Professional Documents
Culture Documents
Principles of Marketing Term Paper On Knorr Pasta
Principles of Marketing Term Paper On Knorr Pasta
Prepared By,
Amyna Nasruddin (2006-01-66-6281)
Arsalan Islam (2006-01-10-6843)
Muhammad Atif Khan (2006-01-19-6746)
Talha Suhail (2006-01-62-6862)
Submitted to,
Umair Zia
Principles of Marketing
Term Paper on Knorr Pasta
Table of Contents
......................................................................................................................1
Introducing Knorr Pasta................................................................................1
Term Paper on the Launch Strategy of Knorr Pasta............................................1
Table of Contents..........................................................................................2
Background...................................................................................................4
About Knorr..................................................................................................4
Passion for Flavor.................................................................................................4
Key Facts............................................................................................................4
Product Concept & Proposition......................................................................6
About Pasta..................................................................................................6
The Instant Pasta Concept..............................................................................6
Target Market Analysis..................................................................................7
Target Segment Identification (Ideal Consumer Profiling)...................................7
Demographics......................................................................................................7
Psychographics....................................................................................................7
Consumer/Buyer Behavior.....................................................................................7
Market Potential............................................................................................8
Symbols..............................................................................................................8
Calculating N.......................................................................................................8
Determining Q ....................................................................................................9
Determining P......................................................................................................9
Competitive Positioning..............................................................................10
Brand Values..............................................................................................10
Positioning Statement..................................................................................10
SWOT Analysis............................................................................................11
BCG Matrix..................................................................................................12
Financial Forecasts......................................................................................13
During Test Marketing Period........................................................................13
Test Market Details.............................................................................................13
Socio Economic Classification................................................................................13
Test Market Potential...........................................................................................13
Assumptions......................................................................................................13
Price.................................................................................................................13
Post Test Marketing ....................................................................................14
Revenue and Operating Profit Projections.......................................................15
Basic Parameters................................................................................................15
Forecasted Sales (Units) .....................................................................................15
Forecasted Sales (Rs.).........................................................................................15
Forecasted Operating Profit..................................................................................15
Pricing Strategy..........................................................................................16
Distribution & Sales Strategy......................................................................16
Background: Knorr’s Brand Strategy Today.................................................18
Communication Campaign...........................................................................19
Campaign Objectives...................................................................................19
Communication Message .............................................................................19
Advertising Strategy...................................................................................20
Electronic Media .........................................................................................20
Press Media................................................................................................20
Out of Home (OOH) Media............................................................................20
Page 2 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Activation Strategy......................................................................................21
Out of Home (OOH) Activation .....................................................................21
School / College / University Activation..................................................................21
Mall Activation....................................................................................................22
“Planet Knorr” - Point of Purchase (POP) Activation.................................................22
Leisure Activation........................................................................................23
Surprise Pasta @ Cineplex....................................................................................23
Canteen/Cafeteria Branding..................................................................................23
Branded Mobile Vans...........................................................................................23
Sales Promotions........................................................................................24
Consumer Promotion...................................................................................24
Instant Pasta Recipe Contest................................................................................24
Trade Promotion.........................................................................................24
Marketing (Communication) Budget............................................................25
Page 3 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Background
This report forms the launch plan for Knorr Instant Pasta in the Pakistani urban
market.
The launch plan has been constructed as an academic project for the course titled
“Principles of Marketing.” The plan contains our views on the overall product concept
and proposition, the product’s target market, positioning, communication,
distribution, pricing, and a broad based business model that outlines projected
financials subsequent to the launch of the said product.
About Knorr
Knorr believes in the power of the cooking woman. Cooking is more than just
transforming raw ingredients into a dish. It is the creation of flavor into food, which
sparks delight into everyday meals. With the power of cooking in their hands, women
create relationships and strengthen bonds. This conviction lies at the heart of Knorr's
success - it is Unilever's no. 1 brand.
Key Facts
Knorr is a trusted and popular brand, recognized and appreciated all around the
world:
It's Unilever's no. 1 brand, with annual sales of more than €3 billion.
Knorr products are currently sold in more than 80 countries and it is growing fast
beyond its European heartland, particularly in Latin America, Africa, the Middle
East and Asia.
Page 4 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
The Knorr logo contains the original signature of Carl Heinrich Knorr, the founder
of the company.
Page 5 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
1
Source: USDA Handbook 8-20
Page 6 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Demographics
Buyer Consumer
Density Urban [Same]
Age 30 – 35 8 – 15
Gender Female Male/Female
Family Size 4+
Lifecycle Stage Married with children Kids/Early Teens
Minimum Household Rs.25,000/- N/A
Income
Education Graduate Primary/Secondary School
Occupation Housewife/Working Students
Woman
Psychographics
Buyer Consumer
Social Class SEC A1, A2 or B [Same]
(Middle, Upper Middle,
Lower Upper and Upper
Upper Classes)
Lifestyle Believers Achievers
Personality Ambitious, trendy Extrovert, confident
Consumer/Buyer Behavior2
Consumption/
Buyer Consumer
Purchase
Occasions Most commonly bought during School lunch breaks,
daily/weekly groceries by the evening/general snacks,
housewife or the chief wage school night dinners
earner. (especially when the main
2
Source: Knorr Brand Team, Unilever Pakistan
Page 7 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Market Potential
Symbols
1. TMSD: Total Market Segment Demand.
2. N: Number of Buyers in the Market Segment.
3. Q: Quantity purchased by an Average Buyer per Week.
4. P: Price of an Average Unit.
Where,
TMSD = N X Q X P
Calculating N
The total population of Pakistan is 160 million, according to unofficial estimates. 3
The average household size is 5 in the target market segment identified above.2
Hence, there are a maximum of 32 million households in Pakistan, (assuming
that the average household size stays constant across various geographies in the
country.)
According to human development index (HDI) statistics provided by UN, 15% of
Pakistani population is below the poverty line i.e. in absolute poverty.
Hence, (100% - 15%) x 32 million yields 27.2 million households across Pakistan
The urban and rural split in the country’s population is 35%:65%3
3
Source: Economic Survey of Pakistan, Chapter on Population
Page 8 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Hence, 35% x 27.2 million yields 9.52 million urban households or 9.52 million
urban housewives
Determining Q
Based upon the buyer and consumer behavior mentioned above, the average units
bought per week per buyer is 6.
Determining P
Knorr Pasta would be sold at the price at Rs.15/- per unit.
The total market segment demand per week i.e. market potential per week
is as follows:
TSMD = NxQxP
= 9.52 x 6 x 15
= Rs.856.8 million
Page 9 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Competitive Positioning
At Knorr, we want people to enjoy good food, any day, any time. This is why we
would like to functionally describe Knorr Instant Pasta as follows:
“Knorr Instant Pasta is a ready to make, healthy and tasty meal specifically
developed for children and teenagers. It is quick and convenient to prepare
and comes in a variety of flavors.”
Brand Values
We intend to communicate what Knorr Instant Pasta should mean to our profiled
ideal buyers (i.e. housewives within the targeted market segment) and consumers.
It is much more than merely an instant meal. It is a passport to world cuisine,
adding new ideas and new twists to old favorites. The challenge is to make our
products the healthy choice for consumers without compromising taste, convenience
and affordability.
Knorr’s value statement is as follows:
“Great food is exhilarating. It elevates us out of the everyday. No matter
what your background or cooking skills, we believe that everyone should be
able to create an incredible meal without having to spend hours in the
kitchen. That's why we've taken some of the world's greatest pastas and
put them right in your home - inspired by different recipes that stimulate
the senses.”
Knorr believes that good food matters. It adds untold pleasure to our lives. And
everyday meals can be just as magical as special occasions.
Food is not just fuel, it really is the glue of life.
Positioning Statement
Based upon the above, Knorr Instant Pasta will be positioned in our target market as
follows:
“A food solution that elevates you out of everyday life and provides you the
exciting ability to create an incredibly tasty meal without any hassles and
thus ensure your family’s good health while remaining within your budget.”
Page 10 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
SWOT Analysis
Strengths Weaknesses
High Brand Awareness Levels (Recall) Low Brand Salience Levels
(Consumers are not really aware of
Association with quality, taste,
the brand’s benefits, despite
convenience and innovation
reasonably high recall)
Strong brand heritage.
Limited Distribution
Expanding distribution network.
Offering suitable for urban markets
Wider variety of taste offered to the only
consumers.
Health consciousness on the rise in
consumers.
Opportunities Threats
(Net) disposable income has Influx of other foreign brands in the
increased over the past few years, same category can give rise to
thus increasing the consumers’ sterner competition
purchasing power.
Frozen foods can curtail the sales.
Awareness of healthy, hygienic and
conveniently packaged food is on the
rise.
Consumer exposure to foreign
products has also increased.
Page 11 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
BCG Matrix
Page 12 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Financial Forecasts
Detailed financial forecasts are enclosed in the attached annexure. These forecast
have been made based upon the information provided below
Assumptions
Trial Purchase Rate 20%
Repeat Purchase Rate 50%
Repeat Purchase Frequency Weekly
Price
Price per Package (PKR) 15.00
Page 13 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Page 14 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Page 15 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Pricing Strategy
Knorr Instant Pasta will be priced along the corporate policy of having sustainable
and premium profit margins. The average operating margin for all Knorr products
sold in Pakistan is 40%.
Knorr Instant Pasta will be sold in a single serving pack. Assuming that the Overall
Cost of 1 Pack Sold is Rs.10/- we would price Knorr Instant Pasta at Rs.15/- + GST
per pack.
Customers usually have a reference price in their mind for a particular product and
therefore they might compare the price of knorr instant pasta with the price of knorr
noodles. Therefore we have priced it for Rs.15 as in knorr instant pasta we have kept
a pasta sauce rather than a powder which makes it different from the knorr noodles
and also the cost production increases.
Page 16 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Page 17 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Page 18 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Communication Campaign
Campaign Objectives
• Create a strong brand association by means of an emotional theme in
communication highlighting the important role the brand plays in terms of care
and health of the family.
• Own a unique position in consumers’ mind through elaborating the functionality
of the product and try establishing the position as in the positioning statement.
• Leverage on the brand’s heritage (“Its from Knorr – it’s healthy and gives
you happiness because its Premium and unique”)
• Use best practices and techniques for developing greater brand awareness,
interest, and trial generation.
• Maintain consistency in visual presentation to establish strong brand recognition.
Communication Message
See: Positioning Statement
Page 19 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Advertising Strategy
At the launch phase, emphasis should be placed on BTL marketing activities that will
be supported by ATL at the follow-up stage.
Electronic Media
A slice of life TVC for 45 seconds will be developed to thematically portray the
positioning statement in a creative and engaging manner.
Subsequently, shorter adaptations of the TVC will be developed.
The TVC will also be adapted into a radio commercial.
Radio will also be used to deliver branded content via content sponsorships
Press Media
The electronic media will be adapted visually
The headline will come from the creative idea used for the TVC
The body copy will be formed using the positioning statement and adapting it to
the creative idea
The Knorr tagline will be retained as is.
Page 20 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Activation Strategy
Out of Home (OOH) Activation
School / College / University Activation
Various leading educational institutions i.e. schools, colleges and universities in
major cities will be activated for infusing product awareness as well as generating
trial.
Product awareness will be given via a branded kiosk/stall placed inside the
cafeteria/near the tuck shop. The kiosk attendant will be responsible to educate
potential customers as well as generating interest and desire while inducing trial.
A non exhaustive list of educational institutions where the activation will be
conducted is as follows:
Karachi Karachi Grammar School
Beacon House School System
The City School
Foundation Public School
Aga Khan Higher Secondary School
DA Degree College
Baharia College
Institute of Business Management
Institute of Business Administration
FAST NU
Baharia University
SZABIST
Iqra University
Lahore Top 3 Secondary Schools
Aitchison College
Lahore University of Management Science (LUMS)
Lahore School of Economics (LSE)
National College of Arts (NCA)
Islamabad Top 3 Secondary Schools
Top 3 Colleges
Top 3 Universities
Page 21 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Mall Activation
The activation of educational institutions will be replicated at various shopping malls
across the city. Along with awareness and trial objectives, interest in the product’s
offering will be enhanced through various competitions, games and prizes.
This activity will be conducted at the following venues:
Karachi Park Towers
Forum
Millennium Mall
Dolmen Mall
Lahore Pace
HKB
Fortress Stadium
M. M. Alam Road
Islamabad Jinnah Market
Page 22 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Leisure Activation
Surprise Pasta @ Cineplex
Potential consumers visiting Universe Cineplex, Karachi will be tapped using the
branded kiosk approach. However, the difference here is that there will be no
sampling. However, Knorr Instant Pasta will be served in a pre-cooked form on a per
serving basis.
Furthermore, an unannounced lucky draw will be conducted at every show’s interval
and the winners will receive a free serving of Knorr Instant Pasta.
Canteen/Cafeteria Branding
Cafeterias/canteens and tuck shops of selected schools/colleges/universities will be
activated via branding using the communication campaign’s visual adaptations.
Furthermore, since Knorr Instant Pasta will be served at these venues at subsidized
prices, it is likely to generate greater trial and repeat purchase.
Page 23 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Sales Promotions
Consumer Promotion
Instant Pasta Recipe Contest
Post launch, a press and radio driven consumer promotion will be designed to invite
consumers to share their own innovations and customizations to Knorr Instant Pasta
Recipes.
Consumers will be asked to share their recipe for a variation of Knorr Instant Pasta.
The recipe will be sent along with 2 used packages of Knorr Instant Pasta and a copy
of the consumer’s CNIC.
The first prize would be Rs.100,000/- along with recognition in the form of the recipe
being printed on the packaging along with the customer’s photo (if they so desire).
Trade Promotion
Retailers will be provided a lot of branding and merchandizing material including
customized dispensers.
Also, tiered trade discounts will be given to retailers to increase their off take vis-à-
vis Knorr Instant Pasta.
The trade terms will not simply be 2 N net 30. However, a special trade discount
structure during the launch period will comprise of:
X N net Y
Where,
X Y
2% 30 days
3% 25 days
4% 20 days
Price ceiling:
Page 24 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
105,984,0
Ceiling 00
Advertising
Television
10,000,00
Production Cost 0
40,000,00
Media 0
50,000,00
Subtotal 0
Radio
200,00
Production Cost 0
2,000,00
Media 0
2,200,00
Subtotal 0
Newspapers
15,00
Production Cost 0
350,00
Average Tariff 0
7,000,00
Media 0
7,365,00
Subtotal 0
Magazines
15,00
Production Cost 0
75,00
Average Tariff 0
750,00
Media 0
840,00
Subtotal 0
Out of Home
20,000,00
Billboards 0
10,000,00
Merchandizing 0
30,000,00
Subtotal 0
Page 25 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
sales promotion
trade promotion
Retailers 14719995
disc 2% 255146.58
Subtotal 14464848.2
If
disc 4% 588799.8
Subtotal 14131195.2
Activation
school/college/university
sales 47250
cost of cups and spoons 28350
amount given to each institution for putting up a
stall 14175
Subtotal 61425
mall activation
sales 303750
cost of cups and spoons 182250
cost of putting up a stall 50000
Subtotal 536000
Page 26 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007
Principles of Marketing
Term Paper on Knorr Pasta
Page 27 of 27
Created On: December 15, 2007 Last Saved On: December 15,
2007