Green Tea Product Launch

8/3/2019 Green Tea Product Launch

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Acknowledgment

We are thankful to God Almighty who has given us the abilities to do share hard work and

enthusiasm to perform well. We owe a special depth of gratitude to our generous teacher. We

would like to express our deep gratitude to Mr. Altamash Pervaiz who guided us throughout

our research which groomed us in the art of identification and statement of issues, problems

and concerns; determination of the parameters for purposes of in depth inquiry; drawing of a

blowups of all the reluctant knowledge in order to reach a synthesis or a reasoned out point of

view at the end. And we are sure that these things that we have learnt in his guidance would

play a vital role in making our future bright.



TABLE OF CONTENTS

1. Objective 4

2. Methodology 5

Market ResearchData Gathering and Interpretation

3. 3C Analysis (Customer, Competitor & Company) 9

4. Market Segmentation 10

5. Market Targeting 10

6. Positioning of Green Tea 14

7. Place 18

8. Promotion 18

9. Cost & Financials 19

10. Price 27

11. Contingency Plan 27



Objective

“ To successfully launch a new brand of green tea in Karachi and capture 20% market shareof Tea in a period of 5 years, keeping in view competitors strategies and consumer

requirements. “



Methodology

Following is the methodology, we used for our product:

Market Research

– It has been done through Survey. Below are the survey results:

Profession

Area of Residence



How often you take tea

Black Tea Health Benefits

Benefits of Tea



Green Tea

Green Tea intake ratio

Green Tea Brands



Why Green Tea

Data Gathering and Interpretation

Statistical Analysis

People will try new green tea brand offering better taste, color and packaging, and change currentbrand of green tea? (16-35 age)

Hypothesis

HoPeople will try new green tea brand offering better taste, color and packaging, and changecurrent brand of green tea?

H1People will not try new green tea brand offering better taste, color and packaging, andchange current brand of green tea?

Data Yes 168NO 53

3C Analysis (Customer, Competitor & Company)

Our Customers are Tea consumers and Health conscious want to remain Activeness, slimsmart, etc.

Our local Competitors are Lipton by Unilever and Tapal. Others imported least competitors are

Tetley, Dilmah, etc. Competitors major reliable on Black Tea and did not introduce green teabecause don’t want to cannibalize their product with green tea.

Our Company should be monetarily strong company with major investment and will not alreadyinto Tea business but can in food industry. Also, will have ease in distribution E.g EngroFoods.



Market Segmentation

Below are our Green Tea Demographics:

We focused on Age Segmentation between 16-35 because this age group is mostHealth Consciousness; want to remain active and look slim and smart. Also they arethe more Tea Consumers.

Market Targeting

After the process of segmentation the next step is for the organization to decide how it is gointo target these particular group(s). There are three targeting options an organization can adopt

Option 1

Undifferentiated Marketing - Sometimes referred to as mass marketing the firm may decide aim its resources at the entire market with one particular product. Coca Colas original marketistrategy was based on this form. One product aimed at the mass market in the hope that sufficient amount of buyers would be attracted, although there are now changes in their produline to cater for growing dietary and caffeine free needs of consumer

Option 2

Differentiated Marketing Strategy - Where the firm decides to target several segments anddevelops distinct products/services with separate marketing mix strategies aimed at thevarying groups.



Current Market for Green Tea

Age Group 16-25 26-35

Population Ratio 21.84% 15.50%

Total Population of Karachi 1,7478,582Target Population 3,817,322 2,709,180

Avg Green Tea Cups/Day 0.40 0.47 Total Cups / Day 1,513,578 1,268,182Total Cups / Day 2,781,760

Amount of Tea / Cup 2 GramsTotals Grams / Day 5,563,520

Total Kgs 5,564

Potential Market for Green Tea

Age Group 16-25 26-35

Population Ratio 21.84% 15.50%Total Population of Karachi 17478582Target Population 3,817,322 2,709,180

Avg Black Tea Cups/Day 1.76 2.52

Total Cups / Day 6,728,839 6,821,677Total Cups / Day 13,550,516

Amount of Tea / Cup 2 GramsTotals Grams / Day 27,101,032Total Kgs 27,101



Combining the result: To conclude the share of green tea

Total Tea Market = 27,098 kg

Share of Green Tea = 17%

Potential Market for Green Tea = 83%

OPTION 3: SELECTED AS MARKET TARGETING:

The pictorial view concluding the target market

Re-emphasizing that these results are concluding: on the bases of questionnaire surveyfloated in all age groups & mystery shopping at different marts.



Tried Green Tea? (16-35 Age)

Yes 88%

No 13%

Green Tea Potential (16-35 Age)

Current Market 17%

Potential Market 83%



Would Try New Green Tea?

(16-35 Age)

Yes 75%

No 25%

Positioning of Green Tea

Health Factors

Burning calories is not easy—it takes a lot of energy and effort to remove huge amounts of fatbut with the help of green tea extracts you can easily speed up the burning process.Researchers have discovered that drinking a cup of green tea daily will boost your metabolismfrom 8 to 14 percent, that’s why they highly recommend it to those who are looking for a quickmethod to lose fat. The health benefit of green tea does not stop there.

New generation has great emphasis on health and being slim and reduces fat in the age of 16-35.

Hence looking at the trend of being Green and slim in this age group, Health is being chosento position upon. It leads to one single product that is Green Tea.

Following are the results of research conducted to verify the existing picture of Green Tea thatmatches to what we are going to position our New Brand on.



Usage Level

Black Tea has the image of ACTIVENESS, while the youth of age 16 and above are naturallyactive and are not attracted to drugs that increase activeness. But they are more conscious of being SMART and healthy. So Green Tea is made for them.

Votes for different UsageLevel of Black Tea

Used To 99Activeness 151

Healthy 7No benefit 46Other 10

Rating (16-35 Age)

Type Health TasteColor &Smell

Green Tea 4 3.44 3.43Black Tea 3 3.5 3.45



Product

Suggested Brand Name

• Sandeela Green Tea

•

Camellia Green Tea Availability

• Tea Bags

• Family Pack

• Jumbo Pack for Restaurants



Products Taste positioning Taste to Health Positioning

Lipton Jasmine √ X

Lipton Mint √ XLipton lemon √ X

Tapal Jasmine √ X

Tapal Lemon √ X

Camilia Green X √



Cool Green √ √

Place

Distribution• Multiple channels

o Level 2 and level 3

• Efficiency of already available distribution channels of investor.

Promotion

Channel Rates TimingsImpressions

/ day

No of day to

useTotal imp / yr Cost

Ary Digital 60000 Prime Time 5 8 480 28,800,000

Geo Super 8000 During Match 10 2 240 1,920,000

Samaa TV 30000 Morning show 5 10 600 18,000,000

Facebook 0.01 9-12am 8640 30 3110400 31,104

FM107 800 Morning/Midnights 20 6 1440 1,152,000

Total advertising and promotional cost per annum

Total first year production in KGs

Cost/KGs of production344520 Sunday 15cm x 8cols 1 4 52 17,915,040

Initial IntroDistribution 41.47 - 10000 30 300000 12,441,000

Total advertising and promotional cost per annum 80,259,144



Total first year production in KGs 547,500

Cost/KGs of production 146.592044



Cost & Financials

Green Tea Production CostingIn order to get the actual production costing to launch a green tea brand in Karachi, we get the current and potential market fromsurvey conducted. On the basis of results of surveys, the current consumption of green tea potential consumption is found asmentioned in below detail.

Variable Cost of Production

Direct Material CostGreen tea is an imported item; readily available in the market in open form. Following is the cost of green tea for bulk purchase.Material involved are acquire the following cost

Material Cost

Green Tea Rs. 275/Kg

SKU Weight of green tea (gm) Cost (Rs/sku) RemarksTea bag(24 tea bags/box) 1.5gm/tea bag 9.9

1.5gm per tea bag and one box contain24 tea bags

Small pack 200gm 55 200 grams per box

Packaging Cost

Green Tea is available in following five sku's in the market. The packaging cost of these sku's are as followSKU Packaging material Cost/SKU Remarks

Tea bag (24 teabags/box)

Filter paper+thread+tag+paper box+carton 26 Open market rate for packaging

Small packSilicon foil+Printed paper box+carton 10 Open market rate for packaging

Fixed Cost of production



Following fixed cost that will incurred when installing a production capacity for green tea production. Payback period is kept 5years for all machinery installed

Mixing/Crushing Chamber

Purpose

To perform mixing of green tea in raw form to ensure the consistence taste in all production Calculation Remarks

Cost of machine Rs. 100,000 Payback 5 years Production 1000 Kg/day (8 hours shift) consumption for greentea per day 1500 Kg Number of machinerequired

2

Cost in Rs/kg 0.05Machine cost*number of Machine/(prd per day*no. of Machine*365*payback period).

Filling/Packing Machine

Purpose To fill defined quantity of sku and pack sealing it.

Calculation Remarks Cost of machine Rs. 600,000 Payback 5 years

Production 7000 sku/day (8 hour shift) consumption for green tea

1500 kg

Number of machinerequired

4

Cost in Rs/Sku 0.05Machine cost*number of Machine/(prd per day*no. of Machine*365*payback period)



Shrink Wrap Machine

Purpose Wrap the sku with polypropylene.

Calculation Remarks Cost of machine Rs. 150,000 Payback 5 years Production 4800 sku/day (8 hour shift) consumption for green tea

1500 kg

Number of machine

required 6 Cost in Rs/Sku 0.02

Machine cost*number of Machine/(prd per day*no. of Machine*365*payback period)

Carton Packing Machine

Purpose To pack sku in single unit for distribution

Calculation Remarks Cost of machine Rs.50,000 Payback 5 years Production 4800 sku/day (8 hour shift) consumption for

green tea

1500 Kg

Number of machinerequired

6

Cost in Rs/Sku 0.0003Machine cost*number of Machine/(prd per day*no. of Machine*365*payback period)/sku per carton

Direct Labor Cost

Staff No. of employees Avg salary Total salary

Production 10 10000 100000Maintenance 5 10000 50000



Cleaning 10 7000 70000

Total direct labor cost per

year 220000

Total direct labor cost per kg (total DL cost/total

annual production in kgs)0.40

Marketing and sellingstaff Staff No. of empolyees Avg salary Total salaryMarketing and selling 20 50000 1000000

Total selling & admin costper kg (total S&A cost/totalannual production in kgs)

1.826484018

Total cost of product including direct material, direct labor, factory overhead and marketing and selling expense

Sku Direct material/sku Manufacturing over head Direct labour

Tea bag (24 teabags/box)

35.90 1.19 0.01

Small pack 200gm 65.00 0.09 0.08 Selling & Admin Advertising Expense Distribution & shelves accupying costTea bag (24 teabags/box)

0.07 5.27 1.00

Small pack 200gm 0.37 29.30 1.00 Retailer Margin 5% Total cost Retail priceTea bag (24 teabags/box)

3.00 37.11 60.00

Small pack 200gm 6.00 65.17 120.00



INFLOWS AND OUT FLOWS OF PROJECT

1666.666667Total Investment in PKR 600Total Machine Cost 3,800,000.00Total variable cost per (teabag sku)

45.25

Total variable cost per kg (teabag sku)

1257.061644

Total variable cost per (200gm sku)

101.75

Total variable cost per kg(200gm sku)

508.7283105

Weighted average cost of twosku

882.8949772

First 3 month investment invariable cost

119,190,821.92 1133.333333

Total investment of first threemonth

122,990,821.92

Total price per kg (tea bagsku)

1,666.67

Total price per kg (200gmsku)

600.00

Weighted average price per kg

1,133.33

Based on our current marketing and promotion, the expected return of sales starts from fourth month

Month Accumulated Out flows Accumulated in flows Accumulated net flows

4 162,721,095.89 51,000,000.00 -111,721,095.895 202,451,369.86 102,000,000.00 -100,451,369.866 242,181,643.84 153,000,000.00 -89,181,643.847 281,911,917.81 204,000,000.00 -77,911,917.818 321,642,191.78 255,000,000.00 -66,642,191.789 361,372,465.75 306,000,000.00 -55,372,465.7510 401,102,739.73 357,000,000.00 -44,102,739.73



11 440,833,013.70 408,000,000.00 -32,833,013.7012 480,563,287.67 459,000,000.00 -21,563,287.6713 997,056,849.32 510,000,000.00 -487,056,849.3214 1,084,463,452.05 561,000,000.00 -523,463,452.0515 1,171,870,054.79 612,000,000.00 -559,870,054.7916 1,259,276,657.53 1,458,600,000.00 199,323,342.47

17 1,346,683,260.27 1,570,800,000.00 224,116,739.7318 1,434,089,863.01 1,683,000,000.00 248,910,136.9919 1,521,496,465.75 1,795,200,000.00 273,703,534.2520 1,608,903,068.49 1,907,400,000.00 298,496,931.51

21 1,696,309,671.23 2,019,600,000.00 323,290,328.7722 1,783,716,273.97 2,131,800,000.00 348,083,726.0323 1,871,122,876.71 2,244,000,000.00 372,877,123.2924 1,958,529,479.45 2,356,200,000.00 397,670,520.5525 2,745,188,904.11 3,366,000,000.00 620,811,095.8926 2,864,379,726.03 3,519,000,000.00 654,620,273.9727 2,983,570,547.95 3,672,000,000.00 688,429,452.0528 3,102,761,369.86 3,825,000,000.00 722,238,630.1429 3,221,952,191.78 3,978,000,000.00 756,047,808.2230 3,341,143,013.70 4,131,000,000.00 789,856,986.3031 3,460,333,835.62 4,284,000,000.00 823,666,164.3832 3,579,524,657.53 4,437,000,000.00 857,475,342.4733 3,698,715,479.45 4,590,000,000.00 891,284,520.55

34 3,817,906,301.37 4,743,000,000.00 925,093,698.6335 3,937,097,123.29 4,896,000,000.00 958,902,876.7136 4,056,287,945.21 5,049,000,000.00 992,712,054.7937 4,985,976,356.16 6,242,400,000.00 1,256,423,643.8438 5,129,005,342.47 6,426,000,000.00 1,296,994,657.5339 5,272,034,328.77 6,609,600,000.00 1,337,565,671.2340 5,415,063,315.07 6,793,200,000.00 1,378,136,684.9341 5,558,092,301.37 6,976,800,000.00 1,418,707,698.6342 5,701,121,287.67 7,160,400,000.00 1,459,278,712.3343 5,844,150,273.97 7,344,000,000.00 1,499,849,726.03



44 5,987,179,260.27 7,527,600,000.00 1,540,420,739.7345 6,130,208,246.58 7,711,200,000.00 1,580,991,753.4246 6,273,237,232.88 7,894,800,000.00 1,621,562,767.1247 6,416,266,219.18 8,078,400,000.00 1,662,133,780.8248 6,559,295,205.48 8,262,000,000.00 1,702,704,794.5249 7,433,361,232.88 9,384,000,000.00 1,950,638,767.1250 7,592,282,328.77 9,588,000,000.00 1,995,717,671.2351 7,751,203,424.66 9,792,000,000.00 2,040,796,575.3452 7,910,124,520.55 9,996,000,000.00 2,085,875,479.4553 8,069,045,616.44 10,200,000,000.00 2,130,954,383.56

54 8,227,966,712.33 10,404,000,000.00 2,176,033,287.6755 8,386,887,808.22 10,608,000,000.00 2,221,112,191.7856 8,545,808,904.11 10,812,000,000.00 2,266,191,095.8957 8,704,730,000.00 11,016,000,000.00 2,311,270,000.0058 8,863,651,095.89 11,220,000,000.00 2,356,348,904.1159 9,022,572,191.78 11,424,000,000.00 2,401,427,808.2260 9,181,493,287.67 11,628,000,000.00 2,446,506,712.33



Price

• Maintaining same price as Black Tea

– Justifying cost

– Cannibalization (Motive)

Retail price

• Tea Bags X 24

o Rs 60.00

• Family Pack 200gms

o Rs 120.00

Contingency Plan

• Ice Green Tea

• SKUs of different flavors already available

Green Tea Product Launch

Documents

Transcript of Green Tea Product Launch