possible threats I can suggest the company that it will be profitable to enter this business because there are some positive sides of the product and the company is also strong. After estimating the cost and sales I can say that it will be profitable. So the higher authority should consider this marketing plan.

ACKNOWLEDGEMENT

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One of the most pleasant parts of submitting a project is the opportunity to thank those who have contributed to it. Unfortunately the list of expression of thanks –no matter how extensive –is always incomplete and inadequate. These acknowledgements are no exception.

I sincerely acknowledge my debt to our dearest faculty Dr. Mijanur Rahman for his valuable counseling towards the improvements of the project. Without his encouragements this would have been impossible.

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INTRODUCTION

Today Nestlé Bangladesh Ltd. is a strongly positioned organization. The company wants to introduce a new product “Apple Toffee’” which is a new type of toffee but it is totally different from the traditional toffees.

“Apple Toffee” will contain the flavor of apples so it will be tasteful for everyone.. In every toffee, there will be enough Vitamin-C so usually it will be beneficial for teeth and gum and it will fulfill the want of Vitamin-C. In apple toffee, there will be some ingredients which will work as mouth or breathe refresher. The product will help as digester. After all, its taste will be exclusive and the quality will be high. It will be a natural or herbal product.

As the representative of Nestlé Bangladesh Ltd, I have analyzed the various sides of this product whether it will be profitable to launch this product or not. The marketing plan containing all its elements is presented in the next phases.

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CURRENT SituationMacro-environment:

Economy: Bangladesh is a developing country. Now though the economic condition of this country is not so good, the industrial sector of this country is being powerful day by day. The economy is turning from agricultural sector to service and industry sectors. So the future of any industry like toffee in this country is very bright.

Government: Now the govt. is also attentive about the industry sector. The govt. encourages and helps to establish new businesses.

Legal: The govt. regulations or the legal condition of Bangladesh is also not a big obstacle at starting new business or to launch new product. But in terms of introducing new consumer product, a company must obtain the approval of BSTI (Bangladesh Standard & Testing Institute). So to launch a new toffee the company must obtain BSTI approval.

Technology: The technological environment of Bangladesh is not developed. So, new and advanced technology and machinery have to be imported from the abroad to produce qualified candy.

Ecological: Day by day Bangladesh is losing her green beauty. Now people are also aware of this. So we also have to do business from societal marketing point of view.

Socio-cultural: From the socio-cultural point of view, there is no barrier for toffee. The toffee has a good acceptance in Bangladesh. But many people are aware about its bad effect. They know that toffee is harmful for teeth and there is a strong idea about this in mind of the people.

Micro-environment:

Customers: Bangladesh is an over populated country. It has a large amount of population. And many of them are fond of toffee. So there is vast market for the toffee industry. But some people are disinterested about the toffee. So the people have also some negative ideas about the product.

Competitors: The toffee industry in Bangladesh is not small. There are a lot of toffee producers. Some of them are national and some of them are local suppliers. Some companies also export their toffee. In our country many foreign brands are also available. They are comparatively costly also. So the consumers’ taste and demand are changing from low quality toffee to high quality toffee. Now the toffee industry of Bangladesh is very competitive.

Suppliers: Bangladesh has a lot of resources. Even then many items of the toffee especially chemical ingredients have to be imported from abroad. So the supply of raw materials from local and foreign sources is very important in producing the toffee and its good management can be a competitive advantage.

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Marketing Intermediaries: As the various branded toffees are available all over the country, many intermediaries are now involved in this business. So using the present intermediaries any company can reach their toffee easily to its target market.

MARKET SUMMARY

According to my market survey, the market has a demand of this kind of product. At present, a lot of toffees are available in the market. And there are some kinds of Vitamin-C tablet and a very few breath refreshing tablets are available in the market. But there is an idea in the market that chocolate or toffee is very harmful for the teeth. So a lot of conscious people do not take chocolate or toffee and many parents do not feel comfort to give this to their children. So people have a latent demand of harmless toffee.

I have collected good information about the market and I have personally gathered a great idea about the common attributes of our potential customers. Nestlé Bangladesh Ltd. will leverage this information to better understand who will be served, their specific needs, and how the company can better communicate with them.

Target Market

a) Those who think that chocolates are harmful for teeth;b) The current users of Vitamin-C tablets;c) The current users of fresh breathing tablets or toffees;d) Those who have digesting problems; ande) The current users of the toffee.

Target Market SegmentsBased on the major market segmentation variables our market has been classified. Then after evaluating all potential market segments on the basis of each segment’s attractiveness, I have selected the following segments where we will give emphasis.

Geographic: The whole area of Bangladesh.

Demographic: Children generally under teen-age. Young generation generally under age range 13-25. Old people generally over age 60. The student generation. Educated people and conscious parents.

Psychographic: The lower middle class, middle class, and upper middle class.

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The conscious people.

Behavioral: Those who have negative idea about the traditional toffee. Those who seek good quality. The non-users and regular users of the toffee. Those who are unaware about the bad effect of the traditional toffees.

Market Needs:

In the market there is a great need of this kind of toffee. Apple toffee which will be harmless for teeth and which will be good for heath, it has a demand for the customers.. Our products will fulfill the following needs of the customers:

“Apple toffee” will be not only safe for teeth but also good for teeth. It will fulfill the want of Vitamin-C and there is great need of this. There is a need for fresh breath and our product will serve this. There is a real need for normal digestion and our product will work as digester. After all, “Apple toffee” will provide some exceptional tastes which will provide

great pleasure.

Nestlé Bangladesh Ltd. will provide the potential customers with high quality toffee. The company seeks to fulfill the following benefits which are also important for its customers:

o Selection: Apple toffees which will give the customers a scope of selection according to their choice.

o Accessibility: By using their strong distribution channel, Nestlé Bangladesh Ltd. will make this product easily accessible to the customers.

o Competitive Price: The Company will also offer a reasonable and competitive price for this product.

o High Quality: By using high technology and high quality ingredients, Nestlé Bangladesh Ltd. will provide high quality Apple toffees.

SWOT ANALYSIS

The overall evaluation of a company’s strengths, weaknesses, opportunities and threats is called SWOT analysis. SWOT analysis helps explore the areas of possible changes in marketing activities. A brief discussion of Nestlé Bangladesh Ltd internal and external environment is as follows:

Internal environment analysis:

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Every business organization needs to analyze its internal capabilities for developing strategy. To fulfill its mission, Nestlé Bangladesh Ltd is committed to capitalize on its key strengths and overcome its major weaknesses. The strengths and weaknesses of Nestlé Bangladesh Ltd “Apple toffee” are summarized below:

Strengths:

High quality product offerings that will exceed the competitors’ price, quality and services.

Nestlé Bangladesh Ltd has a great company reputation Customer loyalty of the company Availability of capital Use of modern technology Financial stability

Weaknesses:

“Apple toffee” is a new brand of the company so it has lack of brand equity. Nestlé Bangladesh Ltd has this kind of product. But for this new type of product,

distribution and promotion will have to be taken. As it is a new flavour product, it will be difficult to manage for the company.

External environment analysis:

Monitoring the trends of micro and macro environmental forces is also a key concern for management of any organization to avoid the major threats and gain advantages of promising opportunities. The major opportunities and threats of “Apple toffee” are given below:

Opportunities:

There is a demand for this kind of product. Expanding awareness of people towards quality foods. There is no existing toffee like Apple toffee. Increasing the chocolate industry in Bangladesh. Increasing rate of customers. Mature retail market in Bangladesh. Availability of raw materials.

Threats:

The present candy manufacturers are also strong competitors. Our product will be a threat to the Vitamin-C tablets. So we will also have to face

its manufacturers. As it is a new product, there is a chance of rejection by the market. It may fail to fulfill the expectations of the customers.

Competition:

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Although there is no product present in the current market, this Apple toffee will be a great threat for many candies and also some other products. All the present candies will be the competitors of the “Apple toffee. As our toffee will provide Vitamin-C, this will be a threat for all the Vitamin-C tablets. And it will also be a threat for the breath refreshing tablets. This will also be a threat to the digesting tablets or pills. So this type of products will also be our product’s competitors. The main competing brands are as follows:

o In terms of candy, major competitors are Nabisco, Alpenlibe, Mon Chiri, Milk Candy, Love Candy, Safari, etc.

o In terms of Vitamin-C, major competitor brands are CEEVIT.o In terms of breath refreshing, Polo is the main competing brand.o In terms of digesting tablet, Tasty Hajmi, Eno, Hajmola are the main competitors.

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MARKETING STRATEGY

Nestlé Bangladesh Ltd will decide to market Apple toffee all over the country especially in the urban and sub urban areas. It considers both sides- the customer side and the business side. It has selected its target customers and on the business side the target market is small to large size retail shops that want to help their products stay in touch. Nestlé Bangladesh Ltd overall marketing strategy will be to create a positive image of offering the highest quality candy. Customers will be communicated through advertisements such as TV ads, newspaper ads, and other media.

Mission:

To provide highest-quality toffee.

Objectives: Marketing objectives:

To maintain positive, steady growth each month. To increase new customers who don’t buy toffee. To attract current customers of the present toffees, mouth refreshers, Vitamin-C

tablets, and digesting tablets. Generate brand equity in the market so that in future no company can take the

market by producing same product. Create loyal customers. Maintaining good relation with backward and forward intermediaries.

Financial Objectives:

Gain new sets of customers within 6 months that worth for Tk. 1,00,00,000

In the year-end TK. 6,50,00,000

Positioning:

Nestlé Bangladesh Ltd will position “Apple toffee” as:

“Harmless toffees”

Marketing Mix Strategy: PRODUCT

Ingredients

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10 small to medium apples, washed and dried 4 cups (1 kg) sugar (white or brown) 8 oz (250g) butter 4 tbs white wine vinegar 4 tbs boiling water 1/2 teaspoon red food coloring

Steps

1.

Have to mix the sugar, butter, vinegar and boiling water. Have to make sure of using a saucepan that has a heavy base to prevent sticking.

2. Food coloring add.3. Have to cook over a low heat.4. Stir continuously until the sugar has all dissolved.5. Once the sugar has dissolved, boil the mixture for 10 minutes or until the mixture

reaches a 'hard crack' stage. Do not stir! If there’s have a candy thermometer, the temperature should read 150ºC (302ºF).

6.

Test the toffee. Drop a little bit of caramel into a bowl of water. If it hardens immediately, it's ready.

7. Remove from the heat and let the bubbles disappear.

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8.

Pierce the apples through with the wooden skewers. Push it through the top until it gets halfway inside the apple. Check for a firm hold.

9. Tilt the saucepan with the toffee mixture in it. (Have to use some sort of wedge to free up hands).

10.

Dip the apple into the toffee and twist it around gently until the whole apple is coated in toffee.

11. Remove the apple, allowing any excess drips to fall back into the saucepan.12. To harden the toffee, dip the covered apple immediately into ice cold water (throw

in ice cubes if necessary).

13.

Put the apple down onto a tray covered in baking paper to set.

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14.

Serve and enjoy!

We have to make high quality products. So for the production we have to use high technology. We have to maintain machinery based production, packaging and quality control. We will launch our products in apple flavour. We will also have the plan to launch toffee at the taste of Grape, Pineapple, Tamarind, Olive etc.

The design of the product will be the slender-round and the slightly long. The color of the product will come form the ingredients. The package of the toffee will be attractive and exclusive. Initially the company will make available this product for retail sales in three types of packet.

Marketing Mix Strategy: PRICEHere Nestlé will set value-based price. Our price will indicate that quality and consumers gut feeling about the product. As we will build our image as quality product, we can charge a high price not for product – for brand.Here, we can set Tk.5 for per piece toffee. And we also set Tk.25 for second type of packet which contains 5 candies. And we can set up Tk.50 for the packet which will contain 10 candies. This price will be the ultimate retail price. Marketing Mix Strategy: PLACE

By using the present distribution channel Nestlé Bangladesh Ltd can easily market this product. The company has many consumer products. The company can use its present marketing channel to make the products available all over the country.

Nestlé Bangladesh Ltd can also use its current delivery vehicles to deliver the product to the wholesalers. The company can use its local offices to deliver to the retailers. So at introduction stage, company’s current marketing channel is enough to deliver the products to wholesalers and retailers.

Marketing Mix Strategy: PROMOTION

To develop a total promotional campaign we must answer these questions:

I. What message and image do we want to promote?II. What are the best media and activities for reaching our potential customers?

III. How much time and money can we spend on the effort?

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Nestlé Bangladesh Ltd will take a large promotional program for this product. The company will keep a hand some amount for the promotional activities of the product. As it is a new brand more promotion is needed to build up the brand awareness.

Nestlé Bangladesh Ltd will use ads through TV, Radio, and Newspaper to aware people about this toffee. The company will take the strategy to create awareness about the bad effects of the traditional toffees. Then the company will present its toffee to the market as harmless.

In the promotional activities, the company will focus or emphasize on the children and students as well as old people. In the newspaper advertising, the company will know or inform the people about the bad effect of the traditional candies and inform about the good sides of the Apple toffee. In their TV commercial they will also try to build awareness in the minds of the customers and try to acquire a strong position in the minds of the customers. In the electronic media’s advertising the company can present famous and renowned doctors to inform people about the difference between traditional toffees and our Apple toffee.

The company will take a mass public relation program. Nestlé Bangladesh Ltd will have to take this kind of promotional activities such as stall booking in many trade fair, child fair etc. to create a positive image about the brand. The company needs no special personal selling program for this product. In introduction stage sales promotion will not also be considered.

Nestlé Bangladesh Ltd will give many facilities to the retailers and the wholesalers. To take the competitive advantage the company will give more facilities than its competitors. The intermediaries are given many gifts items such as wall clock, T-shirts etc. and sales helping equipments such as keeping pots, bill board etc.

They will develop some cartoons which will be used on the T-shirts, bill boards, neon boards, and in some ads to attract the children and young people. The company also uses this brand’s logo, picture, symbol etc. on many toys, dolls and on many other things to know and attract the target market.

Marketing Research:

During the initial phase of the marketing plan development, several focus groups were held to gain insight into prospective customers.  These focus groups provided helpful insight into the decision making processes.

An additional source of dynamic market research is a feedback mechanism based on a suggestion system. In the suggestion system customers are asked to rate in terms of a given scale.  There are also several open ended questions that allow the customer to freely offer constructive criticism or praise. Nestlé Bangladesh Ltd will work hard to implement reasonable suggestions in order to improve their products offerings, as well as show its commitment to the customer that their suggestions are valued.  The last source of market research is competitive analysis. Nestlé Bangladesh Ltd will send people to local competitors to gain information about their product offerings and also its competitors’ product offerings.

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FINANCIAL PROJECTIONS

This section will offer a financial overview of “Apple toffee.” as it relates to the marketing activities.  I have addressed all expenses forecasts with fixed costs and variable costs and with first six months estimated costs, sales forecasts with the first six months estimated sales, break-even analysis, and the possible profit after six months in this section.

Expenses Forecast:Estimated total Cost for the first Six Months:

Fixed cost Tk.10,00,000Raw materials Tk. 12,50,000Preservation chemical Tk. 50,000Rent Tk. 1,50,000Employee (Operation & Sales) Salary Tk. 12,00,000Packaging Tk. 1,50,000Promotional Expenses Tk. 5,00,000Distribution Tk. 1,00,000Commission Tk. 10,00,000Operational Expenses Tk. 1,50,000Administrative Expenses Tk. 1,50,000Insurance Tk. 10,000Interest Tk. 75,000Miscellaneous Expenses Tk. 1,00,000

Total Tk. 58,85,000

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Sales Forecast

There will not be enough sales in first month. In the second month the sales will be increasing at a satisfactory rate. From the third month the increasing rate of sales will be very high. That means from month three there will be a steady increase in production and sales. Our sales forecast is 1000000 pieces toffee for the first six months. On an average per piece of toffee will be sold for Tk.10.

 Estimated Sales for the first Six Months:

Break-even Analysis

BEV= Fixed cost / (Price- Variable cost) 1000000 10-5

=200000 units

So, breakeven point can be achieved within 6 months.

Estimated Sales (TK.)

180000

360000

540000

720000

900000

1080000

0200000

400000

600000

800000

1000000

1200000

1 2 3 4 5 6Consecutive Month

Series1

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IMPLEMENTATION &CONTROL

Initially we have to monitor the goals, the marketing process in every month. If there find out any gap in plan and output, we have to take corrective actions. Not only that, if there is any problem arise in production, marketing process, or any other areas, we have to take necessary steps to overcome that. There is a low possibility of new competitors in the market. The marketing strategy could be change of reform. We know, in the marketing, arena every challenge makes an opportunity if the program is handled smartly. Finally, the management will monitor the total environment, progress, and gap and will take the corrective actions if necessary. The company always has to maintain the TQM (Total Quality Management).

CONCLUSION

I am very much confident about the new product “Apple toffee” as there is no such kind of product in the current market and our product will be high qualified. This product has some exclusive characteristics that will help us to acquire position in the minds of the customers. We have a plan of exporting our products to the foreign countries. If we want to do this then we can collect a handsome amount from the foreign market. Then we can go for vast production or in other business which will create opportunity in the market. And we can serve the society or the people through our business.

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