Documente Academic
Documente Profesional
Documente Cultură
SUBMITTED TO,
SIR YAWAR ABBAS
SUBMITTED BY,
NAMES
Reg. #
MUHAMMAD SHAHNAWAZ
2008-Ag-43
ACKNOWLEDGEMENT
Countless thanks to ALLAH Almighty for giving us such extraordinary abilities and
making us privileged enough to take part in such activities and all respects and regards to
Holy Prophet Hazrat Muhammad (PBUH) for giving us the faith paving us on the
right path with the essence of faith in GOD.
We would like to thank our Supervisor Mr. Yawar Abbas for his cooperation and help.
He fully supported us throughout our work. We express our heartiest gratitude to him.
His cooperation made this project a lot much easier..
We also express our profound gratitude to ALL OUR Friends who supported us a lot not
during this project but through out the whole semester.
Finally, we wish to record our deepest obligations to our Parents and Family for their
prayers and continuous support.
GOALS
Description of Business:
Green Land Manufacturers is a company which provides a unique product Instant Tea.
The Instant Tea is basically a ready to use tea with all the required quality ingredients
(tea, powdered milk, and powdered sugar) with different flavors, just put the teabags
into the hot water and a refreshing hot tea is ready.
Financing
Initial financing requested is Rs 4,000,000 loan to be paid off over ten years. This debt
will cover office space, office equipment and suppliers, two leased vans, advertising
and selling costs.
This report is confidential and is the property of the co-owner listed above. It is
intended for use only persons to whom it is transmitted, and any reproduction or
divulgence of any of its contents without the prior written consent of the company is
prohibited.
EXECUTIVE SUMMARY
Many Pakistanis have a perception that not having a cup of tea in the morning will leave
a day blank for them, tea one of the most used beverage after water in Pakistan and it is
so popular that its nearly impossible to start a day with out a cup of tea. Serving guests
with hospitality is that guests are always asked for tea in Pakistan, in offices people
always want a tea for refreshment this is explaining how much tea is given importance in
Pakistani peoples life.
The goal of this business plan is to outline the strategies, tactics, and programs that will
make the sales goals outlined in the Green Land Tea Manufactures business plan into
reality in the year 2010. Basically there are 9 persons which are going to establish a
unique business in Pakistan as entrepreneurs. We needed Rs 10.0 billions to start this
business. We have Rs 4.0 billions as owners equity and remaining Rs 6.0 billions will
get from banks in the shape of loan. Pay back period of our investment is 7.83 years.
Capital budgeting showing that our project has a positive net present value and higher
internal rate of return than to the market opportunity rate 13%.
Green Land Tea Manufactures, unlike a typical company, provides a unique form for
taste and high quality tea within no time. The name of the product is Instant Tea. Actually
Green Land Tea Manufacturers is the answer to an increasing demand for quality tea in
shortest possible time.
The instant tea is basically a ready to use tea just put the teabags with all the required
quality tea ingredients (tea, powdered milk, and powdered sugar) into the hot water and
your refreshing hot tea is ready. We are getting the sugar from the local supplier, for the
milk powder we have contracted with 'Everyday' and we are importing tea from Kenya.
As a new brand is get underway in the market there are chances of failure so for that we
have conducted a market research & from that research we came to know that this
product will be a super hit in the market and exactly the customer want this product to
come into the market.
Marketing will play a vital role in the success of Green Land Tea Manufacturers. The
company will build a brand around the services it offers by heavily promoting itself
through local television, radio, and print advertising. Marketing efforts are just beginning
by the time a potential customer enters Green Land Tea Manufacturers for the first time.
A strong emphasis will be put on keeping customers and building brand loyalty through
programs focused on staffing, experience, and customer satisfaction.
The basic motive behind every business is to generate profits out of it. We also need
profits to manage our needs and growth of the business. We will focus on superior quality
as well as reasonable price that customer can afford.
Basically the idea behind this company is that think big by thinking small means that we
want an entrepreneurial change in the culture of tea. For starting our entrepreneurial
activities we have targeted the small part of working class people because this working
class has one of the major effects on the economy of the country.
For that we are moving with the Motto:
We are not just asking for your money; but we are anxious about your
time
TABLE OF CONTENTS
Introduction to product .....9
Vision statement........10
Mission statement.........10
Situational analysis.11
Environmental analysis...11
Swot analysis..12
Pest analysis13
Competitors....14
Direct competitors..14
Indirect competitors....14
Competitor's analysis...15
Keys to success....16
Industry analysis..16
Market share picture...17
Future outlook & trends...18
Venture description..18
Organizational plan .19
Form of business.19
Management team19
Organizational structure21
No of employees22
Check signing authority 23
Salaries..23
Plan to meet personnel needs.23
Performance management system23
Roles & responsibilities of members of organizational charts..24
Production plan.29
Operational plan30
Marketing plan analysis.33
Marketing mix...39
Product..39
Price..42
Placement..42
Promotion ....46
Assessment of risk....47
Financial plan analysis 48
Contingency plan.55
Harvesting strategy..55
Appendix 56
INTRODUCTION TO PRODUCT
It is a new product to be launched in the market about which you have never listened and
even never thought before. It will be launched and come in the market in year 2010. It is
basically a consumer product and is necessity of almost every house and it is usually used
in routine in many houses and offices. The name of the product is: INSTANT TEA.
Instant Tea is manufactured by the GREEN LAND MANUFACTURES. Our tea has
special feature that it is prepared within few seconds and all ingredients (tea, powdered
milk, and powdered sugar) are combined in a balanced quantity in the Quick Time. It is
in the form of teabags. You have to do nothing, just boil water and dip the teabag in that
and your delicious tea is prepared in few seconds time. There was never such an easy
way to prepare a quality tea that we have made possible
WAS IT DREAM?
We strongly believe in an idea and a vision rather than a dream. What we have always
wanted for ourselves, we want this for others as well. We want to make people realize
that they can have the quick time making of tea to save their time.
We would promote Healthy & Tasty living.
Instant tea bags will be very proficient for the users and customers as all want something
that can be prepared quickly and within a blink of an eye. So we have firm belief that as
this product has not been introduced in Pakistan it will have its unique attraction and rare
importance among the consumers. The whole idea behind this concept was to introduce
new and improved drinking habits of the people.
VISION STATEMENT
We aim to be the market leaders of Tea Industry
MISSION STATEMENT
We provide instant flavored tea with all required contents in a tea bag to
our time starved customers in urban areas. Our aim is to become market
leader in instant tea with our committed employees.
10
SITUATION ANALYSIS
Tea is the cheapest and most popular beverage that is served at both professional and
social gatherings all over the world. In Pakistan it is counted as a staple food item of
common man and is an integral part of our culture and heritage. Due to these causes
Pakistan consumes a substantial quantity of tea. There are many brands like Lipton,
Tapal, Supreme etc that are fulfilling the Pakistans demand for tea but no one pay
attention to that now people are becoming time conscious. They dont want to waste their
time, they want to utilize their time in productive things, here we found a gap so keeping
in view this need of our customers on which no one is paying attention we are going to
provide tea in the form of tea bags that will be proficient for the customers and the users
as all want some thing being prepared quickly with in blink of an eye.
ENVIRONMENTAL ANALYSIS
We have conducted the SWOT and PEST analysis that what kind of situation we are
going to face when we launch our product. By knowing that what our strength and
weakness and with help of that we can convert the threats into opportunities. Also we
conducted PEST analysis to know the political, economical, and social & technological
situation in the country.
11
SWOT ANALYSIS
The SWOT analysis provides us with an opportunity to examine the internal strengths
and weaknesses we must address. It also allows us to examine the opportunities presented
to the company as well as potential threats.
STRENGTHS:
i.
Strong Partners; All of our business partners are knowledgeable, friendly and
strong. Also our suppliers such as EVERYDAY very strong and supportive to us.
All are committed to enhance the quality of product with their support and hard
work.
ii.
Clear Vision of the Market Need; Green Land Manufacturers clearly know the
need of their customers and they aim at satisfying their customers in best possible
way.
iii.
iv.
Unique Product; We have no direct competitors in the market because we are the
first movers and introducing a unique product.
WEAKNESSES:
i.
Low Capital: We dont have much capital to fianc our business and it is one of
our weaknesses.
ii.
12
OPPORTUNITIES:
i.
Growing Population of Daily Tea Users: Now-a-day, tea has almost a necessity
of every individual. As the population of daily tea users increases, we have an
opportunity to capture more of the market share.
ii.
THREATS:
Cheap Technology: As the technology is being getting cheap and cheap day by
day it is possible that in future we might have number of competitors.
PEST ANALYSIS
PEST analysis tells us about political, economic, social and technological effects faced by
our product in the market.
Political Effect:
The Government policies regarding the business class in Pakistan and regarding other
matters may affect our business too. But we do not expect that we would have many
problems regarding political conditions in Pakistan.
Economical Effect:
Our teabags formed tea would not be much expensive for our customers and would be
sold at affordable price. It will also be economic for us as manufacturers because we
would be able to make it on lower cost and sell on high price and will gain profits for us
as well.
13
Social Effects:
We may face certain problems regarding the peoples response to our product. In this
region the people are conservative and loyal with their already using brand, not want
changes in their lives. So, it will effect or difficult for people to change their traditional
taste of tea with a newly emerged tea. But we shall formulate the strategies to overcome
their problems and make the people addicted to our product.
Technological Effects:
We dont require high technology to prepare this tea. So, technology factor will not effect
as much as in other industries.
But one threat we face is that there are big giants sitting in the market like Lipton, Tapal
and Supreme etc. as technology is going on cheaper and cheaper day by day, so, they can
make a prodct like us in the future and our sales may deteriorate.
COMPETITORS
Direct Competitors:
We have no direct competitors in the market because we are the first movers and
introducing a new product.
Indirect Competitors:
Our indirect competitors brand names are:
Lipton
Tapal Tea
Lemon Grass Tea
14
COMPETITOR ANALYSIS
Competitors Strength:
i.
ii.
iii.
iv.
Competitors Weaknesses:
i.
ii.
iii.
We are engaged in small business can easily change our strategies on early stages.
ii.
iii.
15
KEYS TO SUCCESS
The keys to the success for Green Land Tea Manufacturers are:
The creation of a unique, innovative, upscale tea that will differentiate us from
other local and future tea competitive companies.
INDUSTRY ANALYSIS
Tea is the most popular beverage in many countries. More than 2.60 billion kilograms of
tea are produced annually in the world. There are three main kinds of tea, i.e. black, green
and olong. But generally black tea is liked and all tea producing countries manufacture
black tea.
In Pakistan, Pakistan is not a tea producing country but is an important consuming
country, being the third largest importer of tea in the world and therefore of considerable
interest to the main tea exporting countries.
The consumption of tea is about 175 million Kilograms, but custom statistics show tea
import of 105 million kilograms. According to the estimates, 70 million kilograms tea is
being smuggled in Pakistan through illegal channels.
Of the tea sold in Pakistan, 55% is unbranded or in loose form. 85% of this is based on
smuggled tea. The players in the remaining 45% segment are Unilever, Tapal, Vital, and
Tetley.
16
45%
40%
35%
Unilever
30%
Tapal
25%
Vital
20%
15%
Tetley
Others
10%
5%
0%
Unorganized market also captures a good market share in the total tea market of Pakistan.
55% is of unorganized tea.71% of total population of Pakistan are living in rural areas.
Due to illiteracy and lack of awareness they are consuming unorganized tea which is
mainly affecting the organized tea market. Due to this they are enjoying a very big
market share of the total tea market.
Organized segment mainly depend on the imported tea. Mainly big players are importing
tea from different countries like Kenya, UK, and Bangladesh
17
VENTURE DESCRIPTION
Green Land Tea Manufactures, unlike a typical company, provides a unique form for
taste and high quality tea within no time. Green Land Manufacturers is the answer to an
increasing demand for quality tea in shortest time.
Product:
Instant Tea
The Instant Tea is basically a ready to use tea with all the required quality ingredients
(tea, powdered milk, powdered sugar) with different flavors, just put the teabags into the
hot water and your refreshing hot tea is ready.
Size of Business:
We would start of our business at a normal scale so that in the start we will be able to
know market circumstances and reactions shown by customers.
Giving the customers what they want and they will dig deep into the packets.
We dont want to crash into the market but we will slowly grow through word-of- mouth
and other means.
18
Background of Entrepreneurs:
We are basically 9 ambitious persons to start this venture, each person would participate
in particular area to run this enterprises and to provide finances for the purpose. A brief
introduction the entrepreneurs involved in establishing Green Land Manufactures is as
follows:
M. Yaseen Tahir: He is an extrovert person with a special quality to convince people, he
is just to complete his Master in Business Administration with major in Finance.
M. Rafique : He has good analytical skill and sense of humor. He is also about to
complete Master in Business Administration with major in Finance.
Majid Ali: With good speaking style, he is near to get is his degree of Master in Business
Administration with major in marketing.
Irfan Yasin: An introvert person, presently doing MBA in marketing.
Asma Ramzan: Doing MBA in HRM form University of Agriculture, Faisalabad. She
has good management skills, and is responsible to design management plan for Green
Land Manufactures.
Amber Gill: She is exciting lady, doing MBA in HRM form University of Agriculture,
Faisalabad. She loves to work in groups and teams. Amber has been assigned the
responsibilities of designing the management plan for our organization.
Maria Ali: She is currently doing Master in Business Administration with major in
finance from UAF. Maria got good financial knowledge, and she is capable of handling
multiple tasks at the same time.
Noor Tanveer: Belongs to a family of business graduates, she got good concepts of
business management studies. She has been given, along with the Maria Ali, the
responsibility of designing operational plan for our venture.
Ayesha Nawazish: With good problem solving attitude, she is just to complete Masters
in Business Administration with major in HRM. She is obliged with the responsibility of
designing vision, mission and conducting industrial analysis for our venture.
19
ORGANIZATIONAL PLAN
FORM OF BUSINESS:
Our liabilities and responsibilities would be the same and will work as a unit.
VICE PRESIDENT
MANAGER MARKETING
MANAGER FINANCE
MANAGER HR
MANAGER IT
MANAGER R&D
20
MANAGER SALES
ORGANIZATIONAL STRUCTURE
21
CHIEF
EXECUTIVE
OFFICER
VICE
PRESIDENT
PRODUCTION
& QUALITY
MANAGER
HR
MANAGER
MARKETIIN
GMANAGER
FINANCE
MANAGER
MANAGER
SALES
Clerical staffACCOUNTANTS,
TYPIST, CLERKS
& ASSISTANTS
Non-Clerical staff:
GURADS,
MESSENGERS
NO OF EMPLOYEES
22
R&D
MANAGER
IT
MANAGER
CEO
Vice President
1 Finance manager
1 HR manager
1 Sales manager
1 Marketing manager
1 R&D Manager
1 IT Manager
5 Salesmen
1 Cost Accountant
2 Drivers
2 Guards
2 Sweepers
12 Labors
2 Peon
Total Employees= 35
23
Salaries:
In order to free up enough capital to continue operations and possible expansion, our
executive team will not receive more than a living wage salary until the product is well
into the black. We understand that as a new product we will need technical support and
legal advice; this will be currently outsourced to various consultants.
Major Functions:
25
VICE PRESIDENT
Job Description: To provide provides strategic leadership for the development of the
service line so that a full continuum of services is created and structured in response to
customer needs (patient, payer, physician). The vice president will guide the
development of the overall leadership structure and strategic plan and create goals and
plans for quality and financial management of the service line.
MARKETING MANAGER
Main Job Tasks and Responsibilities:
26
o manage and coordinate all marketing, advertising and promotional staff and
activities
o conduct market research to determine market requirements for existing and future
products
o analysis of customer research, current market conditions and competitor
information
o develop and implement marketing plans and projects for new and existing
products
o manage the productivity of the marketing plans and projects
o monitor, review and report on all marketing activity and results
o determine and manage the marketing budget
o deliver marketing activity within agreed budget
o develop pricing strategy
o liaison with media and advertising
FINANCE MANAGER
Typical activities include:
o providing and interpreting financial information;
o monitoring and interpreting cash flows and predicting future trends;
o analysing change and advising accordingly;
o formulating strategic and long-term business plans;
o analysing competitors and market trends;
o developing financial management mechanisms that minimise financial risk;
o conducting reviews and evaluations for cost-reduction opportunities;
o liaising with auditors to ensure annual monitoring is carried out;
o arranging new sources of finance for a company's debt facilities; supervising
staff;
o Keeping abreast of changes in financial regulations and legislation.
SALES MANAGER
27
28
PRODUCTION PLAN
Distillatory,
Rotary evaporator
Vacuum dryer,
Grander,
Freeze dryer,
Colorimeter,
Major Suppliers: We are getting the sugar from Local supplier, for milk powder we
have contracted with Everyday and we are importing tea from Kenya.
SUPPLIERS
NAMES
ADDRESS
FOR TEA
Kenya
FOR SUGAR
Faisalabad
Faisalabad
Faisalabad
Faisalabad
FOR MILK
30
OPERATIONAL PLAN
The following section will identify the proposed operational plan for Green land
Manufacturers. Included are the general operating procedures, human resources,
insurance and an outline of Green land Manufacturers' operational workflow.
Human Resources
Our company has 35 employees as a part of its management including the top
management. When additional human resources are needed, Green land Manufacturers
has identified the persons qualified and able to assist on a contract basis.Job
advertisements will be put in the local papers and organizations to attract a good pool of
respondents.
Insurance Requirements
Green land Manufacturers will have to incur costs for business liability insurance. The
estimated cost for this requirement is Rs. 100,000 per year
Operational Workflow
Step 1: Green land Manufacturers, will first of all procure all required items from
different suppliers:
Main suppliers of milk will include:
31
Step 2: To provide customers with healthy product, Green land Manufacturers has
arranged the preservation of necessary items. The process of treating and handling
product is to stop or greatly slow down spoilage (loss of quality).
Common methods that will be used for preservation includes:
Drying,
Spray drying,
Freeze drying,
Freezing,
Vacuum-packing,
Tea Bags
Boxes
Wrappers
Physical protection,
Convenience,
32
The above operational workflow is very standard, easy to understand and within
industry's norm.
The graphical presentation of the OPERATIONAL PLAN is given below
Milk
Sugar
Tea
PROCUREMEN
T
(Collection of Items)
Freezing,
Drying, &
preserve.
PRESERVATIO
N
Used To Stop Spoilage
& Bacteria And To
Maintain The
freshness.
Tea Bags,
Boxes, cartons,
wrappers.
PACKAGING
It Provides Physical
Protection & Labels
Are Act As
Information
transmission.
Sales
(Through
distributio
n
channel)
Response Centre
Receives feedback
from customers
Feed
Back
33
To establish a wide brand recognition through the capture of market shares in the
Tea
Coffee
Both
None
3 minutes
5 minutes.
No idea
4. Would you like to switch on to another brand of tea if new brand provides better taste
with easy and time saving preparation?
Yes
No
1 cup
2 cups
3 cups
Strong
Medium
Light
Taste
Brand name
Availability
Taste
Brand
Price
Quality
9. If a tea is introduced in the teabag form where you just have to dip that
in hot water and tea is ready what will be your response?
No idea
10. If a tea is introduced in the teabag form with different flavors like chocolate,
strawberry, mango etc then what will be your response?
No idea
11. According to you, what medium should a Tea Company use more frequently to
advertise itself?
Television
Billboards
Newspaper
Radio
Others________________
15,000-20,000
20,000-25,000
25,000-35,000
Above 35,000
Dependent
Children
Young
Middle Age
Old people
14. Gender
Male
Female
15. Occupation
36
Households
Students
RESULT OF QUESTIONNAIRE
FEEDBACK
o We found a positive response from everywhere in the market as well as in the
offices.
o Everyone was found eager to welcome this new idea and product. People are short
of time and it is not less than a gift in their busy routine lives.
o Especially office workers were in need of such product which is prepared in just
no time.
o People are ready to pay more for quality products.
o They literally said to us that we were in the need of such a product to come in the
market.
37
SEGMENTATION
Based on three bases:
Demographic.
Psychographic.
Behavioral Style
Demographics Segmentation
Age
Above 18
Gender
Family Size
Average
Young
Income
Occupation
Psychographics Segmentation
Social Class:
Life Cycle:
Personality
Behavior Segmentation
Occupations
Regular Occupation
Benefits
User Status
Regular User
38
Readiness Stage
Intending to buy
Positive
TARGET MARKET
Green Land Manufacturers customers can be divided into three groups.
The first group is familiar with the quick time concept and desires a progressive and
inviting atmosphere with their offices and workplace where they can enjoy a delicious
cup of tea with in few seconds. This group is made up of business people from different
offices and professional centers means people in Corporate Level.
The second group is not familiar with quick time tea concept. This group is made up of
seniors from the different retirement centers. Seniors represent a growing segment of
tea users. They use the tea with friends and family and they will be regular users of the
Instant Tea.
The third group is somehow familiar with this concept. This group is made up of
students. They represent the young segment of tea users. They use the tea during their
studies to refresh themselves and they will be regular users of the Instant Tea.
SIZE OF MARKET:
On the basis of our research and on demographic studies conducted in the city of
Faisalabad, about 15,000 people our target market in first year then 16500 in the 2nd
year (10% increase) and in third year 18150. This would consist of individuals between
the ages of 28 and 65, male and female, with high disposable income, employed as
professional businesspersons or office staff.
39
There is a potential to reach an additional customers who work on the fringe of this area
and may not directly pass our office on a regular basis. This secondary market may be
penetrated through advertising, word of mouth and distribution of marketing literature.
Positioning Statement
For busy, mobile people whose time is already at a premium, but desire a refreshing,
high quality beverage.
Positioning: Time Saving
MARKETING MIX
We have focused also on 4 Ps of marketing in our project to launch new tea. 4 Ps mean
a mix of:
PRODUCT
PRICE
PLACEMENT
PROMOTION
PRODUCT:
Tea bags including all needed quality tea ingredients which includes world class tea
leaves, fresh milk powder, moderate sugar and different flavors.
Product Line Length:
In start our product line will include:
With high sugar and milk
Regular
With light sugar and milk
With Canderal
40
Brand Elements
Slogan:
Ready when you want
Brand Association:
Princess Fairy Cartoons
Logo:
Insignia:
41
Packing:
Tea in the form of teabags that is ready to take form with good and attractive packing.
Primary Packing;
Secondary Packing;
Box
Labeling
Ingredients:
Kenya Danedar Tea.
Every Day Dry Milk
Powdered Sugar.
Powdered Canderal
Recipe of tea:
Bring 100ml water boil.
Put 1 teabag in a cup.
Pour boiled water into the cup.
42
73
Total Fat:
2.4g
Carbohydrates:
12g
Protein:
1g
Instructions:
Store in a cool dry place away from direct sunlight.
Date of MFG & Date of EXP
Contact:
www.greenlandmanufacturs.com
PRICE
PRICE OF THE PRODUCT:
Price per teabag is Rs.10 whereas,
43
Pricing Strategy
The pricing will be comparable to the competition, but with the value-added
feature of immediate, drive-thru service and convenience
PLACEMENT OF PRODUCT
Location:
We have chosen the location for our business in the Faisalabad. In Faisalabad the shop
number is 55/C Batala Colony main road and in Shaheen Chok Saddar Bazaar Gulam
Muhammad Abad the shop number is 165 Commercial Market. Both shop size is of 20
by 20. This is enough for us to store our imported material and to use it as sales outlet
initially.
Placement is the 4th element or P in the four Ps of the marketing and it is very
important as it helps the businessman to bring product into the market. Also it is very
difficult decision to select an appropriate location. We have also worked on this element.
44
DISTRIBUTION CHANNELS
45
person for this job who would have relationships in certain offices and who can convince
them to use our product.
In start of our business we will open our business outlet store in the almost centre of
Islamabad and Rawalpindi where the imported tea and powdered milk will be stored and
after the filling and packing process our tea would also be sold over there initially. At this
initial stage our distribution channel would be as:
MANUFACTURER
DISTRIBUTORS
CUSTOMERS
Distribution Strategy
Our representative distributors will continuously make delivery in the banks and
other offices in the city
PROMOTION
We believe that it is not enough to have good products just sold at attractive prices. To
generate sales and profits, the benefits of products have to be communicated to
customers.
Our Promotional Mix will be based on the following things:
Web promotion.
Advertisement.
Billboards.
Newspapers.
Broachers and Posters.
Cloth Banners.
46
Among all of these blends of promotional mix we will be focusing at most on the
Advertising blend. Other blends will be used whenever we would find any situation in
which they might be helpful to us.
OBJECTIVES OF PROMOTION
We will have several objectives of promotion which we will use to make our product
accepted. Those objectives might be:
To Inform:
As we are launching a new product in the market so we will promote our product in a
way that our customer might know about our product to be existed in the market
Persuade:
We will create a perception about our product in the minds of the customer that our
product is superior to the products currently available in the market.
Image Creation: By promotion we will create an image in minds of the customer that our
product is different than others in the market.
Reassurance:
We will also promote to make customer reassure that he/she has made right decision to
buy our product. We might use several blends of the promotional mix while creating my
promotional strategies like direct selling, advertising, sales promotion etc.
Advertising:
Through advertising we will try to deliver our most persuasive possible selling message
to the right audience at minimal cost we can have.
PROMOTIONAL MIX
47
PROMOTION MIX
Promotional Mix will be based on these elements as discussed under:
Word Of Mouth: It is a personal communication about product between target buyers
and neighbors, friends, family members and associates. It is a very effective strategy in
which we plan to use word of mouth to introduce our product and also the benefits of our
product to the customers.
Advertising: We will use advertising to communicate our product into the market
through "prime media": i.e. television, newspapers, magazines, billboard posters, radio,
etc. Our advertising would be intended to persuade and to inform.
Direct Marketing: Through direct marketing we shall create direct relationship between
us and our customers.
Personal Selling: We will also use personal selling technique to make our product sell.
For that we will hire people on commission who will communicate with people and try to
manage sale of our product.
Sales Promotion: We will offer certain incentives to our customers to increase the sales
volume of our business such as coupons, extra quantity etc.
48
RISK ASSESSMENT
Green Land Manufacturers although free from any direct competition, has a very low
barrier to entry. But there are certain risks which can affect the overall value of a
business. In order to ensure that a current business owner receives the best value for
their company, it is important to take certain steps to avoid sale delays, obtain the
necessary resources to help the sales process along and retain the help of knowledgeable
professionals in areas where they are needed.
Financial Risk
Risk which affects the overall value of a business with regard to the sale thereof has a
lot to do with the lack of resources. Unlike corporate counterparts, smaller business
owners do not have attorneys, accountants and financial advisors at the back and call
who can aid them in the sale of the business.
Competitors: Possible Competitors are global leaders so they have more technology as
compared to us.
Management Team Conflicts: There may be conflicts due to so many people in the
management.
People Risk: In the future may be the trend and demand of the consumer changes.
Technological Risk: This is the era of rapidly advancements in the technology as the
technology is being getting cheap and cheap day by day it is possible that in future we
might have number of competitors.
49
50
Balance Sheet(PROJECTED)
As on June 30, 2010-12
ASSUMPTIONS
In 2nd & 3rd year, the sales are expected to grow 10% per year.
Fire insurance policy amounted to 100000 will be taken for safety purposes.
Interest on bank loan will be paid every month & interest rate is assumed to 8%
2010
2011
2012
Rupees
Rupees
Rupees
Share Capital
60,00,000
66,00,000
7,260,000
Accumulated profit
9,00,000
9,90,000
10,89,000
NON-CURRENT LIABILITIES
51
Long-term finances
40,00,000
44,00,000
48,40,000
CURRENT LIABILITIES
Electricity bills outstanding
100,000
1,10,000
1,21,000
Outstanding salaries
4,50,000
4,95,,000
5,44,500
Accounts payable
7,00,000
7,70,000
8,47,000
125,000
1,37,500
1,51,250
Rent outstanding
1,25,000
1,37,500
1,51,250
3,00,000
3,30,000
3,63,000
Total
1,27,00,000
1,39,70,000
1,53,67,000
2010
2011
Rupees
Rupees
2012
Rupees
NON-CURRENT
ASSETS
Property, plant and
equipments
84,00,000
92,40,000
1,0164,000
Advertisement
5,20,000
5,72,000
6,29,200
Registration fees
4,80,000
5,28,000
5,80,800
DEFERRED COST
52
CURRENT ASSETS
Income Statement(PROJECTED)
Stock
20,00,000
22,00,000
24,20,000
Advances and
receivables
280,000
3,08,000
3,38,800
10,20,000
11,22,000
12,34,200
1,27,00,000
1,39,70,000
1,53,67,000
Total
2009
Projected
2010
Projected 2011
Rupees
Rupees
Rupees
Sales
33,00,000
36,30,000
39,93,000
Cost of Sales
15,97,200
17,56,920
19,32,612
Gross Profit
17,02,800
18,73,080
20,60,388
1,50,000
1,65,000
1,81,500
1,25,000
1,00,000
13,27,800
1,37,500
1,10,000
14,60,580
1,51,250
1,21,000
16,06,638
Finance Cost
3,20,000
3,52,000
3,87,200
Profit / (loss)
10,07,800
11,08,580
12,19,438
53
before taxation
Taxation
1,078,00
1,18,580
1,30,438
Profit / (loss)
after taxation
9,00,000
9,90,000
10,89,000
Accumulated
profit carried
forward
9,00,000
9,90,000
10,89,000
10,0
7,800
Adjustments for:
Depreciation
5,00,0
00
Finance cost
3,20,
000
18,27,
800
Changes in working capital
(Increase)/decrease in current assets:
Stock and stores
Advances and receivables
(2,00,000)
(28,
000)
54
180
,000
(30
0,000)
Cash generated from (used in) operations
Payments for:
Finance cost
(8,60,
000)
(3,20
,000)
(1,07
8,00)
Income tax
Net cash inflow/(outflow) from operating
activities
4,27,
800
(476250
0)
Preliminary expenses
(10,00,0
00)
(57,62,50
0)
40,00
,000
60,00,
000
Share Capital
Net cash inflow/(outflow) from financing
activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of the
year
Cash and cash equivalents at end of the year
55
1,000,
000
780,000
(5,00
,000)
11,
22,000
Accumulated
profit / (loss)
Total
Rupees
Rupees
Rupees
0,00,000
00
9,00,0
0,00,000
00
00,000
69,
9,00,0
00,000
69,
Ratio Analysis
GREEN
LAND MANUFACTURED
LIMITED
RATIOS ANALYSIS
2009
Rupees
PROFITABILITY RATIOS
Gross Margin% (Gross Profit / Net Sales)
Net Margin % (Net Profit / Net Sales)
Return on Assets% (Net Profit / Total Assets)
Return on Equity% (Net Profit / Equity)
51.6%
27.2%
7.69%
13.04%
ACTIVITY RATIOS
Inventory turnover (Cost of Goods Sold / Inventory)
Receivable turnover (Sales / Account Receivable)
56
0.7986times
11.78
8.8
25.98%
0.38
LIQUIDITY RATIOS
Working Capital (Current Assets - Current Liabilities)
15,00,
000
Capital Budgeting
57
1.83
0.723
0.57
0.60
0.32
n = 3 years
58
Years
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
CashFlows
900000
990000
1089000
1197900
1317690
1449459
1594404.90
1753845.39
1929229.93
2122152.92
2334368.21
2567805.04
2824585.54
3107044.09
3417748.50
3759523.35
Discount at 13%
Present Value
0.8850
0.7832
0.6932
0.6134
0.5429
0.4805
0.4252
0.3763
0.3330
0.2947
0.2608
0.2308
0.2043
0.1808
0.1600
0.1416
796500.00
775392.75
754844.84
734841.45
715368.16
696410.90
677956.01
659990.18
642500.44
625474.17
608899.11
592763.28
577055.06
561763.10
546876.37
532384.15
10499019.97
IRR
Years
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
CashFlows
900000
990000
1089000
1197900
1317690
1449459
1594404.90
1753845.39
1929229.93
2122152.92
2334368.21
2567805.04
2824585.54
3107044.09
3417748.50
3759523.35
Discount at 18%
Present Value
0.8475
0.7183
0.6087
0.5159
0.4372
0.3705
0.3140
0.2661
0.2256
0.1912
0.1620
0.1373
0.1164
0.0986
0.0836
0.0708
59
762750.00
711073.69
662898.45
617987.08
576118.45
537086.43
500698.82
466776.48
435152.37
405670.80
378186.60
352564.46
328678.22
306410.27
285650.97
266298.12
7594001.18
CONTINGENCY PLAN
Green Land Manufacturers will need to rely on its quality of service and being
first in the market to protect its market share. For this we do extra ordinary promotional
efforts to make consumers aware of our product, to create a positive image of our
product and to have maximum of loyal customers
HARVESTING STRATEGY
Exit Strategy
If we face any hurdles or crisis in future business then we will adopt Joint Venture with
TAPAL Tea (Pvt) Limited because our share remain in business and we will got a strong
shelter which already has a strong image in Pakistan.
Insurance
Our insurance company will provide a strong back up in case of business closing or
changing its shape. As above it is mentioned that joint venture is an exit strategy in case
of that our insurance company will pay full banks loan.
Finance
As our finical plan shows that our sales forecasting and our Owners Equity is a backup
of us in case of any crisis.
Employees
We signed a contract with our employees of 6 months. So in case of any serious
conditions we can fire any employee our employees.
60
Appendix
MARKETING PLAN APPENDIX
Our Advertising campaign will pass through five stages
STAGE 1: SETTING THE ADVERTISING OBJECTIVES
We would have specific objectives regarding our advertising campaign which we would
feel the need of the time at the time we shall start our advertising. Our advertising
objectives will fall into three main categories:
TO INFORM e.g. to tell customer about my product and its features.
TO PERSUADE e.g. to encourage the customers to switch to a different andbetter
brand.
TO REMIND e.g. to remind the buyers that where they can find my product in the
market.
STAGE 2: SETTING THE ADVERTISING BUDGET
As we are launching a new product in the market, thats why, in start we would need
heavy investment on the advertisement because we first will have to create an image in
the minds of our potential customers. We not consider advertisement as our expense but
investment. For such a heavy investment we would also need heavy budget. We would
set our budget and would make required calculations before starting the advertisement
campaign and will conduct feasibility study.
When in the future we would be launching new product lines then our advertisement
budget would not be much heavy because at that time our image would have been created
in the minds of our potential customers and they would just welcome my product. We
would have to just inform them at that level that we have enhanced our product line.
Advertisement for that will not have heavy budget. But we will also calculate it before
time.
It would be really difficult for us to judge before time that how much expenses we would
have on the advertising campaign. For that, we shall use a rule-of-thumb"
61
(e.g. advertising/sales ratio) as a guide to set the budget. Means we shall estimate our
sales or would see sales of previous years and would spend on advertisement with respect
of the sales volume of particular product.
STAGE 3: DETERMINING THE KEY ADVERTISING MESSAGES
We believe that blindly spending on advertising do not guarantee success.
More important is your advertising message that your aim is to deliver to the customer.
Advertising must be done in a manner that your target customers must be addressed and
for that no heavy advertisement is required as such. We would also focus on carefully
designed message and not on such spending over. Our advertising message would have
the following characteristics:
MEANINGFULL: Our advertising message would be meaningful and customer
would feel it to be relevant.
DISTICTIVE: It would be designed in a manner that can attract the customers or
minimum can get their attention.
BELIEVABLE: Our advertising message would seem to be believable and not such
that customer feels just impossible to be. It is really a difficult and challenging job to
create such an advertising message but we have worked hard on it and would manage it.
STAGE 4: DECIDING WHICH ADVERTISING MEDIA TO USE
There are the varieties of advertisement Medias from which we can make
selection. But we would use such a media or media mix which would be more
appropriate for advertisement of our specific product. We would see the key factors while
choosing advertising media include:
RESEARCH: We would do research that what proportion of our target customers will
be exposed to our advertising message.
FREQUENCY: Research will also tell us about the frequency or number of times our
target customers will be exposed to my advertising message?
MEDIA IMPACT: We would also see that which media would be appropriate for our
product to be advertised which would have much impact on the customer. For example,
62
television ads or billboards or newspaper ads, which would be better for advertising our
product that will have more impact?
We would probably use the following medias for my advertising whichever we would
feel the need of time and my product to be advertised:
Television
Radio
Billboards
Transport
Direct mailing
Mail Promotion
Which Media we will use in the Start
We will use the strongest media of NEWSPAPER and CABLE in start of our business
and launching the product as the newspaper is read by most of people in our community
and cable is now days very common in the homes and shops of the customer. Thats why
I have selected such a media and it will help the customer to be familiar with our product
STAGE 5: EVALATING THE RESULTS OF THE ADVERTISING
We would also evaluate our advertising campaign on the routine basis and it will focus
on two key areas:
COMMUNICATION EFFECT: We would see whether the intended message is being
communicated effectively and to the intended audience?
SALES EFFECT: We would also see whether our campaign has generated the
intended sales growth. This area is much more difficult to measure but would be
beneficial for us to measure.
63
64
Partnership Agreement
This Partnership Agreement is made on 31 May 2010 among Nine Partners of Green
Land Manufactures.
Name and Business
Parties hereby form a partnership under the name of Green Land Manufactures to
produce Instant Tea. The principal office of the business shall be Saddar Bazaar Gulam
Muhammad Abad shop # 165 commercial market.
Term
The partnership shall begin on 31 May 2010, and shall continue until terminated.
Capital
The capital of the partnership shall be contributed in cash by the partners as follows:
Upon the demand of either partner, the capital accounts of the partners shall be
maintained at all times in the proportions in which the partners share in the profits
and losses of the partnership.
65
Interest
No interest shall be paid on the initial contributions to the capital of the partnership or on
any subsequent contributions of capital.
Management Duties and Restrictions
The partners shall have equal rights in the management of the partnership business, and
each partner shall devote their entire time to the conduct of the business. Without the
consent of the other partner neither partner shall on behalf of the partnership borrow or
lend money, or make, deliver, or accept any commercial paper, or execute any mortgage,
security agreement, bond, or lease, or purchase or contract to purchase, or sell or contract
to sell any property for or of the partnership other than the type of property bought and
sold in the regular course of its business.
Banking
All funds of the partnership shall be deposited in its name in such checking account or
accounts as shall be designated by the partners. All withdrawals therefrom are to be made
upon checks signed by either partner.
Books
The partnership books shall be maintained at the principal office of the partnership, and
each partner shall at all times have access thereto. The books shall be kept on a fiscal year
basis, and shall be closed and balanced at the end of each fiscal year. An audit shall be
made as of the closing date.
Voluntary Termination
The partnership may be dissolved at any time by agreement of the partners, in which
event the partners shall proceed with reasonable promptness to liquidate the business of
the partnership. The partnership name shall be sold with the other assets of the business.
The assets of the partnership business shall be used and distributed in the following order:
to pay or provide for the payment of all partnership liabilities and liquidating expenses
and obligation;
66
67
Arbitration
Any controversy or claim arising out of or relating to this Agreement, or the breach
hereof, shall be settled by arbitration in accordance with the rules, then obtaining, of the
American Arbitration Association, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof. In witness whereof the parties have
signed this Agreement.
________________________
68