MBA IN MARKETING AND

ENTREPRENEURSHIP

STRATEGIC MARKETING MANAGEMENT

NAME OF STUDENT: SAITOT K JOEL

REG //: 2015010034

NAME OF INSTRUCTOR: Dr. KASTORY

SUBMISSION DATE: 17/7/2015

TERM PAPER – MARKETING PLAN REPORT

NAME OF PRODUCT/BRAND – “MOLIFE”

MARKRTING PLAN PERIOD – 5YEARS

EXECUTIVE SUMMARY

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This report will serve as a marketing plan to introduce an innovative green coconut drink for

ABC Company by the name of "MoLife" in the Tanzanian market. MoLife would be a

revolution in the soft drinks industry of Tanzania as the proposed market plan is covering all

aspects of the marketing such as the target customers, current market situation and

preferences of people. I want to market Green Coconut Water. I have prepared this feasibility

plan on that basis. I have assigned a name for the product as “MoLife”. Since the raw

materials are very much available in our country, I have decided to give the product an

international image.

MoLife is a kind of soft drink that provides the consumers with processed green coconut water

in bottles. For the marketing purpose of the product I have decided to launch three product

lines. The MoLife would be launched in the market at 250 ml. 500 ml. and 1 Litre bottle. I

have set a reasonable price for the product so that all kinds of people can afford to buy this soft

drink. I would gain a competitive advantage, as this is a first hit in the market.

I have targeted a huge market segment for the product. Tanzania is a large populated country.

Lots of people are looking for such a product. Green Coconuts are not available all the time.

For example: a person walking on the street. Suddenly he feels thirsty. Now if he wishes to

drink green coconut water he cannot find it easily. It is not always found in the right place at

the right time. If I launch our product in the market, a person willing to drink green coconut

water can have it from a nearby shop. At present this is not possible. Our target market

includes health conscious people, sick people, sportsperson & many other consumers

which I have segmented from the Demographical, Geographical, and Psycho graphical &

Behavioral point of view.

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I have prepared a financial documentation for this feasibility plan of a new product. As I am

introducing the product in three categories at 250 ml, 500 ml and 1 Liter bottles, I have

prepared the Break-Even-Analysis for each of the product line. I have prepared the feasibility

plan for five-year basis.

For 250mls the break-even point is at 4158004 Units. That means if ABC Company sale

4158004 Units a year, they will make neither profit nor loss. So to make profit ABC has to

create a market demand in such a way so that more than 4158004 Units are sold every year.

Obviously the unit cost will eventually come down because of the law of Marginal Cost. Then

the break-even point will also come down. But that is from the long run perspective. So

initially ABC might suffer loss but ultimately they would earn enough profit. The consumers

will first taste the product by consuming the 250ml bottles. So ABC might gain a short run

profit from that.

For 500mls the break-even point is 4914004.914 units per year. So they have to sell more

than 4914004.914 units to earn profit. I know that after the product is ill promoted, people

will eventually consume more of 500mls, as pet bottles are more in demand. The price is such

that people will turn to the 500mls because ABC will provide them at lowest possible market

price.

For 1 Litre bottles I have a different plan. I know many people are not going to consume the 1

Litre package. So I have assigned more profit on them per unit. Our target is to sell less

quantity of products but achieving higher profit. For 1 Litre bottles I have estimated the

break-even point at 1724137.931 bottles per year. As I can see, I have prepared the selling

price in such a way so that, to be in a profit earning zone ABC have to sell least amount of

units comparing the other 2 product lines.

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I have given an elaborate discussion on financial summary at the later stage of the feasibility

plan. I have considered the Target Costing Pricing Policy; which means an ideal price is set

first based on customer considerations then target costs will ensure that the price is met. I

decided the market price before. Then I calculated the estimated unit price & fixed price.

Then I decided how much profit margin is possible on each of the product line. I have

assigned three different profit margins for three product lines. This price setting is based on

the current market research.

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TABLE OF CONTENTS PAGE

COVER PAGE…………………………………………………………………..1

EXECUTIVE SUMMARY……………………………………………………..2

TABLE OF CONTENTS……………………………………………………….5

1. INTRODUCTION……………………………………………………………...7

1.1 PRODUCT PORTRAYAL………………………………………………......7

1.2 PRODUCT PROFILE………………………………………………………..7

2. MARKET RESEARCH AND ANALYSIS…………………………………..8

2.1 MARKET DESCRIPTION…………………………………………………..8

2.2 MARKET SEGMENTATION ANF TARGETING………………………..8

2.3 COMPETITIVE ANALYSIS………………………………………………...11

2.3.1 SWOT ANALYSIS………………………………………………………….11

2.3.2 COMPETITOR ANALYSIS……………………………………………….12

3. MARKETING PLAN………………………………………………………….13

3.1.1 SETTING THE PRICE OBJECTIVE…………………………………….13

3.1.2 DETERMING DEMAND……………………………………………….....13

3.1.3 ESTIMATING COST………………………………………………………14

3.1.4 TYPES OF COST AND LEVEL OF PRODUCTION……………………14

3.1.5 ANALYZING COMPETITORS COST, PRICE AND OFFER………….14

3.1.6 SELECTING A PRICE METHOD…………………………………………15

3.2.1 ADVERTISING………………………………………………………………15

3.2.2 PERSONAL SELLING………………………………………………………15

3.2.3 PROMOTIONAL TOOLS……………………………………………………16

4. MANUFACTURING AND OPERATION………………………………………17

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4.1 LOCATIONS……………………………………………………………………17

4.2 HUMAN RESOURCE………………………………………………………….17

4.3 TECHNOLOGICAL ASPECTS……………………………………………….17

5. FINANCIAL ANALYSIS AND PROJECTION……………………………….18

5.1 SALE FORECASTING …………………………………………………..……18

5.2 PROFIT AND LOSS PROJECTION ………………………………..……..…19

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1. INTORUCTION

1.1 Product Portrayal

‘MoLife’ is a product that serve different segment of customer. The product is green coconut

water, which is unique in the current market. The green coconut water will be processed

and sold in glass bottle of convenient sizes of 250 ml, 500 ml and 1 liter. The green

coconut water will be very much refreshing and provide great support to the sick and

health conscious people. Our target market is very large with different segments. Our

expected sales are very high. The development cost is 32151.950 USD approx.

1.2 Product Profile

Name of the Product:  MoLife

Type of Product: Green Coconut Water

Ingredients: Pure natural green coconut water,

Sugar, mineral salts, vitamins C.

Container: Stylish glass bottle

Container size: 250 ml, 500 ml, 1 Litre

Product Price: 250 ml for 0.154USD

500 ml for 0.231USD

1 litre for 0.489USD

Estimated Durability: 12 Months from date of manufactured

Machinery used: Advanced technology imported from USA, UK and Netherlands.

Brand Slogan: Always Pure… Always Refreshing

2. MARKET RESEARCH AND ANALYSIS

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ABC Company wants to develop and introduce a new Product. So, I have gathered

information through in-depth interviews. I made a survey of the market to have a clear idea

about our market, our customer demand, needs and wants. This information helps ABC to

know about the current market and prospects of our new product.

2.1 Market Description

Tanzania is a country of about 40 million people. The total market size of the soft drink

industry is about 5 million and day by day it is increasing. I have a spread nationwide market

of different convenient product. People are nowadays very much concerned about the market

and product conditions. So I have a growing prospect of customers of “MoLife”. Among the

population I worked out few segments of customers who will prefer our product most.

2.2 Market Segmentation and Targeting

Market Segments

I have observed and analyzed the market and based on the nature of the market I segmented

the market in the following sectors:

Geographic Segmentation:

Tanga, Pwani, Dar es salaam, Zanzibar, Arusha, Kilimanjaro, Lindi, Mtwara and Mwanza.

Demographics:

Individuals

Family

Sportsman

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Business buyer

Psycho graphics:

Higher class

Higher mid class

Middle class

Behavioral:

Sick people

Health conscious

Sophisticated who take the new product from the market.

Target market and projections:

Analyzing all the segments, I decided our target market according to our product category.

The target customers of “MoLife” are sick people, health conscious people, sportsmen and

tourists. I have decided to charge 0.154USD for 250 ml bottles, 0.231USD for 500 ml bottles

and 0.489USD for 1 Litre bottles, if we consider price versus taste received then we can see

that taste received is more in value. Therefore charging the mentioned prices is justified. The

following graph gives a clear idea of our target market.

Target Market:

Health Conscious – 32%

Sick people –        43%

Tourist –                  3%

General people –  22%

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I separate our target market into four different segment based on their geographic,

demographic, psychographic and behavioral characteristics.

Health conscious: Health conscious people basically the sports person are one of our largest

target markets. In this segment, I get a lot of potential customer. Half of our total population

is young. This is a significant number that I have to concern about them and provide product,

which is fit for them. About 5 million people of this total number are health conscious. They

spend about 6.430USD in a month in average.

Sick people: Sick people are one of our major considerations. More than 1 million children

suffer from diarrhea that needs liquid food. Not only child but also the adult might suffer from

those types of problems.

Tourists: Every year a huge number of tourists visit Tanzania. I want to provide them with

“MoLife”.

General Customers: Besides the above segments, the general customers will acquire a

significant portion of our target market.

Market Needs:

“MoLife” wants to satisfy its customers need. That’s why it is important to identify the

market needs. Our first consideration is to provide the best product to our customers. That’s

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why I offer three different sizes of bottle with different prices for its different segment of

customers.

250 ml: The lowest price for the rural mid social class and individuals.

500 ml: Its target the sick people and tourist

1 litre: For a small family.

2.3 Competitive Analysis

The Soft drink industry is very much competitive. Many soft drink companies have acquired a

significant portion of the market. But the unique features of “MoLife” will take it far beyond

the reach of the competitor. Because no one has yet thought about selling green coconut water

in such a specialized way, to evaluate our prospect of “MoLife” in the current market I have

analyzed the market situation in various ways. Following are some demonstration of the

analysis:

2.3.1 SWOT analysis:

The product existence in the future is depending on its strengths, weakness, opportunities and

threats analysis:

Strengths:

1. Available input materials

2. Low production cost

3. Technological and marketing knowledge

4. Strong distribution channel

5. Easy manufacturing process

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6. Reasonable price

Weaknesses:

1. It is easy to copy the idea by others

2. Taste differ from the natural green coconut water

3. Green coconut water cannot be preserved for longer period

Opportunities:

1. Monopoly market

2. Large market

3. High demand

4. Might have a chance to get subsidies by Govt. to export

Threats:

1. High competition in future by copying the idea

2. Entrance of new product

3. Alternatives are avoidable in some segment

4. Uncertainty of launching a new product.

2.3.2 Competitor Analysis

The major soft drinks and juice companies in Tanzania of current market are:

Said Salim Bakhresa & Co Ltd

Coca cola

Pepsi

Foreign Products etc

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Distinct Competency:

These companies can try to entrance our market by launching new product lines to compete

us. Yet, I have distinct competitive advantage. That is our product is still brand new. The

other companies will take sometimes to enter into the market. Till then ABC can have a

monopoly market condition. The other advantage that I have is good price. ABC will sell

products in a reasonable price then other competitors do.

Strategies against competitors:

To compete with the major competitors ABC can adopt the following measures:

Providing the best service to create high customer satisfaction

Reasonable and acceptable pricing

Promising and providing top quality product

Launching highly effective mass promotional activities

Continuous innovation and modification of the products

Creating and maintaining long term customer relationship

Creating “Brand Loyalty” among the target consumers

3. MARKET PLAN

Pricing Strategies

I have decided to set a reasonable price for our product when ABC Company will develop it. I

considered many factors in setting the pricing policy. I will describe a six-step procedure:

3.1.1. Setting the pricing objectives:

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Our company has decided where it wants to position its market offering. I have chosen our

objective to maximize market share. I believe that a higher sales volume will lead to

reasonable unit costs and higher long-run profit. I have set the reasonable price because I

assume that the market is price sensitive. Our overall objective is to capture the maximum

market share by setting reasonable price.

3.1.2. Determining Demand:

Each price will lead to different level of demand and therefore have a different impact on

company’s marketing objectives.

3.1.3. Estimating costs:

I have estimated the cost and want to charge a price that covers the cost of production,

distribution and selling the product, including a fair return for its effort and risk.

3.1.4. Types of cost and level of production:

There are two types of cost: a) fixed and b) variable. In our new product development project

fixed cost is 257,215.60USD. Fixed cost includes- machinery, monthly bills, and salaries of

employees and so on, regardless of output.

There are some variable costs like-cost of bottle, packaging and so on. These costs tend to be

constant per unit production. I have estimated that per unit variable cost is 0.081USD for 250

ml, 0.162USD for 500 ml and 0.314USD for 1 litre.

3.1.5. Analyzing competitor’s costs, prices and offer:

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I have analyzed our competitors’ price and found that Azam charges 0.129USD for 250 ml

bottle, Coca cola 0.154usd for 250 ml Pac.

3.1.6. Selecting a pricing method:

I have chosen the target costing method to set price for our product; pricing that starts with an

ideal selling price based on customer considerations, then target cost will ensure that the price

is met.

Promotional Strategies:

To acquire a strong position in the market, ABC needs to give special emphasis on effective

promotional activities. In order to get the maximum market share ABC will have to use all

four tools of marketing promotion. Specially, advertising through mass media will support us

a lot.

3.2.1 Advertising:

I initially will give more emphasis on paper ads and TV commercials. Because, advertising

through these media is the most effective way to reach the customers and position our product

in their mind. I am anticipating that this will have a massive impact on the teenagers and other

enthusiasts. Few neon signs and bill boards of “MoLife” also can be set up in some core

points of the city. I hope to reach 75% of our customers through effective advertising.

3.2.2 Personal Selling:

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Though personal selling skill is not that much effective for convenient products like

“MoLife”, I will inspire and train the sales persons of the retail stores to convince people to

buy our product when they will come to buy any drinks item, the sales persons will inform the

consumers about the cool refreshing taste of “MoLife” and about the nutritious aspects. I hope

that will play a significant role to increase ABC sales.

3.2.3 Promotional Tools:

I have also planned to apply some promotional tools. Initially for sometimes I will distribute

our product at 50% discount just make our new product familiar with the customers. This will

be the market-testing period for our product. Later, ABC may apply the strategy of giving

gifts, lucky coupons, tour tickets depending on the market and competitive situations.

Public Relations:

I have future plans to hold seminars, commit social development, supporting social activities,

to arrange cultural functions and mobile game shows for publicity purpose.

Distribution Channel

In the initial stage, ABC will distribute the products with our sole distribution channel. When

our market will spread out, ABC will distribute our products through dealers. I will set our

own outlets in few core market positions. When ABC will go for mass marketing, I will

supply our product nationwide through dealers. Our dealers will take the products to every

district of the country. “MoLife” will be available in all retail stores of the country.

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Services and warranties

As ABC are targeting to the top most customer satisfaction and building long-term customer

relationships, there is no alternative for us rather than providing top quality service. Giving

the customers timely and instant quality service is our primary concern. I even planned to

open few customer service centers where will response to customers’ interactions. ABC will

collect information, suggestions, ideas and opinions of the customers through these centers

and will innovate and modify our product accordingly. I also will change any defected

product.

4. Manufacturing and Operations

4.1 Locations

I will set our manufacturing and other working areas in convenient locations. I will prefer the

locations to set up our manufacturing firms, warehouses and inventories in different core

business points of the country where it will be easier to both collect the raw materials and

transport the final goods to the market.

4.2 Human Resource

The board of directors will be responsible for the recruiting activities. Recruiting will be done

through written tests followed by interviews.

4.3 Technological Aspects

To create and innovate new quality products ABC needs to use advanced technology. ABC

will need high tech machineries imported from the foreign countries. Not to mention, skilled

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people to operate them. I have already studied all the technical aspects and prepared a list of

instruments and their costs. The machinery will be collected when required.

5. FINANCIAL ANALYSIS AND PROJECTIONS

5.1 Sales Forecasting

The following Table and graph show our (ABC) expected sales for the coming five years

(USD):

Expected Sales(Per year) 250 ml. Bottle 500 ml. bottle 1 Litre bottle

First Year 51443.120 57873.510 19291.170

Second Year 57873.510 64303.900 21863.326

Third Year 70734.290 74592.524 25721.560

Fourth Year 77164.680 83595.070 30865.872

Fifth Year 81022.914 86167.226 32151.950

5.2 Profit and Loss Projection

For 250 ml

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 571533.063 642974.696 785857.962 857299.595 900164.575

Total Cost (581307.256) (621818.713) (702841.627) (743353.084) (767659.958)

Total Profit (9774.193) 21155.983 83016.335 113946.511 10303000

Tax 18% — 11034.549 58928.094 71300.164 78723.407

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Net Profit (9774.193) 32693.590 69809.801 98367.906 99502.770

For 500 ml

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 964751.412 1071946.013 1243457.375 1393529.817 1436407.657

Total Cost (986421.826) (1067444.740) (1197081.402) (1310513.482) (1342922.648)

Total Profit (21670.414) 4501.273 46375.973 83016.335 93485.010

Tax 18% — (3800.509) (18550.389) (33206.534) (37394.004)

Net Profit (41670.414) 4700.764 47825.584 69809.801 76091.006

For 1 Litre

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 694482.120 787079.736 925976.160 1111171.392 1157470.200

Total Cost (727920.148) (790680.754) (884821.664) (1010342.877) (1041723.180)

Total Profit (33438.028) (36018.018) 41154.496 100828.515 115747.020

Tax 18% — — (7407.80442) (18149.1327) (20834.4636)

Net Profit (66876.056) (39619.036) 44692.698 80497.109 99448.212

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