Professional Documents
Culture Documents
Anti Nicotine Gum Marketing Plan
Anti Nicotine Gum Marketing Plan
Business
Administration
Jahangirnagar
Course Title
Introduction to Marketing (MKT 201)
Submitted to:
Arafat Rahman
Course Instructor
Submitted by:
Group-9: Chrysanthemum
20th Batch, BBA
Date of Submission
April 8, 2012
iii
Name
Roll
801
811
821
1332
Kaiser Mahmud
1983
Saddam Hossain
2137
iv
Letter of Transmittal
April 4, 2012
Arafat Rahman
Assistant Professor
Institute of Business Administration,
Jahangirnagar University,
Savar, Dhaka-1342.
Subject: Submission of a report on marketing plan of the product Nicotino: Quit Smoke
smartly!
Sir,
We are presenting a report on the marketing plan of our product Nicotino: Quit Smoke
Smartly!
In this report we have explained our business idea for this product and showed the marketing
plans and strategies we may take. We have also included our estimated Balance sheet details
for the next few years. In making this report, we had to take help from the various sources of
internet, different institutes and class lectures of our course teacher. We are grateful to them
for extending generous help.
We are pleased to be granted this vital opportunity and grateful for your versatile assistance.
We hope that our work will please you. We will be available in the presentation for further
explanations.
Sincerely,
__________________
Md. Nafeesur Rahman Khan
On behalf of the Group
Chrysanthemum
20th Batch, BBA
Acknowledgement
vi
vii
Table of contents
List of illustrations
Executive summary
1.0 Introduction
1.1Product offerings
1.2 Features and unique selling proposition
1.3 Business model
2.0 Goals and objectives
2.1 Vision
2.2 Mission statement
2.3 Short term goals
2.4 Long term goals
2.5 Objectives
3.0 Competitor analysis
3.1 Competitive force analysis
4.0 SWOT analysis
5.0 Marketing strategies
5.1 Target customer
5.2 Market positioning
5.3 Product strategy
5.4 Pricing strategy
5.5 Distribution strategy
5.6 Marketing communication strategy
viii
ix
1- 2
13- 15
1
2
2
3
3
3
3
3
3
4- 5
4
6- 7
8- 11
8
8
8
8
9
10
13
13
16-19
16
17
17
20- 25
20
20
20
21
22
23
24
25
25
26- 27
viii
List of illustrations
Illustration No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Illustration name
Problems to prospect
Business model
Porters five force analysis of Nicotino
Nicotinos SWOT analysis
Product positioning map
Nicotinos product offering
Wholesale and Retail price of Nicotino products
List of product distribution zones
Pull strategy of Nicotino
Project implementation schedule
Organizational structure of Nicotino
Staffing needs
Distribution Channels
Marketing organization structure
Advertising and promotional campaign schedule
Three year marketing budget
Page No.
1
2
5
7
8
9
10
10
11
12
13
14
15
16
17
18
ix
Executive summary
The following market plan has the potential to be the basis for a new product which can help
the country to ensure a smoking free environment. This product, Nicotino, is a nicotine
chewing gum, which helps smokers give up smoking by suppressing their craving for
cigarettes with almost harmless nicotine.
Smokers take more than 3000 type of harmful chemicals in their body with each smoke puff
they inhale. Nicotine is one of them that creates craving in smokers body. When it is
swallowed as nicotine chewing gum, it goes to liver and is dissolved as harmless chemical.
Thus it enables smokers to gradually give up smoking by chewing these gums for few
months.
Nicotino will be launched in the market at the end of December 2012. It will be launched in
the market in three flavors- original, cinnamon and fresh mint. Each packet will contain 30
pieces of gum. It will operate in the Dhaka city for the first three years. The city is divided
into 8 zones covering 16 areas. The target customers are middle class and high end based on
income. Target segment is divided into two groups on age basis, 20-35 and 35-55 years.
Nicotino will use pull strategy to make people aware of its products. It will be positioned as a
product of moderate price and high quality. There will be various types of promotional
campaign to make people aware of the product brand and the health benefit it offers. The
marketing tools will include TVC, FM radio ads, newspaper ads, 24/7 help desk etc.
Nicotinos marketing budget is estimated in affordable method which will enable it to
continue the huge sales promotion schedule.
Nicotino products are produces in its own production plant in Sirajganj because of
convenient transport and availability of raw materials. Finished product will be distributed
with help of local distributors.
The estimated project cost is BDT 8,493,500 in FY 2012-13 which is financed by 69% equity
from partners and 31% debt from lenders. This report contains projected income statement,
balance sheet, cash flow statement and break even analysis for FY 2012-13, 2013-14 and
2014-15. The projected financial statements portray liquidity and solvency of the firm.
Page- 1
1.0 I N T R O D U C T I O N
Nicotino is the countrys first ever nicotine gum brand which will enter the market as a
Nicotine Replacement Therapy (NRT). This gum will be an alternative nicotine source for the
smokers and will also compel them to give up smoking and thus nicotine and other 3000 plus
harmful chemicals. According to Global Adult Tobacco Survey 2009, around 41.3 million
people of our country use tobacco in form of cigarette. For this around 57000 people die
every year due to smoke related diseases. Also, according to World Health Organizations
survey of 2004-2005, low income households of our country spend around 15% of their
income in tobacco products, which thus reduces private savings. Nicotino identifies these
problems as opportunity and combines two solutions into a single direction which is
producing a chewing gum that reduces the nicotine craving of the smokers by supplying very
small amount of nicotine and ultimately directing them to give up this habit.
Solution
to
smoking
problem
Solution
to health
hazard
Nicotin
gum
Nicotino will launch its products in 2 small packet sizes: 30 pieces and 60 pieces. These
packs will be released into market containing 2mg strength nicotine gum.
Page- 2
2-3 months.
No artificial sweetener, color, flavor will used when producing Nicotino.
Produce gums in its own production plant using eco-friendly production process.
Sell products in 2 small packet sizes (30 and 60 pieces) containing 2mg strength
nicotine gums.
Valued
custome
r
Nicotino
firm
Gum
ingredie
nts
Nicotin
gum
Money
Page- 3
2.0 G O A L S
AN D
OBJECTIVES
2.1 Vision
Nicotinos vision is to create a smoking free Bangladesh to create a healthy nation.
process.
To persuade the target customers regarding the benefits of using nicotine gums as a
NRT for cigarettes which will bring familiarity among customers.
To expand its operation beyond Dhaka within the year 2015 and further goes for
export.
To set up new industrial unit in the west region of Bangladesh by the year 2018.
To enlarge its product mix by adding nicotine lozenge and nicotine patch product
lines.
2.5 Objectives:
3.0 C O M P E T I T O R A N A L Y S I S
Page- 4
Nicotino is the first production company in this country which is going to introduce tobacco
users to Nicotine replacement therapy. That means no other company in this country offers
nicotine gums for smoking substitution. It implies that Nicotino is going to enter the market
as the only one of its kind. Thus Nicotino will have no competitors in this country until the
time when
The existing domestic pharmaceutical companies decide to include this product line
Bargaining power of suppliers is high because there are not a lot of suppliers who can
but it is essential for Nicotino to keep a moderate price to attract new customers.
Threat of new entrants domestically is low as the raw materials are not easily
available and there hasnt been any other company in the past whose market operation
could be monitored.
Threat of substitute is very low also.
The intra-industry rivalry is domestically very low as Nicotino is the first company to
produce this product.
Page- 5
The following illustration shows the summary result of Porters five forces analysis of
Nicotino:
High
Low
Low
Low
Low
Page- 6
4.0 S W O T A N A L Y S I S
Strength:
Positive internal factors that Nicotino uses to accomplish its goals and objectives are
Nicotino is the first nicotine chewing gum brand of the country. Thats why it enjoys
loyalty.
The management team is comprised of efficient and dynamic persons.
It will face less government regulations due to its business intention to reduce the
smoking habit in society.
Weakness:
Negative internal factors that inhibit the accomplishment of Nicotinos goals and objectives
are
consequence.
Nicotino has no established brand or image. So it may need aggressive promotion to
create brand awareness among customers.
Opportunity:
Nicotino can take advantage of two major market opportunities
There are increasing rate of voice in the nation against smoking habit and its health
hazard. Recent data shows that alone in Dhaka city, 72% of the smokers are willing to
quit cigarettes but are failing to do so. They can be potential customers.
Government has banned smoking in public places. This regulation helps to attract
customers to our product to help them in quitting cigarettes.
Threats:
Page- 7
Strengths
Weaknesses
Threats
Opportuniti
5.0
M AR K E T I N G S T R AT E G I E S
Making people aware about nicotine chewing gums and its benefits.
Focusing price unique selling propositions while developing marketing campaign
Page- 8
Harmless
to health
Nicotino
Marlbor
Dunhill
B&H
Gold leaf
High
price
Low
pric
e
Page- 9
Nicotino offers two basic types of products: original and flavored. The pack sizes of
Nicotino Original is 30 and 60 piece gums per packet. Nicotino Flavored offers 2 flavors
(fresh mint and cinnamon) with pack size of 30 and 60 piece gums per packet. All these gum
are offered in 2mg strength nicotine gum. Nicotino uses state-of-the-art technology for
packing its offers. The following table illustrates Nicotinos total product offeringNicotino Original
Gum strength
Piece per pack
Nicotino Cinnamon
2mg
30
2mg
60
30
2mg
60
30
60
68.6% of current smokers, aged 35-55, are looking for means to give up smoking.
Thus there are enough buyers who will pay high price for the product.
As the product is totally new for Bangladesh market, competitors are unlikely to
emerge in the market easily and undercut the high price.
Nicotino will be introduced to market at Tk.195 wholesale / Tk. 240 retail price for 30 pieces
gum packet. For 60 pieces gum packet, the price is estimated Tk.390 wholesale/ Tk. 480
retail price.
The following price list shows the wholesale and retail prices of Nicotino products:
Page- 10
Nicotino Original
30
60
195
390
240
480
Nicotino Cinnamon
30
60
195
390
240
480
Zone
Zone-1
Zone-2
Zone-3
Zone-4
Zone-5
Zone-6
Zone-7
Zone-8
Covering areas
Mirpur, Pallabi
Cantonment, Kafrul,
Mohammadpur, Dhanmondi
Ramna, Tejgaon
Gulshan, Uttara
Lalbag, Kotwali
Demra, Sutrapur
Sabujbag, Motijheel
Page- 11
distributes the product by using their own resources. Nicotino will also make strategic
alliance with super stores and educational institutes canteens to sell its products.
Nicoti
no
Order
Distribut
ors and
retailers
Dema
nd
Custom
ers
Marketing
activities
Illustration-9: Pull strategy of Nicotino
Nicotinos marketing communication mix or promotion mix includes all the typical elements
like advertising, sales promotion, public relation, personal selling and direct marketing.
Heres the detail:
Advertising:
commercials.
Print media advertisements, such as newspaper ads, posters and leaflets.
Point of purchase advertisements, Shelf space advertisements.
Sales promotion:
SMS contest
Price discount at special occasion
Page- 12
Public relation:
Personal selling:
Direct marketing:
Page- 13
6.0
P R O J E C T I M PLE M E N TAT I O N S C H E D U LE
AND
O R G AN I Z AT I O N AL S T R U C T U R E
July1
2
Aug1
2
Sept1
2
Oct12
Nov1
2
Dec1
2
Jan13
License and
approval
Product
development
Land, building
Machine
purchase
Installation
Premise
beautification
Pilot Production
Quality testing
Commercial
operation
At the initial phase, the operation of Nicotino is monitored by six department heads Page- 14
categorized as finance, human resource, manufacturing, marketing, research and
development, procurement and storage. The head of the departments are taken from the
partners and requirement for labors, supervisors and managers are fulfilled from outsource.
Following is the organizational chart of Nicotino:
NICOTIN
O
Head of
Finance
Head of
human
resourc
e
Head of
marketi
ng
Head of
manufa
cturing
Head of
Procure
ment
Head of
R&D
Financ
e
manag
er
HR
manag
er
Marketin
g
manage
r
Manufa
cturing
manage
r
Storage
manage
r
R&D
manag
er
Staf
Staf
Supervis
or
Supervis
or
Supervis
or
Staf
Staf
Staf
Staf
At the initial phase, the operation of Nicotino is monitored by six department heads. The
needs of staffs can be illustrated below based on the organizational structure:
2012-13
2013-14
2014-15
1
1
3
1
1
3
1
1
3
Finance unit
Head
Manager
Staff
Human resource unit
Page- 15
Head
Manager
Staff
Marketing unit
Head
Manager
Supervisor
Staff
Manufacturing unit
Head
Manager
Supervisor
Staff
R&D unit
Head
Manager
Staff
Storage unit
Head
Manager
Supervisor
Staff
1
1
3
1
1
3
1
1
3
1
3
4
16
1
3
4
17
1
3
4
17
1
1
3
12
1
1
3
13
1
1
3
13
1
1
6
1
1
7
1
1
7
1
1
1
5
1
1
1
6
1
1
1
6
All the staffs are permanent and recruit by giving monthly wages
The production unit needs extra staffs each years due to process more raw-materials
The staffs are giving all privileges stated in Bangladesh Labor Code 2006.
Page- 16
7.0
S ALE S P R O M OTIO N
Website
Nicotin
Nicoti
Consu
Order
form
Retaile
Consu
Website
Chief
Marketin
Illustration-13: Distribution channels
g Officer
As it is shown in the graph, the retail distributors and dealers can place order by using order
form or through internet. The customers can place orders only through the website. The
distribution process goes as the following:
Finished Nicotino products are transported from the Sirajganj plant to a warehouse
that is situated in Dhaka.
Nicotino uses intensive distribution strategy, which means that this product will be
available in all the outlets on basis of demand by dealers and consumers.
Our product representatives will deliver the finished products to super stores, drug
stores and departmental stores. They may use the firms covered vans to do this.
Specific day for specific zone are to be assigned, so the distribution operation may
continue systematically.
Retailers will then sell the products to the valued customers.
We will provide a 24/7 call center. Also retailer survey will be conducted quarterly by
the marketing team to know the first hand information of the customers.
Regional Sales
Regiona
l Sales
SalesManager
Advertisi
Advertisin
ng
g
Analyst
Manager
Promotio
n
Analyst
Manager
Page- 17
In January, we will start advertising for our product with the help of newspaper ads
and creating Buzz by providing samples to selected product reviewers, opinion
leaders, and in its case, the renowned doctors of our country. Newspaper ads will
continue whole year. Also our marketing staff will use direct marketing by working
Page- 18
We will launch create our own website and start online ads this in August.
In October, there will be a discount offer for the four week period.
In December we plan to roll out a massive advertising campaign. We will use
celebrity voices telling how Nicotino helped them stop their smoking habit.
The following schedule shows one year plan of our advertising and promotional campaign:
Jan
13
Fe
b1
3
Ma
r1
3
Ap
r1
3
Ma
y1
3
Jun
13
Jul
y1
3
Au
g1
3
Se
p1
3
Oct
13
No
v1
3
Dec
13
Page- 19
Illustration-15:
Advertising
and promotional
schedule
Following is the three
year allocation
of our marketing
budget atcampaign
affordable
method:
Advertising
Sales promotion
PR and personal selling
Direct marketing
Total
2012-13
2,983200
150,000
1,146,600
20,000
4,300,000
2013-14
5,146,400
200,000
933,600
20,000
6,300,000
2014-15
5,146,400
200,000
1,233,600
20,000
6,600,000
Page- 20
8.0
F I N AN C I AL A N ALYS I S
AN D
PROJECTIONS
8.1 Financial statement assumptions
The wages of production staff increased by BDT 300 yearly started from BDT 4200.
Wholesale price of both original gum and flavored gum is BDT 6.5/ piece.
Salaries of employees increased by BDT 1000 yearly.
Marketing and promotion expense is the highest indirect expense and the marketing
budget is calculated using affordable method.
Office rent includes the rent of Dhaka office and warehouse.
Accounts receivable is 10% of sales revenue each year.
Accounts payable is 35% of the raw materials cost.
The firms initial investment is BDT 8,493,500 which is financed by 69% equity and
31% debt.
The cost of capital or discount rate is assumed to be 20%.
Interest for loans is 15% per annum repayable annually.
Page- 21
52,000
25,000
64,000
327,500
45,000
513500
722,500
600,000
4,302,600
606,300
1,698,600
50,000
7,980,000
8,493,500
Means of finance
Equity
Debt
Amount in BDT
5,870,775
2,662,725
% of Total
69%
31%
Period
1
2
3
4
5
Beginning Balance
2,622,725
2,493,551
2,345,000
2,174,167
1,977,710
2,622,725
July 1, 2012
10
1
15%
522,583
Loan Repayment
522,583
522,583
522,583
522,583
522,583
Interest
393,409
374,033
351,750
326,125
296,656
Principal
129,174
148,550
170,833
196,458
225,927
Ending Balance
2,493,551
Page- 22
2,345,000
2,174,167
1,977,710
1,751,783
2012-13
Operating revenue
2013-14
2014-15
Sales revenue
Less: Cost of goods sold
Gross Margin
Less: Operating expenses
Salaries
Marketing expenses
Office rent and utilities
Depreciation
Insurance and others
Total operating expenses
Income from operations
Less: interest expense@ 15%
Net income before tax
Less: income tax @ 40%
Net income after tax
15,200,000
8,232,000
6,968,000
41,800,000
20,739,500
21,060,500
51,300,000
24,166,100
27,133,900
825,000
4,300,000
210,000
275,445
210,000
5,820,445
1,147,555
393,409
754,146
301,659
452,488
1,782,000
6,300,000
420,000
275,445
220,000
8,997,445
12,063,055
374,033
11,689,022
4,675,609
7,013,413
1,914,000
6,600,000
480,000
275,445
225,000
9,494,445
17,639,455
351,750
17,287,705
6,915,082
10,372,623
Purchase of ingredients
Transportation cost
Packaging cost
wages
utility
Other direct expenses
Cost of goods sold
2012-13
4,390,000
550,000
1,520,000
756,000
960,000
56,000
8,232,000
2013-14
10,820,000
1,100,000
4,180,000
1,782,000
2,700,000
157,000
20,739,500
2014-15
12,070,000
1,400,000
5,130,000
2,073,600
3,300,000
192,500
24,166,100
Cash
Accounts receivable
Inventory
Other current assets
Total current assets
Long term assets
Accumulated depreciation
Total long term assets
Total assets
Accounts payable
Other current liabilities
Total current liabilities
Long term liabilities
Total liabilities
2012-13
2,082,550
1,520,000
3,800,000
64,229
7,470,779
6,231,400
275,445
5,955,955
13,426,734
2,881,200
1,728,720
4,609,920
2,493,551
7,103,471
2013-14
4,668,825
4,180,000
9,500,000
3,266,461
21,615,287
6,231,400
550,890
5,680,510
27,295,797
7,258,825
4,355,295
11,614,120
2,345,000
13,959,120
2014-15
9,664,310
5,130,000
10,450,000
8,767,107
34,011,418
6,231,400
826,335
5,405,065
39,416,483
8,458,135
5,074,881
13,533,016
2,174,167
15,707,183
Page- 23
Paid up capital
Retained earnings
Total equity
Total liability and equity
5,870,775
452,488
6,323,263
13,426,734
5,870,775
7,465,901
13,336,676
27,295,797
5,870,775
17,838,524
23,709,299 Page- 24
39,416,483
2013-14
2014-15
13,680,000
(8,232,000)
(825,000)
(4,300,000)
(210,000)
(210,000)
(393,409)
(301,659)
(792,067)
37,620,000
(20,739,500)
(1,782,000)
(6,300,000)
(420,000)
(220,000)
(374,033)
(4,675,609)
3,108,858
46,170,000
(24,166,100)
(1,914,000)
(6,600,000)
(480,000)
(225,000)
(351,750)
(6,915,082)
5,518,068
(6,281,400)
(513,500)
(6,794,900)
0
0
0
0
0
0
2,622,725
5,870,775
(522,583)
7,970,917
0
0
(522,583)
(522,583)
0
0
(522,583)
(522,583)
383,950
1,698,600
2,082,550
2,586,275
2,082,550
4,668,825
4,995,485
4,668,825
9,664,310
Page- 25
2012-13
2013-14
2014-15
Total costs
Per unit selling price (BDT)
Break even selling unit
30 piece /packet
9.0
14,445,854
6.50
2,222,439
74,081
30,110,978
6.50
4,632,458
154,416
34,012,295
6.50
5,232,660
174,422
C O N T I N G E N C Y P LAN
Nicotino will use tight control measures to closely monitor Quality and consumer
satisfaction. It will enable us to react quickly in correcting problems that may occur. If there
comes any crisis that pushes Nicotino to exit the market, then we have the following
strategies to lessen the risk
Firms primary exit strategy is converted into private limited company from
partnership firm to reduce capital problem (if occurs) and skill managing.
Firms secondary exit strategy will be to convert the product from nicotine chewing
gum to a usual chewing gum. This will lessen the risk of being dissolute.
Page- 26
10.0 A P P E N D I X
Nicotinos product offerings
Page- 27
Purpose
Stop smoking aid
source
Nicotine compound, solid,
n.o.s. UN1655
Produced from chicle or
mouth freshener
rubber
toluene (E321)
Sorbitol
Sweetener
Obtained by reduction of
glucose
Produced from soda ash
Produced from soda ash,
dissolved in water treated
Flavor
Flavor
(cinnamon, mint)
Produced from Haverstroo
Glycerol
compound ZD 4932
By product of biodiesel
Talcum
Calcium carbonate
bacteria cleaner
Creates gum substance
Works as gastric antacid
carbonate compound