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KARACHI UNIVERSITY BUSINESS SCHOOL Class: BS-VIII (Morning)

ct

Dated: 22-11-2012

Submitted to: DR. ZIA UL HAQUE

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i LETTER OF TRANSMITTAL Nov 22, 2012 Dr. Zia Ul Haque Course Coordinator (project report) Department of Business Administration University of Karachi Respected Sir, We are pleased to present you our final research report, due Nov 22, 2012, that you requested. The report is entitled Launch of Delish- The Honey Bread. This report is the outcome of the research conducted by us to study the responses of people towards the idea of Honey bread. In this report we have focused on the feasibility study for the launch of Delish- The Honey Bread. If you have any question regarding this report, we will be more than obliged to discuss them with you. We look forward for your response about our piece of work. Your comments and suggestions will be highly appreciated.

Sincerely Yours,

Name Waqas Hassan Jowairia Qadri Syed Saqlain Shah

Members Signature

Name Mushama Ashraf Talha Shabbir

Members Signature

Enclosure: Final Report

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iii ACKNOWLEDGEMENT

We bow our heads before Almighty Allah with gratitude for this ability to do work in a better way. Also, we wish to acknowledge many individuals who provided the valuable assistance during the compilation of this report. Their efforts are much appreciated. We are thankful to our course coordinator Dr. Zia Ul Haque for this opportunity and his guidance throughout the project.. Last but not the least we are thankful to our parents for their support.

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iv EXECUTIVE SUMMARY
Delish uniquely produced bread for those who are health, fitness and goal oriented. The production of Delish has been done on premium level keeping all the production standards under consideration. Ingredient sand contents are fresh and pure without artificial enhancers and tasters; the main USP of Delish is the naturally obtained honey as a major ingredient of it. The product has been brought to the market after a detailed research of the market and consumers tastes and preferences. It introduced a new category; a natural honey bread having no comparison with plain and flavored bread. The company has considered all the external and internal factors that influence its business and presence in the market. A detailed PEST analysis has been given in the report. The company compared its position with the key players and competitors in the market which include DAWN, WONDER etc. delish bread has formed its own niche in natural and slightly sweet category. The manufacturing plant and warehouse in the metropolitan city has enabled the company to have an influx of skilled workforce and efficient transportation to the consumer market. The production is done on high technology with our State of the art facility layout and technology. All the equipments are modified which ensures the efficient production and least wastage of the raw material. To market the product all the modern and conventional means has been considered and utilized which include ATL and BTL activities and a sufficient amount of budget has been given for this purpose. We ensured that our message has been communicated to our desired audience and they have understood it completely. In order to distribute the product we have divided Karachi in two regions that have fore zones; to facilitate the timely transferred of the bread to the consumers and with all its nutrition.

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Table of Contents Transmittal letter .............................................................................................................................. I Acknowledgement .......................................................................................................................... II Executive Summary ...................................................................................................................... III 1. Introduction ................................................................................................................................. 6 2. Hypothesis & Data Analysis ....................................................................................................... 8 3. Research Questionaire .............................................................................................................. 13 4. Market Analysis ........................................................................................................................ 29 5. Promotion Plan.......................................................................................................................... 39 6. Distribution Plan ....................................................................................................................... 48 7. Location & Site Analysis .......................................................................................................... 58 8. Financial Analysis ..................................................................................................................... 63 9. Technical Analysis .................................................................................................................... 72 10. PEST Analysis ........................................................................................................................ 75 11. Conclusion .............................................................................................................................. 84 12. References ................................................................................................................................. 8

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Launch Of Delish
The Honey Bread

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1. 1.1 Mission Statement:

Introduction

Our products are backed fresh everyday using natural ingredients, wrapped & packaged With delicate care to insure healthy life. 1.2 Vision: In the coming years, Delish foods will be the Pakistans top baked foods Company by consistently providing premium quality products with natural contents and by keeping the view of healthy and sustainable environment. Delish - The Honey Bread Delish Bread is made up of 100% pure & natural honey. Honey Bread is introduced first time in Pakistan. Honey is a source of energy, vitamins, minerals and yummy flavor. Because it is packed with nutrients, it gives you and your family a perfect start

for a tough day ahead.

Breakfast nutritional importance Nutritional experts have referred to breakfast as the most important meal of the day, citing studies that find that people who skip breakfast are disproportionately likely to have problems with concentration, metabolism, and weight. (Wikipedia, 2012) Many dietitians and nutritionists consider breakfast to be the most important meal of the day. After a number of hours without food, our bodies literally need to break the fast to renew our energy reserves and re-fuel the brain and body. There is considerable evidence showing many health benefits to those who regularly eat breakfast. Breakfast can provide you with essential nutrients that the body needs, such as fibre, vitamins and iron. It has been shown that people who eat breakfast have more balanced diets

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than those who skip this meal, are less likely to be overweight and have reduced risk of certain diseases. If you want a healthy breakfast, then nothing beats honey. 1.3 Why Honey bread? Research shows that Children who eat breakfast have higher achievement scores, lower rates of

absence and tardiness, and increased concentration in the classroom. Adults who eat breakfast regularly tend to eat fewer calories, less saturated fat

and cholesterol and have better overall nutritional status than breakfast skippers. According to a poll, 38% of people skip breakfast everyday with a further 36% skipping breakfast sometimes. Nearly two thirds of people said that they skipped breakfast more than once a week. The reasons given included having too little time, trying to manage weight and not liking eating in the morning.

What makes Delish different? Ready to eat

(Who are short of time as you can eat without spreading butter or jam?) Sweet in taste

(Who dont like eating plain bread in the morning?) Healthy Diet (Who skip breakfast to control weight?)

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2.

HYPOTHESIS AND DATA ANALYSIS

We have formulated the following hypothesis on the basis of our attached questionnaire in the appendices; which will help us to identify whether the idea of honey bread is accepted by the people of Pakistan or not and people will buy honey bread if it is easily available in the market. 2.1 Hypothesis:

Will you buy honey bread if it's easily available in the market Null hypothesis H0 = will buy the bread. Alternative hypothesis HA = will not buy the bread.

Participants/ Sample size: The participants will include around 200people. A

total 50 questionnaires will be distributed.

Scale chosen: (Likert scale analysis)

In our research questionnaire the respondents will be asked to indicate their choice of buying the honey bread. They will be given a five point scale, where 1 indicated definitely yes and 5 indicate definitely no.

2.2 HYPOTHESIS TESTING We formulate the null hypothesis that the mean is equal to 3.0; H0: = 3.0 The alternative hypothesis is that the mean does not equal 3.0;

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HA: 3.0 Above figure shows a sampling distribution of the mean assuming the null hypothesis, that is, assuming = 3.0. The darker shaded area shows the region of rejection where = 0.025 in each tail of the curve. In other words, the region of rejection shows those values that are very unlikely to occur if the null hypothesis is true, but relatively probable if the alternative hypothesis is true. The values within the white area are called acceptable at 95 percent confidence level (or 5 percent significance level, .05 alpha level), and if we find that our sample mean lies within this region of acceptance, we would conclude that the null hypothesis is true.

LIKERT SCALE ANALYSIS

In our research questionnaire the customers of Delish Honey bread were asked to indicate their choice whether they would buy the honey bread or not. They were given a five point scale, where 1 indicated definitely yes and 5 indicated definitely no.

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Following data was collected Scale


Definitely Yes Yes May be No Definitely No

Frequency (f) 20 86 60 20 14 f=200

Rating (R) 1 2 3 4 5

f*R 20 172 180 80 70 f.R= 520

Cumulative frequency 20 106 166 186 200

(X )2 2.56 0.36 0.16 1.96 5.76

- )2 51.2 30.96 9.6 39.2 80.64 211.6

CALCULATIONS SAMPLE MEAN X: Mean= ("" f.R)/ (f) Mean= 520/200 Mean=2.6 MEDIAN: Median group= n/2 Median group= 200/2 = 50 50th number lie in 2rd row, so median is 2. MODE: The most frequency is in 2th row so mode is 2. Variance S2 = f(X - X) 2 / n 1 = 211.6 / 199 = 1.0633 Sample Standard deviation S = 1.0633 = 1.0311

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100 80 FREQUENCY 60 40 20 0 Frequency 1 20 2 86 3 60 4 20 5 14

Now we have enough information to test the hypothesis. We have decided that the decision rule would be to set the significance level at the .05 level. This means that in the long run the probability of making an erroneous decision when H0 is true will be fewer than 5 times in 100(.05) from the standardized normal distribution table, we found that the Z-score of 1.96 represented a probability of .025 that a sample mean will lie above 1.96 standard errors from . Likewise the table shows that about .025 of all sample means will fall below -1.96 standard errors from . CRITICAL VALUE The values that lie exactly on the boundary of the region of rejection are called the critical values of . Theoretically, the critical values are Z = -1.96 and +1.96. Now we transform these critical Z- Values to the sampling distribution of the mean for this study. The critical values are; Critical value lower limit = - Z (S/n) = 3.0 1.96 (1.0311 / 200) = 2.86 Critical value upper limit = + Z (S/n) = 3.0 +1.96 (1.0311 / 200) = 3.14

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A SAMPLING DISTRIBUTION OF THE MEAN ASSUMING = 3.0

2.60 from sample

2.86 Critical value lower limit

3.0 Hypothesized

3.14 Critical value upper limit

RESULT Based on the survey, X = 2.60. As we can see in above figure, the sample mean is contained in the region of rejection. Thus, since the sample mean is lower than critical value, 2.86, we can say that the sample result is statistically significant beyond the .05 level. INTERPRETATION The results indicate thatat 5% significance level the data do not provide sufficient evidence to conclude that the people will not buy honey bread if it is available in the market. Therefore we can say that people appreciate and like the idea of honey bread and will also encourage buying it.

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3.

RESEARCH QUESTIONNAIRE (From customers perspective)

And the analysis of the rest of the questions from the customer questionnaire is as follows:

1.

Which is the most important meal of the day? Breakfast Lunch Dinner

RESULT: It is concluded from the survey that 87% respondents consider breakfast as most important meal of the day 3% considered lunch and 10% considered dinner to be the most important meal of the day.

Lunch 3%

Dinner 10% Breakfast Lunch Dinner Breakfast 87%

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2.

What you/they like to have in breakfast? Paratha Regular bread Others

Specify______________________ RESULT: It is evaluated from the survey that still Paratha is preferred by 50% of the respondents.30 % prefer regular bread and 20% have different preferences which include brown bread, Rusk, biscuits and other items in breakfast.

BREAKFAST PREFERANCES
regular bread 30% others 20% Breakfast Lunch Dinner paratha 50%

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3. RESULT:

How often you/your children take breakfast? Everyday On Holidays 3-4 days a week

It is evaluated that 66.7% of respondents take breakfast every day, 23% take it on holiday as a family breakfast, and 10% take breakfast when they feel like.

BREAKFAST TREND
3-4 days aweek 10%

on holiday 23%

everyday holiday everyday 67% 3-4 days aweek

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4.

Why you/they skip breakfast? Dont like eating in morning Dont have enough time for breakfast Other, then

mention_________________________________________________

RESULT: The results shows that about 50% of the respondents have no time for taking

breakfast due to hurry in the morning and because of unavailability of having any ready to eat product. The other 33% dont feel to have anything in the morning because of some

personal or genetic reasons. And the remaining 17% have some other multiple reasons but, the most

common is bored from having routine breakfast items.

Other reasons 17% Dont like eating in morning 50%

Dont like eating in morning No time for Breakfast Other reasons

No time for Breakfast 33%

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5.

Why they dont like eating in the morning? What thing do you think can

attract them towards breakfast? Reason:________________________________________________________

_____________________________________________________________________

RESULT: Results show that about 33% of the respondents are not willing to take

breakfast because of some medical reasons. But, they would like to have something light, slightly sweet or different in taste. Most of the respondents say they find lesser time in the morning to have

anything to eat because of late getting up and also the two income households. They are seeking something that can be serving readily and take less time to consume. 17% of the respondents are finding something new or different in breakfast,

they are bored from the same parathas and conventional breakfast items.

percentages

Bored 17% unwilling 33% unwilling lesser time Bored lesser time 50%

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6. RESULT:

If time is the issue, then do you think ready to eat product can be beneficial? Yes No

About 62% of the responses are inclined to words YES that shows people

believe ready to eat product will be beneficial in breakfast; due to multiple factors i-e lesser time, tow income households and easy to consume. The other 38% say that it might not bring a big change. Not worthy.

percentage

No 38% Yes No Yes 62%

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7.

According to a survey, children who take regular breakfast, have high

achievement score. Do you agree? Yes No

RESULT: About 85% of the respondents say breakfast is one of the major meals of the

day, and it has a massive impact on the persons efficiency in its daily chores. So children who involve in physical and mental activities i-e studying are directly get impact from breakfast; and they also get high scores in their achievements. And 15% respondents are unaware about this fact.

percentages
No 15% Yes No Yes 85%

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8. your meal?

Are you conscious about healthy diet? Do you care about nutritional aspect of

Yes No

RESULT: The survey shows that 64% said that they care about health and nutritional facts of their meal. While, 36% said that they take whatever is available in their meal.

70% 60% 50% 40% Yes 30% 20% 10% 0% Yes No No

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9.

Do you like using honey in breakfast? Yes No If no, then why?

___________________________________________________________________________ ___________________________________________________

RESULT: From the survey it was concluded that 57% said yes they use and they like to use honey in their breakfast whereas 43% said of the respondents said no.

Reasons for not taking honey bread in breakfast:


60 50 40 30 20 10 0 Yes No Yes No

It is very sweet thing to take in breakfast. Perception of high calories in honey. Perception that diabetic patients cannot consume honey.

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10.

Do you think honey available in market is 100% pure? Yes No

RESULT: There is a big confusion regarding purity of honey available in the market, because different brands claim different percentages of purity. According to survey majority i.e 63% of the people think honey available in the market is not 100% pure.

Yes 37% Yes No No 63%

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11.

In what size the bread should be available? Small Size Medium Size Large Size All Sizes

RESULT: It is evaluated that most of the respondents preferred the medium and large size bread. So we will choose these two SKUS.51% respondents favored medium sized bread,28% large size, 4% small size and 17% all size. Small size bread 4% Medium size 51% Large size 28% All size 17%

small size 4%

SKU'S

all sizes 17% small size medium size large size 28% medium size 51% large size all sizes

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12.

What price would you prefer to pay for this type of bread? (Medium Size) Rs. 20-30 Rs. 30-40 Rs. 40-50

RESULT: According to majority of our targeted respondents, price range for honey bread medium size should be between 30-40 rupees, 37% said 40-50 rupees which is bit higher than simple bread available in the market but because of value addition of honey it is acceptable.

Rs. 40-50 37%

Rs. 2030 12%

Rs. 20-30 Rs. 30-40

Rs. 30-40 51%

Rs. 40-50

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13.

What you would like to have with honey bread? Tea Milk Butter No compliment

RESULT: In is assessed that 53% of respondents preferred tea with honey bread, 26% milk, 11% butter and 10 % with no compliment.

COMPLIMENT
10% 11% 53% 26% tea milk butter no complimenrt

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Conclusion:

It is concluded that that there is increasing trend of more health conscious people in city like Karachi though a major segment is still consuming Paratha as nutritious diet in their breakfast. The people who are cognizant to their health prefer a meal with low fat that has more nutritional value and that makes them fit. High-fat diets are associated with increased risk of several serious medical conditions including obesity, cancer, and heart disease especially in adult age individuals. Consequently, current public health recommendations emphasize the importance of reducing total fat intake to no more than 30% of total calories, or 60 grams of fat per day in an 1800 calorie diet Honey is considered to be of more nutritional importance that helps keep your immune system strong. This natural sweetener has antioxidants that is fat and cholesterol free. Breakfast is in fact the most important meal of the because of the following reasons; A study presented at the Learning Connection Summit demonstrated that brain

scans of children who eat breakfast show more activity than scans of children who skip breakfast. A study from the Dairy Research Institute found that people who skip

breakfast weigh more and have more unhealthy habits than those who eat breakfast. Those who skip breakfast consume 40 percent more sweets, 55 percent more soft drinks, 45 percent fewer vegetables and 30 percent less fruit than people who eat breakfast. A study from the University Of Minnesota School Of Public Health found that

people who eat breakfast everyday are 34% less likely to develop type 2 diabetes than those who do not eat breakfast. They are also 43% less likely to become obese and 40% less likely to develop fat around the belly.

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A new study from the Sussex Innovation Centre, Brighton, UK found that

eating breakfast improves people's mental performance. 61% of test subjects showed improvements in English and mathematics tests after eating breakfast. Hand-eye coordination was also improved. Breakfast eaters also showed a reduction in anxiety levels when faced with stressful situations. A study at the Beth Israel Deaconess Medical Center indicated that daily

consumption of whole grain breakfast cereal lowers a person's risk of developing high blood pressure. May 11, 2012

A study of 6,000 students from the Toronto Foundation for Student Success found that students who ate breakfast had better grades and were more likely to graduate. March 10, 2012

A new study from the Sussex Innovation Centre, Brighton, UK found that eating breakfast improves people's mental performance. 61% of test subjects showed improvements in English and mathematics tests after eating breakfast. Hand-eye coordination was also improved. Breakfast eaters also showed a reduction in anxiety level when faced with stressful situations. From the above studies and the result of our research shows that people believe that taking breakfast can keep the person active in his daily activities and have a great impact on the children achievement scores. Moreover there is a need to bring something in the breakfast category that can readily serve and consume and different from regular stuffs. The majority of the response shows the need of ready to eat items, and shows it will be beneficial for big size households, two income households and working class. It is further concluded from the survey that respondents would prefer to buy medium sized bread as the average ratio of persons per house in Karachi is 7.So a single unit of bread in a home would be enough for a

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family.And as far as taking any compliment with the honey bread is concerned most of the respondents want to have tea with the honey bread as it does not need any complimentary product like jelly, butter etc. it is itself a wholesome meal with premium taste and quality specially designed for health conscious people and those who prefer different taste in their breakfast. This would help customer reducing their budget for compliments of breakfast and paying more for honey bread other than the regular bread. Breakfast is perhaps the most important meal of the day. After all, you literally break a fast, fueling your body for the day ahead. Many people skip breakfast, especially if they're trying to lose weight, others miss breakfast because they're 'just too busy.' Unfortunately, this sets us up to grab anything and everything when hunger pangs finally kick in. So begin your day right and spend a little time eating a healthy breakfast, even if it means a little planning ahead. Your body will thank you. A woman needs a healthy start for her husband and for her children which is nutritious and tasty as well. So if something tasty is available in market that is nutritious as well other than regular bread or cereals people would most probably prefer that product.

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4. 4.1 OBJECTIVES:

MARKETING ANALYSIS

TO create brand awareness among prospective customers as the brand is new in its category, market and for customers.

Create perception in mind of consumer about nutritious value of honey in break fast Generate 25% of sales in the first year. Shift prospective customers from paratha or any other breakfast item to our brand. Complementary product remains same I-e butter, egg. Substitute gets change. To be the leader in the market through emotional attachment. To provide superior quality product to consumers To maintain high standard of quality of the brand. Maintain strong association in the consumers mind about the brand.

Variants of Delish Brown Bread with whole wheat: Its good for people who are with cholesterol, diabetic and BP problem and extra diet conscious. White Bread with plain flour: For everyone who want to be healthy and fit by honey.

TARGET MARKET The target markets we are focusing are the housewives and households with income of Rs 40000+. And the sec A and B.

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4.3 SEGMENTATION Initially when we are offering the the honey bread for the first time in the market, we have focused on some marketing segmentations that are followed Demographic Geographic Psychographic Behavior

DEMOGRAPHIC: In Demographic segmentation, particularly we have focused on following variables thathave significant impact on the product Age: 35 to on words Income: 40000+ Occupation: house wives, salaried persons, students , businessman.

GEOGRAPHIC: On the initial phases we are just focusing on some major areas of Pakistan to serve/cater the market. Including; Karachi Lahore Islamabad Faisalabad

PSYCHOGRAPHIC: As a part psychographic segmentation we have focused on; Life style of the People (health oriented, gyming) Personality Beliefs
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BEHAVIOR: As a part of behavioral segmentation we have focused on the knowledge, awareness, attitude & perception of the people regarding the product

SOCIOECONOMIC CLASS: Upper most segment of the consuming class- A1,A2 and B1 Middle segment- B2 and C

POSITIONING: Our product is different from our competitor in taste and in quality and in ingredients because it has honey as a major content and we positioned our brand as having the fresh ingredients. 4.4 Bread Industry Analysis: INTRODUCTION Bread industry is elevating at a very higher pace and at the same time it is dawdling at an enormous rate. Bread, which is less of a need and more of a want, is creating a difference in consumers life. To some people its mere wastage of money and to other at the same time it is readymade food which is ready for consumption with very less efforts, easy to carry and convenient. People are to some extent reluctant in consuming bread and other bread related things, they give bread a very pessimistic view, and regards it a western way of having a breakfast. Despite this all, people still consume bread but at different occasion and juncture. We have conducted a bread industry analysis on how much breads are sold every year and how much that translates in to PAK rupees. We have also looked into different historical and future trends which have effected and which will affect the sales and consumption of bread in overall. Additionally, competitors analysis was carried out on

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different major brands available, their respective market share, and the role of promotion which plays a very significant role in accelerating and boosting the sales. We have also carried an in-depth interview with different companys employee to give an additional insight on how their market shares are monitored in regards with different market trends, the existing players market share and how they respond to new entrants. There are around 30 different bread companies in Pakistan, even some of them have multiple SKUs, but in this project we are not taking SKUs in account. We have only considered breads consumption without any regards to a specific brand of bread. CURRENT MARKET ANALYSIS IN UNITS SOLD PER ANNUM Karachi has an average market of 53,3334 loafs in a day, in other words 53,3334 units are sold in total of the existing bread companies. This also includes the major ones and the unorganized bread maker i.e. bakeries and the like. The average size of a loaf which is sold in greater frequency is of 400 grams The sales in unit per annum is 192,000,240 loafs IN PAK RUPEES The above figure translates in to approximately PAK 8,213,344 a day, and 5.2 million tons a day, but this figure does fluctuate in accordance with the promotions and advertisements undertaken by major bread brands in to account. The sales in PAK RS 127,306800 per annum. The average growth rate in the industry is 10% per year, this rate remained constant till 2003, but due to promotional activities carried out by different brand the growth rate accelerated from 10% -- 15% in 2004, to 20% in 2005.

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Historical data revealed that AVERAGE breads sold in past three years were as follows: 2005 Sales in units 192,000,000 2004 220,800,000 2003 230,400,288

Sales in PAK RS

127,36900

111,393500

99,299,329

Breads are made on two major sectors, namely industrial sector and local bakeries.As stated earlier, the bread consumption in Pakistan is comparably less then western world. PARATHA, PURIS and other related homemade substitutes are used instead of bread at different intervals (breakfast, snacks, and the like)

SALES TREND: BREADS NAME 1 DAWN PKR 1600,000 1050000 900000 750000 650000 450000 PER DAY SALES IN PER MONTH SALES IN PKR 48000,000 31500000 27000000 22500000 19500000 13500000

BAKE PARLOR 2 3 4 5 6 WONDER SONA CLASSIC BRADYS

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4.5 COMPETITORS ANALYSIS: There exists a mild competition among several major brands of breads; each brand of bread desires to play a monopolistic role in the industry, but they are not. The competition is more of regional and national level. For example DAWN bread has two major competitors, WONDER bread which is competing at national level, and VITA bread which competes at regional level with DAWN. The former is not considered a threat by dawn bread because it only concentrates on a specific niche of the market; and only supplies bread to milk shops and local bakery stores. DAWN bread has a market share of 35 to 40% in Pakistan, it has 45% share in Karachi, targeting SEC A+, A , B, and C. the respective share in each segment is 75%, 60%, 45%, and 35%. BUNNY bread a major competitor of DAWN, runs neck to neck competition, its market share all over Pakistan is almost the same as DAWN. The reason being their heritage, BUNNY is in market since 1960, but Dawn stills has a dominant market share only because their share insect A+ is exorbitant.

WONDER has a market share of 12%. VITA which almost negligible has a market share of 4%. BAKE PARLOUR in Karachi has a market share of 17%. CLASSIC which operates in Karachi has a approximate market share of 7%. Different bread companies exercise different tools to boost up their sales.

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CATEGORY PLAYERS OVERVIEW: Historical data revealed that average bread sold in past three years were as follows:

Sales
DAWN BAKE PARLOR WONDER SONA CLASSIC BRADY'S

12% 14% 17%

8%

30%

19%

The data shows that in the past three years dawn was the major player in the market with 30% market share. The second largest market share was with bake parlor which is 19%, Wonder was with 17% market share and attain the third largest market share. Sona was having the fourth largest market share with 14%. Classic was having the market share of 12% and Bradys had the least 8%.

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4.6 SWOT analysis For analyzing the position, market share & growth potential of the company we haveSWOT analysis to measure it. STRENGTHS: WEAKNESSES OPPORTUNITIES: THREATS

A new and unique flavor made by fresh

Came up with only single flavored sweet

Consumers are more receptive towards the change due to media and competition

Low operating cost, trade discounts offered by the competitors

ingredients first time in bread. bread category

Unique kind of packaging that keep the bread fresh for a long.

A bread that have lesser alternative uses as compared with competitors brand i-e Dawn, bunny.

To increase the skilled labor

Barriers to entry are very low in the industry

Stability of production

Slow in acquiring efficient process in the brand building area.

Low investment requirement

Extension of accessibility networks by other brands

Less Turnover of the employee

Focused only SEC.A1,A2 and B1, B2 and C

Plant and equipments are available on rent.

Weak rental/delivery system.

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High skilled labor

Price are relative high

Rental delivery system

as compared with other is easily available. brands of competitors.

Qualified finances staff

4.7 Porters Five Forces Model: Mainly following factors can influence industry environment of our product: Threats of new entrants: (High) The growing industry is like a magnet for others and bread industry as it is growing very fast has a threat of new entrants. We have created some barriers to entry to minimize this threat: 1. Product Differentiation: We are manufacturing a new flavor of bread which is not available in the market. 2. First Mover Advantage: As the idea of Honey flavored bread is initiated by us so we are having the advantage of first mover. 3. Management Team: Our management team is very skilled and experienced and has a good knowledge of this industry.

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Rivalry among existing firms: (High) Rivalry among the firms who are already in the market is high. The main players in the market are: 1.Dawn Bread 2.Bake Parlor Bread 3.Gourmet 4.Cakes and Bakes Threat of Substitutes: (Low) At present there is no direct substitute for our bread because we are the first ones to introduce Honey bread. The indirect substitutes are milky or plain breads available but we will make sure that our quality and price attract people towards our bread. Bargaining Power of buyer: (Low) Bargaining power of buyer is low as the price of our product is already very competitive and is fixed and our product is different from our competitors. Bargaining Power of suppliers: (Low) Bargaining power of suppliers is low in this industry as raw material is easily available and there are lots of suppliers.

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5. 5.1 Creating Brand Equity:

PROMOTION PLAN

5.2 Brand Audit: Brand Name: Delish means delicious or tasty. The name is short, catchy and relevant. It resonates with the actual product attribute that is with the use of honey instead of sugar the taste is more enhanced and it is more delicious to eat. The font used for writing the name is trendy and elegant which shows that the product is different, new,classic and up-to-the minute. Color: The colors used in the packaging are brown, orange and white. Brown is a natural color that evokes a sense of strength and reliability.It brings to mind the feeling of warmth, comfort, and security. It represents keen sense of duty and responsibility. It is a color of physical comfort, simplicity and quality.To avoid the negative impression of being dull, boring, materialistic and lack of humor, portrayed by the brown
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color we used orange color. Orange is vibrant. It denotes energy and warmth. It stimulates the emotions and even the appetite.The color orange demands attention.Orange calls to mind feelings of excitement and enthusiasm. Whereas the addition of white color represents at the sides of the package represents purity or innocence.

Brand Logo:

The logo of the brand has the name of the brand itself and a picture of honey rolling down on the bread that shows that pure honey is used in the manufacturing of Delish. The three curve lines on the top give a feeling of freshness and aroma as it resembles the steam that raise from a freshly baked product. Package: The packaging is done in a slightly different manner as compared to other brands of bread in Pakistan so as to differentiate Delish "The Honey Bread" from others. All the information is printed in upright or vertical manneron the package.

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Brand Personality: The personality of the brand can be defined by the following features:

Women Age 35 to 45 Family oriented Health conscious Educated Reliable Intelligent Up-to-date Sophisticated(Upper Class, Charming) Shopping Habits (selective)

Brand Awareness: For the awareness of the brand name and logo we have chosen all the means through which we can best approach our target market. The means of communication are;
-

TV. Radio FM 107 FM 100 FM 103 FM 98 FM 106.2 Newspapers Dawn. The News.

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Express. Magazines SHE Magazine Internet Social Networks Website Billboards

Trade Marketing Naheed. Chase Imtiaz. Aghas. Makro. Metro. Sopnsorships Tv shoes/cooking Kids competition

Brand Perceived Quality: The quality perception of the brand will be built on the following factors: Features:

Honey Extra Nutritional Value Soft Texture Perfectly Baked

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Reliability:

Consistency Same recipe and great taste every time

Durability:

Long lasting freshness and softness

Fit and Finish:


Properly packed Package ensuring freshness Easy to carry and handle

Brand Associations: The associations that directly or indirectly affect the buying behavior of the target group of Delish are: Product attributes: Intangibles: Customer benefits: User/ Customer: Celebrity: Life style/ personality: Product class:

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DISTRIBUTION: We will follow the conventional mode of distribution. After baking the fresh units, they are transferred to store where the temperature kept on the level that keep the breads fresh after that breads are given to the distributers for distribution. The distributers deal with the wholesaler and then delivered to the retailers and finally reached to the consumers breakfast table.
Factory Store Distributors

Retailers

Wholesalers

End Consumer/ Customer

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PRODUCT Our products are different from our competitors in taste& quality and in ingredients because it has honey as a major content and we position our brand as having the fresh ingredients. Therefore, it will give uniqueness to our product among the lot of products already available inthe market. Our product is focusing a newly emerging health conscious class of Pakistan.

Some of the features of our product include the following:

Honey bread is introduced first time in Pakistan by the Delish foods. Which is also a symbol of its superiority.

Maintain a balanced diet. The Delish Bread gives the full neutrtional value to those who dont have the

time to have a heavy breakfast. I t can also be consumed without any complementary product.

VALUE CHAIN STRATEGY We are going to introduce our products firstly in Karachi, Lahore, Islamabad & Faisalabad and then we will move other areas of Pakistan after getting positive response by the customers. Delsih breads emphasize on their customers by focusing on multi channel distribution we will distribute in all the modern stores and the super stores and departmental stores in the designated regions. For this we will involve the intermediaries and also the company own vehicles will be used to distribute the baked food.

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Promotion strategy Promotion strategy consists of planning, implementing, and controlling communications from an organization to its customers and other target audience. Firstly we have defined our objectives that we want to achieve through promotion. Then we have defined how and what massage should be communicate? Which media should be used for promotion? Following objectives we want to achieve through promotion strategy. Objectives: Creating awareness & motivate to the target audience towards buying the products. The message The message conveyed by the company is a clear reflection of the major components and those are quality, fresh ingredients with honey and a step towards fit and healthy lifestyle. Which can be observed in the advertisements and promotional campaign held by the company. The media: We are focusing on conventional approach ATL (Above the line) for promotion through mass media (electronic, print & outdoor media) because through mass media we can make aware &motivate people towards the product easily as compare to BTL or TTL But initially, with the ATL we are also using a small part of BTL (Below the line) in which we will consider the personal selling & trials of the products so that we can observe the behavior of the people. Maintaining the goodwill & image Gaining the market share

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Electronic media includes; Television ads FM Radio

Print media includes; PRINT AD Newspapers Magazines

Outdoor includes; Bill boards

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6. DISTRIBUTION PLAN

Mode of distribution: Limited number of outlets (super stores and bakeries) To develop profitable account Strong relationship with retailers

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6.1 SELLING APPROACHES

DEVELOP PRODUCT STRATEGY become product expert sell benefits, not features configure value-added solutions

DEVELOP CUSTOMER STRATEGY understand buyer behavior discover customer needs develop prospect base.

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6.2 Channels of distribution:


Manufacturer

RETAILER GENERAL STORE BAKERIES

SUPER STORE

CONSUMER

The channel of distribution that we are using is the common in the market. The product is delivered to the retailers by our sales persons. Retail stores include super stores, general stores and bakeries and then reached to the consumers. In our channels we focus where the product can get maximum encounters with the target market.

BREAD DELISH DELISH

SIZE MEDIUM 400g LARGE 600g

TRADE PRICE Rs.36/= Rs. 48/=

RETAIL PRICE Rs. 45/= Rs. 60/=

We have our bread in two sizes medium which have the weight of 400g and it have the different prices ranges on different channels i-e bakeries, departmental stores, super stores and it cost Rs 45/= to final consumer.Similarly the larger size (sandwich size) which is of 600g have the same channels to available and it price to final consumer are Rs.60/=

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We have divided Karachi in two regions; Region 1 has Karachi East that includes Gulshan Town and Malir that include Malir Town. These are the areas where our target population is quite dense, so we are expecting the high level of sales in these areas.

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Areas that will be covered in region 1Gulshan Town are; S.No AREAS 1 2 3 4 5 6 7 DEHLI MERCHANTILE SOCIETY UC-10 CIVIC CENTER UC-02 P.I.B COLONY UC-03 GULSHAN-E-IQBAL I UC-05 GULSHAN-E-IQBAL II UC-09 METRO VILLE UC-11 GULZAR-E-HIJRI UC-12

Area that is covered in Malir Town is; S.No 01 AREAS MODEL COLONY UC-01

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Areas that are covered in region-2 North Nazimabad Town are; S.NO AREAS 1 2 3 4 5 6 7 PAPOSH NAGAR UC-01 HAIDERY UC-04 SAKHI HASAN UC-05 FAROOQ-E-AZAM UC-06 SHADMAN TOWN UC-08 BUFFER ZONE UC-09 BUFFER ZONE I UC-10

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The areas covered in gulberg town are; S.NO AREAS 1 2 3 4 5 AZIZABAD UC-01 KARIMABAD UC-02 AISHA MANZIL UC-03 ANCHOLI UC-04 WATER PUMP UC-07

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The areas covered in Sadar Town region-ii are; S.NO AREAS 1 2 3 4 5 GARDEN UC-02 KHARADAR-UC03 SADAR UC-08 CLIFTON UC-10 KEHKASHAN UC-11

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The area covered in Jamshaeed Town region II are; S.NO AREAS 1 2 3 4 PECHS I UC-06 PECHS II UC-07 GARDEN EAST UC-11 SOLDIER BAZAR UC-12

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SALES ORGANOGRAM: The upper position is factory manager who handles finished product in the factory, the sales manager reporting to the factory manager and oversee the sales officer of region one and region two. The sales officer of regions one have three salesman and three drivers under him. And the sales officers of region two have five salesman and five drivers because of the large geographic are of the territory. Budgeting: SKUs Units sold per day Selling price per unit (in Rs) Delish 400g Delish 600g 1800 1200 45 60 Total sales Budgeted sales for the quarter (in units) 162000 108000 270000 Budgeted sales for the quarter (in Rs) 7290000 6480000 13770000

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7. 7.1 LOCATION FEASIBILITY

LOCATION AND SITE ANALYSIS

The location of the facility is an important factor in its cost determination and has a profound impact in its distribution. The location of plant that we chose is based on three factors: Nearness to consumer Low transportation cost for product reaching the market Environmental factors

NEARNESS TO COMSUMER Since our product is highly perishable so it needs to be reached at the retail stores as early as possible from production point to consumption point. TRANSPORTATION COST The presence of plant within the city and near to consumer helps firm to save the transportation cost which in turn help to reduce the overall cost of the product hence increasing the profitability of firm. ENVIRONMENTAL FACTORS The environmental factors include the following: 1. 2. 3. Weather conditions Law and order situation Infrastructure

WEATHER CONDITIONS The climate of the place where the plant is being built is important in the manufacturing of the bread. As we have humid and hot climate in Karachi so it helps in manufacturing the bread.

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7.2 LAW AND ORDER SITUATION The political situation of the area in which plant is built influences the production. Since our plant is located in the industrial area of city so less chances are there for law and order situation to be out of control. INFRASTRUCTURE Infrastructure of the place plays an important role in delivery of product. It includes: 1. 2. 3. 4. 5. 6. 7. Utilities Communication Roads Labor availability Schools Hospitals Civic services

LOCATION SELECTED City: KARACHI Area: FEDERAL B AREA IMPORTANCE OF THE AREA TO BE CHOOSE FOR PLANT MANUFACTURING Federal B. Industrial Area this is the 5th largest industrial area of Sind province, spread over block 1 to 22 of Federal B. Area, Karachi. In fact, block 21 & 22 are the declared industrial areas, fully occupied by large and medium size industrial units while the cottage and small industries are located within the residential areas from block 1 to 20.

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Factories Above 2,000 industrial units are operating over there. 70% of them are export oriented units of home textile, knits and woven industries; 20% indirect exporters including packaging, labels, elastics, zippers and other allied industries, and 10% are the other units of pharmaceuticals, auto engineering, chemicals, multimedia, food and beverages etc.

Contribution to national economy they are contributing a big share in national economy by paying duties and taxes apart from earning huge foreign exchange for the Country as well as employing a large workforce; a large section of which constitutes women folk of the area.

Income tax about Rs. 3 billion per annum. Cesses & levies about Rs. 500 million per annum. Other taxes about Rs. 5 billion per annum. Total taxes about Rs. 8.5 billion per annum. Or about Rs. 25 million daily.

Association Federal B. Area Association of Trade & Industry came into existence in 1987 with clear objectives to promote industrial activities in the area and to contribute positively to the economic well-being of the Country by way of enhancing industrial production.

The Association is incorporated under the Companies Ordinance 1984 as a company under section 42 and registered under No. K-01504 of 1989-90 by the Registrar of Companies. It was earlier licensed under section 3 of the Trade Organizations Ordinance 1961. The

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Government has withdrawn the Trade Organizations Ordinance 1961 and promulgated a new Trade Organizations Ordinance 2007 requiring fresh registration of the associations. This Association has also got fresh registration under license # 27 dated May 19, 2008. 7.3 RAW MATERIAL AVAILABILITY Raw materials are important to the production of any product.raw materials can be divided into two categories; Physical goods material Human material

Physical goods material This Will Include The Ingredients Used In Bread Making, Which Are: Bread Flour Sugar Yeast And Other Chemicals Water Salt Oil Honey Butter Milk

HUMAN MATERIALS: Labor are most important for completion of any process. In Karachi labor is easily available at cheap cost which makes it an ideal place for selection of the plant.

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7.4 LAYOUT OF THE FACTORY The layout of the factory will be assumed to be in following manner:

DELISH BREAD FACTORY LAYOUT

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8.

Financial Analysis:

8.1 Cost Analysis and Resource Allocation Total Investment: Fixed Cost: Machinery Vehicles Furniture & Fixture Variable Cost (Working Capital): Raw Material + Inventories Labour + Utilities Bills+Rent 8.2 Fixed Cost Details Machinery The Plant And Machinery Needed For Bread Manufacturing Are: Vehicles For Proper Distribution Of The Product, We Will Buy Suzuki Carriage CaRs Which Will Depart To Different Locations Of City. 8.3 Variable Cost Details Raw Material This Will Include The Ingredients Used In Bread Making, Which Are: Bread Flour Sugar Yeast And Other Chemicals
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20 Million

6.5 Million 3.5 Million 1 Million

4 Million 5 Million

Baking Ovens Mixer Machines Bread Cutters And Slicers

Water Salt Oil Honey Butter Milk

Per-Unit Costs After considering all material cost and labor costs, that consists ingredients needed in a 600gm and 400gm bread. According to current prices of all ingredients, the 600gm bread raw material costs totaled Rs. 39/unit. We know that the labor costs are fixed, so we have added a lump sum amount of Rs. 100,000 as our labor cost. According to our budgeted sales of 432,000 units per year, we get the total cost/unit of Rs. 40 for 600gm bread. Similarly, we are getting the total cost/unit of Rs. 25 for 400gm bread in a sale of 648,000 units per year. For 600gm, Calculation Of Per Unit Raw Material Cost Bread Flour= Rs. 21.6/Unit Sugar= Rs. 3/Unit Packing= Rs.1.5/Unit Honey= Rs.5/Unit Chemicals= Rs.4/Unit Milk & Butter= Rs.4/Unit Totaled= Rs. 39/Unit

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Calculation Of Per Unit Bread Cost

Raw Material Cost=Units Sold * Raw Material Cost Per Unit Raw Material Cost =432,000*39 Raw Material Cost =16,848,000 Add:Labor Cost Total Cost Cost Per Unit Cost Per Unit Cost Per Unit =100,000 =16,948,000 =Total Cost/Units Sold =16,948,000/432,000 =Rs. 40/Unit

For 400gm, Calculation Of Per Unit Raw Material Cost

Bread Flour= Rs. 14/Unit Sugar= Rs. 2/Unit Packing= Rs. 1/Unit Honey= Rs. 3/Unit Chemicals= Rs. 1.5/Unit Milk & Butter= Rs. 2.5/Unit Totaled= Rs. 24/Unit

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Calculation Of Per Unit Bread Cost

Raw Material Cost =Units Sold * Raw Material Cost Per Unit Raw Material Cost =648,000*24 Raw Material Cost =15,552,000 Add: Labor Cost Total Cost Cost Per Unit Cost Per Unit Cost Per Unit =100,000 =15,652,000 =Total Cost/Units Sold =15,652,000/648,000 =Rs. 25/Unit

8.4 LOAN AMORTIZATION: To maintain our capital structure of 60% debt and 40% equity, we take the loan of 12 million to finance our initial investment of 20 million. The average ongoing cost of borrowing rates is 12% in debt markets. The amortization of our loan will be followed on this pattern:

AMMORTIZATION SCHEDULE No. 1 2 3 4 5 Loan Amount 12,000,000 10,111,083 7,995,496 5,626,039 2,972,247 Payment Interest Principal (3,328,917) (1,440,000) (1,888,917) (3,328,917) (1,213,330) (2,115,587) (3,328,917) (959,460) (2,369,457) (3,328,917) (675,125) (2,653,792) (3,328,917) (356,670) (2,972,247) Remaining Amount 10,111,083 7,995,496 5,626,039 2,972,247 0

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8.5 CALCULATION OF WACC:

As we are willing to maintain our capital structure of 60% debt and 40% equity, therefore; we take our Debt to equity ratio of 60%. To calculate our weighted average cost of capital, first we calculate cost of equity: Cost of Equity=0.11 + (0.07)*1.5 Cost of Equity=0.11 + 0.105 Cost of Equity=21.5% We take 11% because it is the opportunity cost of doing investment in the business, because we can invest in National Savings Scheme which is giving 11% return. Also, our project is 50% riskier than market thats why we take 1.5 as a weightage to calculate Cost of Equity. Our Capital structure will be 60% debt and 40% equity, therefore; D/E=0.6 D=0.6E We know that, sum of weightages of equity and debt financing equals 1. D + E=1 0.6E + E=1 (D=0.6E) 1.6E=1 E=1/1.6 E=0.625 For Calculation of WACC, WACC=(Weightage Of Debt)*(Cost Of Debt)+(Weightage Of Equity)*(Cost Of Equity) WACC= (0.375*12%)+(0.625*0.21) WACC=4.5%+13.12% WACC=17.62%

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8.6 CASH FLOW ESTIMATIONS

Years Initial investment Working Capital Revenue Expenses Utilities + Rent EBIT Tax (35%) Net Income Net Cash Flows

0 (11,000,000) (5,000,000)

CASH FLOW ESTIMATIONS 1 2 3

44,064,000 (33,480,000) (500,000) 10,084,000 (3,529,400) 6,554,600 (16,000,000) 6,554,600

50,673,600 (38,502,000) (575,000) 11,596,600 (4,058,810) 7,537,790 7,537,790

55,740,960 (42,352,200) (661,250) 12,727,510 (4,454,629) 8,272,882 8,272,882

60,200,237 (45,740,376) (760,438) 13,699,423 (4,794,798) 8,904,625 8,904,625

63,210,249 (48,027,395) (874,503) 14,308,351 (5,007,923) 9,300,428 9,300,428

CALCULATION OF NPV: We know that, Net Present Value can be calculated by discounting all inflows and outflows 17.62%. The time of project is 5 years. NPV= PVinflows - PVoutflows

NPV= 6,554,600/(1.1762) + 7,537,790/(1.1762)2 + 8,272,882/(1.1762)3 + 8,904,625/(1.1762)4 + 9,300,428/(1.1762)5 - 16,000,000 NPV= 8,889,289 We can say that this project will be very profitable for us even if we failed to increase our sales through the years, still it can be a very profitable project.

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8.7 PROJECTED FINANCIAL STATEMENTS PROJECTED INCOME STATEMENT FOR 5 YEARS

Years Revenue Cost of Goods Sold Gross Profit Operating Expenses EBIT Interest EBT Tax (35%) Net Income Retained Earnings

INCOME STATEMENT 1 2 3 4 44,064,000 50,673,600 55,740,960 60,200,237 (33,480,000) (38,502,000) (42,352,200) (45,740,376) 10,584,000 12,171,600 13,388,760 14,459,861 (6,406,400) 4,177,600 (1,440,000) 2,737,600 (958,160) 1,779,440 (5,067,360) 7,104,240 (1,440,000) 5,664,240 (1,982,484) 3,681,756 736,351 (5,574,096) 7,814,664 (1,440,000) 6,374,664 (2,231,132) 4,143,532 506,708 (6,020,024) 8,439,837 (1,440,000) 6,999,837 (2,449,943) 4,549,894 1,956,941

5 63,210,249 (48,027,395) 15,182,854 (6,321,025) 8,861,829 (1,440,000) 7,421,829 (2,597,640) 4,824,189 2,300,000

EXPLANATION FOR INCOME STATEMENT PROJECTIONS GROSS PROFIT As we have made our target of selling 3000 units per day in entire city of Karachi. We have divided 3000 units of sales in 1800 units of 400gm bread and 1200 units of 600gm bread. In terms of year, we are having sales of 44 million according to our distribution strategy for selling the bread to local bakeries, departmental stores and super stores. Our pricing strategy proves to be a critical factor as we are having profit margin of Rs. 8 per unit by not selling our product directly to consumers but to retailers. For retailers, our price for 600gm and 400gm bread is Rs. 48/unit and 36/unit respectively. According to our projections in year 1, our company will gain 10 million gross profits. Also, we have taken different growth rates for coming years because when the product will be launched people will take time to shift their buying decision to our product and chances for growth will be higher in first two years. We have taken 15% growth for 2nd year, and similarly; we have take 10% and 8% for the next two years. OPERATING EXPENSES These expenses will contain general selling and administrative expenses that will include branding expenses, advertising expenses, transportation expenses, petroleum expenses, Utilities bills, and rental expenses. By keeping all things in mind, we have assumed that our operating expenses will be our 10% overall sales in every year. In year 1, we have taken an extra amount of 2 million as a branding and advertising expense because the product will going to be a new type of product in markets, therefore, this will create a need of high investment for creating awareness about the product to consumers.

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PROJECTED BALANCE SHEET FOR 5 YEARS

YEARS Current Assets Fixed Assets Total Assets Current Liabilities Long Term Liabilities Total Liabilities Owner's Capital Retained Earnings Total Equity Total Liabilities & Equity

BALANCE SHEET 1 2 3 6,000,000 8,400,000 7,700,000 11,000,000 9,900,000 9,108,000 17,000,000 18,300,000 16,808,000 1,440,000 2,824,000 2,960,492 12,560,000 14,000,000 3,000,000 3,000,000 17,000,000 10,676,000 13,500,000 4,063,649 736,351 4,800,000 18,300,000 8,540,800 11,501,292 4,063,649 1,243,059 5,306,708 16,808,000

4 6,160,000 8,379,360 14,539,360 1,255,801 6,832,640 8,088,441 3,250,919 3,200,000 6,450,919 14,539,360

5 6,776,000 7,960,392 14,736,392 1,567,349 4,782,848 6,350,197 2,886,195 5,500,000 8,386,195 14,736,392

EXPLANATION FOR BALANCE SHEET PROJECTIONS

ASSETS Our projects initial investment will be 20 million and for first year of operation we will have assets of worth 17 million for controlling the working capital and for making reserve fund for the company to survive in case of not having much sales. CURRENT ASSETS Keeping in view that our projects basic needs will be its raw material (ingredients) for making the production effective. For having higher production initially, we have put high working capital for labor, material, and inventory costs. FIXED ASSETS For production and distribution in a higher scale for city of Karachi. We have to acquire large machineries for effective production of the bread. But in balance sheet, Fixed assets are declining throughout the years because of the depreciation occurs on the fixed assets. Bread making is highly dependent on technology and machinery, therefore; their depreciation expense is decreasing the fixed assets in every year. LIABILITIES AND EQUITY LIABILITIES To meet our investment needs, we have decided to maintain our debt to equity ratio to 60%. To keep on this ratio, we have decided to take a loan for 5 years of 12 million which

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will help us to acquire machinery and to meet other short term expenses as well. Our longterm liabilities are declining due to payments that will be made for the debts in the future.

EQUITY To further finance the project, the owners; our group will invest 40% of the total investment initially. As per our projections, our sales will generate enough income that will help us to retain our earnings for future period. After year 1, our expenses have not increased much due to lower marketing expense. This will help us in keeping the retained earnings in our equity side. In future, when our retained earnings will be increased, the owners will dump their investment from the company.

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9. 9.1 PRODUCTION PROCESS

TECHNICAL ANALYSIS

The process involved in manufacturing of the honey bread will be as follows: 1. 2. 3. 4. 5. Mix the flour and egg and other ingredient in mixer. Put the whole dough into pieces in block make. Separately make the bread round in diver round. Mold and shape the bread in shape maker. Ferment and bake the bread in ferment box.

9.2 SELECTION OF TECHNOLOGY Selection of technology is based upon the three factors which are as follows:

RECOURSE
Recourse:

FLEXIBILITY

EXPANSION

It is related to the use of appropriate technology by the firm and whether particular technology is allowed in specific country to be used. Flexibility: The particular technology selected by the firm is able to produce other products that are offered by the firm. Expansion: The technology is able to compete in market and can help firm increasing its market share by use of latest technology.

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9.3 TECHNOLOGY ACQUISITION AND TRANSFER On the basis of selection criteria following machines are selected to be use in the factory: Machinery The basic Machinery Needed for Bread Manufacturing Are: Baking Ovens Mixer Machines Bread Cutters And Slicers

TECHNOLOGY UP GRADATION The technology is upgraded by using the following machines in the production of honey bread: Flour blending machine Flour shifting machine Flour weighing machine Water tempering and measuring tanks Sponge stirring machine Moveable pan kneading machine Dough dividing machine Spindle handle up machine First prover Spindle final molding machine Final prover Swinging tray steam pipe travelling oven Automatic bread cooler Bread wrapping machine
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These high technology machines would help in effective flow of materials and increase in efficiency of the production process. TECHNOLOGY EVALUATION Delish bread manufacturing process is well capable to achieve the high quality standard in market as compared to its competitors DAWN and VITA. The government policies regarding the emission of fluids and the waste material is fully observed by the firm and the technology adopted produced less of smoke from the ovens thus making the environment safe for the citizens. MAINTENANCE REQUIREMENTS The maintenance of the high-tech machinery is carefully considered by the management by following the below mentioned measures: Highly skilled labor for handling of machines Installation of fire alarms in the factory Computerize system for maintenance of inventory of raw materials Timely work Competent labor evaluation system Efficient compensation system for employees

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10.

PEST ANALYSIS:

PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. (Wikipedia, 2011) 10.1 POLITICAL ENVIRONMENT: Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation. Pakistan has had considerable difficulty developing stable, cohesive political organizations because they have suffered long periods of repression. Further, political parties, with few exceptions, have been founded as vehicles for one person or a few individuals, or to achieve specifically defined goals. When these individuals die or abandon their parties or after party goals have been met many organizations have lacked the ability to carry on. In addition, political parties have been handicapped by regional and ethnic factors that have limited their national appeal and have also been torn by personal and class rivalries. (Sharif, 1994) The political conditions of any country may influence the company products that are being manufactured or traded. The country's political instability, law & order situations & continuous changes in policies may sometime resistin success of their products. So to survive handling and coping up with the political environment is one of the greatest challenges of all.But as bread is in the regular consumption list of our target market the effect of political

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environment would not be that massive. But then again company will have to device policies so as to secure the product from the threats of unstable political conditions of the country. Moreover, there is also a political pressure on food companies to come up with healthier foods. The government publicizes and supports healthy eating by creating initiatives in the form of food laws, in Pakistan there exist a large number of food laws. However, most of them deal with control of production, distribution and supply of food, in addition to dealing with profiteering and hoarding. There are four laws that specifically deal with food safety. Three of these laws directly focus issues related to food safety, while the fourth one namely Pakistan Standards and Quality Control Authority Act, is indirectly relevant to food safety. To meet these political challenges the bread we will provide will have all the natural ingredients in it and it would be prepared in a healthy and simple way. The packaging of the Delish bread would be such that it would be environmental friendly and with the introduction of this new environment-friendly packaging the company acknowledges its concern for its activities and encourages an optimistic influence through its activities on environment and consumers. Regular plastic can take up to 400 years to be broken down and conventional plastic will survive in the environment for many decades, but oxo-biodegradable will degrade in a short time leaving no harmful residues. Therefore the company is not only dedicated to deliver the best quality products but is also keen towards preserving the environment. With the introduction of this inventive and environment friendly technology company is actively playing its role for a greener planet and sustainable future. By adapting ECO friendly packaging we can create a greener, cleaner PLANET! And this package would also keep the freshness intact for the specified period of time. The product would be such that it would meet the standards as per the description of Pakistan Standards and Quality Authority Act.

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10.2 ECONOMICAL ENVIRONMENT: Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy. Economic factors also include changes in buying patterns as people's incomes rise. For example, as incomes go up people prefer to buy what they see as superior varieties of a product type. We see this with the development of ready prepared foods. When we talk about the economic environment in this era, unfortunately we see the situation is very dangerous not only in Pakistan but also all over the world. Most of the developed and developing countries are going in recession. They have high inflation rates, unemployment, unequal distribution of income, high interest rates etc. These economic factors are making the people poorer and their purchasing power is going down. Their income is not increasing as consumption. So our challenge in this economic condition when people have low purchasing power is to offer the quality products in very economic prices that people can afford very conveniently. As studies show that most of the people compromise with their breakfast because they are short of time or they do not like the taste of whatever they eat in morning. So as to cope up with this problem we are introducing a bread that is ready to eat and also the taste of the bread is sweet that would be liked by the people to be eaten in the breakfast. Rather than applying butter or jam on the bread, the Delish bread can be eaten as it is. Of course, it would save the people money for buying the spread (butter, jam etc.).

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Inflation rate is also an important economic factor. Inflation rate of Pakistan for the current fiscal year has grown by7.7 percent. This thing is really hurting the purchasing power of Pakistani consumers. This factor decides which class Delish is going to target. The consumption behavior of the people plays an important role.

10.3 SOCIAL AND CULTURAL ENVIRONMENT: Humans essentially create their own cultural and social environment. Customs, practices and traditions for survival and development are passed down from one generation to the next. In this way, the members of a particular society become conditioned to accept certain "truths" about life around them. In broad terms, the social-cultural environment includes everything that is not included in the economy or the political system. Economic life is organized primarily through a market in which individuals relate to one another as buyers and sellers and the purpose is production. In political life individuals relate to one another as citizens and the basic purpose is making collective decisions and rules. The economic and political systems together create the conditionsgoods, services and ruleswhich we all need in order to live the kinds of lives that we choose. The social-cultural environment, then, consists of the whole range of behaviors and relationships in which individuals engage in their personal and private lives, including: The characteristics of the population (e.g. age, sex, race or ethnicity, class) Values and attitudes Lifestyles and relationships.

Culture is an attribute of groups, and this can mean society as a whole (e.g. national culture), Spatial levels groups within society (sub-cultures), or even groups of societies and nations (trans-national culture). For example, it is quite common to speak of western

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culture. This term implies that the rare certain values and ways of life that western societies might be said to share, such as: Secularismthis refers to the increasing influence of rational and scientific thought, and the decline of religion as a framework of understanding and guide to behavior. Consumerism or materialismthis refers to the view that achieving higher levels of consumption of goods and services leads to greater happiness. A good life means having more stuff. This attitude lies behind the belief that economic growth is always a good thing. Individualismthis usually refers to the idea that individuals make their own lifestyle choices and are motivated primarily by self-interest. It can also involve the idea that individuals should strive to be self-reliant. However these attitudes or values vary in strength between western societies (e.g. UK society is more secular than the United States), and they also have their own distinctive cultural traits. For example, Brutishness might be said to include (among other traits): An attitude of reserve (e.g. compared to American outspokenness) A sensitivity to class differences (as expressed by accent and manners) A sense of fair play.

In analyzing the social-cultural environment of business it is important to recognize that society and culture are not homogeneous or fixed. Rather they are diverse and fluid or dynamic. Social and cultural change is a hallmark of modern societies (more than in the past), symbolized by the widely recognized phenomenon of a generation gap. This refers to the way in which, due to social and cultural change, each generation tends to feel somewhat out of touch with (and even bewildered or shocked by) the attitudes and behaviors of the next. Business needs to stay in touch with social and cultural shifts. WHAT HAS IT GOT TO DO WITH BUSINESS? SOCIETY, CULTURE AND BUSINESS:

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As with other aspects of the environment, the relationship between business, culture and society involves a two-way interaction. Although we tend to think of business as operating according to a distinctive instrumental rationality of profit-and-loss and the bottom line it is also influenced by the social-cultural setting in which it is embedded. At the same time business affects the wider culture and society profoundly. For example, a good deal of what we think of as making up the culture of modern society consists of the outputs of private sector businesses in what might be called the culture industries, such as popular music, films, literature, newspapers and magazines. These influences can be seen as either positive or negative. For example, aspects of the culture of a society might be seen as hindering or assisting business performance. Therefore governments might be interested in promoting cultural change as a way of boosting economic competitiveness. On the other hand business might be seen as having harmful or beneficial effects on the wider society or culture, and governments might want to influence or regulate business behavior for this reason. SOCIO-CULTURAL RESPONSIVENESS OF DELISH BREAD: On the bases of the above importance of socio-cultural environment Delish foods brought the best for the socio-cultural environment in which it is operating its business. We are focused on Our first priority is to provide always high quality products considering the all

religious perspectives according to countries &customer needs. We produce a product that will be manufacture on the standard procedures as

prescribed by the government and consumer laws. We also use energy efficiently required to produce our product Mills from where we bring raw material are located close to wheat fields saving time and energy. At the mills, flour is packaged in flour bags that are usually made of recycled paper. Flour bags made with unbleached paper cut down on problematic water pollutants.

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We use the fresh ingredients in our bread that is approved and tested by the

laboratories and are certified by quality control department of Pakistan. Our procedures of production are high Tec which required less involvement of

human hands; so ensures more hygienically produced bread. The safety of our employees is more important to us; we abide the labor laws

of Pakistan. And ensures the safety of the employees as our priority. Packaging plays a critical role in almost every industry, every sector and every

supply chain. Appropriate packaging is essential to prevent loss of goods and as a result decrease impact on the environment and makes a positive contribution towards achieving a sustainable society. We package our bread in meets the ISO standard, prevent the loss of product and quality, increase the shelf life and also it is recyclable.

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TECHNOLOGICAL ENVIRONMENT: TECHNOLOGY It is about application of tools, methods and techniques to improve production and processes. Nothing is as obvious as technology, whether in households or Businesses. The intensity and type of technology use varies depending on the type of economic activities an enterprise is involved in. There will be no point of analyzing every single technology available in all industries and their applications. The most important concept for an enterprise to monitor is: TECHNOLOGY LIFE CYCLE: For any product or technology there is a finite life, it may be measured in decades or even centuries but eventually it gets old and something comes along to replace it. It is obvious with some of today's computer and communication technologies this life cycle is very short and may be measured in months rather than years. STAGES IN THE INNOVATION LIFE CYCLE CHARACTER FLUID PATTERN CHARACTERISTICS Competitive emphasis Functional product placed on performance Innovation stimulated Information on user by needs, technical inputs Predominant type of innovation Product line Frequent major changes in product Diverse often include custom designs Flexible and inefficient - aim is to experiment and make frequent changes TRANSITION PHASE Product variation Opportunities created by expanding internal technical capability Major process innovation required by rising volume Include at least one stable or dominant design Becoming more rigid and defined SPECIFIC PHASE Cost reduction Pressure to reduce cost, improve quality

Production processes

Incremental product and process innovation Mostly undifferentiated standard products Efficient, often capital intensive and relatively rigid

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THE TECHNOLOGY DELISH BREAD USE: We ensure the least involvement of human hand in the manufacturing and backing of our bread. Thats why we have a multiple numbers of modern machines and equipment that facilitate the quickest per unit production and also the efficient use of raw material, which leads to the least amount of wastage during production. We have advance technology that provides complete assurance that the products are high quality products. We are efficient to adopt the new technological advancements with passage of time or as per requirement. We use the equipment which is not only having the latest technology but also have the environmental friendly attributes. Some equipment we are using in our processing are; 1. Italian Bakery Machine: that is designed to bake cookies, pizzas, buns and several other food items. 2. Rotary Oven: that is designed for baking various products like bread, buns, cakes and cookies. Suitable for baking in large quantities. 3. Baking proofer: used to control temperature and humidity, assuring the production of consistently high quality bread. 4. Flour sifter: used for mixing flour, baking powder, soda and other dry ingredients for making dough. 5. Dough Mixers: These dough mixers are designed using latest technology and are thus reckoned for their superior performance with less energy consumption. 6. Dough Divider: These commercial dough dividers are specially designed to divide the dough into accurate sized pieces. 7. Dough Moulder: Designed for continuous operation at high speed, this commercial dough moulder perform perfect molding operation. 8. Dough Rounder: that rounds and kneads the pre-cut pieces of dough into perfect round balls of uniform size.
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9. Bread Slicer: performedcontinuous slicing of bread pieces in an efficient manner. The bread slicer machine is appreciated for superior, quick and noiseless performance.

Change comes from a number of sources Social, Legal, Economic, Political and Technological. Change is the one constant in the business environment. The company recognizes that it has to respond to what its consumers want. There are clear indicators that today's consumers want to live a healthier lifestyle. Consumers are increasingly aware of food content and food issues. More and more people look at food labeling and read information in the press about what is good for them. They listen to advice from teachers and nutritionists. Food technologists enable the company to keep in tune with the changing environment..Delish advertising will support the company's message that the bread is nutritionally acceptable provided it is made in the right way. The challenge now is to keep listening to consumers and to the external environment in order to continue to give those consumers the best value.

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CONCLUSION: Nutritional experts have referred to breakfast as the most important meal of the day. Studies that find that people who skip breakfast are inexplicably likely to have problems with attention, metabolism, and weight. Many dietitians and nutritionists consider breakfast to be the most important meal of the day. After a number of hours without food, our bodies literally need to break the fast to renew our energy reserves and re-fuel the brain and body. We have formulated the following hypothesis on the basis of our attached questionnaire in the appendices; which will help us to identify whether the idea of honey bread is accepted by the people of Pakistan or not and people will buy honey bread if it is easily available in the market. The results indicate that at 5% significance level the data do not provide sufficient evidence to conclude that the people will not buy honey bread if it is available in the market. Therefore we can say that people appreciate and like the idea of honey bread and will also encourage buying it. It is concluded that that there is increasing trend of more health conscious people in city like Karachi .The people who are cognizant to their health prefer a meal with low fat that has more nutritional value and that makes them fit Consequently, current public health recommendations emphasize the importance of reducing total fat intake to no more than 30% of total calories, or 60 grams of fat per day in an 1800 calorie diet Honey is considered to be of more nutritional importance that helps keep your immune system strong. This natural sweetener has antioxidants that is fat and cholesterol free. There exists a mild competition among several major brands of breads; each brand of bread desires to play a monopolistic role in the industry, but they are not. The competition is more of regional and national level. For example DAWN bread has two major competitors, WONDER bread which is competing at national level, and VITA bread which competes at

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regional level with DAWN. The former is not considered a threat by dawn bread because it only concentrates on a specific niche of the market; and only supplies bread to milk shops and local bakery stores. We are going to introduce our products firstly in Karachi, Lahore, Islamabad & Faisalabad and then we will move other areas of Pakistan after getting positive response by the customers. Delish breads emphasize on their customers by focusing on multi channel distribution we will distribute in all the modern stores and the super stores and departmental stores in the designated regions. Promotion strategy consists of planning, implementing, and controlling communications from an organization to its customers and other target audience. Electronic media includes; Television ads FM Radio

Print media includes; Newspapers Magazines

The location selected for pant building is Karachi F.B. AREA which is the industrial area of the city and where labor and raw materials are easily available. Moreover, there is also a political pressure on food companies to come up with healthier foods. The government publicizes and supports healthy eating by creating initiatives in the form of food laws, in Pakistan there exist a large number of food laws. However, most of them deal with control of production, distribution and supply of food, in addition to dealing with profiteering and hoarding. There are four laws that specifically deal with food safety. Three of these laws directly focus issues related to food safety, while the fourth one namely Pakistan Standards and Quality Control Authority Act, is indirectly relevant to food safety.

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When we talk about the economic environment in this era, unfortunately we see the situation is very dangerous not only in Pakistan but also all over the world. Most of the developed and developing countries are going in recession. They have high inflation rates, unemployment, unequal distribution of income, high interest rates etc. As studies show that most of the people compromise with their breakfast because they are short of time or they do not like the taste of whatever they eat in morning. So as to cope up with this problem we are introducing a bread that is ready to eat and also the taste of the bread is sweet that would be liked by the people to be eaten in the breakfast. Rather than applying butter or jam on the bread, the Delish bread can be eaten as it is. Of course, it would save the people money for buying the spread (butter, jam etc.). We ensure the least involvement of human hand in the manufacturing and backing of our bread. Thats why we have a multiple numbers of modern machines and equipment that facilitate the quickest per unit production and also the efficient use of raw material, which leads to the least amount of wastage during production. We have advance technology that provides complete assurance that the products are high quality products. We are efficient to adopt the new technological advancements with passage of time or as per requirement. So the after complete analysis of product which includes: Marketing, Financial, Location, Technical, PEST, SWOT analysis, and by the help of questionnaire we concluded that DELISH honey bread if introduced in market would be accepted by most of the individuals who are health conscious and those who want something different in their breakfast, and with high quality standard we can achieve a sound market share in the near future after the launch of DELISH honey bread.

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Bibliography
1.

Ross, Sheila. (2003, April 5). Pakistan-political dynamics. Retrieved from http://www.mongabay.com/history/pakistan/pakistan-political_dynamics.html Wikipedia. (2011, February). PEST Analysis Retrieved from http://en.wikipedia.org/wiki/PEST_analysis

2.

3. Scribd. (2012, June). Brand Research. Retrieved from http://www.scribd.com/doc/30035978/Bread-Research 4. Wikipedia. (2012, November). Breakfast Retrieved from http://en.wikipedia.org/wiki/Breakfast

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