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1. 2. 3. 4. 5. 6. Project on flavored bread Group name is NeXt Executive summary Main contents of project Survey form Complete documentation
Executive Summary
The bread and bakery products market, like many others, struggled during 2010, with the banking crisis and the consequent difficulty in obtaining credit adding to pre-existing problems, such as the rising costs of energy and raw materials. These factors meant that the cost of bread continued to rise throughout the year. Its status as a staple dietary item within a mature market has caused problems in the past, with manufacturers having to be continually inventive in order to try to maintain market value. Paradoxically, however, this has at least cushioned the market from the vagaries of consumer behavior, and consumer expenditure on bread and bakery products grew by 6.2% in 2010. The market is segmented into four broad sectors: white bread, brown and whole meal bread, specialty breads and bakery products. The white bread sector, which had lost sales during the years between 2007 and 2009, recovered during 2010, with consumer expenditure growing by more than 10% on the previous year and bringing sales to their highest level of the review period (2006 to 2010). This could be linked to the current financial situation, with consumers being more likely to switch to own-label and discounted bread, which tends to be focused more on the white than the brown sector. In terms of market share, however, white bread's share remains considerably smaller than it was at the start of the review period. By contrast, the brown and whole meal sector, which saw something of a revival during the middle part of the decade, saw growth slow down during 2010, although household expenditure remained considerably higher than it was in 2008.
The specialty breads sector overtook white bread as the largest market sector in 2008, and has steadily increased its share of the total bread market since then. Year-on-year growth in household expenditure on bakery products was erratic over the review period and modest in 2010, and its share of the total market has contracted since 2005. Overall consumption of bread is almost universal and daily consumption is high, but there are significant differences in the types of bread favored by men and women. Bakery businesses found 2010 a challenging year. A number of retail craftbakery chains went into administration and/or were sold, and several larger companies are finding the current financial climate extremely difficult. Although expenditure is forecast to rise in 2011 and beyond, at least some of this will be due to rising prices resulting from increased production costs.
Flavored Bread
This industry is comprised of establishments that make fresh or flavored breads or rolls and perishable bakery products.
Survey analysis
1. I enjoy so much that I eat it? Anytime 44.5% Only in a while 16.5% Occasionally 16% Just about like a snack 5.5% I avoid bread because it is not allowed for my diet 17.5% 2. I buy bread in the following forms? Loafs, not sliced 17% Loafs,sliced 63% Rolls 11% Others 9%
3. I buy bread from the following sources? Bakers 48% Local stores 27% Metro 8% Marts 11.11% Distributors 5.85% Others 0.04% 4. I enjoy the following types of bread? Plain white28% Whole wheat 14% Butter crust 8% Sugar free 8.33% Flavored 25.67% Others 16% 5. Which flavor you like in MaxEn flavred bread? Chocolate 36% Vanilla 33% Strawberry 31% 6. I eat bread because it is? A good sourceof fiber12% A good source of energy 33% It is low in fats 44% It goes with other 5% It reduces heart diseases5% Others 1% 7. I prefer to buy bread in the following packaging? Plastic disposale bags 48% Paper bags 13% Heat resistant bags19% It doesnt matter 20%
8. About the price of bread? Idont care much 45% I buy less when the price goes up13.5% I can pay more for standard 20% Others 21.5% 9. I bake my own bread Often 4% Once in a while10% Never86% 10. Childern like bread in lunch? Yes60% No40%
Contents
Topics Introduction Explanation of Innovation
GAP analysis Fulfilling the Need Product Qualities (Differentiation) Market Situation Expected Market Size and Potential Mission Statement Vision Goal Market Trend Competitor analysis Indirect competitor Substitute Competitors Placement Strategy: Brand Name Logo Trademark FAB analysis: Quality function deployment quality statement: Market Segmentation Promotion Strategy Advertising strategy Understanding the Psycho-Dynamics of the market: Advertising objective Campaign theme Reach Frequency Media Vehicle Proper Budget Allocation Advertising Slogan USP Push strategy Promotional Materials Price Marketing Skimming: Key People with Specific Skills Physical evidence Land and Building Market entry strategy: Quantitative SWOT matrix analysis: Matching the SWOT matrix: Financial Analysis
Introduction
MaxEn Bread is a name that has come to signify quality and freshness in bread products. The enterprise, MaxEn Bread will operate six plants throughout Pakistan. Initially we are going to launch it in Lahore having Factory in Muridkey. The Bread distribution network comprises rent 15 vehicles that deliver MaxEn to more than 200 retail outlets daily, making it one of the largest distribution networks for any product in the country customers are located in major metropolitan areas, secondary metropolitan areas and rural areas. The fleet will run approximately 500KM each day to deliver fresh bread. Peshawar. Multan, Karachi, Islamabad Faisalabad will be our future destinations to launch our product there. For purpose of standardization, the company will bring itself in line with international standards of production, technology, machinery and formulation. All the MaxEn Bread plants boast of the latest machinery used in the bread-making process. They will be managed by senior food technologists with decades of experience, while those manning the machinery will be provided on the job training in congenial working conditions. Taking a responsible place in society, the company is committed to the uplift and development of the society as a whole, and participates in sports and social welfare activities. We hope to continue to develop and maintain this relation in the future.
Innovation Our product is unique in sense that it provides unique flavored bread first time in Pakistan. Currently MaxEn have three flavors of breads Chocolate, Vanilla Strawberry. It is also at the same time a product for the health conscious people as well. The bread industry in Pakistan has seen many changes in the last twenty-five years. It has emerged as a small-scale bakery processing industry to numerous industrial bread making units all over Pakistan. The bread industry in Pakistan is flourishing very quickly and bread products are gaining much popularity. Bread has been accepted as a popular substitute of Rice, Naan, Paratha.
GAP analysis
Consumers are increasingly concerned about their health and are well aware of the relationship between nutritious food and optimal health. Various concerns have caused consumers to monitor their dietary habits closely. The growing media coverage on health, the rising incidence of health conditions (obesity, diabetes and cardiac problems), concerns over physical appearance, changing lifestyle and also soaring costs of healthcare have all contributed to
the demand for healthier bakery products. In addition, the aging baby boomer population has had a specific effect in increasing the demand for healthy foods. Some popular trends in the market are the introduction of low/light, functional, natural and organic products, as described below.
Low / Light Bread: Our bread is with reduced fat and carbohydrates. With the growing incidence of obesity and popularity of diets low calorie foods have gained immense popularity which is our core capability. Functional Bread: In recent years, enhancement of the nutritional profile in bread products is a key trend that has gained a great deal of momentum. We will also trying to enhance the nutritional value of traditional bread products through the addition of functional ingredients, such as omega-3, multigrain, multivitamins etc. Natural and Organic Bread: Increasing health awareness and concern over the consumption of artificial ingredients have fuelled the demand for natural products. Bread products that contain all natural ingredients are likely to thrive in this competitive market. Organic bread is yet another category gaining impetus in recent times, and the products are clearly labeled to draw attention to their organic nature. We will also have a look over it. PleasureIn addition to healthier products, consumers also are purchasing products that satisfy their taste buds. The taste enjoyment factor is vital in the marketplace and we will be focusing on this more deeply. With lifestyles becoming increasingly stressful, consumers may indulge in food for comfort eating purposes. Indulgence/luxury products are becoming more pronounced
as a key trend in the bread industry. Consumers increasingly seek for premium, gourmet and exotic products to satisfy their desire to indulge
Mission Statement
"This is a family company selling traditionally baked bread with a freshness and quality you really can taste".
Vision
Our vision is to become Pakistan's favorite bread this is underpinned by our dedication to continued improvement across all areas of the business. We are committed to developing the bread market and working with our customers, that is why we invest a lot of time and money to understand our consumer's needs.
Goal
Our goal is to ensure that important values such as quality, freshness, and service are delivered to our consumers in the 21st Century. For us this isn't just a business. It's a way of life.
The task ahead is to concentrate on making the cake bigger rather than fighting for a bigger piece of the existing cake.
Market Trend
Market is currently not using up to dated technology and generally companies are interested making the breads that remain at low cost. There is great deal of competition in the market in a congested area of the market. There is a huge market available where one can hit the target market. Currently, 5% of the total population of Pakistan consumes packaged bread. The major factors for such a low percentage of people consuming bread are mostly economical and cultural. Pakistani diet consists of many substitutes for bread, which are cheaper and preferred over bread by a majority of the population. The political scenario as well as the legal scenario is not posing any threat to the bread industry growth apart from the price restrictions, which actually fixed by negotiations between the government of Sindh and the committee of bread-making.
Competitor analysis
Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats. Competitor profiling combines all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment.
Indirect competitor
Indirect competitors of MaxEn Flavored Bread are: Different cakes Biscuits Cookies Pastries, etc
Substitute Competitors
A substitute competitor is any competitor that fills the same buyer need you fill but fills it in a different way. The substitute competitor of Flavored Bread is: Dawn Bread Gourmet Bread Cakes and bakes Different bakery breads Vita Bread Bunny
Placement Strategy
Brand Name Trademark Logo
Brand Name
MaxEn Flavored Bread a name that has come to signify quality and freshness in bread products. The purpose of the research is to analyze the current state on the baked goods market. The main tendencies and forecast the possible market growth. Prior to the establishment of flavored Bread, will become largest producer of bread products is the public sector. However, this sector could not cope with the demands of the consumer and this when, perceiving a change in the eating habits of Pakistanis, Flavored Bread will envisioned. Flavored Bread builds up a reputation for freshness, quality and taste. Creating awareness plus a demand for bread products, and started its production in Lahore.
Logo
Trademark
We have registered our brand in ACCP office with registration number 895988. Now we have legalized it. We have registered our company by the name of MaxEn & Co.
Advertisement:
Distribution:
MaxEn distribute on network will be indirect and comprise of over two hundred company owned vehicles in a distribution system spread all over Pakistan. On a daily basis, we will distribute our goods to over a 200 retail outlets. We will distribute in almost all the major metropolitan areas, secondary metropolitan areas as well as the rural parts of the country, later.
Channels of Distribution:
Channels of distribution will be intensive because MaxEn will operate six plants throughout Pakistan. The Bakery's distribution network will rent more than 50 vehicles which will deliver baked products to more than 200 retail outlets, and will making it one of the largest distribution networks for any product in the country customers are located in major metropolitan areas, secondary metropolitan areas and rural areas. We will develop a manufacturing process utilizing state of the art bakery machinery combining
it with locally developed equipment. This unique combination resulted in products which are closer to the actual taste and form that we make at home.
Attributes are intangibles that are associated with the product, not the person (and hence are not yet benefits) MaxEn Flavored bread has many attributes whilst others have far fewer. Our product specifications will be according to the customer needs. MaxEn Flavored bread will be useful for stepping-stone between the physical product and the benefits that the person actually receives and can be used in a sales pitch as such.
Liquid: Water, potato water, milk or other liquids may be used in making bread. The bread will be whiter in color and have greater food value if milk is used. Both milk and potato water prevents bread from becoming stale so rapidly as bread in which water is the only liquid. Yeast: Because yeast is very small plants, it must be kept fresh and active. Yeast may be bought in dry granulated form or compressed cakes or grown at home in the form of "starter" or "liquid yeast". Fat: The fat in dough makes the bread tendered and increases its keeping qualities. Any high quality cooking fat is satisfactory. Sugar: Yeast plants grow quickly in the presence of a small amount of sugar as it is food for their growth. A golden-brown color will be given to the crust by the use of sugar. Salt: Gluten is made stronger by the salt. Flavor is also improved. Flavor: flavor gives the bread a real taste. Quantity: 2 3/4 c. liquid 1/2 to 1 ounce (1 to 2 packages or cakes) yeast 3 tbsp. sugar 4 tsp. salt 2 tbsp. fat 3 tsp. flavor About 9 cups sifted hard-wheat flour. (More all-purpose or soft wheat flour will be needed.)
Market Segmentation:
Market Segmentation is an effort to increase a companys precision marketing. A market consists of a large identifiable group within a market with similar wants, purchasing power, geographical location, buying attitude, or buying habits. We have done the segmentation on the basis of the following variables:
Demographic Segmentation
Age, Income, Social Class & Occupation Demographics Gender: flavored bread can be use by males and females as well Income: Flavored is basically for middle upper class people and it will be easily affordable for all type of these people. Age: Flavored bread will be useful at every stage of life. Young generations and older ones can also use this delicious bread Geographic Area Flavored bread is located in Lahore and it is easily available in all super stores and general stores. Psychographic: MaxEn flavored bread is according to the customer needs and demands. It consists of natural flavors like chocolate, vanilla and strawberry.
Behavioral segmentation
Occasions, Benefits, Usage Rate & Attitude Usage rate Flavored bread is particularly use by young generations who are very fond of flavors like generation X they love chocolates and different flavors products. Usage rate will be high because of these young generations. Benefits: it consists of Vitamins and fibers so it is quite notorious and have energy as well Targeting After segmenting the market we are targeting the following segments: Income Groups We will be targeting all income groups who should afford easily. Flavored bread, being an established brand with mass appeal and cost effective pricing, it will not discriminate between income groups. Youth A huge potential market for this bread it lies with youth whom we will be specifically targeting road shows to be held as part of the Add Color campaign.
Travelers It is also available in mini-size factor, so it will be highly convenient to carry along during large journeys or trips. This is why it will be targeted at travelers as well.
4. By product or service class MaxEn bread will competes as an alternative to the ordinary breads. It is positioned as a lower cost and healthier alternative to the ordinary bread, while it provides better taste and healthy ingredients. 5. By price or quality MaxEn wants you to believe that their flavor bread is of the highest quality. Positioning is what the customer believes and not what the provider wants them to believe. Positioning can change due the counter measures taken at the competition. Managing your product positioning requires that you know your customer and that you understand your competition; generally, this is the job of market research not just what the entrepreneur thinks is true.
Advertising strategy
There are two major parts to an advertising strategy. 1) Assessment. What's going on in the market, whats the history, the current situation? What are the major trends in the market?
What's the future looking like? (With the product. With consumer attitudes.)
2) Action What should your customer do about the most significant opportunities or problems presented by the situation? What should to do with the brand? With direct marketing. With the way the company is positioned. A SWOT analysis helps in figure out the "What's going on" part. And figure it out quickly.
Currently MaxEn dont have any Web site but it will have an internet asses and web site in future to target and sell younger buyers, new buyers, before they have established a product.
Rational to emotional. High to low involvement. People probably buy the same brand of breads with a mindless motion at the market. But besides Consumer Involvement Theory (CIT), there are likely other issues, perhaps more important issues, such as why people buy the other brand bread: People may think that the ordinary bread is of higher quality or more good in taste or more healthier products. Or perhaps it's not so much what people think about competitors, but what they think about our customer: "I don't know if it will be available in the market easily."
Advertising objective
MaxEn has clear and specific aim of an advertising or commercial, such as To earn profits To compare, To gain attention, To inform, To persuade, or
Reach
60% of the television viewers, 70% of radio users and 90% of news paper readers should be exposed to the ads or commercials which are on media and media schedule within a period of four months in the big cities of Pakistan such as; Karachi, Lahore, Islamabad, Faisalabad, Peshawar.
With the time and market conditions these ratios can be reviewed according to the needs.
Frequency
The frequency in the beginning will be high. It will keep high for some months for the period after the soft launch and later it can be decrease. There will be changes in the frequency with the time and market conditions.
Media Vehicle
The print and electronic medium employed in an advertising campaign used by MaxEn is as follow.
ELECTRONIC MEDIA
TV PTV GEO TV AJ A-TV ARY RADIO FM 100 FM 106.2 89 FM FM 101 FM 99
PRINT MEDIA
NEWS PAPER THE NEWS DAWN JANG KHABRAIN DAILY TIMES NAWA-EWAQAT MAGZINES BILLBORD YOUNG WORLD SUNDAY MAGZINE AKHBARE- JAHAN US MAG ALLAH HO CHOWK KALMA CHOWK MUSLIM TOWN MUR MAZANG CHOWK MALL ROAD MM ALAM ROAD DEFENCE
DUBAI CHOWK
The product lends itself to rational appeal. All these things give MaxEn advertiser are provided with an idea of the market conditions. Thus, how best to advertise within these conditions. Once this analysis of the market situation is complete, an advertiser has to decide how the money dedicated to advertising is to be allocated. Channel ESTIMATED COST PER
Slogan
USP
MaxEn The bread which build strong bodies and which has the flavor of your choice.
Push strategy
A push strategy is used by MaxEn because it is a new product which is unknown to the consumer. As there is no consumer demand in the product launch, the product and the information are "pushed" to the consumer by distribution and promotion.
Promotional Materials
Some of the promotional materials are as follow:
Price
Price is not just the number or tag on the product. But it is the most important thing.
Marketing Skimming:
MaxEn is using Price skimming strategy. It is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, and then lowers the price over time. It is a sequential version of price discrimination and yield management. It allows the firm to recover its sunk costs quickly before competition steps in and lowers the market price.
Psychological Pricing:
MaxEn is selling at PRS.30. So they are not using the Psychological pricing currently. Retail prices are often expressed as odd prices: a little less than a round number, e.g. PRS19.99 instead of $20. Psychological pricing is a theory in marketing that these prices have a psychological impact that drives demand greater than would be expected if consumers were perfectly rational. Psychological pricing is one cause of price points.
The method determines the price of a product or service that uses direct costs, indirect costs, and fixed costs whether related to the production and sale of the product or service or not. These costs are converted to per unit costs for the product and then a predetermined percentage of these costs are added to provide a profit margin.
Customer sensitivity:
Customers are very sensitive and they want fresh bread in the breakfast and if they dont get it then they might dislike the product because of the availability.
Physical evidence
The site for the factory is in Muridkey where we can visit to see the desired place. Exact address is 10 km Sheikhupura road GT road Muridkey.
It is located in industrial area of Muridkey where other industries are situated. It is regarded as the industrial are. We are going to have 6 Acres. Labor is easily available there at a cheaper cost and raw material is also available there. It is having all the required facilities need for the bread industry.
lately to the beverage industry. The competition has become tougher & tougher as the time has progressed. We will make agreement with Pakistani cricket team management to sponsors the matches. We realize that fact that cricket is a very strong element by which we can reach our consumers & masses invested in the opportunity and launched a massive campaign on mass media showing all these cricket stars support & flatter our product. We will introduce adds of our product in which some cricket stars will promote our product.
Sponsoring Concerts:
We will arrange concerts for the enjoyment of people and also aware them about our product. We will bring the stars of people close to them. Again the purpose is same, to create awareness about our product.
5. publicity:
Publicity is the important factor to create awareness about any product. We will also do publicity of our product. We will use newspaper, T.V channels, and also direct selling. We will also use radio for publicity. This steps will
helps us to improve our sales. On T.V channels we will choose that channels which are famous in ladies like, GEO TV etc. and in newspaper we will choose ladies magazine for publicity.
3. Our new taste will attract much such type of consumers who are taste changer. Internal weakness: 1. The more flavors we create, the more production costs will increase. 2. New technology and production methods will require greater preparation and back-up wants. 3. At starting we will not have as such trained staff that has such a market experience.
strengths 1. Our ability to produce options keeps more consumer interest and needs met 2. Our new production technology will enable us to mass produce
Weakness 1. The more flavors we create, the more production costs will increase. 2. New technology and production methods will require greater preparation and back-up wants
opportunities 1. Creating a healthy product that provides options in flavors and relating to diet value will plot new regulars 2. Our new taste will attract many such type of consumers who are taste changer
Weakness 1. The more flavors we create, the more production costs will increase
2. The more flavors we create, the more production costs will increase
weakness
Threats
1. The more flavors we create, the more production costs will increase. 2. At starting we will not have as such trained staff that has such a market experience
have brand loyal customers providing the market with not exactly similar but milky and other breads.
2. There is open market everywhere
means any new company or existing ones can start the same production that may have more experience or more qualified staff.
Financial analysis
Projected startup cost-onetime expense Asset land Price 20,000,00 0 building 125,000,0 0 Plant & 75,00,000 Detail Land located near Muridkey, total area 6 acres. At front there is G.T road. At right and left side there are garments and other factories. We will construct a building which contains 4 storerooms. And 2 big storeroom for plant and machinery. Plan and machinery for production of bread and packing and printing. Furniture require for office.
Revenue & cash flow projected with estimated sales forecasted. Price/packet of bread
Ingredients flour sugar Eggs(piece) salt Flavor(chocolate) packing Total Profit margin (34.16%) Total price/ pack
February 29310
INCOME STATEMENT Sales Revenue(lacks) Less: Cost of Goods Sold Gross Profits Less: Operating Expenses: Marketing Expense PKR 11.76 PKR 11.76 PKR 11.76 June PKR 20.00 PKR 15.60 PKR 4.40 July PKR 22.50 PKR 17.55 PKR 4.95 August PKR 30.00 PKR 2.34 PKR 27.66
General / Admin. Exp. Depreciation Expense Total Operating Expenses net profit before taxes less tax Net loss/profit After Taxes
PKR 0.15 PKR 0.25 PKR 12.16 -PKR 7.76 PKR 0.09 -PKR 7.85
PKR 0.17 PKR 0.25 PKR 12.18 -PKR 7.23 PKR 0.07 -PKR 7.30
PKR 0.22 PKR 0.26 PKR 12.24 PKR 15.42 PKR 0.15 PKR 15.27
June PKR 300,000.00 PKR 300,000.00 PKR 32,500,000.00 PKR 7,500,000.00 PKR 10,000.00
July PKR 320,000.00 PKR 320,000.00 PKR 32,500,000.00 PKR 7,496,000.00 PKR 9,700.00
August PKR 330,000.00 PKR 330,000.00 PKR 32,500,000.00 PKR 7,492,000.00 PKR 9,400.00
Cash
PKR
Total Gross Fixed Assets Less: Accumulated Depreciation
PKR 40,001,400.00
40,010,000.00 PKR 25,000.00 PKR 40,285,000.00 June PKR 8,500.00 PKR 0.00 PKR 8,500.00 PKR 8,500.00 PKR 41,061,500.00 -PKR 785,000.00 PKR 40,285,000.00
25,000.00 PKR 26,000.00 PKR PKR 40,300,700.00 July PKR 0.00 40,305,400.00 August PKR 0.00
Total Assets
Current Liabilities: Taxes Payable Other Current Liabilities Total Current Liabilities Total Liabilities
PKR 7,300.00 PKR 14,200.00 PKR 7,300.00 PKR 14,200.00 PKR 7,300.00 PKR 14,200.00 PKR PKR 41,023,400.00 -PKR 730,000.00 PKR 4,030,700.00 38,764,200.00 PKR 1,527,000.00 PKR 40,305,400.00
capital
Conclusion
We are quiet confident to have a successful launching of the bread in the market.