fawad

Rice krispies

Project:

Rice Krispies

By:

Group Seekers

Name Reg#

Iltaf Hussain MB083002

Rafiullah khattak MB083032

Zeeshan Ahmed MB083023

Muzzamil Munawar MB083030

Zain-ul-Hassan MB083037

To:

Aarif Vaseer

Date: 28-01-2010.

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Product.

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Dedication

With the name of “Allah”, the most beneficent and merciful who gave us strength and

knowledge to complete this research. This report is a combine effort of Seekers group. We would

like to dedicate this study to our parents without their prayers and kindness we might not

complete this project. This time we would like to express our gratitude to our teacher Mr.Aarif

Vaseer, who gave us this opportunity to do this report. He gave us helpful comments in every

step of our project.

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Acknowledgment

1st of all we are thankful to Almighty ALLAH who has given us the abilities to do hard

work to perform well. We be indebted a special debt of gratitude to our generous parents. We

also would like to thank our friends they help us a lot in finding the data and how to work. An

appreciation to Mr.Aarif Vaseer who gave us a chance to do a project on Launching of Product

in Pakistan market. Although it was a big challenge for us to launch a product in Pakistani

market because it’s very hard when it comes practical and it was also due to the competitors

pressure in the market but we never go back and face the challenges in very short times. We are

thankful to the teacher also for teaching us with such zeal and vigor to enable us to present our

thoughts and ideas in an arranged manner.

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Introduction Rice Krispies (known as Rice Bubbles in Australia and New Zealand) is a breakfast cereal that was created by Clayton Rindlis bacher for the Kellogg Company, and later marketed by Kellogg's in 1927 and released to the public in 1928. Rice Krispies are made of crisped rice (rice grains that are cooked, dried and toasted), and expand forming very thin and hollowed out walls that are crunchy and crispy. When the cereal is subjected to a change in heat, the walls tend to collapse, creating the famous "Snap, crackle and pop" sounds.

Rice Krispies cereal is widely known and popular with a long advertising history, with the cartoon characters Snap, Crackle, and Pop touting the brand. In 1963, The Rolling Stones recorded a short song for a Rice Krispies television advertisement. Rice Krispies are also an important ingredient in Rice Krispies treats made by combining the cereal with melted marshmallows.

It is a healthier product and widely used in Australia and New Zealand. It contain high amount of nutrition’s that’s why people prefer its purchasing than other cereals. It attracts the children’s towards itself because they are providing more packages, taste, flavors etc. it is also used by the older peoples and all other people because they knew that using these types of product is very beneficial to health due to high containing of nutrition’s.

Customer’s analysis:

For our product the following will be the customer’s analysis.

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Who will be our customers?

The customers will be kids under 18 and also old people. For that purpose we are launching our product name as Rice Krispies. It’s a breakfast cereal mostly used by children’s and old peoples in their breakfast because they love to eat these types of product and specially kids mostly used this product they demand in new packages new taste and new flavors in the product. And these types of product are very much beneficial for the kids because their bones are getting stronger by eating and taking breakfast daily with good things of eating.

Who will use this product?

The kids under 18 and old people will use this product because it is very healthy to their health. And there are also other people who are using this product to get nutritious because calories are required to health they take in breakfast and prepare their self for whole day work. Without taking breakfast you cannot do work perfectly, not accurately.

What are their unmet needs?

Their unmet needs are to find good things for their health which contains some nutrition’s and calories they loose whole day to fulfill those requirements. Everybody wants that he/she should eat healthy product which give benefits to their health nor to give harm to health.

Competitor’s analysis:

Competitors are always playing good role and sometimes it is a major threat for no success of product in future market.

Existing Competitors

The existing competitors for our product is

1. Nestle cereals

2. Fauji cereals

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Last 5 Years Profit / Turn Over (PKR million) of Fuaji cerals.

Year Total Assets Net Worth Turn Over Net Profit / Loss2001-02  119  35  99  172002-03     151  46  106  272003-04     165  45 111  232004-05      78  52  117  30 2005-06      98  47  123  31 2006-07 135 51 142 35

Fauji Products

Product Year of Introduction        

Corn Flakes 1957Wheat Flakes 1960Rice Flakes 1960Jelly Quick Set 1962Wheat Porridge 1964Pearl Barley 1964Custard Powder 1970Corn Flour 1979Rice Flour 1990Barley Porridge 1995Laundry Kalaf 1999Instant Porridge 2001Honey Corn Flakes 2001Honey Corn Pops 2001Choco Corn Pops 2001Kheer Mix Special & Khoya 2005Choco Corn Flakes 2005Choco Rice Krunchies (Flakes)

2005

Fauji Frootooz 2006

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The Nestle growth and Market shares:

The Nestle has 70 to 80 percent market shares and they are exporter to major countries of the world like UAE, Afghanistan, Bangladesh, and New Zealand.

And they have also won the international food award of 2005. Now they are ISO, 9001-2008 certified.

SWOT Analysis Nestlé

Strengths

Global food producer, located in over 100 countries. Consistently one of the world's largest producers of food products, with sales in the USA in 2008 of $10 billion; sales and earnings in 2008 were better than expected, even in a downturned economy. Global sales in 2008 topped $101 billion.

Repeatedly ranked as the world's largest bottled water company and have set up facilities to operate water resources in a responsible manner.

In 2008, Nestlé was named one of "America's Most Admired Food Companies" in Fortune magazine for the twelfth consecutive year.

Nestlé provides quality brands and products and line extensions that are well-known, top-selling brands including:

Lean Cuisine, Yoplait, Maggi, Dryer's/Edy's, Haagen-Dazs, Stouffer's, Boost, Dibs, Hot Pockets.

Chocolate and Candy: Kit Kat, Toll House, Butterfinger, Baby Ruth, Crunch Bar, the Willy Wonka Candy line.

Pet Products: Purina, Alpo, Cat Chow, Fancy Feast, Friskies, Tidy Cat. Drinks: Carnation, Perrier, Nesquik, S. Pellegrino, Nescafe, CoffeeMate, Taster's Choice,

Juicy Juice. General Mills: subsidiary which makes Betty Crocker, Bisquick, Hamburger Helper,

Pillsbury, Old El Paso, cereals, fruit snacks, frozen pizza, canned soups, frozen vegetables, ready-made frozen meals.

Gerber: baby formula, prepared baby foods, baby cereals, water, juice, yogurt, foods for infants, toddlers and preschoolers.

Professional brands sold to restaurants, colleges, hotels, and food professionals including Jenny Craig meals, Impact liquid meals for trauma patients, liquid meals for diabetics, and OptiFast weight loss products.

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Successful due in part to their unquestionable ability to keep major brands consistently in the forefront of consumer's minds (and in their shopping carts) by renovating existing product lines, keeping major brands from slipping into saturation/decline and having superior access to distribution channels.

Weaknesses

Their LC-1 division was not as successful as they thought it would be in France. In the late 1980s, Dannon entered the market with a health-based yogurt, and become the top selling brand of yogurt; Nestlé's 1994 launch was behind the product life cycle curve in an already mature market and could not compete against a strong, established brand.

Growth in their organic food sales division was flat in 2008, even though the industry grew 8.9%.

Since 2004 the breakfast cereal industry has been under fire from the FDA and the American Medical Association, both of which say that false claims of "heart healthy" and "lower cholesterol" need to be removed from packaging and advertising. They have also been forced to reduce the amount of sugar in their products, as parent's advocates groups claimed they were contributing to the diabetes epidemic among American children.

General Mills is an experienced, established brand and are the market leader in the USA, however, they have been lacking in innovation, have not cashed in on the booming health food craze and have been behind in creating new, niche products, especially in their yogurt division, where Yoplait is the only brand making a profit.

In 2008, although their products did not carry the recalled pistachios, several of their ice cream brands, Dryer's, Edy's and Haagen-Dazs, were still plagued with bad PR and loss of sales.

Opportunities

In today's health conscious societies, they can introduce more health-based products, and because they are a market leader, they would likely be more successful.

Provide allergen free food items, such as gluten free and peanut free. They launched a new premium line of higher cacao content chocolates dubbed Nestlé

Treasures Gold, in order to cash in on the "recession economy" in which consumers cut back on luxury goods, but regularly indulge in candy and chocolate. Americans want luxury chocolates, and high-end chocolate is immune to the recession (so far), because it is an inexpensive indulgence.

Opened Nestlé Café's in major cities to feature Nestlé products.

Threats

Any contamination of the food supply, especially e-coli. Their Toll House brand cookie dough was recalled in March of 2009 because of e-coli. Outbreaks were linked to 28 states and the product had to be recalled globally. Nestlé has yet to find out how this happened, and is still investigating.

They were affected by the pet food recall in 2007, in which 95 different brands of dog and cat food was recalled due to contamination with rat poison. Also in 2007, FDA learned that certain pet foods were sickening and killing cats and dogs. FDA found contaminants in vegetable proteins imported into the United States from China and used as ingredients in pet food.

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Raw chocolate ingredient prices are soaring; dairy costs alone rose 50% in 2008, this cuts heavily into their profit margins and often gets passed on to consumers, by shrinking the packaging in a way that is almost unnoticeable-therefore the consumer is paying the same prices for less product.

They have major competitors, like Hershey's, Cadbury-Schweppes (owned by Pepsi), Lindt and Ghirardelli, Kellogg's, Post, Starbucks, Beech-Nut, Quaker, Kraft Foods, Dannon, Del-Monte, Iams, Earth's Best, Heinz, Frito-Lay (owned by Pepsi).

Nestle vision and strategies

The Nestlé global vision is to be the leading health, wellness, and Nutrition Company in the world. Nestlé Pakistan subscribes fully to this vision. In particular, we envision to:

Lead a dynamic motivated and professional workforce – proud of its heritage and bullish about the future.

Meet the nutritional needs of consumers of all age groups – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products of the highest quality.

Deliver shareholder value through profitable long-term growth, while continuing to play a significant and responsible role in the social, economic and environmental sectors of the country.

We have profitable and diversified high quality food and beverage product portfolio, delivering 60:40+ advantage to consumers, available across all sales channels.

Our brands are the preferred choice in their categories. Consumer insight drives all aspects of our marketing and communication efforts.

Our communications to the consumer are relevant, cutting-edge, and adhere to the highest standards of responsible communication.

Our company is seen as the No. 1 career destination for talented, motivated and ambitious professionals.

Our result-oriented organisational structure ensures effective communication and empowered self-management.

Our milk collection and agri services will continue to play the primary role in development of the dairy sector in rural Pakistan.

Our proactive innovation and renovation culture is the key to our success in the marketplace.

Fully integrated systems (Nestlé Pakistan, suppliers, customers) ensure efficient business processes.

Non-strategic activities and products are outsourced or discontinue.

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Growth trend of Fouji cereals:

Wheat & Barley Porridge

Fauji Porridge have been prevalent in the domestic market for over 4 decades   and are  now the market leaders in this segment of the category due to genuine  consumer  preference  alone. in a market segment   dogged   by a multitude of unbranded or cheaper brands offered by backyard  manufactures, Fauji Porridge drives the category growth with a market share of over 65%.

The best    Wheat   and   Barley   is selected during Fauji's uniquely scientific and hygienic process to ensure less cooking/ preparation time   for   consumers. It   makes  for  a  delicious ,  nourishing  and energizing meal that can be consumed at any time of the day. Add some milk , cream   and   sugar for an irresistible taste. Soups can also be made more savory by adding Fauji Porridge to them. It is the best nutritive meal for children, the convalescent and is a solid food for babies over the age of four months.

Market Analysis:

The market analysis is the following for our product.

Market size: we will first sale our product in the market

Product segments: the best-selling kids’ cereal brands and also for old people.

Market share: competition is heating up in this market as flat sales and low-price.

Market Forecasts: the kids’market has been growing at a rate of more than 15% a year, for the 5 to 7 years and shows no sign of slowing through the end of the decade. Growth in the overall kid’s food market was driven, to the largest extent, by gains in cereals.

Marketing/promotion: We will advertise our product through banner, panaflex also we will make broachers and especially we will focus on kid’s variety. We will ensure kids variety and provide them lots of fun and different packages.

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Environmental threats: Nestle and Fauji cereals are major threats to our product because they are already present in the market and providing low price and good quality products. They attract the customers by giving those best packages, better taste and more.

Opportunities: There are vast varieties of opportunities. Those are that our competitors are providing product but in their products there are less number of nutrition’s by this we will make customers by providing them high nutrition’s because everybody wants that they get healthy products for their health.

Trends exist: We first launch our product in the market and then we will increase our sale day by day according to market conditions. For the first time we will provide sample to make ensure our customers about our products.

Political factors

The main political factors in this industry are employment laws, Food and Drug Administration laws, and freedom of business practices in the Pakistan, trade regulations in the Pakistan and other countries and the global code of ethics. Employment laws affect the company in that they differ in different countries, and the company must adapt its wages and hours to fit these regulations. The company can add value by manufacturing its products in areas where the cost is the least for labor. The manufactured product must also meet FDA regulations, which is a political factor in that all the products must meet certain quality levels, levels that change due to which country the food is being sold in, such as regulations that are different in different countries. Trade and tariff laws also affect Kellogg's because it operates internationally, and must meet international market regulations keep in mind the logistic costs involved in the movement of the cereals and other goods between borders.

Economical Factors

Exchange rates and inflation Exchange rates largely affect Rice krisphies because of its products which are sold in other countries, and the better the exchange rate, the more profit is earned. Inflation rates affect Rice krispies the most, because it is basically a low-cost product, and consumers buy it as such. Inflation means consumers buy less of the products, because they have less money to spend.

Sociological factors

Rice krispies must study lifestyle trends such as the demand for sugary products versus organic ones, quality products versus cheap ones, and which promotional techniques will be most effective to the niche which they are targeting. To add value to their company this is one of the most important factors because it determines on who buys their product, and how often.

Technological factors

Rice krispie is affected by many technological factors in the logistics of how it moves its products, keeps tracks of its accounts, and even manufactures its cereals. New technology and shipping companies such

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as UPS make it easy for cereals and other products to be shipped globally, and manufactured where the rates are cheapest.

We should develop strategies to improve access to existing technologies to reduce our cost and to offer a reasonable price to our customers.

Ensuring the development of new technologies in areas where the market is failing.

We should adopt cost-effective new technologies in order to minimize our cost and to remain Rice krispie remaining at cutting edge by offer a minimum cost.

Internal Analysis

Level of investment:

We will invest Rs.30,00,000.

Cost price:

Our cost price will be 150.

Product unit:

20,000

Sale price:

We will sell our product in the market for Rs.200 each.

Incomes :

400,000.

Our cost is 150 per 9 oz (255 g). And we will sale in the market for Rs.200.

Strategies:

For promotion of our products we will first import the product from new Zealand and also from Australia. Then we will launch the product in Pakistani market for that purpose we will use different channels to make availability of product.

Performance:

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We will make availability of product in the market and provide quality product as compare to our competitors. We will provide fun to kids. We will provide best packages and different taste and flavours.i.e chocolates, honey. Also we will provide recepies to families to make those specific products in homes also.

Point of differentiations:

Our product is different from our competitor’s products because our product contains more nutrition’s and calories that are very much useful for the children’s and also for the old people. Our products contain lots of packages and flavors, taste.

Strength:

Our products contain more nutrition’s that is very much useful for the kids as well as older people health. This is our main strength due to which we will survive in the market in future. We are also ensuring quality product. We will be known for our quality product.

Weaknesses:

Our core weaknesses are that we are new in the market and our product is not available and also we are facing some problems about distribution of products. No such advertisement exists.

Strategic problems and cultures:

Culture varies market because some people dislike these type of product and they donot want to use that type of products. Especially in village there is no known how of these products that’s why they are not using it. If somebody tell them.

A portfolio of strong brands of Kellogg’s:

Ready-To -Eat Cereal Our commitment to brand building and innovation has Made Kellogg the world’s leading cereal maker, with a large family of beloved Brands that includes Kellogg’s,

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Kellogg’s Corn Flakes, Froot Loops, Kellogg’s Frosted Flakes, Kashi, Frosted Mini-Wheat’s, fro sties, Special K, Crispix, Zucaritas, Kellogg’s Raisin Bran and Rice Kris pies.

TOASTER PASTRIES AND Wholesome e Portable Breakfast Snacks:

Today’s busy consumers want a broad selection of foods that are tasty, nutritious and compatible with an on-the-go lifestyle. Kellogg fulfills these needs through an assortment of breakfast bars, healthy snacks and other non-meal options from a variety of our brands, including Nutri-Grain, Special K, Kashi and Pop-Tarts.

Cookies and Crackers:

Our cookie and cracker business offers a growing assortment of great-tasting products for snacking and entertaining from a host of well-known brands, including Club, Townhouse, Cheez-It, Sandies, Famous Amos and Fudge Shoppe.

Natural, Organic and Frozen:

Our natural, organic and frozen food lines Offer an extensive selection Of quick, delicious and health-conscious meal solutions For any time of day. Eggo leads the frozen breakfast category By offering hot breakfast solutions that are ready in minutes,m While Morningstar Farms leads the meat-alternative category, Offering a variety of great-tasting veggie foods. Our Kashi Line of natural frozen entrees and crispy crust pizzas. is one of our fastest growing businesses.

Strategy development

We will launch our product in all over Pakistan. For this purpose our investment level will be

The investment level of Rice Krispies 30, 00,000

Per unit price =150

Total units =20,000

Marketing & admin expense =600,000

Selling price =200

Profit =400,000

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Milking strategy

We have limited time and we have to launch it in 3 weeks. For this purpose we will sell 20,000 units with the cost of 30, 00,000 and our profit will be 400,000 after that we will invest again some portioning of our profit into the business for further expansion. First we will launch this product throughout in Pakistan and after taking the responses from different customers we will enlarge or expand operations in different countries.

We have targeted the kids under eighteen and older people and we are providing quality products to our customers and it contain high amount of nutrition calories as compared to our competitors.

Value proposition

We are making unsubstantiated and misleading claims in advertising on Rice Krispies boxes. The Rice Krispie Claims made by the company included "now helps support your child's immunity" and "has been improved to include antioxidants and nutrients that your family needs to help them stay healthy. It attracts our customers. It is our core offering to our customers as compared to competitors. Our product Rice Krispies is guaranteed this means if a customer is not satisfied with a product, that they are able to obtain a full refund.

Alternative Functional Strategies

In the case of failure of our marketing plan when we fail to achieve our target sales, we have a contingency plan that is we should start Rice Krispie shops first in Islamabad and than in other cities. We do not stop sailing Rice Krispies. Through this we can attract people to our Rice krispies. Through providing a quality Rice Krispies in our shops.

Main purpose of introducing our Rice krispies shops is to take attention of people to our newly introduced Rice krispies.

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Porter’s Five Forces

Forces analyze a company by addressing which suppliers, buyers, barriers and substitutes in its given industry.

Suppliers

Kellogg is a major corporation which sells brand name Rice krispies cereals, snacks and a few other products. This means is must have a great deal of raw materials with which to make its products. To make its Rice krispies, the main product which the Kellogg’s brand name is known for, it has suppliers for raw ingredients such as grain, Rice, sugar (glucose and fructose), salt, malt (corn flour, malted barley) , sucrose, and dairy products. It also has suppliers who provide the packaging such as cardboard boxes and plastic bags, and suppliers such as David Michael who provide flavorings and colorings to the cereal making process. They also must have labor supplies, processing and packaging equipment, and things that provide sanitation, refrigeration and waste removal.

Buyers

Buyers are key component to the industry of cereals and Rice krispies, which Kellogg’s competes in. Kellogg mostly sells in bulk to wholesalers and retailer stores such as super markets. Then individual packages from those stores are bought by individual customers from a wide segment of people who are brand loyal to one or two certain types of cereals based on demographic and psychographic segmentation aspects. Kellogg must be constantly aware of what the individual customer is likely to buy more of, or how to update its products to meet new trends, such as the demand for healthier, whole-grain cereals within the same brand that the customer is loyal too.

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Substitutes

Since Rice krispies is in the food industry, there are dozens of other substitutes with which it competes. Other cereal companies such as Nestle cereals and Fauji cereals, and since the switching price for the customer is so low -just walk over to a different section of the shelf- it is very constant competition. A customer may also just choose not to buy cereal, or they may have regularly changing preferences as to which cereal or snack food they buy.

New Entrants

The barriers specific to the Rice Krispie product are ones of low product cost due to cereals being sold in bulk, the high number of different products, the product mix and economies of scope, and the maturity of the cereal industry in its product age and brand loyalty of its consumers.

Industry Competitors

In market there are many competitors. We will face lot of road blocks in our launching the product in the market. We will remove that road blocks and overcome the market and become market leader because we are providing more healthy and quality product to our customers.

Value Chain Analysis

Supplier End

Inbound logistics are a critical part in supply chains that involve manufacturing and getting all the required parts and raw materials in the right order, the right quantity, the right quality and the right time to the manufacturing and assembly plants. In the process of finding the most cost-effective ways to organize these very complex logistics activities, inventory levels are being reduced and technological advances are put to use to provide a way to see the location of all parts moving to the plant at any given time.

Transportation and warehousing are a big part of most inbound logistics chains, but Kellogg’s service portfolio goes beyond this. Quality control is assured to guarantee that Kellogg's is manufacturing products with safe, healthy, and flavorful. Many of Kellogg’s standards are even stricter than those required by the government. Kellogg's Quality Assurance workers often visits suppliers’ plants to assure that proper sanitation procedures are being followed and that the raw materials they supply meet Kellogg’s specifications.

Operations and manufacturing is the next critical step along the value chain. Sub-assembly is the assembly of a component from individual parts before onward distribution. Sub-assembly services can be found in the electronics, automotive and fast moving consumer goods industries. These provide a cost

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efficient solution for customers. Inventory planning is used in order to maintain optimal stock for the required level of service with minimal cost and Kellogg's tightly controls inventory flows by using the latest and most innovative warehouse management systems. Line replenishment ensures that the right material is available at the right place when it is needed on the production line. Kellogg’s packaging techniques are designed to help maintain nutrient levels, freshness, and flavor. Packaging protects products during handling, shipping and storage. It also provides important consumer information. Packages are made from various materials that are selected after extensive testing. Moisture and/or air permeability, the effect of aging and various storage conditions on product protection, and consumer acceptability are key factors in selecting packaging materials.

Forward End

After-market logistics and service is one of the most important steps for Kellogg’s. Normally, one would not think a cereal company would need such a thing, but the truth is that is what makes Kellogg’s a household favorite among families. Kellogg’s customer service is remarkable. All of Kellogg’s products are “guaranteed,” this means if a customer is not satisfied with a product, that they are able to obtain a full refund.

When Kellogg started manufacturing his original rice krispies, he had a goal: to provide his customers with a high-quality, nutritious product that was enjoyable to eat. Today, Kellogg's Company still follows this basic idea – “every Kellogg employee has a responsibility for maintaining the high quality of Kellogg products.” It is plain to see that Kellogg’s strives for simplicity. They stop processes, procedures and activities that will slow the company down or will not add value. This is important to the company as well as its customers. It assures that results will be greater in the long run and operations will run smoothly.

Supply chain

Indirect distribution

Agent Wholesale Retailer Customers

Direct distribution

Sales person Customers

We are launching a new product that’s why we will adopt all the distribution channels as shown in the figure. Because at the initial stages of product life cycles if the product is difficult to available to its customers they switch off to the substitutes. References:

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http://www.faujicereals.com.pk/home.html http://www.cerealpartners.co.uk/ http://www.ricekrispies.com/#/Default http://www.beliscity.com/grocery_store_grocery_gourmet_food_breakfast_foods/

c2056_2068_2075/p28048/fauji_cereals_corn_flakes_450g/product_info.pakistan.html http://www.beliscity.com/grocery_store_grocery_gourmet_food_breakfast_foods/

c2056_2068_2075/p28048/fauji_cereals_corn_flakes_450g/product_info.pakistan.html http://www.ricekrispies.com/recipes/the-original-treats.aspx#/recipes/the-original-

treats http://en.wikipedia.org/wiki/Rice_Krispies

http://www.ricekrispies.com/recipes/peanut-butter-treats.aspx#/recipes/peanut-butter-treats

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