250 ml Brick pack CSD SHANDY Drinks

Table of Contents

250 ml Brick pack CSD SHANDY Drinks

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1.0-Company Introduction:
Shandy Cola was established in early 1980s with more than 30 products. In 1995 Shandy Cola came with an innovative PET packing for their CSDs which revolutionized the whole CSD industry. Now PET bottle is available in 300 ml at a low market price of Rs10. They changed their packing from glass bottles to PET bottles because their assets of empty glass bottles were stolen by other competitors. Then they came with a new idea of PET bottles.

250 ml Brick pack CSD SHANDY Drinks

k llll This also added to the customer convenience due to the non returnable bottles. Shandy Drinks were the trend setters in CSD industry. They have 6 different flavors in the market. They are launching a new flavor that is Shandy DEW. Considering these facts we chose Shandy Cola for our strategic marketing plan.

2.0-Competitors / Market Players:

The main market players in the CSD industry are

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Pepsi Cola Coca Cola RC Cola Amrat Cola Mecca Cola

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Pakola Players Pepsi Cola Coca Cola Shandy Cola Others Market Share (Lahore) 44 % 38 % 7% 11 % 5

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3.0-STP:
3.1-Segmentation:

250 ml Brick pack CSD SHANDY Drinks

k llll 3.1.1-Geographic Segmentation: In geographic segmentation our attention will be on the metropolitan city of Lahore, the vicinity of Lahore and few other areas of Central Punjab. 3.1.2-Demographic: Young and energetic people are our demographic segments. 3.1.3-Psychographic:

250 ml Brick pack CSD SHANDY Drinks

k llll Strivers: These are trendy people who favor stylish products. 3.2-Targeting: Our potential target markets for Shandy Drinks are Young, energetic, people who favors stylish products The city of Lahore 8

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k llll 3.3-Strategic Positioning: Positioning is defined as the marketers effort to identify a unique selling proposition for the product. With this the product occupies a clear, distinctive and attractive position relative to competing products in the minds of target consumers. For positioning the firm has to consider for each potential segment, how it would approach serving that group of customers and how it would want to be perceived by those customers. It could be done by a slogan that is based on patriotism which could stand out in the minds of customers. e.g. 9

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k llll Shandy cola slogan is you are satisfied A positioning statement answers these questions: Who are the customers? What is the set of needs that the product fulfills? Why is the product the best option to satisfy those needs? 10 meaning Its yours, drink it until

250 ml Brick pack CSD SHANDY Drinks

k llll For our product brick pack Shandy Cola we have answered the above questions as follows: Our customers are those consumers who have problem with returning of glass bottle and depositing some amount for it. Our Product fulfills the need of those consumers who want disposable packing for health or hygiene purpose or who do not want to deposit money and return the bottle to the store.

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It is the best option as it is much more convenient to those people who do not want to return the bottle right on spot and can easily consume it while driving back home. Also it is much hygienic than the used washed glass bottle because it is disposable and consumers do not have to worry about transferable diseases like Hepatitis.

4.0-Marketing Mix:

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k llll 4.1-Place (Distribution): Company currently is covering the metropolitan city of Lahore because they have limited production facility. Gradually they will increase to other cities of Punjab their production facility in Lahore. They are outsourcing their distribution and they select their channels of distribution like Punjab University, Kinnaird College will increase to GCU & UET. They are customizing distribution with the name of channel

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Ravians Shandy Punjabian Shandy KCite Shandy UETian Shandy

4.2-Promotions:

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k llll The different promotion strategies that will be used by Shandy Drinks to position its product in new packing as the highly convenient handling will be: 4.2.1-Promotion through Bill boards: The company is also doing the promotion through billboards near the main markets and main roads in Lahore only. 4.2.2-Promotion through Hammering:

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k llll Company is also doing their marketing via sponsorship, sponsoring in different T.V channels and FM radio for Lahore & Punjab. Shandy Cola is doing sponsorship in time check after each fifteen minutes in different TV channels and FM radio. They usually do not commercialize through complete advertisement because capacity is limited & Shandy drinks are only available in Lahore & some areas of Punjab. 4.2.3-Promotion through Sponsorship:

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k llll Our company will sponsor the local sports events like Polo and Kabbadi. This is because the slogan of the company is based on patriotism. Thats why company will sponsor the local events (the colors of Lahore). 4.2.4-Promotion Through Customize Distribution of Wedding Halls: Company will market its product through customize distribution to local wedding halls of A+ Places in Lahore.

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k llll 4.3-Pricing: 4.3.1-Pricing Objective: The pricing objective of the company is to increase market share in the metropolis of Lahore. Their higher unit volume sales will lead to lower cost. The fixed cost remains the same but Variable cost will go down. V.C per unit is approximately Rs. 5 / unit that will go down to approximately Rs. 2 2.5 / unit (Exhibit 5).

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k llll 4.3.2-Pricing Strategy: Company sets low price (penetration pricing) as compared to other market leaders (Pepsi, Coke) because customers do not perceive it as high priced product. Low price discourages actual & potential competition. The selling price is Rs.10 / unit including V.C, F.C and distribution cost. 4.4-Product: AUGMENTED

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k llll EXPECTED

Cor e Augmented:

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k llll It is the fourth level of customer value hierarchy, a set of attributes and conditions, above buyers expectations when they purchase the product. In order to meet with the expectation of the customer, company monitors each of the production work carefully and implements quality assurance method for production and packaging of the product.

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k llll 4.4.1-PLC:

PLC (Shandy Drinks)

7000000 6000000 5000000

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k llll PLC (Shandy Drinks)

7000000 6000000 5000000 Sales 4000000 3000000 2000000 1000000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Year

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k llll 4.4.2-BCG Growth Matrix Share: High Low

*
Growth High

Cash Cows

Dog

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Low

Relative Market Share (Cash Generation)

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k llll The Company is in Low MS & High Growth Rate quadrant. After the new packaging introduction the company will move towards Star because they will able to increase market share. 5.0-Green Marketing: Green marketing is done to support your product and show your product as an environment friendly product in the mind of the customers.

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k llll 5.1-Lean Green: Company is doing the green marketing and they are incorporating with Lean green strategy. In lean green marketing companies do green marketing but they dont publicize it. Companys interest is only in reducing costs, improving efficiencies and creating low cost competitive advantage. Their point of differentiability and substantiality is low. 6.0-Meta Market:

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k llll In Meta market different industries are involved. In our product chemicals, plastic, paper, cardboard/packaging are used as Meta market.

7.0-Value Chain Information (Customers, Raw Materials) Packaging Retailer

Raw Material Ware house Customers

Processing Whole seller Information

Production 29 Distribution

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7.1-Supply Side 7.1.1-Information: The following key information is considered while manufacturing the CSD 31

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Customer preferences Availability and cost of raw materials Current prices of CSD in markets

7.1.2-Raw Material: The raw material used in the manufacturing are bought from local supplier.

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k llll 7.1.3-Processing: The company processes the raw material for the final production in desired proportion. Approximately 50% value added in processing. 7.1.4-Production: In the production of Shandy CSD, CO2 is inserted at a pressure of 1.0-1.2 psi with small technology addition. Value added in terms of its addition of CO2 (taste).

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k llll 7.1.5-Packaging: After production, new packing has done their self in production house. Value added in terms of its new packing. 7.2-Demand Side 7.2.1-Warehouses:

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k llll Company stores its products in their own warehouses at plant site to meet the demand in time. Company is already behind the demand. Value added terms of its storage to meet demands. 7.2.2-Distributors: Company outsources its distributions to local distributors.

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k llll 7.2.3-Retailers: Distributors provide the final product to retailers with no defect. Value added is due to reach without defects and company provides chillers to retailers for chilling the CSD. 7.2.4-Customer: Retailer sells chilled products to customer. The value added is chill product with beautiful and attractive packing.

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k llll 7.2.5-Information: The final key information given by customers is Convenience in buying the product Expected taste and variability in taste Perceived price and satisfaction level.

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8.0-Customer Variables:
Flavors Design of packing Customize Distribution Taste

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Carbonation (Pressure) Temperature SKB

9.0-Competitive Advantages:
Our company has the following competitive advantages:

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Innovative packing Multi flavors Low price Low Packing cost

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10.0- Balanced Scorecard

FINANCIAL PERSPECTIVES (How do we look to shareholders) Measures Cash flows (To survive in the CSD industry with the help of using our cash flow)

Goals Survive

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k llll Succeed Prosper Profits To succeed in the market by reviewing our quarterly sales growth and operating income. Our target would be to increase our market share and ROE by generating more sales. The companys aim would be to increase profits and market share by generating more sales.

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INTERNAL BUSINESS PERSPECTIVES (What must we excel at?) 43

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k llll Goals Technology Capability Product Development Manufacturing excellence Measures Used innovative & cheaper technology for new packing introduction Introduced new package, to be number 1 in delivering value to the customers

Measuring the unit cost and capacity

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k llll INNOVATION & LEARNING PERSPECTIVES (Can we continue to improve & create value) Goals Measures Technology Leadership leader in the CSD brick pack technology Percentage of products which are generating Product Focus higher sales or 90% Time to Market looking at our competitors if they are affecting our growth 45

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CUSTOMER PERSPECTIVES (How do customers see us?) Goals Measures The CSD product packing is an New Product innovative and new in the market

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k llll Responsive Supply Price We would be delivering the products on time as per specification How customers compare the price with value the customer perceives out of it.

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Appendix: Exhibit 1 10.0-Buyers Utility Map

Purchase Delivery Use Supplements Maintain Disposal

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k llll Customer Productivity Simplicity Convenience Risk

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k llll Fun & Image Environmental Friendly

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Exhibit 2 Income Statement (Shandy Drinks)

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2009 Unit Price Sale unit Sales Cost Per Unit Price Cost of goods sold Gross profit Fixed Cost 10 4,200,000 42,000,000 7.5 31,500,000 10,500,000 1,000,000 2010 10 4,368,000 43,680,000 7.95 34,725,600 8,954,400 1,000,000 2011 12 4,542,720 54,512,640 8.43 38,281,501 16,231,139 1,000,000 2012 12 4,724,429 56,693,146 8.93 42,201,527 14,491,618 1,000,000 2013 14 4,913,406 68,787,683 9.47 46,522,964 22,264,720 1,000,000

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Depreciation 70,000 1,070,000 Operating profit 9,430,000 70,000 1,070,000 7,884,400 70,000 1,070,000 15,161,139 70,000 1,070,000 13,421,618 70,000 1,070,000 21,194,720

Profit before tax Tax 34%

9,430,000 3,206,200

7,884,400 2,680,696

15,161,139 5,154,787

13,421,618 4,563,350

21,194,720 7,206,205

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Net profit 6,223,800 5,203,704 10,006,351 8,858,268 13,988,515

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Exhibit 2 (Continued.) Income Statement (Shandy Drinks)

2014 Unit Price Sale unit Sales Cost Per Unit Price 14 5,109,942 71,539,191 10.04 2015 14 5,314,340 74,400,758 10.04 2016 16 5,526,913 88,430,616 10.04 2017 16 5,747,990 91,967,840 10.64 2018 16 5,977,910 95,646,554 10.64

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Cost of goods sold Gross profit Fixed Cost Depreciation 51,286,915 20,252,276 1,000,000 70,000 1,070,000 Operating profit 19,182,276 53,355,972 21,044,786 1,000,000 70,000 1,070,000 19,974,786 55,490,211 32,940,404 1,000,000 70,000 1,070,000 31,870,404 61,172,409 30,795,431 1,000,000 70,000 1,070,000 29,725,431 63,604,958 32,041,596 1,000,000 70,000 1,070,000 30,971,596

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Profit before tax Tax Net profit 34% 19,182,276 6,521,974 12,660,302 19,974,786 6,791,427 13,183,359 31,870,404 10,835,937 21,034,467 29,725,431 10,106,647 19,618,785 30,971,596 10,530,342 20,441,253

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Exhibit 3 Cash Flows (Shandy Drinks)

2009 EBIT Depreciation Tax 9,430,000 70,000 3,206,200 2010 7,884,400 70,000 2,680,696 2011 15,161,139 70,000 5,154,787 2012 13,421,618 70,000 4,563,350 2013 21,194,720 70,000 7,206,205

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OCF 6,293,800 5,273,704 10,076,351 8,928,268 14,058,515

2014 EBIT Depreciation Tax OCF 19,182,276 70,000 6,521,974 12,730,302

2015 19,974,786 70,000 6,791,427 13,253,359

2016 31,870,404 70,000 10,835,937 21,104,467

2017 29,725,431 70,000 10,106,647 19,688,785

2018 30,971,596 70,000 10,530,342 20,511,253

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Pay Back Period

5.11 Years

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Exhibit 4
Shandy Drinks Balance sheet

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For the year ended on 31 December 2009

Rs. Cash & Bank Inventory Total Current Assets Fixed Assets: 473,000 1,000,000

Rs.

1,473,000

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Machinery Less: Depreciation Furniture and Fixtures Less: Depreciation Vehicles Less: Depreciation Office Equipment Less: Depreciation 700,000 70,000 70,000 10,500 700,000 70,000 112,500 22,500 630,000 59,500 630,000 90,000

1,409,500

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Working Capital Total Assets Rs 451,300 Rs3,333,800

Liabilities and Owner's Equity Debt Equity Total Liabilities

30% 70%

1,000,140 2,333,660 3,333,800

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Exhibit 5 Break-Even (Shandy Drinks)

The break-even analysis indicates the amount of units Shandy Drinks have to sell in order to recover the variable cost as well as fixed cost.

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k llll Break-Even = Fixed Cost/price-variable cost = 1,000,000/(10-7.5) = 1,000,000/2.5 = 400,000 units

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Exhibit 6 Cost break up (Shandy Drinks) 300ml Plastic bottle

Type of Packing for CSD Packing 3.45 2.00

250ml brick Pack

2.25 2.00

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k llll Cap CSD Total (Rs. / Unit) 0.65 3.77 9.87 0.00 3.14 7.50

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