Marketing plan for Butterfinger and Crunch

Table of contents

1.0 Executive Summary.....................................................................................................3

2.0 Situation Analysis.........................................................................................................4

2.1 Market Summary..........................................................................................................4

2.1.1 Market size............................................................................................................4

2.1.2 Market Trends.......................................................................................................4

2.1.3 Price......................................................................................................................5

2.1.4 Product offering.....................................................................................................5

2.1.5 SWOT Analysis.....................................................................................................5

3.0 Market Strategy............................................................................................................6

3.1.1 Mission..................................................................................................................6

3.1.2 Objectives.............................................................................................................6

3.1.3 Target Marketing...................................................................................................6

3.1.4 Product usage rate................................................................................................8

3.1.5 Positioning............................................................................................................8

3.1.6 Advertising Strategy Development.......................................................................9

3.1.7 Communication objectives..................................................................................10

4.0 Financial Projections..................................................................................................11

4.1.1 Monthly Sales Forecast Butter Finger................................................................13

4.1.2 Monthly Sales Forecast Crunch..........................................................................14

4.1.3 Profit & loss Forecast..........................................................................................15

4.1.4 Break-even Analysis...........................................................................................16

5.0 Controls......................................................................................................................17

5.1 Contingency Planning................................................................................................17

Appendix 1.......................................................................................................................18

Company Profile

Name of Business:- Healthy confectionary Pvt Ltd

Punch Line :- We care for your hunger

Constitution: - Private limited company

Administrative Office: - Plot no, 179,180

G.I.D.C. phase-1,

Mehsana. Pin -384 002.

Phone 1800 159159159

Tele.fax.no. 091-253441

Website:- www.healthyconfectionary.com

Executive Summary

The Indian confectioner market is a steady growing market. The product market is

segmented into 3 product groups namely Enrobed, molded and pieces chocolates.

Nestlé’s Butterfinger and crunch regular sized chocolate bars are key players in the

enrobed and molded product segment respectively. These two brands currently have a

collective market share of 5% (2.52% for Butterfinger and 2.48% for Crunch). The goal

of this marketing plan is to increase profit margins by +10% at product contribution

margin through grocery stores in anticipation that market share will grow accordingly.

Our targeted market segments are young and active people, these segments fall under

the group of adults, teens and children. They have two basic needs when it comes to

eating chocolate, hunger or craving needs. Both brands respond to these needs and can

be repositioned as offering the consumer nutrition and an instant energy boost.

The marketing plan will focus on repositioning both brands to target markets, focus on

areas where the product is most purchased and in the region where there is market

opportunity.

From past performance measures we can infer that the southern region will provide an

opportunity for Butterfinger and the northern region will provide an opportunity for

Crunch.

Expected profits at product contribution margin can be reached solely through grocery

stores after break even collective sales of $2,088,295. With a marketing budget increase

of $3,000,000, the estimated sales response comes to $16,770,000. We will achieve a

10%+ increase in profit margin and market share growth.

In effect, marketing efforts will give both brands a competitive edge in retaining loyal

customers, in acquiring new markets and gaining market share.

Product offering

Butterdipping regular size Crunchy Dhamaka regular size

Chocolate coating caramel

Crispy, crunchy and peanut-butter

taste

2.10 ounce/unit

Envelope wrap packaging

Chocolate caramel with crisps rice

Creamy and crispy

Distinctive taste and texture

1.55 ounce/unit

Flow wrap packaging

Toffee and chocolate making process

Ingredients

The basic ingredients required for chocolate manufacture are cocoa nibs, cocoa liquor,

sugar other sweeteners, cocoa butter, butter fat (oil), milk powder, milk crumb and

emulsifiers.

Cocoa nibs, cocoa liquor

These are prepared as described under ‗roasting, winnowing and nib grinding‘. The type

of beans used for both dark and milk chocolate are primarily the bulk or ordinary grade,

mostly Forastero.

For special high grade chocolate, trinitario, and occasionally Criollo, beans may be

employed.

It is appropriate here to mention imported liquor, which means that it has been produced

in the area where the beans are cultivated.

Sugar and other sweeteners

High-grade sugar should be used in manufacturing chocolate; it must be dry and free

from inivert sugar. Certain grade of off white sugar, particularly for chocolate

manufacture, is available.

Washed raw sugar are sometime used in health food chocolate but they usually contain

some and moisture. The presence of moisture and invert sugar causes the sugar to roll

into ‗plate‘, which are detrimental to the chocolates texture and presents difficulties in

the subsequent conhing and enrobing processes.

Dextrose and anhydrous corn syrup (glucose syrup) are used as replacement for sugar.

Non sugar substances such as sorbitol, mannitol and xylitol are occasionally used as

sweeteners in dietic chocolates.

Cocoa butter

Milk chocolate require cocoa butter with a mild flavour. Fracture and contraction also are

important to afford good molding and texture.

Milk products

Whole milk product and non fat milk powder are the primary milk product used. In some

countries whey is permitted. Butter fat (or oil) is derived from unsalted dairy butter by

dehydration and removal of curd. It is used in conjection with non fat milk powder to

make less expensive milk chocolate.

Emulsifiers

The most popular emulsifier is lecithin used to reduce viscosity and save cocoa butter.

Flavour

Some of the flavour of chocolate, particularly dark chocolate, comes from the blend of

beans used. With milk chocolate milk cramelization play an important part. Flavour also

may be added including vanillin, cinnamon, cassia oil, essential oil of almonds, lemon,

orange, varieties of balsams and resins as well as manufactured combinations flavour.

Rework

This is the name given to reprocessed chocolates bars and confectionary. It is possible to

reclaim misshapen chocolate units in the form of pastes, syrups, or crumb and utilize

them as part of the basic ingredients of new batches of chocolates. This practice has been

opposed by members of the EEC and codex on the grounds that it opens the way to

adulteration with non chocolate ingredients used in the fillings or centers of chocolate

candies.

Chocolate processes

Manufacturing processes, whether for dark or milk chocolate, involve certain basic

operations: preparation of ingredients, mixing of ingredients, refining of mixture, pasting

or partial liquefaction of the refined mixtures, conching (or an alternative process) and

adjustment of viscosity and flavouring.

Preparation of ingredients

Two main ingredients, cocoa nibs and sugar must be pulverized either before mixing or

by using a machine with a combined grinding and mixing action.

The equipment is now being developed that avoid sugar milling. Cocoa butter and other

fats are liquefied and care must be taken to see that they are not overheated when melting

and are not stored as liquids for long period, particularly butter fat.

Milk fat should not be stored in open hopper and should be used as soon as possible after

delivery. Moisture content should exceed 3 %; if over 4%, staling will occur. In some

cases, milk powder and cocoa powder may be further dried for mixing, but this is more

likely with compound coating.

Mixing

In most chocolates plants, the basic ingredients are dispensed by automatic method –

punched card or computer – which deliver the correct quantities according to any given

formula.

In some instances, the ingredients are metered and mixed continuously, in other it is fed

in to batch mixer.

There is no doubt that continuous process has many advantages and they being adopted

and more in all braches of food industry.

The mixing process prior to refining should produce a chocolate paste of somewhat rough

texture and plastic consistency.

Refining

The refining of chocolate paste is an important operation and produce the smooth texture

so desirable in modern chocolate confectionary.

Exactly what constitute smoothness is debatable, as it is clear that refining is carried out

to an extreme, producing chocolate with maximum particle size less than 25m, the

texture become slimy, particularly with milk chocolate.

Another factor concerning particle size is whether the large particle are sugar, cocoa

material or milk crumb aggregrates-each produce a different sensation on the palates.

Having once decided on the degree of refining for any particular chocolate, the problem

is to maintain its consistency.

Today roll refiners are precision made machines consisting of five roll mounted vertically

with bottom feed roll offset. These steel rolls are centrifugally cast by pouring liquid steel

into permanent molds. By rotation of the molds the steel is forced outward, giving a

perfect surface free of lighter material, such as slug. The steel of special composition to

the hardest possible surface. The rolls are slightly crowned so that when the machine is

working, the pressure exerted ensure that a film of chocolate of even is spread over the

entire roll surface.

The speed of the rotation of the rolls increases from the bottom to top, and this known as

the deffrential. It allow the chocolate film to be transferred from one roll to the next in

shearing action in the nip of the roll.

SWOT Analysis

Strengths

Both brands have a superior taste, healthy ingredients, packaging and attributes

Brands satisfy segment needs

Healthy confectionary is having sound management capability.

Healthy confectionary is having geographical advantage for production.

Good schemes to attract customers.

Weaknesses

Lack of strong brand positioning in high potential markets

Strategically balancing communication strategies for both brands

New in the market so might face entry problems

Product and test is not new for the market

Financial Limitations

Opportunities

Brands control a certain market segment

Overall size of chocolate confectionary market is increasing

Overall size of toffee confectionary market is increasing

Market growth expected to increase with population

Growing perception that chocolate has health benefits

Targeting new market segments like mothers

Threats

Strong customer loyalty towards established competitors brands

Strong competitors brands with solid existing distribution

Stiff competition for limited display space in groceries

TOWS Matrix

Today most business enterprises engage in strategic planning, although the degrees of

sophistication and formality vary considerably Conceptually strategic planning is

deceptively simple: analyze the current and expected future situation, determine the

direction of the firm and develop means for achieving the mission. In reality, this is an

extremely complex process, which demands a systematic approach for identifying and

analyzing factors external to the organization and matching them with the firm's

capabilities.

The TOWS Matrix indicates four conceptually distinct alternative strategies, tactics and

actions. Here T stands for Threats , O stands for opportunity , W stands for weakness and

S stands for Strength. In practice, of course, some of the strategies overlap or they may

be pursued concurrently and in concert. But for the purpose of discussion the focus is on

the interactions of four sets of variables. The primary concern here is strategies, but this

analysis could also be applied to the development of tactics necessary to implement the

strategies, and to more specific actions supportive of tactics.

(I) The WT Strategy (mini-mini).

In general, the aim of the WT strategy is to minimize both weaknesses and threats. A

company faced with external threats and internal weaknesses may indeed be in a

precarious position.

In fact, such a firm may have to fight for its survival or may even have to choose

liquidation. But there are, of course, other choices. For example, such a firm may prefer a

merger, or may cut back its operations, with the intent of either overcoming the

weaknesses or hoping that the threat will diminish over time (too often wishful thinking).

Whatever strategy is selected, the WT position is one that any firm will try to avoid.

(2) The WO Strategy (mini--maxi).

The second strategy attempts to minimize the weaknesses and to maximize tile

opportunities. A company may identify opportunities ill the external environment but

have organizational weaknesses which prevent the firm from taking advantage of market

demands. For example, an auto accessory company with a great demand for electronic

devices to control the amount and timing of fuel injection in a combustion engine, may

lack the technology required for producing these microprocessors. One possible strategy

would be to acquire this technology through cooperation with a firm having competency

in this field. An alternative tactic would be to hire and train people with the required

technical capabilities. Of course, the firm also has the choice of doing nothing, thus

leaving the opportunity to competitors.

(3) The ST Strategy (maxi-mini).

This strategy is based on the strengths of the organization that can deal with threats in

the environment. The aim is to maximize the former while minimizing the latter. This,

however, does not mean that a strong company can meet threats in the external

environment head-on, as General Motors (GM) realized. In the 1960s, mighty GM

recognized the potential threat posed by Ralph Nader, who exposed the safety hazards of

the Corvair automobile. As will be remembered, the direct confrontation with Mr. Nader

caused GM more problems than expected. In retrospect, the initial GM response from

Strength was probably inappropriate. The lesson to be learned is that strengths must often

be used with great restraint and discretion.

(4) The SO Strategy (maxi-maxi).

Any company would like to be in a position where it can maximize both, strengths and

opportunities. Such an enterprise can lead from strengths, utilizing resources to take

advantage of the market for its products and services. For example, Mercedes Benz, with

the technical know-how and the quality image, can take advantage of the external

demand for luxury cars by an increasingly affluent public.

Successful enterprises, even if they temporarily use one of the three previously

mentioned strategies, will attempt to get into a situation where they can work from

strengths to take advantage of opportunities. If they have weaknesses, they will strive to

overcome them, making them strengths. If they face threats, they will cope with them so

that they can focus on opportunities.

Healthy Confectionary’s TOWS matrix

Strengths Weakness

1 superior taste, healthy ingredients, 2 Brands satisfy segment needs3 Sound management capabilities.4 Geographical advantage5 Good schemes

1 Lack of strong brand positioning2 Entry barriers3 Product and test is not new4 Financial Limitations5 Lack of strong distribution channel

Opportunity SO STRATEGIES WO STRATEGIES

1 Brands control a certain market segment2 Increase in overall size of chocolate confectionary3 Increase in overall size of toffee confectionary4 Market growth expected to increase with population5 chocolate has health benefits6 Targeting new market segments

1 Target new market on the basis of healthy ingredients (S1,O6)

2 Control segment by brand same(S2,O)

3 Use of management capability to penetrate market (S3,O2,O3)

1 Launch existing product test in new manner. (W3,O1,O6)

2 Do proper marketing efforts to position market in the mind of consumers and make product health icon (W1,O4,O5 )

Threats ST STRATEGIES WT STRATEGIES

1 Strong customer loyalty towards established competitors brands2 Strong competitors brands with solid existing distribution3 Stiff competition for limited display space in groceries

1 Use product test to convert brand loyal customers into our customers (S1,T1)

2 Take advantages of geographical location and schemes to cut stiff competition. (S4,S5,T3)

1 Avoid competing with giants of market for few segments due to financial limitation (W1,T1)

2 Use the distribution channel of other players to avoid distribution challenge. (W5,T2)

Situation Analysis

Butterdipping and Crunchy Dhamaka are the name of the two new prodicts that we are

planning to launch into the Indian market. Butterdipping is basically a toffee with the test

of butter and cream and Crunchy Dhamaka is basically a chocolate with crunchy

ingredients. Both chocolates basically satisfy a hunger and craving need amongst other

needs. There are few competitors in the same class of trade are controlling more market

share e.g. Snickers and 5star(Crunch) which is similar to Crunchy Dhamaka has a

market share of 5.28 . Healthy confectionary Pvt Ltd can increase market share of both

brands by targeting market segments with a better marketing strategy.

Summary

Market size

Despite its vast population, India’s confectionery market is still very

small. With a population about five times larger than the US, the

volume size of its confectionery market is more than 20 times smaller.

It is valued at close to 24750 million, and is estimated to be

138,000MT. but still with growth expected to increase with population increase.

Specifically for toffee and chocolate industry among confectionary is having 68000 MT

and 22500 MT market respectively. Butterdipping and Crunchy Dhamaka target market

segment consists of adults, teens and children. According to available statistics they are

approx 10 to 12 percent increase in this segment every year.

Market Trends

Toffee and Chocolate consumers can choose based on the product segments of

confectionary namely enrobed, molded and pieces. Butterdipping and Crunchy

Dhamaka are players in the enrobed and molded segments. Today’s customer is always

on the move either to work, to school, to friends etc. Consumers are searching for ways

to increase stamina and perform to peak capacity without having a huge meal.

Chocolate’s popularity as a temporary meal replacement is anticipated to continue being

a quick and convenient alternative. Consumers are loyal to competitor brands and strong

competition has resulted in looking for tactical ways to attract new and retain loyal

customers.

2.1.3 Price

Increased competition in the market has resulted in competitive prices. The list price of a

regular size for a chocolate and toffee is 5 to 10 RS and for toffee it is 0.50 to 1 RS

respectively. This so far is an acceptable price for target customers. The company can

continue to cover costs within this price. Our product price for Butterdipping and Crunchy

Dhamaka is Rs 1 and Rs 5 respectively.

Market Strategy

Mission

The goal of this marketing plan is for Butterdipping and Crunchy Dhamaka to be more

appealing to kids, teens and adults and to be the number 1 choice amongst category

brands.

Objectives

Marketing

The key marketing objective of this marketing plan is to grap maximum market and sales

of Butterdipping and Crunchy Dhamaka through groceries stores in next 2 years.

Financial

The key financial objective is to get profits of Butterdipping and Crunchy Dhamaka of at

least +10% for the next year.

Target Marketing

Butterdipping and Crunchy Dhamaka key target segment are young adults and teens

aged 13 – 49 who love and eat chocolate on regular bases. The target consumers are

predominantly females and males aged 18 to 49 with over 75% of both brand consumers

clustering around ages 18-25. Consumers here are skilled and manual workers who

have responsibility for other people e.g. housewives. High school students and children

are also included in this group; consumers are from Lower/Middle income families.

Target market Needs

The needs that Butterfinger and Crunch chocolate satisfies mainly falls into two of six

categories.  Each need category defines a market segment.  These segments

needs are:

Female adults: This segment of consumers needs chocolate basically for mood

satisfaction, for children and somewhat for cravings

Male adults: Their need for chocolate is primarily for hunger satisfaction and somewhat

for energy

Teens: Their major need is for hunger satisfaction

Children: Children primarily eat chocolate to satisfy hunger needs and somewhat

cravings.

Market Segment Size:

According to needs, our market opportunities lie in those segments that Butterdipping

and Crunchy Dhamaka directly satisfy their needs. These are kids, teen and adults aged

18-25. These groups are more than 50% of the total population of heavy users.

Positioning

Both brands will be repositioned as a nutritional and superior quality chocolate for the

future, chocolate for every household. Based on the present teen and adult positioning

of both brands, the goal is to reposition Crunchy Dhamaka more inside the circle

towards hunger satisfaction and Butterdipping further up towards craving satisfaction.

Positioning statement for Crunchy Dhamaka

For kids and young adults who love chocolate. Crunch is a “crave for” crispy chocolate

bar that gives you an instant energy and nutrition before your next meal.

Communication objectives

To create brand awareness for Butterdipping and Crunchy Dhamaka within the

enrobed and molded chocolate category in other to increase brand recall and brand

recognition. The following promotion launch will be used to create awareness and

stimulate purchase which will build equity and enhance awareness

Point of Sale (POS) material will be widely used in grocery stores. Creative

posters will be made primarily to communicate each brand value and promote

awareness. Also, placements of POP material i.e. display stands to ensure

visibility at Point of Sale.

Magazines: Magazine ad is a good way to reach teens and not very expensive.

Teen magazines will be a worthy window to reach active teens.

Sales promotion: Buy one Crunchy Dhamaka and get one free Butterdipping,

can boost immediate sales. Butterfinger can be reduced for promotion sake to

the size of crunchy Dhamaka.

Media: Housewives are also a lucrative segment because they tend to buy

chocolate for their children and home. We can reach both housewives and

children through a short TV ad on favourite programs during school hours for

mothers and after school hours for children.

Controls Marketing teams will ensure the implementation of the advertising Launch as per

Brand guidelines so as to avoid costs escalations or poor launch.

Brand Marketing will ensure availability of all necessary communication materials

before the start of the launch so as to ensure smooth sailing from launch

onwards.

Marketing Operations will develop Roles and Responsibility guidelines on

execution of the Regional grocery activities and ensure that budgets are adhered

to.

Product Development and Supply Chain will ensure adequate availability of

Product on Time for the launch.

Contingency Planning

Some of the risks of the communication strategy include

Product unavailability due to limited distribution. This will be mitigated through

expansive distribution targeting all stores.

Poor Awareness and Visibility through POS/merchandise material which is not

effective in market. This will be mitigated through utilising strong ad personnel

which will give the brand impact & presence