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MaxEn flavored bread company
1. Project on flavored bread2. Group name is NeXt
3. Executive summary4. Main contents of project5. Survey form6. Complete documentation
Executive Summary
The bread and bakery products market, like many others, struggled during2010, with the banking crisis and the consequent difficulty in obtaining
credit adding to pre-existing problems, such as the rising costs of energy andraw materials.
These factors meant that the cost of bread continued to rise throughout theyear. Its status as a staple dietary item within a mature market has caused
problems in the past, with manufacturers having to be continually inventivein order to try to maintain market value. Paradoxically, however, this has atleast cushioned the market from the vagaries of consumer behavior, andconsumer expenditure on bread and bakery products grew by 6.2% in 2010.
The market is segmented into four broad sectors: white bread, brown andwhole meal bread, specialty breads and bakery products. The white breadsector, which had lost sales during the years between 2007 and 2009,recovered during 2010, with consumer expenditure growing by more than10% on the previous year and bringing sales to their highest level of thereview period (2006 to 2010). This could be linked to the current financialsituation, with consumers being more likely to switch to own-label anddiscounted bread, which tends to be focused more on the white than the
brown sector. In terms of market share, however, white bread's shareremains considerably smaller than it was at the start of the review period.
By contrast, the brown and whole meal sector, which saw something of arevival during the middle part of the decade, saw growth slow down during2010, although household expenditure remained considerably higher than itwas in 2008.
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The specialty breads sector overtook white bread as the largest market sectorin 2008, and has steadily increased its share of the total bread market sincethen.
Year-on-year growth in household expenditure on bakery products waserratic over the review period and modest in 2010, and its share of the totalmarket has contracted since 2005.
Overall consumption of bread is almost universal and daily consumption ishigh, but there are significant differences in the types of bread favored bymen and women.
Bakery businesses found 2010 a challenging year. A number of retail craft-bakery chains went into administration and/or were sold, and several larger
companies are finding the current financial climate extremely difficult.Although expenditure is forecast to rise in 2011 and beyond, at least some ofthis will be due to rising prices resulting from increased production costs.
Flavored Bread
This industry is comprised of establishments that make fresh or flavoredbreads or rolls and perishable bakery products.
Survey analysis
1. I enjoy so much that I eat it?
Anytime 44.5%
Only in a while 16.5%
Occasionally 16%
Just about like a snack 5.5%
I avoid bread because it is not allowed for my diet 17.5%
2. I buy bread in the following forms?
Loafs, not sliced 17%
Loafs,sliced 63%
Rolls 11%
Others 9%
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3. I buy bread from the following sources?
Bakers 48%
Local stores 27%
Metro 8%
Marts 11.11%
Distributors 5.85%
Others 0.04%
4. I enjoy the following types of bread?
Plain white28%
Whole wheat 14%
Butter crust 8%
Sugar free 8.33%
Flavored 25.67%
Others 16%
5. Which flavor you like in MaxEn flavred bread?
Chocolate 36%
Vanilla 33%
Strawberry 31%
6. I eat bread because it is?
A good sourceof fiber12%
A good source of energy 33%
It is low in fats 44%
It goes with other 5%
It reduces heart diseases5%
Others 1%
7. I prefer to buy bread in the following packaging? Plastic disposale bags 48%
Paper bags 13%
Heat resistant bags19%
It doesnt matter 20%
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8. About the price of bread?
Idont care much 45% I buy less when the price goes up13.5%
I can pay more for standard 20%
Others 21.5%
9. I bake my own bread
Often 4%
Once in a while10%
Never86%
10. Childern like bread in lunch?
Yes60%
No40%
ContentsTopics
IntroductionExplanation of Innovation
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GAP analysisFulfilling the NeedProduct Qualities (Differentiation)Market Situation Expected Market Size and PotentialMission StatementVisionGoalMarket TrendCompetitor analysisIndirect competitorSubstitute CompetitorsPlacement Strategy:Brand NameLogo
TrademarkFAB analysis:Quality function deployment quality statement:Market SegmentationPromotion StrategyAdvertising strategyUnderstanding the Psycho-Dynamics of the market:Advertising objectiveCampaign themeReachFrequencyMedia VehicleProper Budget Allocation AdvertisingSloganUSPPush strategyPromotional MaterialsPriceMarketing Skimming:
Key People with Specific SkillsPhysical evidenceLand and BuildingMarket entry strategy:Quantitative SWOT matrix analysis:Matching the SWOT matrix:Financial Analysis
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Ratios for MarchConclusion
Introduction
MaxEn Bread is a name that has come to signify quality and freshness inbread products. The enterprise, MaxEn Bread will operate six plants
throughout Pakistan. Initially we are going to launch it in Lahore having
Factory in Muridkey. The Bread distribution network comprises rent 15
vehicles that deliver MaxEn to more than 200 retail outlets daily, making it
one of the largest distribution networks for any product in the country
customers are located in major metropolitan areas, secondary metropolitan
areas and rural areas. The fleet will run approximately 500KM each day to
deliver fresh bread. Peshawar. Multan, Karachi, Islamabad Faisalabad will
be our future destinations to launch our product there.
For purpose of standardization, the company will bring itself in line with
international standards of production, technology, machinery and
formulation. All the MaxEn Bread plants boast of the latest machinery used
in the bread-making process. They will be managed by senior food
technologists with decades of experience, while those manning the
machinery will be provided on the job training in congenial working
conditions.
Taking a responsible place in society, the company is committed to the upliftand development of the society as a whole, and participates in sports and
social welfare activities.
We hope to continue to develop and maintain this relation in the future.
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Innovation
Our product is unique in sense that it provides unique flavored bread first
time in Pakistan. Currently MaxEn have three flavors of breads Chocolate,
Vanilla
Strawberry.
It is also at the same time a product for the health conscious people as well.
The bread industry in Pakistan has seen many changes in the last twenty-five
years. It has emerged as a small-scale bakery processing industry to
numerous industrial bread making units all over Pakistan. The bread
industry in Pakistan is flourishing very quickly and bread products are
gaining much popularity. Bread has been accepted as a popular substitute of
Rice,
Naan,
Paratha.
GAP analysis
Consumers are increasingly concerned about their health and are well aware
of the relationship between nutritious food and optimal health. Various
concerns have caused consumers to monitor their dietary habits closely. The
growing media coverage on health, the rising incidence of health conditions
(obesity, diabetes and cardiac problems), concerns over physical appearance,
changing lifestyle and also soaring costs of healthcare have all contributed to
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the demand for healthier bakery products. In addition, the aging baby
boomer population has had a specific effect in increasing the demand for
healthy foods. Some popular trends in the market are the introduction of
low/light, functional, natural and organic products, as described below.
Fulfilling the Need
Every day, before the sun rises, we begin making our bread from scratch.
The dough is made with natural whole grains and unbleached flour, with no
preservatives. Most of the breads are leavened with a natural sourdough
starter using a long, slow fermentation time. Every loaf is formed by hand
and left to rise naturally. The breads are baked throughout the day, with
patience and care, on a traditional stone hearth.
This is an Old World style of baking, perfected over centuries. It is a process
that brings the most flavors out of the bread creating chewy loaves with a
crunchy, flavorful crust. We bake dozen varieties each day, and all of our
breads are low-fat or fat-free.
Product Qualities (Differentiation)
Our product provides with following type of health related benefits which
provides the better health.
MaxEn Flavored Bread:
The unfitness of our bread is that it is flavored bread. We are going to
provide it in three different flavors i.e. Chocolate, Vanilla and Strawberry.
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Low / Light Bread:
Our bread is with reduced fat and carbohydrates. With the growing
incidence of obesity and popularity of diets low calorie foods have gained
immense popularity which is our core capability.
Functional Bread:
In recent years, enhancement of the nutritional profile in bread products is a
key trend that has gained a great deal of momentum. We will also trying to
enhance the nutritional value of traditional bread products through the
addition of functional ingredients, such as omega-3, multigrain,
multivitamins etc.
Natural and Organic Bread:
Increasing health awareness and concern over the consumption of artificial
ingredients have fuelled the demand for natural products. Bread products
that contain all natural ingredients are likely to thrive in this competitive
market. Organic bread is yet another category gaining impetus in recent
times, and the products are clearly labeled to draw attention to their organic
nature. We will also have a look over it.
Pleasure-
In addition to healthier products, consumers also are purchasing productsthat satisfy their taste buds. The taste enjoyment factor is vital in the
marketplace and we will be focusing on this more deeply. With lifestyles
becoming increasingly stressful, consumers may indulge in food for comfort
eating purposes. Indulgence/luxury products are becoming more pronounced
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as a key trend in the bread industry. Consumers increasingly seek for
premium, gourmet and exotic products to satisfy their desire to indulge
Market Situation Expected Market Size and
Potential
Only 5 % population of Pakistan is using the packed bread so rest of the
market is still to be captured. Here people are wiling to pay extra amount for
the differentiated product. Our main focus wood be
Mission Statement
"This is a family company selling traditionally baked bread with a freshness
and quality you really can taste".
Vision
Our vision is to become Pakistan's favorite bread this is underpinned by our
dedication to continued improvement across all areas of the business.
We are committed to developing the bread market and working with our
customers, that is why we invest a lot of time and money to understand our
consumer's needs.
Goal
Our goal is to ensure that important values such as quality, freshness, and
service are delivered to our consumers in the 21st Century. For us this isn't
just a business. It's a way of life.
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The task ahead is to concentrate on making the cake bigger rather than
fighting for a bigger piece of the existing cake.
Market Trend
Market is currently not using up to dated technology and generally
companies are interested making the breads that remain at low cost. There is
great deal of competition in the market in a congested area of the market.
There is a huge market available where one can hit the target market.
Currently, 5% of the total population of Pakistan consumes packaged bread.
The major factors for such a low percentage of people consuming bread are
mostly economical and cultural. Pakistani diet consists of many substitutes
for bread, which are cheaper and preferred over bread by a majority of the
population. Thepolitical scenario as well as the legal scenario is not posing
any threat to the bread industry growth apart from the price restrictions,
which actually fixed by negotiations between the government of Sindh andthe committee of bread-making.
Competitor analysis
Competitor analysis in marketing and strategic management is an
assessment of the strengths and weaknesses of current and potential
competitors. This analysis provides both an offensive and defensive strategiccontext through which to identify opportunities and threats. Competitor
profiling combines all of the relevant sources of competitor analysis into one
framework in the support of efficient and effective strategy formulation,
implementation, monitoring and adjustment.
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Indirect competitor
Indirect competitors of MaxEn Flavored Bread are:
Different cakes
Biscuits
Cookies
Pastries, etc
Substitute Competitors
A substitute competitor is any competitor that fills the same buyer need you
fill but fills it in a different way. The substitute competitor of Flavored
Bread is:
Dawn Bread
Gourmet Bread
Cakes and bakes
Different bakery breads
Vita Bread
Bunny
Placement Strategy
Brand Name
Trademark
Logo
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Brand Name
MaxEn Flavored Bread a name that has come to signify quality and
freshness in bread products. The purpose of the research is to analyze the
current state on the baked goods market. The main tendencies and forecast
the possible market growth. Prior to the establishment of flavored Bread,
will become largest producer of bread products is the public sector.However, this sector could not cope with the demands of the consumer and
this when, perceiving a change in the eating habits of Pakistanis, Flavored
Bread will envisioned. Flavored Breadbuildsup a reputation for freshness,
quality and taste. Creating awareness plus a demand for bread products, and
started its production in Lahore.
Logo
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Trademark
We have registered our brand in ACCP office with registration number
895988. Now we have legalized it. We have registered our company by the
name of MaxEn & Co.
Advertisement:
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Distribution:
MaxEn distribute on network will be indirect and comprise of over two
hundred company owned vehicles in a distribution system spread all over
Pakistan. On a daily basis, we will distribute our goods to over a 200 retail
outlets. We will distribute in almost all the major metropolitan areas,
secondary metropolitan areas as well as the rural parts of the country, later.
Channels of Distribution:
Channels of distribution will be intensive because MaxEn will operate six
plants throughout Pakistan. The Bakery's distribution network will rent more
than 50 vehicles which will deliver baked products to more than 200 retail
outlets, and will making it one of the largest distribution networks for any
product in the country customers are located in major metropolitan areas,
secondary metropolitan areas and rural areas. We will develop a
manufacturing process utilizing state of the art bakery machinery combining
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it with locally developed equipment. This unique combination resulted in
products which are closer to the actual taste and form that we make at home.
The Product Analysis
FAB analysis:
Features:
A common scenario of MaxEn Flavored Bread in selling is for the sales
person to extol the virtues of the product they are selling by demonstrating
the assorted features that it has.
Another variant of the flavored breads features trap will be when the
customer comes in with a checklist of the features that they want. Anything
that does not have all features is immediately rejected, whilst products with
extra features are ignored. When they have narrowed down their choices to
a set of products that have all the features they want, then they choose
solely on price.
Benefits:
Benefits of MaxEn Flavored Bread will be what the customer gains byusing the product. Selling on benefits thus sells to what they really want,
not what they say they want or what you want to sell. With benefits,
consumer will get them excited and emotionally engaged.
Attributes:
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Attributes are intangibles that are associated with the product, not the
person (and hence are not yet benefits) MaxEn Flavored bread has many
attributes whilst others have far fewer. Our product specifications will be
according to the customer needs. MaxEn Flavored bread will be useful for
stepping-stone between the physical product and the benefits that the
person actually receives and can be used in a sales pitch as such.
Quality function deployment quality statement:
Flour:
Hard wheat flour, or bread flour, is preferred for yeast breads,although soft or all-purpose flours may be used successfully if the procedure
is adapted to the type of flour. Bread flour has high gluten (wheat protein)
content and thorough kneading is necessary to develop the gluten so it can
hold up a loaf of bread. The gluten is elastic and stretches as the yeast
grows and gives off gas, making the bread light in texture.
Soft wheat or pastry flour is weaker flour because it does not contain as
much gluten; therefore, bread made with it needs less kneading than bread
made with bread flour. A blend of the two flours requires a moderate
amount of handling to properly develop the gluten. Over-kneading of
doughs from any type of flour may injure the baking quality of the gluten
and produce a bread of poor texture and volume.
Bread may be made entirely of whole-wheat flour or in combination with
white flour. A mixture of white and whole wheat flours makes a lighter loaf
than whole wheat alone, but the nutritive value increases as the increased
amount of whole wheat flour is used.
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Liquid:Water, potato water, milk or other liquids may be used in making
bread. The bread will be whiter in color and have greater food value if milk
is used. Both milk and potato water prevents bread from becoming stale so
rapidly as bread in which water is the only liquid.
Yeast:Because yeast is very small plants, it must be kept fresh and active.
Yeast may be bought in dry granulated form or compressed cakes or grown
at home in the form of "starter" or "liquid yeast".
Fat: The fat in dough makes the bread tendered and increases its keeping
qualities. Any high quality cooking fat is satisfactory.
Sugar:Yeast plants grow quickly in the presence of a small amount of sugar
as it is food for their growth. A golden-brown color will be given to the
crust by the use of sugar.
Salt:Gluten is made stronger by the salt. Flavor is also improved.
Flavor: flavor gives the bread a real taste.
Quantity:
2 3/4 c. liquid
1/2 to 1 ounce (1 to 2 packages or cakes) yeast
3 tbsp. sugar
4 tsp. salt
2 tbsp. fat
3 tsp. flavor
About 9 cups sifted hard-wheat flour. (More all-purpose or soft wheat flour
will be needed.)
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Market Segmentation:
Market Segmentation is an effort to increase a companys precision
marketing. A market consists of a large identifiable group within a market
with similar wants, purchasing power, geographical location, buying
attitude, or buying habits. We have done the segmentation on the basis of the
following variables:
Demographic Segmentation
Age, Income, Social Class & Occupation
Demographics
Gender: flavored bread can be use by males and females as well
Income: Flavored is basically for middle upper class people and it will be
easily affordable for all type of these people.
Age: Flavored bread will be useful at every stage of life. Young generations
and older ones can also use this delicious bread
Geographic
Area Flavored bread is located in Lahore and it is easily available in all
super stores and general stores.
Psychographic: MaxEn flavored bread is according to the customer needs
and demands. It consists of natural flavors like chocolate, vanilla and
strawberry.
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Behavioral segmentation
Occasions, Benefits, Usage Rate & Attitude
Usage rate
Flavored bread is particularly use by young generations who are very fond
of flavors like generation X they love chocolates and different flavors
products. Usage rate will be high because of these young generations.
Benefits: it consists of Vitamins and fibers so it is quite notorious and have
energy as well
Targeting
After segmenting the market we are targeting the following segments:
Income Groups
We will be targeting all income groups who should afford easily. Flavored
bread, being an established brand with mass appeal and cost effective
pricing, it will not discriminate between income groups.
Youth
A huge potential market for this bread it lies with youth whom we will be
specifically targeting road shows to be held as part of the Add Color
campaign.
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Travelers
It is also available in mini-size factor, so it will be highly convenient to
carry along during large journeys or trips. This is why it will be targeted at
travelers as well.
Promotion Strategies
Product position Strategy
Positioning is what the customer believes about your products value,
features, and benefits; it is a comparison to the other available alternatives
offered by the competition. These beliefs tend to based on customer
experiences and evidence, rather than awareness created by advertising or
promotion.
Marketers manage product positioning by focusing their marketing activities
on a positioning strategy. Pricing, promotion, channels of distribution, and
advertising all are geared to maximize the chosen positioning strategy.
Basic strategies for product positioning that we have used:
1. By attribute or benefit
The flavors that make you feel different. It tastes great and that it is rich.
2. By use or application
The different tastes from the ordinary bread. Use it with butter or eat the
simple loaf.
3. By user
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Everyone who wants to have a different taste may have it.
4. By product or service class
MaxEn bread will competes as an alternative to the ordinary breads. It is
positioned as a lower cost and healthier alternative to the ordinary bread,
while it provides better taste and healthy ingredients.
5. By price or quality
MaxEn wants you to believe that their flavor bread is of the highest
quality.
Positioning is what the customer believes and not what the provider wants
them to believe. Positioning can change due the counter measures taken at
the competition. Managing your product positioning requires that you know
your customer and that you understand your competition; generally, this is
the job of market research not just what the entrepreneur thinks is true.
Advertising strategy
There are two major parts to an advertising strategy.
1) Assessment.
What's going on in the market, whats the history, the current
situation?
What are the major trends in the market?
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What's the future looking like? (With the product. With consumer
attitudes.)
2) Action
What should your customer do about the most significant
opportunities or problems presented by the situation?
What should to do with the brand?
With direct marketing.
With the way the company is positioned.
A SWOT analysis helps in figure out the "What's going on" part. And figure
it out quickly.
MaxEn bread advertising Strategies
A) Position the product:
"Because we are worth it."
B) Investing in creating a stronger brand personality:
It will base on an upscale, character that people will aspire to associate with.
C) Using the Internet / Web site:
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Currently MaxEn dont have any Web site but it will have an internet asses
and web site in future to target and sell younger buyers, new buyers, before
they have established a product.
Ad strategy deals with the big strategic issues:
Branding,
Positioning,
Media.
MaxEn is a new in the world of breads because it is just not that ordinary
bread which has that old milky or simple bread taste. It is different from the
traditional breads because it has flavors.
We have just launched MaxEn in Lahore and we want it to be in every
house, every restaurant, where there is its need. And it does so with simple
action statements describing what you intend to accomplish.
Psycho-Dynamics of the market:
Whats going on inside the brains of buyers, of perspective customers? It
includes, but is not limited to, Consumer Involvement Theory (CIT).
How the consumer relates to the purchase?
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Rational to emotional. High to low involvement. People probably buy
the same brand of breads with a mindless motion at the market.
But besides Consumer Involvement Theory (CIT), there are likely other
issues, perhaps more important issues, such as why people buy the other
brand bread:
People may think that the ordinary bread is of higher quality or more good
in taste or more healthier products.
Or perhaps it's not so much what people think about competitors, but what
they think about our customer: "I don't know if it will be available in the
market easily."
Above the line sales promotion
MaxEn is using above the line (ATL) sales promotion currently, thatis MaxEn will advertise through media such as;
TV
Radio
Newspaper
Magazines
Banners
To promote the brand, major uses include television, radio, and newspaper
advertising and banners ads on different squares (chowks) in the city. This
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type of communication is conventional in nature and is considered
impersonal to customers.
Advertising objectiveMaxEn has clear and specific aim of an advertising or commercial, such as
To earn profits
To compare,
To gain attention,
To inform,
To persuade, or
To remind our customers about our product.
Reach
60% of the television viewers, 70% of radio users and 90% of news paper
readers should be exposed to the ads or commercials which are on media and
media schedule within a period of four months in the big cities of Pakistan
such as;
Karachi,
Lahore,
Islamabad,
Faisalabad,
Peshawar.
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With the time and market conditions these ratios can be reviewed according
to the needs.
FrequencyThe frequency in the beginning will be high. It will keep high for some
months for the period after the soft launch and later it can be decrease. There
will be changes in the frequency with the time and market conditions.
Media Vehicle
The print and electronic medium employed in an advertising campaign used
by MaxEn is as follow.
ELECTRONIC
MEDIAPRINT MEDIA
TV RADIO NEWS
PAPER
MAGZINES BILLBORD
PTV FM 100 THE NEWS YOUNG
WORLD
ALLAH HO
CHOWK
GEO TV FM 106.2 DAWN SUNDAY
MAGZINE
KALMA
CHOWK
AJ 89 FM JANG AKHBAR-
E- JAHAN
MUSLIM
TOWN MUR
A-TV FM 101 KHABRAIN US MAZANG
CHOWKARY FM 99 DAILY
TIMES
MAG MALL
ROAD
NAWA-E-
WAQAT
MM ALAM
ROAD
DEFENCE
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DUBAI
CHOWK
Proper Budget Allocation Advertising
In order to keep the advertising budget in line with promotional and
marketing goals MaxEn have focus on the followings:
Our target consumer are householders (income 10000 or above),
bakers and Restaurants
Those who are interested in change in taste and are health conscious
will be interested in MaxEn Bread advertisements.
Media is the advertiser considering able to reach the target consumer.
The product lends itself to rational appeal.
All these things give MaxEn advertiser are provided with an idea of the
market conditions. Thus, how best to advertise within these conditions. Once
this analysis of the market situation is complete, an advertiser has to decide
how the money dedicated to advertising is to be allocated.
Channel ESTIMATED
COST PER
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AD
PTV 900000
GEO TV 1000000
ARY 950000
Total Budget 2850000
Slogan
Channel ESTIMATED
COST PER AD
FM 100 22000
FM 101 18500
FM 99 19500Total Budget 60000
NEWS
PAPER
ESTIMATED
COST PER
AD
THE NEWS 55000
DAWN 65000
JANG 50000
Total Budget 170000
MAGZINES COST PER
AD
YOUNG
WORLD
35000
SUNDAY
MAGZINE
50000
US 35000
Total Budget 120000
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MaxEnDiscover a Healthier Slice Of Life!
USP
MaxEn The bread which build strong bodies and which has the flavor of
your choice.
Push strategy
A push strategy is used by MaxEn because it is a new product which is
unknown to the consumer. As there is no consumer demand in the product
launch, the product and the information are "pushed" to the consumer by
distribution and promotion.
Promotional Materials
Some of the promotional materials are as follow:
Point of sale(POS) Terminals
MaxEn has place different check out counters in big general stores like AL-
FATEH, City Mart. Plus they have placed very different and unique and
stylish type of racks to the shops, which are very attractive and heart
appealing.
Banner & Hoardings:
MaxEn has placed banners on different squares in the city and they have the
hoarding placed on the malls and stalls in the exhibitions.
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Price
Price is not just the number or tag on the product. But it is the most
important thing.
Marketing Skimming:
MaxEn is using Price skimming strategy. It is a pricing strategy in which a
marketer sets a relatively high price for a product or service at first, and then
lowers the price over time. It is a sequential version of price discrimination
and yield management. It allows the firm to recover its sunk costs quickly
before competition steps in and lowers the market price.
Psychological Pricing:
MaxEn is selling at PRS.30. So they are not using the Psychological pricing
currently. Retail prices are often expressed as odd prices: a little less than a
round number, e.g. PRS19.99 instead of $20. Psychological pricing is a
theory in marketing that these prices have a psychological impact that drives
demand greater than would be expected if consumers were perfectly rational.
Psychological pricing is one cause of price points.
Computing price method
Cost-plus pricing
Cost-plus pricing is a pricing method used by MaxEn. It is used primarily
because it is easy to calculate and requires little information. There are
several varieties, but the common thread in all of them is that one first
calculatesthe cost of the product, and then includes an additional amount to
represent profit.
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The method determines the price of a product or service that uses direct
costs, indirect costs, and fixed costs whether related to the production and
sale of the product or service or not. These costs are converted to per unit
costs for the product and then a predetermined percentage of these costs are
added to provide a profit margin.
Price Elasticity and Customer sensitivity
Price Elasticity:
It is percentage change in quantity demanded as per the percentage change
in price of the same commodity. The price elasticity of demand is a measure
of the sensitivity of quantity demanded to changes in price. It is measured as
elasticity that is it measures the relationship as the ratio of percentage
changes between quantity demanded of a good and changes in its price.
In simpler words, demand for a product can be said to be very inelastic if
consumers will pay almost any price for the product, and very elastic if
consumers will only pay a certain price, or a narrow range of prices, for the
product.
Inelastic demand means a producer can raise prices without much hurting
demand for its product, and elastic demand means that consumers are
sensitive to the price at which a product is sold and will not buy it if the
price rises by what they consider too much.
Demand for bread is elastic because as the price of this flavor bread
increases, there are many substitutions which consumers may switch to.
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Customer sensitivity:
Customers are very sensitive and they want fresh bread in the breakfast and
if they dont get it then they might dislike the product because of the
availability.
Discounts and Rebates
MaxEn in its soft launch of its product will provide special offer which is
buy two MaxEn bread and get one small absolutely free.
Key People with Specific Skills
We have worker who have decades of experience in bread industry. We have
contracts with them to work with us and on our formula.
Physical evidence
The site for the factory is in Muridkey where we can visit to see the desired
place. Exact address is 10 km Sheikhupura road GT road Muridkey.
Land and Building
We will purchase our land in Muridkey for factory. We have cash in hand
for this acquiring.
Location and side details
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It is located in industrial area of Muridkey where other industries are
situated. It is regarded as the industrial are. We are going to have 6 Acres.
Labor is easily available there at a cheaper cost and raw material is also
available there. It is having all the required facilities need for the bread
industry.
Market entry strategy:
1. Guerilla attack:
We will first use guerilla strategy to launch our innovative product. We will
offers different selling offer to the market so that we can capture market
share. We will set price of our product as low as possible. And give also
extra benefit like availability of product as near to the consumer.
2. Soft launch strategy:
We will first launch our product to the discounted shops so that we can
check our products demand in market. This step tells us about the weekly
sales of our bread.
3. official launch strategy:
After the 3 weeks of soft launch we will launch our product officially in big
market. But before it we will create awareness among the people of our
product. We will set our product in every self of every good and well known
shop.
Sponsoring cricket matches:Cricket the most sought after; watched & played game in Pakistan .the game
of cricket has been owned by various brands in the industry for the
promotion of their products over a period of time. It has ranged from
tobacco to lubricants to communication companies to banks to airlines &
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lately to the beverage industry. The competition has become tougher &
tougher as the time has progressed. We will make agreement with Pakistani
cricket team management to sponsors the matches. We realize that fact that
cricket is a very strong element by which we can reach our consumers &
masses invested in the opportunity and launched a massive campaign on
mass media showing all these cricket stars support & flatter our product. We
will introduce adds of our product in which some cricket stars will promote
our product.
Sponsoring Concerts:
We will arrange concerts for the enjoyment of people and also aware them
about our product. We will bring the stars of people close to them. Again the
purpose is same, to create awareness about our product.
4. public relation activities:
Public relation is our most important objective because it is the key thinkto enter and remain in the market. We will do lot of exercise to built
public relation. Like our sale person will stand on the retailing shop to
tell the customer about our product. We already have planned to arrange
different events. The purpose of those events is to create public relations.
5. publicity:Publicity is the important factor to create awareness about any product. We
will also do publicity of our product. We will use newspaper, T.V channels,
and also direct selling. We will also use radio for publicity. This steps will
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helps us to improve our sales. On T.V channels we will choose that channels
which are famous in ladies like, GEO TV etc. and in newspaper we will
choose ladies magazine for publicity.
Quantitative SWOT matrix analysis:
External threats:
1. There are large companies who have brand loyal customers providing
the market with not exactly similar but milky and other breads.
2. Switching brand loyal consumers to a smaller and newer company
3. Rising material, production, and shipping costs for a new, up till now
branch out company.
4. There is open market everywhere means any new company or existing
ones can start the same production that may have more experience or
more qualified staff.
External opportunities:
1. Creating a healthy product that provides options in flavors and
relating to diet value will plot new regulars
2. Healthy component will allow us to break into the diet consumer
3. Being a new company will provide us the chance to set up thrill
Internal strengths:
1. Our ability to produce options keeps more consumer interest and
needs met.
2. Our new production technology will enable us to mass produce
products more efficiently and quickly than other old companies.
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3. Our new taste will attract much such type of consumers who are taste
changer.
Internal weakness:
1. The more flavors we create, the more production costs will increase.
2. New technology and production methods will require greater
preparation and back-up wants.
3. At starting we will not have as such trained staff that has such a
market experience.
Matching the SWOT matrix:
strengths Opportunities
1. Our ability to produce options
keeps more consumer interest and
needs met
2. Our new taste will attract many
such type of consumers who are
taste changer
1. Creating a healthy product that
provides options in flavors and
relating to diet value will plot new
regulars
2. Our new taste will attract many such
type of consumers who are taste
changer
strengths Weakness
1. Our ability to produce options
keeps more consumer interest and
needs met
2. Our new production technology
will enable us to mass produce
1. The more flavors we create, the
more production costs will increase.
2. New technology and production
methods will require greater
preparation and back-up wants
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products more efficiently and
quickly than other old companies.
opportunities Weakness
1. Creating a healthy product that
provides options in flavors and
relating to diet value will plot
new regulars
2. Our new taste will attract many
such type of consumers who
are taste changer
1. The more flavors we create, the
more production costs will increase
2. The more flavors we create, the
more production costs will increase
weakness Threats
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1. The more flavors we create, the
more production costs will
increase.
2. At starting we will not have as
such trained staff that has such a
market experience
1. There are large companies who
have brand loyal customers
providing the market with not
exactly similar but milky and
other breads.
2. There is open market everywhere
means any new company or
existing ones can start the same
production that may have more
experience or more qualified staff.
Financial analysis
Projected startup cost-onetime expense
Asset Price Detail
land 20,000,00
0
Land located near Muridkey, total area 6 acres. At front
there is G.T road. At right and left side there are
garments and other factories.
building 125,000,0
0
We will construct a building which contains 4
storerooms. And 2 big storeroom for plant and
machinery.
Plant &
machinery
75,00,000 Plan and machinery for production of bread and packing
and printing.
furniture 10,000 Furniture require for office.
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Revenue & cash flow projected with estimated sales forecasted.
Price/packet of bread
Ingredients Quantity(kg) Price
(Rest)
flour .50 7.5
sugar .10 1.25
Eggs(piece) 4 9.5salt .10 1
Flavor(chocolate) 1.5
packing 1
Total 20.75
Profit margin
(34.16%)
10.25
Total price/ pack 30
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Expected sales in 1st quarter (approx).
Months Total units
sales
Price/unit total
January 25863 30 775890
February 29310 30 879300
March 31034 30 931020
INCOME
STATEMENT June July August
Sales Revenue(lacks) PKR 20.00 PKR 22.50 PKR 30.00
Less: Cost of Goods
Sold PKR 15.60 PKR 17.55 PKR 2.34
Gross Profits PKR 4.40 PKR 4.95 PKR 27.66Less: Operating
Expenses:
Marketing Expense PKR 11.76 PKR 11.76 PKR 11.76
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General / Admin. Exp. PKR 0.15 PKR 0.17 PKR 0.22
Depreciation Expense PKR 0.25 PKR 0.25 PKR 0.26
Total Operating
Expenses PKR 12.16 PKR 12.18 PKR 12.24
net profit before taxes -PKR 7.76 -PKR 7.23 PKR 15.42
less tax PKR 0.09 PKR 0.07 PKR 0.15
Net loss/profit After
Taxes -PKR 7.85 -PKR 7.30 PKR 15.27
BALANCE SHEET
Current Assets: June July August
Cash
PKR
300,000.00
PKR
320,000.00
PKR
330,000.00
Total Current Assets
PKR
300,000.00
PKR
320,000.00
PKR
330,000.00
Land & Buildings
PKR
32,500,000.00
PKR
32,500,000.00
PKR
32,500,000.00
Machinery and Equipment
PKR
7,500,000.00
PKR
7,496,000.00
PKR
7,492,000.00
Furniture & Fixtures
PKR
10,000.00 PKR 9,700.00 PKR 9,400.00
inventory
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Total Gross Fixed Assets
PKR
40,010,000.00
PKR
40,005,700.00
PKR
40,001,400.00
Less: Accumulated
Depreciation
PKR
25,000.00
PKR
25,000.00 PKR 26,000.00
Total Assets
PKR
40,285,000.00
PKR
40,300,700.00
PKR
40,305,400.00
Current Liabilities: June July August
Taxes Payable PKR 8,500.00 PKR 7,300.00 PKR 14,200.00
Other Current Liabilities PKR 0.00 PKR 0.00 PKR 0.00
Total Current Liabilities PKR 8,500.00 PKR 7,300.00 PKR 14,200.00Total Liabilities PKR 8,500.00 PKR 7,300.00 PKR 14,200.00
capital
PKR
41,061,500.00
PKR
41,023,400.00
PKR
38,764,200.00
net loss/profit
-PKR
785,000.00
-PKR
730,000.00
PKR
1,527,000.00
Total Liabs. & Stockhldrs'
Equity
PKR
40,285,000.00
PKR
4,030,700.00
PKR
40,305,400.00
Ratios for march :
Current ratio:
Total Current AssetsCurrent Ratio = ____________________
Total Current Liabilities
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Current ratio= 330000/14200 = 23.23944
Gross margin ratio:
Gross Margin Ratio = gross profit/net sales
Gross margin ratio= 2766000/3000000 =0 .922
Net Profit Margin Ratio:
Net Profit before Tax
Net Profit Margin Ratio = _____________________
Net Sales
Net profit margin ratio = 1542000/3000000 = 0.514
Conclusion
We are quiet confident to have a successful launching of the bread in themarket.
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