Transcript
GRENADIERCHOCOLAT
ECOMPANYLIMITED
Group 3
INTRODUCTION
Mr. Ronald Begg is an ex-employee of :P&G – brand managerFrito Lay – National Sales Manager
He now wanted to start his own company and after several trials and thought process and looking at available finance the eventual choice was a new, milk modifying, instant chocolate syrup for household use.
The product was given the name MilkMate.
SYNOPSIS
Chocolate is the dominant flavour, estimated to account for about 80% of total sales.
The competition powdered Milk Modifiers had low solubility, were difficult to mix, and often left a residue in the glass after drinking
The new liquid form of product – dissolves instantly & completely
Market researches on Milk Mate gave positive results which gave Mr. Begg encouragement to go for the product
Nestle
50%
Hershey20%
Cadbury10%
Other Small Regional Brands
20%
CURRENT MARKET SHARE
Pricing and positioning strategies were worked out keeping in mind the competitors
Investment and working capital figures were chalked out and banks gave a nod provided the viability of product as well as business was there.
Mr. Begg wanted to find a space here where he could combine a small scale product with multi-national marketing techniques.
The biggest catch was that big multinationals could manage huge brands but not small ones , Canadian companies could manage small brands, but are reluctant to invest in marketing and promotion support programs.
SYNOPSIS
To master a particular market requires experience & additional learning
Broaden to Generic Mktg
concept
Mktg Mgmt
Formulate Problem
MR
Determine Research
Design
Design Data Collection
Competition
Offering
Markets/Publics
Diffussion, Adoption & Innovation
Corporate Strategy
&allocation
Strategic marketing Planning
Configuration (Product)Facilitation (Distribution/place)
Valuation (Price)Symbolisation(Promotion)
Durables
FMCG
B2B
Govt Mktg
Retail
International Mktg
Rural Mktg
Social Mktg
Exchange
COMPETITION OF MILKMATE
Which brand?
Milk Mate Powder
Liquid
What from of milk modifier do I go for?
How do I want my milk?
What desire do I want to satisfy?
HoneySugarPlain milkTeaCoffee
Milk Modifier
Coconut WaterJuice
Milk
EnterpriseCompetitors
FormCompetitors
GenericCompetit
ors
DesireCompetitors
SEVEN DECIDING CRITERIA
Market Penetration Vs Market Skimming
Selling Price
Trade Margins
Advertising and Promotion
Supply Chain : Retail Distribution
Company salesmen Vs Sales Agents
Regional distribution Vs National Distribution
MODIFYING A HABIT
Form of existing product: Powder
Form of new product: Liquid
Methods to bring about the change in consumer mindset:Produce a relevant benefitLiquid that dissolves instantlyNo need of refrigeration
MARKETING MIX
Product: Suits the market and comprehensive testing was carried out to come down to final formulation.
Price : Market leaders were making losses ($1) per case because of rise of prices of sugar, essential ingredient in the product.
Advantage to companyCost of ingredients, packaging, manufacturing, distribution lower than competitionLess Raw Material (Sugar) requirement: reduced costCost reduction of 10 – 20 %
Distribution
Company salesman v/s Salesman on commission
Salesman commission : 3 to 10 %
Retailers Expectations : 20 % Margin ( margin given by existing players 18 %)
Communication
Focus on ONTARIO and QUBEC
Efficient advertising: Advertisements on 16 Channels
Promotion: Cents-off coupons
Constraints
Limited resources
Entire dependence banks for funding
MARKETING MIX
PROJECTED MARKET SHARE
Total Market Size : 23 million poundsPer pound revenue: 0.99$
Total market (units million
pounds)
Expected market
share (%)
Expected market(units million
pounds)
Revenue (Million
$)
25.30 15 3.79 3.75
27.83 25 6.95 6.88
30.61 35 10.71 10.60
33.67 45 15.15 15
37.03 50 18.51 18.32
Total 55.31 54.76
PROGRAM OFADVERTISING & PROMOTION
Year 1: Extensive PromotionTELEVISION:
ON CBC NATIONAL NETWORK: Class AA Time (Prime) 1 Ad @ $4775 for 180 days
ON CBC MID EASTERN REGIONClass B Time (Noon to 6:00pm Weekdays) 1 Ad @ $2303 for 180 days
MAGAZINES: CANADIAN MAGAZINE (NATIONAL EDITION) - HALF PAGE $7960 for 26 Weeks
NEWS PAPER:Toronto star $2.7/line x 15 lines for 26 weeks (once every 2 weeks)
TOTAL - $ 1,482,053
PROGRAM OFADVERTISING & PROMOTION
Year 2 to Year 5TELEVISION: ON CBC MID EASTERN REGION
Class B Time (Noon to 6:00pm Weekdays) 1 Ad @ $2303 for 365 days (Everyday for 4yrs)
TOTAL FOR YEAR 2 TO YEAR 5 $336237
Total Advertising Cost for 5 years plus 10% interest on bank loan (assumed) for 5 years is $7,802,001
ADVERTISING &PROMOTIONAL EXPENSES
Advertising Cost: $7820001Promotional Expense: $15000Special Promotional Material: $25000 Total: $7,842,001
Total No. Of cases Sold : 4.6 Million Cases (ie 55.31 million units)
Advertising and Promotional Expense Per Case : $1.70
SELLING PRICE & TRADE MARGINS
* Cost per case (12 packs of 1 pound each)
Particulars Nestle ($)*MilkMate
($)* Ingredients 7.25 6.16 Packaging 0.75 0.64
Manufacturing 0.5 0.425 Distribution 0.5 0.425
Selling Expenses 0.5 0.5 Advertising &
Promotion1.5 1.70
Total Exp. 11 9.85 Selling Price to
Retailer11.5 11
Profit/Loss 0.5 1.15
PROFITABILITY OVER 5 YEAR PERIOD
Overhead Expenses : 50000x5 = $250,000
Initial Investment : $25,000
Total Expense For 5 Years
Variable Cost : $45,310,000
Fixed Cost : $275,000
Total Cost : $45,585,000
Sales (Units) : 4,600,000
Sales ($) : 4600000x 11 = 50,600,000
Overall Profit : $5,015,000
THANKYOU
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