YOUR HEALTH OUR CONCERN

Our new marketing strategic focus is on marketing, distribution and sustenance of our product, digestive biscuits as a successful business proposition in our local market. DR YES will change its focus to differentiate itself from other major competitors in the market, namely, Mavities, Nestle, KF and other producers from unorganized sectors. Our marketing challenge is to position DR YES as a high-quality, low-price, healthy, any-time snack for the younger generation. Our objective also includes optimizing the distribution strategy and maximizing profits.

MARKETING PLAN FOR DR YES

DR YES is a new digestive biscuits in the Indian Market. Objective of this marketing plan is to successfully market, launch and sustain DR YES digestive biscuits in the market.

Primary Objectives

1. Establish market share of 4% of the overall market share for digestive biscuits in the first 2 years 2. Increase sales for DR YES through sales promotion

Market Research

For knowing consumer behaviour about digestive biscuit we prepared a Questionnaire of 7 questions. These questions were relatively simple and less time consuming. We have targeted some of the important and crowded destinations The Great India Place, Saket, Sarojini, and Rajeev Chowk. These destinations were also different with respect to demographic of consumers.

Questionnaire for Market Survey

Consumer No Do you buy Digestive Biscuits? Who consumes? Age 0 22 Age 22 36 Age 37 55 Age 56 65 Age 65+ Which Brand do you buy? Mcvities Brittania Nutricoice KF Digestive Biscuits Nestle Local brands Other Frequency One/week 1 2 3 4 5

Twice/week Once/month Twice/month Where do you buy from? Malls Retail stores Wholesale Local bakery Others Does it make a difference what brand it is? No/yes Reason 1 Reason 2 Reason 3 Reason 4 Reason 5 Anything that you wold like to change? Taste Reason Packaging reason Nutrient value reason

Product Specification
DR YES is a new brand of Digestive biscuits which will be introduced by us in the market. It will be made available in SKU containing 12 pieces 100 grams, 25 pieces 250 grams, 100 (20 * 5) pieces 1000 grams.

Competitor Analysis

Digestive Biscuit industry can be categorized into Organized and Unorganized sector. Majority of the consumption of Digestive biscuit is from the organized sector with more than 85% share. The major players in the market are Mcvities, Britannia, KF Digestive Biscuit and Nestle.

Mcvities: It is oldest and the largest selling glucose biscuit in World. Many counterfeit companies have attempted to recreate and sell lower quality products of similar names and virtually identical package design. It holds more than 35% of the Indian Market.

Britannia Nutrichoice: Nutrichoice was launched in 2006, became one of the largest brand in Britannia's portfolio in the very first year of its launch and continues to be so till today. Also being a part of the famous Britannia makes it a second largest selling biscuit in India after Mcvities. It holds around 56% of the Market Share

KF Digestive Biscuit: One of the new entrants in the market. KF Digestive biscuit is catching up with the other Digestive biscuit brands available in the market. It is mainly market in very small areas and tier 2 cities. It is holding around 3% of the Idian Market. These brands constitute 95% of the total market share of Digestive biscuits. Remaining market consists of unorganized sectors, manufacturers that produce and sell Digestive biscuits locally

Major brands for Digestive biscuits and their attributes:

Company Macvities

Brand Macvities

Quantity (in gms) 19, 40, 66, 82, 232, 347, 400, 576, 935

Price (in Rs.) 14(40g), 30(82g),

Britannia

Nutrichoice

16, 30, 61,82, 140, 200

12(40g), 27(82g)

KF Bisuits

KF Digestive Biscuits

40, 82, 150

12(40g), 25(82g)

Target Market Segments

Current market segmentation

Currently, Digestive biscuits in India are targeted at mostly in the age group of 22-72 years of age. It is being promoted as biscuit for people for easy digestion. Consumers especially old people associate it as a healthy, low-cost snack worth its money. However, consumers of digestive biscuits include adults in the families (22-36 years), college going students (19 22 years), kids section of the society (5- 18 years). Being a lightly high-price product, most of the consumers of digestive biscuits are families/individuals belonging to the high to middle class income groups. Being one of the oldest and most commonly consumed snack, there is no specific geographic segmentation for digestive biscuits.

Planned target segment

For DR YES we have segmented the market into 2 major segments: Families with Older People and people of age group 22- 36 years. Families with low to middle class income groups. The reason for targeting this sub-segment is their lifestyle which includes longer hours of work (late-nights), irregular eating schedules. They rely on their office canteens or street stores/stalls for their regular snacks.

Other factors that make this target segment attractive for us are: they use the product more as mid-night, tea-time & snacks. Thus the frequency of consumption is relatively higher compared to family segment on a daily basis. Consumption rate is higher during over times when digestive biscuits with tea/coffee serve as snacks. Some even consume digestive biscuits as snacks in between sports breaks. Smaller packages are preferred due convenience of carrying and lower price. Also it includes number of units just enough to last for one time, than buying bigger packages resulting in softening of the biscuits. Also, they are the most commonly available snacks in canteens and stores.

Marketing Strategies

Strategy Development for Target Group

Since the existing players in the market target old people and office goeres in age group 22 65 years and college going students market is still untapped from the promotion point of view, it is an opportunity for DR YES to capitalize on this untapped market. Our strategy would include investing more in trade marketing by increasing shelf-space at retail stores and canteens for DR YES.

Positioning and Advertising

DR YES will be positioned as a low-priced, any-time snack for our target customers. Advertisements will show every target customers enjoying DR YES at various different point of times in a day.

Promotional activities

Sales promotion: For the initial 2 months our marketing strategy would include short term incentives designed to stimulate quicker purchase. This will include free samples, discount offers.

Advertising: Second phase of promotion would include advertising expenses in the print media (local newspapers) and local television channels. Television and print ads will be targeted at Everyone. Also we can target billboards at some strategic positions on the city to attract maximum visibility.

Sponsorships: Third phase of promotion would include sponsoring local doctors, hospital offices & college level events which will eventually give a lot of visibility for DR YES. We could also organize contests through radio media.

Distribution Strategy

Distribution Channel

The current distribution channel for digestive biscuits in the area of our survey is as described below. We assume that similar distribution strategy is adopted across the country. Distribution for DR YES would follow a similar distribution path except for a few changes.

The manufacturer transfers the completed product from the factory to one of the warehouses. The warehouses are located such that it is a common point of distribution to over 7 to 10 distributors. From the warehouse the product goes to the wholesale distributors (WDs) who will cover the entire country. Usually these WDs supply to the entire district. These WDs are usually private agencies who will handle the supply-chain of all the brands of a particular company. In the case of our competitors like Macvities, Britannia after the WDs the channel gets divided into two links. One link goes to all the retail outlets which are at a reachable distance i.e. the ones inside the urban radius or ones within the township. The other link is managed by sub-wholesale distributors (SWDs) who distribute the biscuits to the retail outlets at interior locations (villages) where the WD cannot reach. For our product, initially we are not using the second link i.e. we are not going to penetrate to the interior locations as the price of our biscuit is one rupee higher than our competitors and penetrating those regions will be difficult. Unlike the workers employed by the WDs who get a regular pay or salary for reaching the retail outlets, these SWDs usually get a 0.8% of commission from WDs for every product that they sell. So in our case we recommend the WDs to neglect SWDs.

The following are the physical distribution channels which we will be supplying to : Convenience stores: These are small stores which sell a variety of daily needed products to the households in the vicinity. This will form 40% of our overall supply.

Office/College Canteens/Stores: These are stores which sell a wide range of food products to college going consumers. This will form 10% of our supply.

Departmental Stores: These are stores which sell a wide range of products like food products, toiletries, cosmetics and many other items. This will form 30% of our supply.

Assorted convenience stores: The remaining small assorted convenience stores will get 20% of supply.

Distribution channel for Mcvities Digestive biscuits

Distribution channel mix for DR YES

Convenience stores Departmental stores

30%

10%

20%

Assorted convenience stores

40%

Sales Projections & Financial Analysis

We have assumed sales to start at 37,500 units for the 1st quarter (Note 37,500 units is approximately 3 tonnes). We have also assumed a gradual yet declining rate of increase in the sales figure. After growing at 20% in the 2nd quarter, the product stabilizes at a growth rate of 8% after 2 years.

It must be noted that most established brands average about 4 tonnes per month (i.e. 12 tonnes every quarter). Hence, our estimate averages at about 3 tonnes every quarter. This figure has been arrived at, considering our product is a new entrant in the market.

The price of the product has remained stable over the 5-year period. Our initial outlay is Rs.1 lakh taken as a loan for 5 years. There is an interest rate of 15% on this amount. We have assumed repayment of principal to start from the end of the 1st quarter. Each quarter, Rs.5000 is repaid from the principal amount for 5 years. The interest per quarter has been calculated on the reducing balance method. It is also assumed that inflows occur at the end of every month and profits are reinvested in the business. The projected profits per quarter do not include the effect of principal repayment every quarter.

The following costs have been assumed Variable costs per unit Price to supplier Rs. 12.5 Distribution costs Rs. 2.25 Transportation & Inventory costs Rs.3.3 Packing expenses Rs. 0.5

Fixed expenses Salaries per quarter Rs.9500 The Marketing expenses have been assumed to increase at the same rate as the sales. We have assumed Tax at 30%.