Group Project

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Group Project of Savoy Ice-cream

Course Name: INTRODUCTION TO MARKETING (MKT202) Sec: 19 Submitted By: Mohammed Jannatun Nayeem 1211191030 Sabrina Humayun Upoma 1110574030 Shaba Tamanna Tonny 1020687030 Nusrat Jahan Nitu 1210554030 Md. Nashwan Hussan 1220875030 Rumaesa Mandana Rob 1130611630

Submitted To: Tasmia Ekram (TsE) Lecturer School Of Business

Date of Submission: 17 -12-12 Letter of Transmittal

Tasmia Ekram (TsE)Lecturer,School of BusinessNorth South University 17-12-2012

Dear Madam,

We are assigned the term paper to do an analysis on the market plan of Savoy Ice-cream.We are submitting to you the report, due December 17th, 2012, that you requested. We completed the report on schedule and met all your proposed objectives. We would like to thank you for offering the opportunity to work on this topic. The information in this report is related or compared (wherever possible) to what we were taught in class. We hope that our work will prove to be satisfactory. Thanking you in anticipation.

Sincerely,Mohammed Jannatun Nayeem Sabrina Humayun UpomaShaba Tamanna TonnyNusrat Jahan NituMd. Nashwan HussanRumaesa Mandana Rob

Table of ContentsSerial No. TopicPageNo.

01Acknowledgement06

02Executive Summary07

03Marketing Mix: Product Price Distribution(Place) Promotion 0808-1010-1313-1415

04SWOT Analysis: Strengths Weakness Opportunities Threat1616-17171718

05Consumer Profile: Target group of Savoy ice-cram Competition Advantage When and where can buy Purchase habit and lifestyle Emotional Barriers 18 18-20 20 20 21 22

06Integrated Marketing Communication

22

07Recommendation23

08Conclusion23

09References24

Acknowledgement

One of the most pleasant parts of submitting a term paper is the opportunity to thank those who have contributed to it. Unfortunately, the list of expression of thanks- no matter how extensive is always incomplete and inadequate. These acknowledgements are no exception.

Our first thank goes to the almighty Allah for bestowing us the patience and courage to finish this huge task within its deadline.

Thanks must go to the team members, whose unflagging patience and astounding capacity for creative work, and long hours made the project both possible and successful under the pressure of knocking deadline.

In addition, thanks to those who has given us important information and various advises about our project.

At last, we sincerely acknowledge our debt to Tasmia Ekram, our honorable faculty, for her valuable counseling towards the improvement of the project. Without her encouragement, this would not have been possible.

Introduction

Having food is necessity of human being and taking various kinds of ice-cream product is todays fashionable frozen dessert, more than necessary. This ice-cream industry has a high level of market segment, variety of products, and a number of companies. Food and frozen dessert industry represents frozen, fresh, chilled and long shelf-life food and ice-cream product. In this time the ice-cream companies have a hard core competition to create the best place in market as well as to establish their very reputation among the customers what makes them regular in market place. Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries. It started its journey in March 1995 with a factory in Tejgaon, Dhaka.

Product ranges of the company include all the basic designs and flavors of the industry. However, the company has not been much of an innovator in the industry. Their product quality is substantially low than that of other players and they price their products at 10-15% lower than the other competitors. The company imports raw materials mainly from Europe. The general raw materials are Euro cream, Skimmed Milk Powder, Cocoa Powder and Flavour (Vanilla, Mango and Strawberry), Colour (Yellow, Red, Chocolate and Green), Ripple Sauce, Cheney Fruit, Palm Kernel Oil, Anhydrous, Butter Oil (Ghee) and Sugar etc.

Savoy ice-cream product is very new if we compare with others in market. So, first of all it should follow an outstanding launching way including with normal advertisement and our exact target market. As in survey the youngsters are the mostly interested to buy ice-cream and they are the regular customer so before doing anything kept their choice and priority in mind.

Day by day the number of regular eating ice-cream consumer is increasing. So Savoy always tries to take an extra care for them. There are several key trends which are looking towards of health and wellness, indulgence, convenience and ethical issues which effect on various flavors of ice-cream products.

Executive Summary

This report is about Savoy Ice-cream which is an ice-cream company that product a high volume at a lower price. It has divided its product categories by various flavors and packages. Consumers of Savoy ice cream are mainly urban kids in the age group of 5-14 who mainly consume normal sticks, cups, cones innovative fillers and water ice creams; there is urban youth in the age group of 15-24 who consume premium and extrusion sticks and cones and urban mothers in the age group of 25-35 who are the decision makers for kids and family ice cream purchases. The consumers can be segmented based on their desired satisfactions from ice cream occasion, portrayed personality traits of ice cream bands and the occasions when they consume ice cream. Analysis shows there is scope for market development and penetration in the country. There is also scope for ice creams that are health conscious and nutritional in the industry. Products or of quite high quality in the Bangladeshi market but price is still out of reach of rural and lower people who belong to low disposable monthly income group. Distribution is mainly done through refrigerated trucks alongside use of carts in the country. Boutique format players serve at their premises, ice cream and other dessert items to offset seasonality of ice cream sales. Promotion in the common format is mainly in newspapers and normal billboards along with trade based consumer promotions and trader schemes.

The Four Ps Of Marketing Mix Figure: Four Ps of Marketing Product:Savoy ice cream has entered the Bangladesh market with a new ice- cream product, which will add new innovation to their product line. Current production capacity of Savoy in the common format ice cream segment is estimated to be as follows:

Name Capacity (Ltrs/ day)

Total Production ('000 Ltrs)

Required Capacity (at 300 production days )

Estimated unutilized capacity (Ltrs/ day)

Savoy 1560

259.85

866 694

Table: Production Capacity of Savoy ice-cream Core Product:Savoy ice-cream including normal premium and cup, stick and family pack items.

Actual Product: Product Features: It is an ice-cream product which will come in different flavors like Vanilla, Chocolate, Strawberry, Ripple and Mango. It is a healthy nutritious and refreshing ice-cream which will be available in a ready to different shape. It is beneficial to health as it contains Cup, Cup Mini, Cone, Choc-bar, Vanilla cup, Vanilla lolly, Kulfi etc.

Augmented Product:People can call us to give feedback about ice-cream. Savoy ice-cream launch a website where customers can share problems, give feedbacks, make understand defects, flaws and give us innovative product ideas.

Product Quality: Top quality raw materials, Modern production equipment, Well trained and dedicated staff, Effective quality assurance, Optimal storage condition, Optimal inspection of raw materials & ingredients, Commitment to adhere the BSTI regulations.

Packaging:Savoy ice-cream has available in both cups and sticks. Cup has available in Vanilla, Strawberry, Mango; Snow ball will be available in varied sizes. Package will be colored according to their flavors. The label on the ice cream will have information on the amount, expiry date, manufacturing date, nutrition facts, certifications, ingredients, contact info, logo of the brand and picture according to the flavors.

Labeling:Cone and cup include the name of ice-cream and its flavor and its logo. It will also consist Ingredients, nutritional benefit, weight and expire date. It will also consist of the name of the manufacturer of the product.

Price:Ice-cream product strategy is a cost-based one. Which means the cost of making with the target profit margin will accumulate our prices of the range of products. It is a profit oriented approach. Savoy ice-cream set its price so that the cost are dealt with achieve target profit means main mission is to cover-up our cost and earn huge revenues so that they can earn a huge profit. The firms have capability to affect the market price to be low as profit margin is very high. If Savoy reduces the price of an item below the prevailing price level in order to increase its sales, its competitors will fear that their customers will go away from them to buy ice cream. To retain their customers they will be forced to match the price cut of Savoy. Historically this has been proven to be true. However, due to price sensitivity, companies cannot drastically increase price even if they provide higher quality of product.

Savoy ice-cream has charged different prices for different ice cream product form and size. It initial pricing will start at 10 Tk to 190 Tk. If we manage to pull these costs at our target sale, we can achieve our target profit. Pricing Strategy

Product Type

Price

Cup 25 Tk

Snow ball 20 Tk

Cone 25 Tk

Choc-bar 15 Tk

Container ( 2 liters) 100 Tk

Family packs (2 liters)150 Tk

Product Costs and Pricing: Points to consider for estimating product costs:Fixed Costs: Fixed costs will mainly include the rent of the factory. Along with that, there will be costs of the supervisors salary. Variable Costs: Variable costs include direct materials and direct labor costs. Direct materials include Euro cream, milk, powder, cocoa powder, ripple sauce, cherry fruit, butter oil, sugar. Total Costs: Summation of the fixed and variable cost. Competitors Approach:An ice cream pricing strategy should take into account the prices that your competition is charging. This does not mean that the neighborhood ice cream truck should charge more because the upscale ice cream shop has a more expensive product. Rather, the ice cream truck catering to a cost-conscious clientele should adjust its prices relative to other businesses targeting the same market while the artisan ice cream shop might even raise its prices to signal that its owners believe their product to be worth more than the competition. Consumers Perceptions Of Value :Ice cream can be an everyday treat or an artisan luxury. An ice cream pricing strategy should communicate to customers whether your products are accessible comfort food or treats for sophisticated eaters. Some customers will select a brand of ice cream because of its low price while others will be drawn to a higher-priced product because of their perception that cost correlates with quality. Your choice of how to price your ice cream will reflect the type of customer you wish to attract.

The Product Life Cycle:

As the product is new and the market is very much saturated the product must be top class and of higher price. This would help to quickly cover up the development costs. And as said earlier, higher price will also give a certain prestige to the product. This would help to capture the market easily.

Savoy is in the introduction stage of the product life cycle. This is the stage in which sales are quite low but starting to rise and profits are initially negative due to promotional activities and other expense before they start to rise. Savoy is in this stage because the market for ice-cream product is absolutely new in Bangladesh, meaning, we are the first ones to introduce such ice-cream product in the market.

Distribution (Place):Place is a term that has a variety of meanings in a dictionary sense, but which is principally used in a geographic sense as a noun to denote location, though in a sense of a location identified with that which is located there.

In marketing, place refers to one of the 4 P's, defined as "the market place". It can mean a geographic location, an industry, a group of people (a segment) to whom a company wants to sell its ice- cream products or services, such as young professional women (e.g. for strawberry flavor), family event (e.g. litres box with various flour).

Distribution Process:Mainly common format ice-cream is distributed in two methods that are directly to retail shops and through hawkers with ice cream carts/ trolleys.

Distribution details of all the companies are provided below. However, detail of Savoy is not available as they are mainly milk producer and they have no dedicated ice cream cabinet for retail stores and currently they are distributing ice cream in Dhaka city, Chittagong, Comilla, Josser.

Company Distribution Method FrequencyNo. of cabinets

Savoy Company1to 2 times a fortnight

176

Table: Distribution Method of Market Players

Retail Distribution: The general distribution that is followed by Savoy is that distributor sends large refrigerated trucks dedicated to specific territories. These trucks are accompanied by small refrigerated vans. Main road side shops are served directly from the large truck and shops that are inside small streets are served by the small vans.

General branded freezer contract policy with Savoy is that traders have to pay BDT 5000 to take a freezer. Maintenance of branded freezers is responsibility of the company but electricity bill is paid by shopkeeper. Savoy gave away their freezers for free; however, they ensured safety of their freezers by checking background of the shopkeepers.

Promotion Mix: Promotion is one of the four aspects of marketing. Promotion comprises three subcategories: Personal selling Sales promotion Trade Promotion

Personal Selling: It is very effective as here for Savoy ice-cream can have different outlet with the retailers. They distribute their various flavor of ice-cream in selective primary schools and local market. In personal selling, they distribute their ice-cream at low price for middle class, low income people. Sales Promotion:Sales will be promoted by encouraging sampling, contests etc. the target segments will be given free samples like we will do promotional campaign in top universities across the country and top school were we will give them free sampling for just 2 days there encourage customer to buy product, they buy ice-cream product. Although the cost is normal in this process but the revenue earn when this people will buy our product at the low price will be very high compare to this cost.

Trade Promotions: Trade promotions are mainly given to Highest retail purchasers and also based on time bound trade schemes where various slabs of purchase amount are mentioned for different prizes. Savoy has a purchase slab scheme where first prize is table fan. It gives special sales commission to their highest purchasers (around 5%).

SWOT AnalysisThe SWOT Analysis is a useful tool for understanding and decision making for all sorts of situations in business. SWOT is an acronym for Strengths, Weakness, Opportunities, and Threats.Strengths Financial condition Good quality Well trained staff Low pricing

Weakness Decision making process Taste of ice cream Weak management

Opportunities Large Young population and long hot summer Growing ice cream marketThreats Intense competition High price of raw materials Political Instability

Strengths:

Financial Condition: Savoy Ice Cream Company is financially backed by Shena Kalyan Shangstha, so thats why the financial condition of the company is very strong. Good Quality:Savoy delivers a very good quality of ice cream to its consumers. This feature works as strengths for the company. Well Trained Staff:The staff of this company is very well trained. After the recruitment of new staff Savoy also provide some training programs to the staff for their improvement. Low Pricing: Savoy is following the low pricing strategy so that they can offer their ice cream to their consumers at a lower affordable price.

Weakness: Decision Making Process:Savoy follows the chain of command process in decision making process. So it makes the process very slow and lengthy. Taste of Ice Cream:The taste of savoy ice cream is not that good, its taste is average. It lacks the consumer appealing taste. Weak Management:The management process of Savoy is very weak. This is one of the main reasons why they are failing to succeed in the market.

Opportunities: Large Young Population and Long Hot SummerThe target market of the Savoy ice cream is youth generation, which is now getting large day by day. As we know that in our country summer lasts for a long time and ice cream is very preferred in this season, so its a big opportunity for any ice cream company. Growing Ice Cream MarketIce-cream is going to be more popular in young people in the country. Even older people likes ice-cream in the hot weather. So the ice-cream market is expanding day by day.

Threat: Intense Competition:As ice cream market is expanding day by day, the competition among the competitors is getting tough as well. Every competitor is coming up with new idea everyday to sustain in market. High Price of Raw Materials:Price of raw materials is getting higher very rapidly. It can increase the cost of production and decrease the profit margin, so it is a threat for Savoy ice cream. Political Instability:Political instability can be a big threat for any business company. It can destruct the business activities.

Consumer ProfilePrimary consumerTeenagers and young adults

Secondary consumer

Family consumer for eat out

Income groupLow income group

Geographic AreaSelected area

Rush timeAfternoon

Target Group Of Savoy Ice-Cream:

Who are the consumers of savoy ice cream? This question does not have a clear answer. Ice cream is a food for all. It is the only food consumed by a human being at less than 0 degree centigrade temperature and people of all ages feel indulged to have it. Geographic Group:Branded ice cream remains an urban product. Geographically branded ice cream has not reached urban and semi urban areas. Savoy ice cream provides ice cream in Dhaka, Chittagong, Jasor, Comilla, Tangail

Figure: Target Geographic Area

Target Age Group: Age wise grouping of target consumer is as follows Kids in the group of 5-1 They mainly consume normal sticks, cups, cones innovative fillers Youth in the age group of 15- 24 They consume premium and extrusion Family or mothers in the age group of 25-35 They determine the family purchase

Figure: Age group

Income Group:Savoy ice cream target lower income group. Price of Savoy ice cream is so low. This is the reason why Savoy ice cream is failed. Savoy ice cream grabbed suburban areas with low price.

Competitive Advantage: Why do consumers consume Savoy ice cream? There are many positive and negative sides. People can buy Savoy ice cream for its lower price but problem is Savoy product quality is so low.

When And Where Can Buy:Savoy ice cream is not available everywhere. Savoy ice cream followed selective distribution. Savoy ice cream is a variety seeking product. Savoy ice cream encourages variety seeking by offering lower price.

Purchase Habit And Lifestyle:There are some common habits of consumer when they purchase Savoy ice cream. Common habits mean the consumer approach towards ice cream that is seen across all target groups. Savoy ice cream mainly seen as a dessert. Savoy ice cream purchase is commonly a planned event. Savoy ice cream is purchased from nearby shops. Savoy ice cream has not so many flavors.

Emotional Barriers: Undisciplined Childish Artificial image Very high in calories.

Integrated Marketing Communication The concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent message". One high level and popular company must have a strong marketing communication system. But Savoy has not many communications channels. They have only 8 or 9 pickup vans to send their products in many places. Their business is limited in Dhaka, Chittagong, Maymansing , Jamalpur and jossor . In Dhaka their production is more than other cities. Savoy Company has no billboards and no advertisement to increase their production. They have only some stickers which is very small in size and cartoon shape which is only attractive for children. They have not much asset to advertise their product or introduce their ice- cream to others people. They have also no sellers promotion.

Recommendations Though Savoy ice-cream company is the part of Shana Kolyan communities it should be afford the communities. Some problem includes his company like decision making, financial support, technical support etc. Firstly they need to maintain (4ps) then environment analysis like SWOT analysis ,and develop the company communication. They also help from others developed companys business plan. Conclusion

Based on the above analysis, Savoy ice cream has good prospect in Bangladesh. It is still a growing market with opportunities for entrants. With the barriers of entry, it needs to consider its priorities. It being a company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot of money to rip the benefits of the industry. However, to initiate company can take regional support and acquire resource expertise. The company should enter the business as soon as possible since there is potential threat from competitors to introduce more ice creams and also with potential of the industry consider entering into the industry too. The marketing plans start off by providing the overall picture of the companys marketing strategy, and then break down into details about how it will realistically achieve such goals and objectives. Another smart technique to use in a marketing plan is to delegate responsibilities to specific people within the company. Although there is much competition in the ice-cream market today, Savoy believes surely be appealing to the kids. It tries to identify a gap in the market, and is positively aiming towards being successful.

References:www.bdtradeinfo.com/yellowpages/des_data.asp?subcategory_id...www.banglayp.com Bangladesh Dhaka

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