Vita - new product

A

Group 3

Initiative

Vision Statement

• An easy to make solution for the constantly moving population.

Mission Statement

• To enter the market of portable health drinks and to become market leader by 2015.

• To help the underdeveloped countries get rid of malnutrition.

• To promote an easier and healthier lifestyle.

Strategy

The heart and soul of our business lies in our customers. As long as they are satisfied , it ensures our growth. So our basic strategy is to continuously innovate in order to meet the ever-changing demands. We will always try to maximize value for our customers. The aforementioned strategy will help us maintain an upper hand in the market.

Marketing MIX

The 4 P’s

• Product (unique selling points)

1. Portable.2. Nutritious.3. Easy-to-make.4. Tasty.

The main USP is that you get all of these features in one single product.

Product Life Cycle

• The product according to us is in the market introduction stage. So there is minimal competition and high initial costs and the demand has to be created by us primararily.

• Packaging

Packaging is of prime importance as it is an edible product and no deterioration can be tolerated. Also proper information about ingredients and all other important stuff such as expiry date needs to be there on the packaging as people have to consume the product.

In the underdeveloping markets less fancy packing will be used in order to provide those product at the lowest possible cost.

Eco friendly plastic

• Green Plastics, sometimes also called Bioplastics, are plastics that are biodegradable and are usually made mostly or entirely from renewable resources.

• We will be using green plastic for our packaging in order to reduce the social costs of our operations.

Price (pricing strategies)

1. Low per unit cost.

2. Easily affordable.

3. Pricing objective is profit maximization as this is a relatively new market and competition is minimal.

4. The pricing method used will be cost-plus pricing.

5. Price floor will be the cost of variable inputs and price ceiling will be determined according to the demand.

6. Discounts to be given on bulk purchases.

• Price discrimination:- We will follow price discrimination as our products are going

into two very different markets.

For the developed markets we will follow price discrimination and charge higher profits as people in such markets care much about there health than money whereas in the lesser developed markets prices will be lower in order to attract more and more customers and to take advantage of economies of scale.

• Place

1. Three level distribution will be used through distributors, wholesalers and retailers as these are low priced consumer goods which need to be distributed through convenience stores .

2) Target Markets

We have divided our markets into two separate segments:-

a)Underdeveloped markets:- In these markets we will be concentrating on selling this product as a health drink so as to control the widespread malnutrition in these areas.

b) Developed markets:- For these markets we will target the constantly busy working class who do not get time for maintaining a healthy lifestyles.

Promotion• Advertising

Large scale advertising is needed as this is a consumer good and should be on the tip of everybody’s tongue. Also this is a new product and market so extensive advertising through newspapers, internet and television is needed.

• Endorsements

The product needs to be associated with a sports person as it will increase its value as a health drink. A bunch of sports persons from various fields will increase the goodwill of the product which is needed in the earlier stages. As we are the first mover we don’t have the luxury of taking advantage of others advertising. Here we have to advertise for the whole market not only our company.

• Free Samples Large scale sampling needs

to be done as the taste is one of the important attribute of the produce and for this we have come out with the concepts of vita girls who will go around with samples and take feedback.

SWOTStrength

•High profit margins.•Easy production techniques.•Less labour required.•Healthy, affordable and easy to make.

Weakness•High quality expectations.•Continuous R&D required in order to remain market leaders.•Large scale advertising requires.

Opportunities•It’s a new market and opportunity to become market leader.•Easy growth opportunities by developing new tastes.•Easy backward and forward integration.

Threats•Product can be easily copied.•Entering a new market, risk of non acceptance.•Threats from existing companies such as bournvita.

Growth

• In order to survive we need to grow, we plan to integrate backwards by doing our own packaging and trying to produce as much raw material as possible which in the long run should save us 80% of our costs. We also plan to internationalize as and when opportunities arise.

Going Global

• We have wide international prospects. We can expand to modern busy cities such as Tokyo and New York and also to the lesser developed parts of the world where nutrition lacks. Our product is so versatile that we can enter any market we want two.

• We have come out with a two stage internationalization strategy:-

• First step is to export into countries with similar tastes and preferences like India such as our neighboring countries,

• The second step is to go beyond our neighbors and make country specific product for different market i.e localize our products.

Further down the line we plan to make investment in the foreign countries and continue production there instead of exporting. This will help us to reduce costs greatly by producing more in countries where production cost ios less.

FinancialsExpenditure Amount

1 Large packet everyday milk powder2 500 grams sugar powder3 Packaging material4 Packaging cost5 Our secret ingredient6 Research and Development (tasting and all)

TOTAL

Units produced-80Per unit cost- Rs 5.075Loss – Rs 0.075 per unit

6328105100200

406

• We expect a 80% reduction in our costs 50% from R&D which is an one time expenditure , 30% from purchasing raw material in bulk. So we can operate on a 100% margin within 1 batch o production

Projections• As we see from our financials we are almost breakeven

from the start and as we grow owing to economies of scale and reduced capital and one time deferred revenue expenditure we look to achieve a gross margin of around 100% in the first year along with a net margin of 65%.

• Down the line as we integrate and globalize we see our gross margins rising to around 200 % in the next 5 years.

Corporate Social Responsibility

• As our commitment to the society we plan to donate one in every 1000 units produced to the UNFP (United Nations Food Program ) in order to help curb malnutrition.

• Prithvi Ghag (35)• Sachin Shantharaju(37)• Prateek Bhardwaj (31)• Apurv Jain (10)• Prashakha Saxena (30)• Shreya Bakliwal (44)