BUSINESS PLAN

1 Introduction

This business plan relates to Bakerman Jelly which is currently sold in the wholesale market

and now moving their focus into retailing this particular product. Bakerman Jelly’s strategic

focus is to grow their business not only in terms of physical expansion but also to create a

brand image which will bring Bakerman Jelly as a day to day usage product.

The purpose of this plan is to help the management to create brand awareness for their

products and to expand their business to new markets within Sri Lanka. This report is

compiled by Pettah Essence Suppliers Management lead by Mr. Kandavel and his partners

and assisted by Hip Consultancies during August and September 2010. This plan is laid out

as follows:

The plan focuses on the industrial analysis including competitor, customer, macro-

environment, etc. We also did our analysis with the use of models such as Porter’s Five

Forces, etc. With the results through this analysis we came up with a suitable marketing

plan for the next five years. To support the plan and to implement it a clear view on the

operational and human resource activities are stated in this document. Along with this a

thorough financial analysis is conducted to assess the feasibility of the whole strategic

process. Last but not least, failing to implement the suggested solution what other plans can

be implemented is briefed under the contingency plan.

This document is confidential and has been made available to the individual to whom it is

addressed strictly on the understanding that its contents will not be disclosed or discussed

by any third parties except for the individuals own advisors.

This plan is strictly for information only and does not constitute a prospectus or an invitation

to subscribe for shares. Forward looking projections and statements in the plan have been

compiled by the promoters for illustrative purposes and constitute an estimated profit

forecasts. The eventual outcome may be more or less favourable than that portrayed.

For further details regarding any confidentiality mater of this plan contact Miss. Michelle

Ratnasothy, Consultant of HIP Consultancies.

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2 Company Background

Pettah Essence Suppliers are well established wholesalers in the essence and bakery

products for the past 5 decades. They are well known for their quality and the lowest cost in

terms of bulk purchases. The company

focuses on more than 1000 products

which range from

cake essence to

products such as Jelly. They are well established in places such as Pettah in Colombo, Kandy

and Jaffna. As their business is currently in a stable position for the past many decades for

quite a longer period they have not thought of expanding their business.

The import raw materials from various places around the world and they are the sole

distributors for many of the well established FMCG brands in Sri Lanka. It is a family business

which is owned by two cousin brothers on a partnership basis. Their main brands are

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Bakerman and Twins. Their main issue in terms of running the business is the lack of

human labour and the time constraints.

Despite of all the complexities they are facing at the moment, the management has planned

to effectively focus on expansion for the future survival of the company.

2.1 Vision

“To become the leading manufacturer and retailer of confectionery and bakery items in

Sri Lanka”

2.2 Mission

Our purpose is to;

Create Bakerman as a household brand.

Become the leading brand in the confectionery and bakery items market.

Become the ‘Must have’ product at every house.

Position our brands in terms of Best Cost Providers.

2.3 Goals To create awareness among the target audience

To expand the markets

To build the brand image

2.4 Objectives

2.4.1 Strategic Objectives

Open up our own manufacturing plant in Sri Lanka within 2 years

Forming an in-house Research and Development team within the next two years.

Continuously coming up with new products targeting the segment of household

successfully within the next five years.

Portray our organization as one of the most ethical companies in Sri Lanka withn the

next three years.

Increasing brand awareness and maintaining a stable loyal customer base for the

next two years.

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Make our brand Bakerman available extensively in all the retail outlets in Sri

Lanka within the next five years.

2.4.2 Finance Objectives

Increase sales revenue by 35% within this year.

3 Industry Overview

A major portion of the monthly budget of each household is reserved for FMCG products.

The volume of money circulated in the economy against FMCG products is very high, as the

number of products the consumer use is very high. Competition in the FMCG sector is very

high resulting in high pressure on margins.

FMCG companies are trying to outdo each other in getting to the urban areas consumers

first, since there is a high turnover rate. But each of them has seen a significant expansion in

the retail reach in mid-sized towns and villages. Some who could not do it on their own,

have backed on other FMCG major’s distribution network.

Consequently, companies that have taken to rural Sri Lanka like chalk to cheese have seen

their sales and profits expanding. According to the Lanka Business Online report, four major

changes have taken place in the last decade in the FMCG sector.

Firstly, the FMCG companies have discovered that large section of rural population

yet untapped is ready to accept their products, but there are challenges regarding

penetrating in the rural Sri Lanka. Higher innovation and improved availability can

help increase the retailer penetration in the rural market vis-à-vis the more

saturated urban market

As the demand fluctuations have become rampant as brand portfolio of FMCG

companies have widened and they are serving large number of small markets, there

is increasing need to adopt just-in-time manufacturing principles. Therefore, the

supply chain of the FMCG companies needs to be lean and efficient to enable just-in-

time production.

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There has been mushrooming of regional companies, which are posing a

threat to the bigger FMCG companies. Competition has intensified and the

dominance of one player across the product range has reduced. Therefore, FMCG

companies need to respond by innovative marketing means which are high decibel

and reach the masses, but at the same are cost effective and doesn’t inflate the

promotional budget.

As the FMCG companies are expanding their operations they need to have strict

control on the processes to contain costs and remain efficient. Therefore, the IT and

manufacturing systems deployed have to be monitored closely to achieve the

desired standards of the business.

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4 SWOT Analysis

In the business context every company has many strengths, weaknesses, opportunities and

threats. Through the strengths and by reducing the weaknesses in an organization it will

benefit them in achieving external opportunities and also companies need to look out for

arising threats to gain more competitive advantage and be more successful.

4.1 Strengths

Strength is the availability of resources and competencies that can provide advantages and

to the organization in achieving its goals and objectives. The strengths faced by Pettah

essence suppliers are mainly,

They have a wide range of colours and flavors’ such as mango, strawberry,

pineapple, orange etc. which they offer to the customers to capture the market.

Well established reputation in Pettah as most of the wholesalers and retailers only

purchase FMCG items from Pettah Essence Suppliers as they have created brand

loyalty.

They also maintain a high standard in the quality of products in comparison to the

competitors by importing quality raw materials from abroad. Even though they focus

on cost cutting they believe that it’s important for the quality to be in the expected

standard.

4.2 WeaknessesWeaknesses are the “non availability” or the lack of resources and competencies that will

either disrupt or obstruct the organization in achieving its objectives.

The main weakness the company is facing currently is that they have four stores only

in Pettah and none of the products are brought out to the super markets as they

don’t cater island wide. Especially when thinking of expansion they do not have

enough human labour to facilitate and conduct the number of stores, factories etc.

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Another weakness would be that they don’t record the transactions that take

place in the stores, due to that no documents are available regarding the products.

This will lead to confusions and errors in the company’s accounts and other related

documents.

Business is done mainly on trust and relationship wise which can be of a greater risk

to the organization because the retailers can change their suppliers as and when

they desire.

The packaging is not sufficient and attractive enough to draw the potential

customers such as households in the target market.

4.3 OpportunitiesThese are the opportunities created in the external environment towards the business

organization. It is all a matter of how the firm takes advantage of these opportunities in

order to gain competitive advantage over the competitors.

The company has an opportunity of expanding the business into different areas

where it will be easily accessed by the customers and also it will be a privilege to

create brand awareness amongst more potential customers.

They can come up with more flavors for jelly as currently they are manufacturing

only four types of flavors. (Mango, pine apple, orange, strawberry). The new flavors’

can consist of mint, lime, chocolate, vanilla, apple etc. so that they can increase their

loyal customer base.

Bakerman has the opportunity to improve on their packaging as that’s the first

promotion tactic which will attract the customers to purchase the product. Packaging

is very important to any business as it will act as a silent sales person for that

particular brand/ product. Therefore the packaging needs to be done attractively and

appropriately.

4.4 ThreatsA business firm should always avoid threats occurring in the external environment as it will

harm the organization. Most companies analyses’ the external environment in order to

identify potential threats which could occur in the current period and takes action to

prevent them. Pettah essence suppliers are facing many threats.

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When other competitor brands have many flavours of jelly, bakerman has

only four products which will be threat as they need to produce more flavours to

capture the target market.

The main threat is that the product is not available everywhere as they don’t cater

island wide, due to that the potential target market is small as most of the customers

are unaware of the brands and products.

Since motha is the market leader in the industry and has highly captured the market

the competition is intensifying to bakerman. It will also involve a high cost when

bakerman try to enter the product into the market as they will have to start from

scratch and will need to incur a huge cost when buying shelf space etc.

As the market leader motha could prevent bakerman from entering the super markets

by promoting their products more, buying more shelf space as they have a huge profit

margin and they have been in the super markets for a long period of time. Also another

tactic they can use is campaigning against bakerman by creating a negative attitude

towards bakerman products by telling the customers to use a familiar reputed brand.

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5 Environmental Analysis (PESTEL Analysis)

5.1 PoliticalEvery good or service in Sri Lanka is being taxed. According to the Department of

Inland Revenue any good or service imported or supplied will be charged Value

Added Tax at 12% p.a. also when the government budget changes annually the

percentage varies. The government changes the exchange rate every week and it

remains the same throughout the week despite the exchange rate changes in the

world market (Exchange rates, 2010).

5.2 EconomicalIncrease in the world prices of the raw materials like gelatin and sugar affects the

price of jelly and also if the import tax keeps fluctuating the prices of jelly will

fluctuate along with it. The government’s budget decides on the import tax. The

inflation rate will affect the purchase of raw materials and the purchase of jelly by

consumers the company will not a great control over the price. Jelly is not a

necessity so consumers will use on their disposable income when purchasing it. In

the domestic environment, high interest rates, high taxation, artificially strengthened

rupee until April and then allowing it to float and drop in sales due to low disposable

income levels of the consumers despite the drop in inflation to 5.3 in March 2009,

had a cumulative adverse effect on businesses in several ways. (Jayawardena, 2009)

5.3 Socio CulturalHaving desert after lunch and dinner has become customary even a small piece of

chocolate or fruit is considered to be desert. The reason could be the influence of

the western countries cultures and the Sri Lankans like having a full course meal to

satisfy them mentally and physically. Many households from rural to urban areas

have adapted to this. Health consciousness has led people to be more careful in the

food they consume. Many FMCG products are low sugar, low fat, no preservatives

and artificial colouring etc.

5.4 TechnologicalBecause of the advancement in technology companies have been able to reduce

their costs to a larger extend which has led them to sell in larger quantities for a low

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price. Organizations in the FMCG industry have moved from manual workers

to automate machinery packaging too is done by machinery.

5.5 EnvironmentalThe environment is under many threats by garbage disposal on land and in water

especially in the urban areas different oxides polluting the air. Disposal of waste in

an eco friendly manner is what the Ministry of Environment is mainly focusing on

because many organisation don’t give much attention to it. Waste liquids are sent

into the canals and rivers. Solid waste is dumped in mash land. At present the

packaging of bakerman jelly by Pettah Essence is not eco friendly which can become

a big threat in the future. The present quality standards law is not very strict on

packaging but the environmental laws are changing becoming stricter on disposal

garbage because of the threats arising in the environment. (Perera, 2003) states that

roughly 80-85% of the municipal domestic sold waste produced in Sri Lanka consists

of organic waster including food items and garden related waste. The balance 15%-

20% consists of paper, glass, plastic, metals and other inorganic materials. (Alagan,

n.d)

5.6 LegalAccording to the Ministry of Environment Food Act No. 26 of 1980 the packaging

used should be of suitable quality and of hygiene conditions. Quality standards

certification like ISO for the production process system and SLS and SGS for the

product is required. Workmen's Compensation Ordinance Act No 19 of 1934 and its

subsequent amendments defines the payment of compensation to injured workers is

defined in the. (Employers’ Federation of Ceylon, 1998). Workers deal with

machinery so they need to be given a safe work environment. Labour is 10% of the

cost of production in the FMCG Industry (Prince, Personal Communication, 2010) so

they need to be looked after well.

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6 Competitor Analysis

6.1 Motha Confectionery Works Ltd. Motha Confectionery Works Ltd. Being one of the leading giant in the Sri

Lankan FMCG industry, produces and distributes baking and Confectionery

products such as Jelly Crystals, Icing Sugar, Corn Flour, Flavoured Custard

Powder, Baking Powder, Flavoured Pudding Mix, Gelatine and etc. They

offer different flavours of jelly crystals which may include the newly introduced varieties

such as, Greengage, Raspberry, and Diet Orange Jelly & etc.. they also can be considered as

an indirect competitor since they offer different other instant desserts such as Pudding Mix-

Strawberry, Chocalete, Watalappam and Pudding Mix -Butterscotch, Caremal, Mango

Flavour. (Motha, 2010)

6.2 Harvest Confectionery Ltd. Harvest is a well known FMCG company in Colombo and its suburbs. It's popular for offering

a unique variety of FMCG items including jelly crystals. As per Motha they also offer a

variety of flavours and other instant desserts. They recently followed Motha in coming up

with different flavours of Moss jelly (quick set) which indeed would directly affect the Bakers

man’s sales. They do offer in 100g, 200g, and 500g, packing. (Harvest, 2010)

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7 Porter’s five forces

7.1 Threat of New Entrants (High)This is an industry that the possibility of promising new entrants is greater, because there is

a high opportunity for new businesses to enter the market and with an average start up cost

in small scale, and compete effective with well established brands in the market. Which

means a high potential competition can be expected and successfully compete in the near

future. Therefore here we should focus on the barriers that need to be prevailing over by

new entrants.

In such industry, economies of scale are significant to focus on. Therefore we need

to give center of attention on reducing the production cost as much as possible. Also

the years of experience they posses in performing in the industry will count the

success towards the industry. So there is a great advantage for Bakerman product to

compete and success with the new inexperienced entrants since it is difficult to

produce at low cost until new entries become experienced and established in the

market.

Since the Bakerman manufacturing factory located in Pettah there is a great

advantage towards its supply and distribution channel. Also a new entrant to the

areas such as Colombo and Kandy where Bakerman well distributed will not be easily

overtake by. But there is a great chance of new entrant affect to the areas where

Bakerman product not well distributed other than Colombo and Kandy.

In this industry there is a high chance of coming up with differentiations of the

product. Since Bakerman introduce different flavours of jelly to the market such as

mint, lime, vanilla which is new to the market that will help to reduce the

competition. Then again treat of new entrants with new flavours which is not

available in the market could be always affected.

Thus, it is obvious that the threat of new firms entering the industry is high. So to compete

with treat of new entrants Bakerman should be effectual by lowering cost, enhancing

distribution channel and by differentiating the product.

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7.2 Bargaining Power of Suppliers (less) Even suppliers are essential for the success of industry performance Since Pettah

Essence is mainly a business which wholesaling production ingredients/ raw

materials such as flour, sugar, essence, coloring, etc, to other competing

manufactures as well as promoting Jelly under their own brand name would be

considered as forward integration where they do not actually deal with suppliers.

Therefore Bakerman generally do not even want to consider switching ingredients

suppliers which means switching cost of supplier is definitely low.

In other hand the bargaining power of suppliers of fuel, electricity, water can be

eventually affect. Especially the frequent changes in prices of these might make an

impact, but that won’t count toward the productivity cost as much. Thus it can be

considered that the bargaining power of suppliers is evidently low.

7.3 Bargaining Power of Customers (high) The customers are the ultimate target of all of the industries in the country. When

considering the bargaining power of customers it seems to be comparatively high

since the switching cost of customers is low due to both substitutes and indirect

competitors. When switching cost is very low due to unavailability of brand

supermarkets such as keels, cargills, arpico would not consider on resave a shell

space the market where other brands gives a wide choice of brands to purchase. If

customer misses one there is always option to another. Furthermore, the variations

in quality and limited preferred flavors of Jelly would increase the power of its

buyers reducing switching costs.

There are also cons related to inefficiencies in delivery service and the unavailability

of the brand in outstation. Well establish brands like Motha, Delmage would

definitely make an impact on the unavailability of the brand each and every supper

markets.this would again have a tendency in reducing the switching cost.

Thus, the bargaining power of buyers is relatively low since all buyers have a wide choice of

having dominant players in the market in such eminent brands.

7.4 Threat of Substitutes (High) There are many substitutes for jelly. So the threats of substitutes are very high and

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category such as Instant caramel puddings, ice cream, custard, instant

watalppan, etc… under well established brand names. These choices reduce the

switching costs of the customer due to the desire nature of the product jelly.

The price/performance ratio – because of the substitutes for jelly are plenty there

are always another option to customers to move on. If the customer cannot meet

the price of jelly or difficulty of search on a one particular brand name there are

verity of similar product available in the market at different price rates, different

brand or substitutes. Thus, the threat of substitutes is high as evidenced above.

7.5 Competitor/ Industry Rivalry (High)All the four factors of the industry analysis above ultimately encroach on the direct

competitive rivalry between a business and its competitors.

According to all facts which discussed above There is a quite a big number of other

brands competing directly with Bakerman and many indirect and substitutes as well.

The direct competitors provide a very similar product range with different flavors

and quality standards. Therefore other similar brands such as Motha, Delmage

consider as direct competitors which need to be more concern when it come to

decision making or strategy improvements on towards the Bakerman jelly.

Also the indirect competitors are functioning in the large to medium scale with a

different and optional range to the customers in the stroke of appetite. Therefore it

is also important to keep eye on the indirect competitors such as elephant house,

Cargils, Perera and sons who produce deserts items to the same set of consumer

market share.

On overall since the brand is not yet established in the consumers’ mind it has been

a disadvantage in competing with the other rivals in the same category. Thus,

although indirect rivalry is at a minimal direct competition has its effects on the

business based not only price but on differentiation which enables it to face

competition effectively.

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8 Marketing plan

8.1 Target MarketMoving from wholesaling to retailing Bakerman Jelly’s current target market, rather their

primary target market would be the households in Sri Lanka as it’s a day to day FMCG

product.

8.2 Market PositionIn the market for Jelly, Motha is the current market leader and Harvest is the market

challenger. As Bakerman’s awareness level is very poor and as it is new to the retail market,

it is one of the market followers currently. Bakerman intend to capture the market leader

position by penetrating the retail market.

8.3 Current Trends in the marketIn the current market the demand for instant puddings/desserts are continuously increasing

due to the fact that it is easy to make and use. In Sri Lanka as women are becoming more

career oriented and engage themselves in different fields of interests, the time they spend

on cooking is very less though they have the interest of trying them out. Hence, instant

puddings/desserts have become their choices when it comes to ease of cooking.

At the same time, a new trend is emerging where jelly is combined with other desserts such

as trifle, cakes, etc. Women who are enthusiastic about cooking especially in trying out new

recipes find jelly as one of the most suitable ingredient in the preparation of many new

desserts.

Quite similarly the Jelly market has become a very attractive market for children. Children

love to eat jelly due to its different colours and flavours. The new trend in targeting the

children is to coming up with different moulds and shapes of jelly’s and also readymade jelly

tubs in different shapes in that case.

8.4 Strategic FocusAs Pettah Essence Suppliers are mainly focusing on wholesaling thus far, currently they

intend to position and promote their brands, especially ‘Bakerman’. As a result they are at

present focusing more towards their retailing. Hence, their strategic focus is to grow their

business in terms of expanding their market into different locations as retailing and widen

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their distribution network. In order to create awareness they intend to focus more on

promotional and marketing aspects.

8.5 Growth StrategiesCurrently the company does not focus on any growth strategies as they were solely focusing

on wholesaling in which they are well established and is the market leader in supplying raw

materials. In consideration to their retailing sector when analyzing the company’s growth

strategies in terms of Ansoff’s Matrix they intend to focus on;

Market Development – where they want to expand their market into different locations as

retailers since they are currently situated only in pettah. Hence, to successfully expand they

need to widen their distribution network which they are currently lacking of.

Market Penetration – As wholesalers Pettah Essence Suppliers are the sole distributors of

raw materials of confectioneries and bakery ingredients for all the leading companies in Sri

Lanka. As retailers they have been successful in establishing their products in terms of the

reputation of their wholesaling. Yet, the use of Bakerman Jelly among the target market is

comparatively low with Motha, etc. Thus, the company intends to penetrate the market

through effective marketing communications and positioning.

8.6 Generic StrategyIn accordance to the generic strategies of Porter’s the current strategy of Bakerman Jelly is

low cost leadership as a result of which they pass on the cost benefit to the customers. But

as the market is very competitive it is vital for Bakerman Jelly to also focus on differentiation

strategies. Therefore it becomes an imperative for them to become a Best Cost Provider to

focus on differentiation while reducing costs effectively in all possible ways.

8.7 Pricing StrategyThe current pricing strategy of Bakerman Jelly is penetration pricing. They should continue

to follow the same pricing strategy as it is a product targeted at the mass market including

all income levels and social classes. As Bakerman intends to capture the position of a market

leader in terms of god quality provider at lower prices, it should continue with the

penetration pricing strategy.

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8.8 Placing StrategyCurrently Bakerman Jelly is only available exclusively in their own retail shops which are

mainly situated in Pettah. This would not be a very effective strategy in terms of trying to

penetrate the market and also for market development. Thus, it is important that Bakerman

makes their product extensively available everywhere in the market, especially in other

retail outlets such as supermarkets and other confectionery stores.

Currently their distribution is in locations such as Colombo where it covers only Pettah,

Kandy and also Jaffna which is currently of high potential as a result of the end of war. Thus

far, Pettah Essence suppliers didn’t have intermediaries in their retail sector due to lack of

man power and the complexity of handling it. Yet, they used few agencies in terms of good

relationships they had with them to distribute to Kandy and Jaffna. The distribution was

done within the organization on the basis of trust and reliability they had on each other and

not with valid agreements, etc.

As mentioned above, in order for Pettah Essence to make their product Jelly an everyday

product, they should make the product available extensively. We suggest that Pettah

Essence should first of all focus on expanding their distribution within Colombo. As they are

only established in Pettah they should now target all the supermarkets around Colombo.

The supermarkets would be Cargills, Keels, Laugfs, etc. and also the grocery stores in places

where the population is quite high.

When the company establishes itself within Colombo, they should widen their distribution

all around Sri Lanka. This will again be by approaching the supermarkets such as Cargills,

Keels, etc. and the grocery stores around Sri Lanka. Hence, in order to successfully do this

the supermarkets averagely charge a commission of 35% in the selling price. This will include

the relevant distribution cost which is incurred by the supermarkets to distribute our

product Jelly in all their outlets around Sri Lanka. Quite similarly we suggest Pettah Essence

to have agreement with external distribution agencies to distribute to all the other grocery

stores. These, agencies too averagely charge a commission of 35% from the selling price of

the product. Therefore, the basic cost on distribution which Pettah Essence will bare would

be 35% of the selling price of the product.

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8.9 ProductIn terms of the product

Bakerman has only four

flavours of Jelly which is not

adequate and attractive

enough to attract the market.

Hence, they should focus on

coming up with different

flavours of Jellys, in different

quantities and in different

shapes/moulds as it will

increase the range of choices

for the target market. This

captures a lot of shelf space,

and also will be one of the modes through which Bakerman Jelly can become the top of the

mind brand. Having new additions to this particular product line will give them the

competitive advantage over other competitor brands in terms of differentiation.

Bakerman Jelly can also consider of including a specific ingredient that would be of health

conscious which can be used to position the product as a healthy dessert. This will attract

women, rather mothers in terms of buying them for their children.

8.10 PackagingCurrently the packaging of Bakerman Jelly is very poor in terms of quality as well as

attractiveness. Hence, they should improve their packaging in terms of quality as well as the

appearance. They should come up with solid box packaging which is air proofed. They

should also use different colours and different images which represent the respective

flavours of the jelly. Additionally, having the packaging of the Jelly in the shape of its

flavours will be a Unique Selling Point to Bakerman. For example, if its strawberry flavoured

Jelly the packaging would be in the shape of a strawberry. Along with the packaging giving

different moulds for the jelly would be another strategy to differentiate your product.

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8.11 Promotional Plan

8.12 Positioning Statement One of the targets of Bakerman Jelly is to make their product as a daily used product. In

other words to make it be a part of their customers’ every memorable moments in life.

Hence the positioning statement will be as follows;

“Jolly Life with Jelly”

We recommend this statement as we intend to target mainly kids as our target market and

also the households. Hence the statement should be catchy, unique and suitable for all the

segments of our target market. The main idea behind this is to make them easily remember

and recall our product. Thus, we are focusing making Bakerman Jelly as the top of the mind

brand in terms of Jelly.

8.12.1

Push and Pull Strategies

8.12.1.1 Push StrategyAs Bakerman is new to the market of retailing its’ product Jelly, an initial push strategy of

some sort is useful because the brand Bakerman and the product Bakerman Jelly is not yet

familiar to the company’s target market which is the households. Actively, engaging the

intermediaries such as the company’s retailers such as supermarkets and other grocery

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stores through networking and through trade promotions will be a smart choice for

Pettah Essence Suppliers to do. The biggest issue the company might face is when they

assume that their brand Bakerman is familiar in the market since they have a well

established wholesale market. As Bakerman Jelly is totally new to the retailing market it’ll be

very difficult to get the target market to quickly adapt to this particular Jelly as there are

already well established brands such as Motha, Harvest, etc. which has captured the market

widely and also the target market is unaware about the Bakerman Jelly’s quality and taste.

Hence push marketing will make the Bakerman brand more persuasive and ubiquitous. It’ll

also help Bakerman Jelly to acquire leads which can be converted into a loyal customer base

in the long run.

8.12.1.2 Pull StrategyWhile focusing on a push strategy, pull strategy should also be utilized alongside for

Bakerman jelly. For example, Bakerman Jelly can pull in buyers by creating the demand in

terms of wide range of choices, preferred tastes and also in terms of higher quality product

with lower prices. The first attraction can be done through intensive sales promotions. Once

the company gets the target market to try the Bakerman Jelly then they can initiate push

marketing strategies at specific segments of the captured target market. There are several

instances where pull marketing is especially pertinent. As Jelly is a FMCG which is widely

available everywhere in any retail outlets the possibility of getting your target market to

purchase the Jelly only through push marketing is inadequate. Hence first of all it is

important for Bakerman to create brand awareness and build the trust on their brand in

terms of quality which will lead the target market to ask for Bakerman Jelly during

purchases. This is one effective source through which the target market can be captured.

8.12.2 Sales PromotionsA major issue Bakerman is facing currently is their poor promotional strategies. As they are

mainly focusing on wholesaling they do not actually have any specific promotional strategies

for their product Jelly. Promoting on mass media wouldn’t be appropriate as it incurs high

cost.

8.12.2.1 Pull PromotionsAs the product is new to the retail market widely, sales promotions will be the most suitable

mode of promotion for Bakerman Jelly. Free sample giveaways, buy one get one free,

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premiums such as free jelly moulds and recipes, etc. would be suitable. Also having

competitions such as draws for sending in the packages of the Jelly would also increase the

purchase of the product.

Free giveaways such as stickers of famous cartoon characters will easily attract children in

buying the product.

8.12.2.2 Push PromotionsAs trade promotions discounts for the retailers, commission on sales of the product, in-store

promotions such as posters, banners, POP sales, etc. will be few of the ways through which

the retailers can be motivated to push the Bakerman Jelly towards the target market.

8.12.3 Buy more shelf spaceBuying more shelf space in the prime outlets such as supermarkets will give them the

advantage of making the consumers buy your product more than your competitors’ as it will

be available extensively.

8.12.4 Leaflets / BrochuresDistributing leaflets and brochures outside the retail shops especially in and out of the

supermarkets which includes interesting recipes will be an effective method of making your

customers aware of your product.

8.12.5 Sampling/premiums with other productsAs bakery products such as baking powder, etc are well established in the market under the

Bakerman brand name, giving away samples of Bakerman Jelly or as premiums when

customers purchases Bakerman bakery products would be an effective way of making your

customers try the Bakerman Jelly. Hence, if the quality and taste is up to the expectations of

the customers this will trigger repeat purchases.

8.12.6 Direct MailsWith the help of the marketing team in the organization direct mails can be sent to potential

customers. Identifying the potential customers would not be of any issue as we are

targeting the mass market.

8.12.7 FacebookFacebook can be another mode through which you can create a group for Bakerman Brand

where you can promote it. A Facebook web page will be created as it’s the best and free

promotional plan for Bakerman. Any future promotions could also be edited on this page. It Chap

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will also help Bakerman keep track of its customer base by roughly having an idea of

their existing customer base. Bakerman will be personally able to connect with its customers

and personalize their preference and opinions about the Bakerman Jelly which will give

them immense ideas on how to improve the product in terms of the flavor, price, package,

distribution, etc.

9 Operational Plan This operational plan is the action plan of the pettah essence suppliers where it leads the

company to reach its organisational goals and objectives. It is an operational plan for the

next three years. It includes an outline of the resources, machinery used to manufacture,

technology which is used and also how to acquire the staff and suppliers. Since we are more

focused on the expansion of the business and out distribution networks the operations for

the pettah essence of suppliers are limited.

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9.1 Availability of Raw materials All the jelly flavoured products are locally made in the factory. The ingredients to make this

product include sugar, gelatine, malik acid and colour powder. The main flavours available in

the industry market will be pineapple, orange, strawberry and mango. In addition to these

flavours Pettah essence will hope to produce many other different flavours according to the

customer preference. The raw materials will be purchased by the parent company (Pettah

Essence of Suppliers) where they can continue to import the raw materials from abroad.

9.2 Equipment neededPettah essence is currently using machinery for the powdering of jelly, packaging and

labelling which is a huge process in the organisation. As for the forecast the sales is

expected to grow within the next two years due to the high promotions and the awareness

programs. Therefore they would need another machine within the next two years for the

production process.

9.3 Technology required The main technology used for pettah essence will the promotional aspects they want to

focus on where they will create a website and also send direct mail to the potential

customers regarding the new flavours and essence regularly . A data base can also be

created with regard to the retail outlets to keep count of all the customers there are in the

target market. A CRM software can be used in the organisation to ensure that the customers

are looked after with standard and quality based product. An IT system is also needed to

keep in track and record information such as the materials needed, stocks available, and the

employee’s payroll etc.

9.4 Location & distributionThe stores are mainly operating in Colombo (pettah), kandy and jaffna. With the expansion

they are suggested to enter the supermarket chains and grocery shops within Colombo.

Then with the growth of sales they can expand to other supermarkets and grocery shops

island wide. Mainly, will be focused on expanding their distribution channels to kaluthara,

negombo, mout lavinia, wellawatthe, kolpetty etc.

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effectively to avoid destruction of the regular work that needs to be done. Safety of

the employees should be taken care of by training them to use the machinery accurately

and also the company should obtain a group insurance policy offered by insurance

companies for the entire organisation as a whole.

9.5 Quality control As the quality should be maintained at all times of bakersman jelly they will ensure that the

quality of the jelly packets are high and will maintain the standard by testing the ingredients

and also the colouring used for different flavours by chemists to make sure that the issues

are eliminated and that it won’t be harmful to the health of the customers. They also will

make sure that all the jelly packets are ISO 9001 certified to maintain the standard and

quality of the brand and image.

10 Human Resource planPettah Essence, being one of the competitors in the FMCG industry, extremely values the

overall contribution of its employees as their level of contacts with the target customers

decide the path to long term organizational success or dilemma. Therefore, the

management should be capable of recruiting and selecting right people for the right job at

right time to ensure efficiency and effectiveness.

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10.1 Management teamThe company management team, currently consist a staff of four, where it involves a

manager and three executive personnel who are responsible of undertaking all operational

activities of the place. Also, it should be mentioned that the staff is properly compensated

with the amount of work load they undertake since employee satisfaction is a vital aspect in

attaining long term objectives. They will be both directly involved in day to day operations

as well as behind the scenes.

10.2 WorkforceCurrently the employees at Pettah Essence has been categorized according to the sections

where each person is responsible, is such as ware house personnel, in store personal

shoppers and data entry and accountants. But in the near future when you are to have your

own distribution operation system, in house, you should be looking forward to hire more

people to fill in the positions of sales executive, drivers and etc… Furthermore it is important

to mention that at the moment, Pettah Essence is consisted of four labourers handling and

operating the machinery.

10.3 Skills required vs. skills available Efficient managerial as well as technical skills

Knowledge about the products- for example the different colors, flavors etc available

Technical knowledge such as adequate computer skills

Customer service- fluent in English / Tamil and Singhalese, politeness, make the

customer feel at ease, understand customer preferences and knowledge of what the

customer is looking for

Staff must have sense of changes in environment, competitors and recent trends.

10.4 Human resource functionsBy implementing a planning process Pettah Essence will be able to establish the company

goals and objectives for a certain period of time. The owner of Pettah Essence will be able to

identify the required skills and the number of employees. A proper planning process will be

the basic foundation of Pettah Essence. As a means of functioning as a whole, Strategic

decisions will solely be made by the top management. Since our client is falling under the

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category of small business units, it is obvious that set out annual targets are fairly

smaller than the targets to be achieved by a multinational firm.

It is vital that employees are confident and thorough about the job specifications and have a

thorough knowledge about the product, its uses and its benefits. Also they should be given

the feeling of having a supportive management team and directors. This will enable the

business to identify the employee requirements as well as suggestions. The owner of Pettah

Essence can implement different means of empowerment and certain activities to make

employees feel the sense of belongingness to the organization and make work atmosphere

more interesting. Such as choosing the best employee of the month, best idea generator of

the month and also the best chef for the month. This will help employee ethics and honesty.

10.4.1 RecruitmentCurrently as mentioned above there are four labourers operating and handling the

machinery. As a result of expansion the company will be purchasing a machinery to be in

use in the year 2010. Hence a recruitment of minimum of four labourers is vital. Quite

similarly, as we expect the demand of Bakerman Jelly to increase rapidly in another 2 to 3

years, this will lead to increase in production. Hence it vital that they recruit another set of

four employees to handle the production, which will give a total of 12 labourers in the

production process.

10.4.2 Training and developmentTraining can be known as the key element to improve the Pettah Essence operations. By

implementing a training program at Pettah Essence, existing employees and the new coming

employees, will build up a good understanding of the business as well as build up their skills.

There is no exact recruiting process being practiced in the organization. As a strategy, they

get the new recruits to be blend with the old employees and to get them self’s trained

which can be known as the on the job training. By implementing a on the job training

program Pettah Essence will not incur any cost.

The company should also train the new recruits of the production labourers in terms of

handling and operating the machinery. This can be done through in-house training with the

help of existing employees which will not be a huge impact on their cost.

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10.4.3 CompensationIt is important that the company should take necessary action to develop a compensation

package which is more attractive for its staff in terms of, rewarding incremental

commissions on sales under step by step basis, providing medical and lodging facilities. This

could increase the profitability as well as the employee satisfaction. Currently Pettah

Essence wage rates to their employees are in the average level of wages, which are being

given to its competitor employees, thus they should be looking forward to increase the level

in order to retain their employees.

So, as a derivation of stretched expenses for staff compensation package, company would

have to stretch out its budget on the provision of miscellaneous expenses from year 2011

onwards.

10.5 Organizational Structure (hierarchy- flat structure)As we mentioned earlier, Pettah Essence is falling under the category of small business

units, it is obvious that set out annual targets are fairly smaller than the targets to be

achieved by a multinational firm. So, after the analysis, we realized that they should carry on

having a flat organizational hierarchy, where it would involve an operational manager,

below the chairperson, and the executives to undertake all activities.

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April May June July August September October November December January February MarchNo of Units 23,319.00 19,765.50 18,652.50 16,749.00 21,396.00 20,625.00 18,447.00 21,525.00 21,375.00 22,957.50 18,798.00 22,306.50

Sales Revenue 1,282,545.00 1,087,102.50 1,025,887.50 921,195.00 1,176,780.00 1,134,375.00 1,014,585.00 1,183,875.00 1,175,625.00 1,262,662.50 1,033,890.00 1,226,857.50 Sales commission 448,890.75 380,485.88 359,060.63 322,418.25 411,873.00 397,031.25 355,104.75 414,356.25 411,468.75 441,931.88 361,861.50 429,400.13 Net Sales Revenue 833,654.25 706,616.63 666,826.88 598,776.75 764,907.00 737,343.75 659,480.25 769,518.75 764,156.25 820,730.63 672,028.50 797,457.38

Direct cost 528,874.92 448,281.54 423,038.70 379,867.32 485,261.28 467,775.00 418,377.96 488,187.00 484,785.00 520,676.10 426,338.64 505,911.42 Contribution 304,779.33 258,335.09 243,788.18 218,909.43 279,645.72 269,568.75 241,102.29 281,331.75 279,371.25 300,054.53 245,689.86 291,545.96

Rent 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00 Salary 73,320.00 73,320.00 73,320.00 73,320.00 73,320.00 73,320.00 73,320.00 73,320.00 73,320.00 73,320.00 73,320.00 73,320.00 Depriciation 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 water 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 Telephone 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 Electricity 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 Other Expen 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 Total cost 129,486.67 129,486.67 129,486.67 129,486.67 129,486.67 129,486.67 129,486.67 129,486.67 129,486.67 129,486.67 129,486.67 129,486.67

Net profit 175,292.66 128,848.42 114,301.51 89,422.76 150,159.05 140,082.08 111,615.62 151,845.08 149,884.58 170,567.86 116,203.19 162,059.29

2011 2012 2013 2014 2015 TotalNo of Units 614,790.00 737,748.00 885,297.60 1,062,357.12 1,274,828.54 4,575,021.26

- Sales Revenue 33,813,450.00 40,576,140.00 48,691,368.00 58,429,641.60 70,115,569.92 251,626,169.52 Sales commission 11,834,707.50 14,201,649.00 17,041,978.80 20,450,374.56 24,540,449.47 88,069,159.33 Net Sales Revenue 21,978,742.50 26,374,491.00 31,649,389.20 37,979,267.04 45,575,120.45 163,557,010.19

Direct cost 13,943,437.20 16,732,124.64 20,078,549.57 24,094,259.48 28,913,111.38 103,761,482.27 Contribution 8,035,305.30 23,844,015.36 28,612,818.43 34,335,382.12 41,202,458.54 136,029,979.75

- Rent 432,000.00 432,000.00 432,000.00 432,000.00 432,000.00 2,160,000.00 Salary 879,840.00 1,059,840.00 1,239,840.00 1,419,840.00 1,599,840.00 6,199,200.00 Depriciation 120,000.00 120,000.00 120,000.00 120,000.00 120,000.00 600,000.00 water 24,000.00 24,000.00 24,000.00 24,000.00 24,000.00 120,000.00 Telephone 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00 90,000.00 Electricity 60,000.00 72,000.00 86,400.00 103,680.00 124,416.00 446,496.00 Other Expen 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 100,000.00 Total cost 1,553,840.00 1,745,840.00 1,940,240.00 2,137,520.00 2,338,256.00 9,715,696.00

Net profit 6,481,465.30 22,098,175.36 26,672,578.43 32,197,862.12 38,864,202.54 126,314,283.75

Financing432000 Capital 879840 Commercial financing (89%) 2,717,918120000 Borrowings from all partners (11%) 335,922

24000 Marketing 18000 Borrowings from Partners (100%) 400,0006000020000

1500000150000

50000Facebook Facebook 30000Direct MailsDirect Mails 10000Leaflets / BrochuresLeaflets / Brochures 60000Sales PromotionsSales Promotions 100000

3453840 Total 3,453,840

TelephoneElectricity Other Expen

Cost

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Total

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11 Financial Plan (in Rupees)

11.1 Cost and Financing

11.2Forecasted Income Statement (2010 / 2011)

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year 01 year 02 year 03 year 04 year 05Cash In Flowsales 21,978,742.50 26,374,491.00 31,649,389.20 37,979,267.04 45,575,120.45 Capital 1,500,000.00 1,500,000.00 Total Cash In Flow 23,478,742.50 26,374,491.00 33,149,389.20 37,979,267.04 45,575,120.45

cash out flowRent 432,000.00 432,000.00 432,000.00 432,000.00 432,000.00 Staff salaries 879,840.00 1,059,840.00 1,239,840.00 1,419,840.00 1,599,840.00 Telephone 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00 Water 24,000.00 24,000.00 24,000.00 24,000.00 24,000.00 electricity 60,000.00 72,000.00 86,400.00 103,680.00 124,416.00 Other Exp 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 Total cash out flow 1,433,840.00 1,625,840.00 1,820,240.00 2,017,520.00 2,218,256.00 net cash flow 22,044,902.50 24,748,651.00 31,329,149.20 35,961,747.04 43,356,864.45 B/f 12,295,800.00 34,340,702.50 59,089,353.50 90,418,502.70 126,380,249.74 Carried Down Balance 34,340,702.50 59,089,353.50 90,418,502.70 126,380,249.74 169,737,114.19

Material cost 19.80 paking cost 3.60 over head 1.89 other exp 0.50

Total 25.79

Cost for the product unit

Description Units

Cost of a product unit 25.79

OAR (Overhead Absorption Rate) 1.89

Total Cost per unit 27.68

Profit Margin 200%

Price per 100g packet 55.36

Agent cost 35% 19.38

Revenue at hand 35.98

Profit in hand per unit 8.30

Expected sales per month in average 955 units

Per month sales 100 g pack 34,378.56

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11.3 Forecasted Cash flow Statement (2011 – 2015)

11.4 Unit Cost The unit cost is for a 100g packet of Jelly.

11.5 Unit Price

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Activities2010 2011 2012

Shelf Space 200000 150000 150000Sampling / Premiums 50000 50000 45000Facebook 40000 30000 30000Direct Mails 10000 10000 10000Leaflets / Brochures 75000 60000 50000Sales Promotions 100000 100000 75000

Total Expense 475000 400000 360000

Cost (Rs.)

Description Rs. Per day Rs. Per month 2011 2012 2013 2014 2015Monthly paid emloyee salary 17500 17500 18000 18500 19000 19500

15500 15500 16000 16500 17000 17500Total monthly paid employee salary 33000 33000 34000 35000 36000 37000Daily paid employee salary in average 640Total salary for the daily paid employees 40320 40320 40820 41320 41820 42320Total salary per month 73320 73320 74820 76320 77820 79320Total salary per leadership 879840 879840 897840 915840 933840 951840

Description UnitsSquare feet 400Price per Square feet Rs. 90Rent per month 36000Rent per year 432000

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11.6 Sales and Marketing Costs

11.7 Salary

11.8 Rent

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Year 2011 2012 2013 2014 2015Total FC 1,161,953 1,394,344 1,673,212 2,007,855 2,409,426 Contribution (per unit) 30 30 30 30 30 BEP (in units) 39,295 47,154 56,585 67,902 81,482 ROI = PBT / Capital (%) 3 10 6 8 9 GP Margin 24% 59% 59% 59% 59%

OP Margin 19% 54% 55% 55% 55%NP Margin 13% 38% 38% 39% 39%

Years CF DCF @ 10% PV- (1,500,000.00) 1.00 (1,500,000.00)

1 20,544,902.50 0.909 18,677,184.09 2 24,748,651.00 0.826 20,453,430.58 4 35,961,747.04 0.683 24,562,357.11

NPV 62,192,971.78

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11.9 Depreciation

Liife time of the machinery 12.5 years

Asset Value 1500000

Depriciation 120000

11.10 Ratio Analysis

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12 Contingency plan

12.1 Plan AAfter analyzing current market projection in the industry we have decided to develop brand

awareness and an expansion strategy for bakerman jelly. This decision was taken based on

the market research we have carried out, resource availability of bakerman, evaluating cost

and benefit of market alternatives available for target market, target audience income and

purchasing power, geographic considerations in relation to skewness, customer demand for

jelly in the market and so on. In order to gaining market share and long term profit,

Increasing the brand awareness of the product and expansion strategy is the best option

currently available for bakerman jelly. However this plan might not be similar to the actual

out come due to risk factors such as;

Government tax regulations might be fluctuating at the time when the product is

actually lounging to the target market. Unexpected cost increases would be affected to a

great extent because the government changes of its tax policies and import and export

tariffs and therefore less or Non-availability of materials. Those fluctuations will directly

course to the cost of production, then to the prices and targeted profit. Recession of the

economic situation of the country affects the personal income levels of potential

customers. If the income levels decrease then that will affect to the expected purchasing

power of customers. And therefore sales will decrease for a certain amount of the

target. Also, Sales projections may be lower than projected due to direct and indirect

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competition, changes in demand or problems with marketing strategy or

distribution channel.

Due to the above mentioned reasons, we would like to recommend a plan B for Baersman

jelly, if plan A wouldn’t bring the expected benefits in terms of increased market share,

make brand awareness, improved customer satisfaction, increased reputation and profits.

The plan B we propose could be acknowledged as follows;

12.2 Plan BTarget only the main areas where bakerman products are currently available such as Kandy

and Colombo rather expanding the distribution channel. But the brand awareness program

will focus on all selected locations targeting future expansion of the market share.

13 Balance ScorecardFinancial Perspective

Goals Measures

Survive Continuous maintenance of healthy cashflow

Succeed Achieving shorter payback periods or quicker

breakeven

Prosper Continuous increase on ROI and market

share

Customer Perspective

Goals Measures

New flavors Most preferred flavors by the customers

Customer Satisfaction Find out customer competitors’ brand

preferences

Preferred retailers Retailers who give more shelf space in their

supermarkets.

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Internal business Perspective

Goals Measures

Technology effectiveness Reduction in the cost of units

Introduction of new flavors Effectiveness of introduction of new flavors

New flavors New flavors of competitors available at

supermarkets

Learning and Growth Perspective

Goals Measures

Training Effectiveness of factory workers in using

the machinery and sales representatives

with sales.

Technology How is introduction of new machinery

contributing towards the overall product

quality.

Flavor contribution Identify the sales percentage of each

flavor’s contribution

Innovation vs. Competition Introduction of new flavors competing with

existing competitors.

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14 References

Alagan, R. (2009). Sri Lanka's Environmental Challenges. Retrieved 8 30, 2010, from Global Vision: http://www.gvglobalvision.org/publications/Sri%20Lanka%92s_Environmental_Challenges.pdf

Exchange Rates. (2010). Retrieved 07 21, 2010, from Customs.gov: http://www.customs.gov.lk/exchange_rates/er100823.pdf

Harvest Jelly. (2010). Retrieved 07 21, 2010, from Home: http://stores.burgundybuttons.com/-strse-1146/Saltbox-Harvest-Jelly-Roll/Detail.bok

Motha Jelly. (2010). Retrieved 07 12, 2010, from Motha Home: http://halaal.acju.net/food-processing-facilities/36-motha.html

Perera, Mr.K.L.S. 2003, An Overview of the Issue of Solid Waste Management In Sri Lanka in Martin J. Bunch, V. Madha Suresh and T. Vasantha Kumaran, eds., Proceedings of the Third International Conference on Environment and Health, Chennai, India.

15 Bibliography

Performance appraisal methods (n.d.). The HR management. Retrieved May 17, 2010, from http://www.humanresources.hrvinet.com/performance-appraisal-methods/

Stone, J, R. (2005).Human Resource Management. (5th Ed.).John Wiley and sons, Australia.

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16 Appendices

16.1 Summary of the Objectives

STRATEGIC OBJECTIVES SMART

Manufacturing plant 2 years

In-house Research and Development team 2 years

New products targeting the segment of household 5 years

Ethical company in Sri Lanka 3 years

Brand awareness and maintaining a stable loyal customer base 2 years

Extensively in all the retail outlets 5 years

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FINANCIAL OBJECTIVES SMART

Increase sales revenue by 35% 1 year

16.2 HR Considerations

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16.3 Risk Factors

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Table of Contents

1 Introduction......................................................................................................................1

2 Company Background.......................................................................................................2

2.1 Vision.........................................................................................................................3

2.2 Mission...................................................................................................................... 3

2.3 Goals..........................................................................................................................3

2.4 Objectives..................................................................................................................3

2.4.1 Strategic Objectives............................................................................................3

2.4.2 Finance Objectives..............................................................................................3

3 Industry Overview.............................................................................................................4

4 SWOT Analysis.................................................................................................................. 6

4.1 Strengths....................................................................................................................6

4.2 Weaknesses...............................................................................................................6

4.3 Opportunities.............................................................................................................7

4.4 Threats.......................................................................................................................7

5 Environmental Analysis (PESTEL Analysis).........................................................................9

5.1 Political...................................................................................................................... 9

5.2 Economical.................................................................................................................9

5.3 Socio Cultural.............................................................................................................9

5.4 Technological...........................................................................................................10 Chap

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5.5 Environmental..............................................................................................10

5.6 Legal.........................................................................................................................10

6 Competitor Analysis........................................................................................................11

6.1 Motha Confectionery Works Ltd..............................................................................11

6.2 Harvest Confectionery Ltd.......................................................................................11

7 Porter’s five forces..........................................................................................................12

7.1 Threat of New Entrants (High).................................................................................12

7.2 Bargaining Power of Suppliers (less)........................................................................13

7.3 Bargaining Power of Customers (high).....................................................................13

7.4 Threat of Substitutes (High).....................................................................................14

7.5 Competitor/ Industry Rivalry (High).........................................................................14

8 Marketing plan................................................................................................................15

8.1 Target Market..........................................................................................................15

8.2 Market Position....................................................................................................... 15

8.3 Current Trends in the market..................................................................................15

8.4 Strategic Focus.........................................................................................................15

8.5 Growth Strategies....................................................................................................16

8.6 Generic Strategy......................................................................................................16

8.7 Pricing Strategy........................................................................................................16

8.8 Placing Strategy.......................................................................................................17

8.9 Product....................................................................................................................18

8.10 Packaging.................................................................................................................18

8.11 Promotional Plan.....................................................................................................19

8.12 Positioning Statement..............................................................................................19

8.12.1 Push and Pull Strategies...................................................................................20

8.12.2 Sales Promotions..............................................................................................21

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8.12.3 Buy more shelf space.............................................................................21

8.12.4 Leaflets / Brochures..........................................................................................21

8.12.5 Sampling/premiums with other products.........................................................21

8.12.6 Direct Mails.......................................................................................................22

8.12.7 Facebook..........................................................................................................22

9 Operational Plan.............................................................................................................23

9.1 Availability of Raw materials....................................................................................23

9.2 Equipment needed..................................................................................................23

9.3 Technology required................................................................................................23

9.4 Location & distribution............................................................................................24

9.5 Quality control.........................................................................................................24

10 Human Resource plan.................................................................................................25

10.1 Management team..................................................................................................25

10.2 Workforce................................................................................................................25

10.3 Skills required vs. skills available..............................................................................25

10.4 Human resource functions.......................................................................................26

10.4.1 Recruitment......................................................................................................26

10.4.2 Training and development................................................................................26

10.4.3 Compensation...................................................................................................27

10.5 Organizational Structure (hierarchy- flat structure).................................................27

11 Financial Plan (in Rupees)............................................................................................28

11.1 Cost and Financing...................................................................................................28

11.2 Forecasted Income Statement (2010 / 2011)..........................................................28

11.3 Forecasted Cash flow Statement (2011 – 2015)......................................................29

11.4 Unit Cost..................................................................................................................30

11.5 Unit Price................................................................................................................. 30

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11.6 Sales and Marketing Costs............................................................................30

11.7 Salary.......................................................................................................................31

11.8 Rent......................................................................................................................... 31

11.9 Depreciation............................................................................................................31

11.10 Ratio Analysis.......................................................................................................32

12 Contingency plan.........................................................................................................33

12.1 Plan A.......................................................................................................................33

12.2 Plan B.......................................................................................................................33

13 Balance Scorecard.......................................................................................................34

14 References...................................................................................................................36

15 Bibliography................................................................................................................ 36

16 Appendices..................................................................................................................37

16.1 Summary of the Objectives......................................................................................37

16.2 HR Considerations....................................................................................................38

16.3 Risk Factors..............................................................................................................39

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Executive Summary

The focus of the report is to give effective and efficient solutions for Pettah Essence

Suppliers to successfully to expand themselves around Sri Lanka. The expansion is related in

terms of widening their distribution channels along with increasing level of awareness about

their products, especially Jelly. Hence, we as a consultancy team implemented and carried

out a thorough analysis to identify the possibilities and the best ways to expand their

business.

As a result of our analysis we suggest a marketing plan which focuses on how their current

marketing mix should be improved. This was followed by a thorough plan on how their

operational activities and requirements should be fulfilled in order to successfully expand

their business. It is also vital to understand the HR practices that should be implemented.

Thus, a HR plan is also recommended to the management.

The feasibility of the whole project is assessed through a financial analysis which forecasts

and projects the organization’s performance in terms of the particular product Bakerman

Jelly. Finally, a contingency plan is suggested having the consideration that there’s always a

certain amount of uncertainty which can obstruct what we plan.

Therefore, we are quite confident that this report will be of great use and support to the

management of Pettah Essence Suppliers. If the management has any further inquiry do not

hesitate to contact our consultancy firm.

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