Marketing Planning of drinking water

STALLIONS-BD AGRO LTD

Marketing Planning BLUE DRINKING WATER

Valued Management of STALLIONS-BD LTD

The Paper was written by Harun ur Rahsid Riad ID Number: 09-93135-2 Signature:

The Paper was written for

Name: Signature: Faculty of MBA (Marketing)

CONTENT Executive Summary-----------------------------------page 4-6 Company profile Board of directors

Market Situation Analysis-------------------------page 716 Major industry players in Bangladesh Market summary Target market: SWOT analysis Possible Major Competitors: Product offerings: Product content

Marketing strategy-------------------------------------page 17-28 Branding Target market Market Positioning Strategies For consumer For distribution channels Awareness by Market Research

Financials--------------------------------------------------page 29-30 Financial objective Packaging and Pricing

Executive Summary In this report we are writing about a consumer product which is natural mineral water branded by the name of “BLUE Drinking water; introduced by STALLIONS -BD, the company originally formed as agro based industry, later moved toward trading consumer products and now we are going to established itself as bottled drinking water manufacturing company in Bangladesh. Here in this report we are going to analysis the current market situation including market summary, major industry players of bottled water manufacturing/supplying companies, target market analysis which are consumer & business market, SWOT analysis of the company which shows the strength, weakness, opportunities and threats created by others, the possible competitors of our product, content of the product mainly the ingredients, marketing strategies include target market, market positioning, strategies including

promotional

activities,

market

capturing

formulas,

maintaining relationship with our business partners and consumers and to hold the market share and how we will expand it and finally the

financial

forecast,

analysis

breakeven

which

includes

analysis,

and

organization.

5

sales

forecast,

control

process

expense of

the

Company profile STALLIONS-BD was formed in 1994 as a agro based industry for international and domestic market, later it went into trading of consumer products like chips, vegetable bottled water, spices, sauce,

jam,

jelly

and

other

related

cooking

ingredients.

The

company’s turnover is well maintained by its board of directors. In year 2011 the new board of directors decided to manufacture its own branded bottled drinking water, the company wants to launch its first bottled drinking water in between mid of 2012. The bottled drinking water would be the first product of this manufacturing unit, later on it will move toward other beverages like soft drinks and energy drinks. Currently the company is focusing

on

its

bottled

drinking

water

manufacturing

unit.

Consumer item was not the main focus when the original company was formed but now with growing market demand of bottled drinking water and for having a good trading experience, the company decided this strategy to manufacture its own branded bottled drinking water.

Name of Organization: STALLIONS-BD AGRO Limited Brand: BLUE Drinking water Product: Bottled drinking water Year of establishment: December 1st, 2011 6

Estimated project budget: taka 160,000,000.00

Board of directors: Nayeemur Rahman Position: Chairman Harun ur Rashid Position: Managing Director Hasan Mahmud Position: Finance Director Fahmida Khanam Position: Human Resource Director Ziad Mahmud Position: Sales & Marketing Director

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Market Situation Analysis: “Water is everywhere But just a little that is clean” Water, The fountain of all life. Even a toddler will tell you it is a prime need of the body. Sixty per cent of our body weight is made up of it. Water can also be the cause of much misery. Specially in Bangladesh, where contaminated water continues to bring down millions with diseases such as diarrhea, dysentery, typhoid, jaundice and gastro-enteritis. Getting pure drinking water from municipal taps in cities and towns is now a luxury. At home most people are forced to either bottled water or install purifiers. While traveling or eating out in restaurants, buying bottled water has become a necessity. This need has seen an explosion of companies marketing “safe drinking water” in bottles across the country. Till about ten years ago branded bottled drinking water were seen to be an item of middle class and elite consumption, mostly produced by multinational companies through their Bangladeshi arms. The total size of the branded bottled drinking water market in Bangladesh is about one thousand corer, consumed by some 50 million households (Source: Bangladesh Retail Audit).

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Major industry players in Bangladesh Here we are showing current situation of regular branded bottled drinking water which are very much popular in Bangladesh. Currently MUM is being considered as market leader in this business and others are as followers.

MUM

Yes

Pran

Fresh

Acme

Dada

Jibon

Bislay

Safi

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Market share of different brands in Bangladesh is given below, here we have given the collective data based on the regular bottled water marketed companies in Bangladesh, we are concluding by market leader, challenger & followers.

Name of brand

Market share in %

MUM

22%

Yes

19%

Pran

17%

Fresh

13%

Acme

9%

Dada

6%

Jibon

5%

Bislay

3%

Safi

2%

Dunkan

2%

Others

2%

Source: Bangladesh Retail Audit-2009

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Market summary Target market: We are targeting our market by segmenting it in consumer market & business market.

Consumer market: We are segmenting the consumer market by family size and social classes exist in Bangladesh. Family size Social class/Income Level According to income level; consumers like monthly, weekly or daily basis may buy our drinking water from our retailers. A mini pack of 250ml has been introduced for a daily basis use; our research says 20% of our population bye at least one 250ml of bottled drinking water in a day. The average customers will buy 5 liter – 250ml bottled drinking water according to their requirement. It will depend on their income and their daily requirement. The average selling patterns shows that mainly 5 liters to 1 liter containers are mainly sold all over Bangladesh, our main target would be those customers. The future forecast says a lot of things but we must learn what our actual customer would like to see from us after using our product. Most of the family in our country is joint-family structured based, a large number of this is shifting to the single family size, for this our target would be the customers of individual and single family and joint family, our packing size would be according to their demand of consumption.

Business market: a. Hotels and restaurants: 1. Five stars: Pan pacific, Sheraton, Westin, Radisson,

all these are world class five star rating hotels, our

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target will be to convince the quality manger to use our branded drinking water, the restaurant food chain mainly select and segment by the master quality manager itself, we have to let him/her/ team know that our water is good for health, only change will be in ingredient which is very much suitable than other existing water in the market and they can get this water from us in a corporate price. Also in the customer menu, we will let them have this option of regular water and bottled water, its customer choice, but our target will be like so that customer participate to choice our drinking water. 2. Three star: there are more than fifty; three star

hotel located all around Bangladesh, we will also target the quality manager and the purchase department to buy our Bottled drinking water, also we will offer them a good amount of commission in a manner so that they may not refuse us, as our product is world class, we strongly believe that it won’t be a big issue to convince them as we have hired some of the best marketing executives from different related organizations who knows how to deal with purchase department or committee. 3. Regular hotel: even though five, four & three star

hotels are known as corporate client, a big number of local restaurants are available all around Bangladesh who fulfills the need of the main stream. We also are going to target them cause, even if we count on a daily basis, a min of one liter to five liters will be required for each restaurants, if we convert it to weekly or monthly basis, it would generate a huge amount of revenue. We have to make them aware of the fact that, a lot of customer visits local restaurant every day, if the restaurant uses good bottled water, customer would definitely come to visit them and we have to make sure that they don’t use same type of bottled water for later days. 12

4. Catering

service: a good amount of number of catering service and event management company are in Bangladesh, a good example is community centers, if we consider a community center may arrange three parties in a week, a minimum of hundred liter of bottled water required for each week, four hundred plus minus a month, which is also generating a handsome amount of revenue for our company. Fukruddin biriyani, Hazi biriyani, Kusturi, Dhansiri, nandan, BBQ, Koyla, Tanduri, Radhuni, Hotel Zaman etc.

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SWOT analysis The overall evaluation of a company’s strengths, weaknesses, opportunities and threats is called SWOT analysis. It’s a way of monitoring the external and internal environment of a company. Strength and weaknesses are measured from internal environment and opportunities and threats are measured from external environment. Strengths: a) The company has strong management b) Latest and efficient machineries and technologies will be use for production c) Have a secured line of raw material supply d) Well trained and skilled employees e) Extensive distribution network f) High Quality of the product

Weakness: a) The company is coming in the market with a new product b) In short of fund for further investment. c) The product (Bottled drinking water) price is slightly higher than the existing products (Regular bottled water) in the market

Opportunities: a) Have opportunity of Market/Product development. b) People in the metropolitan areas are inclined towards branded products c) The Bottled drinking water is becoming popular and can be advertised to gain the market share among health conscious people

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Threat: a) Already there are many companies in the market. So Competitive environment exists b) People always get substitutions. If they think product price is higher than they will switch to other brand c) Increase price of raw materials and other necessary things d) If Import & export duty & other Government VAT & TAX issue e) Competitors invested huge amount for promotional activities to gain their market share

Possible Major Competitors: Our main competition will be with all the companies exist in the market. So we have to compete with other companies for catching the market share. For that we think some company’s product like MUM, Yes, Pran will be our main competitors. MUM: It is the product of Partex beverage ltd and they have the largest market share. The MUM considered as the main competitor because these are under the same genre. It draws the attention of our target audience due to the well-known products. Right now it captures almost 22% share of total market. Yes: It has become one of the best-selling bottled drinking water in 2010. Yes Drinking water is a flagship product from Sanowara Group. They spent a huge amount of money for promotional activities. Currently they have secured almost 19% of total market. They are trying to be the market leader from market challenger. They do not only contain unique elements in their products but an educational message as the main character strives to achieve the market share. 15

Pran: In order to differentiate from the main competitors, Pran promoted as a mothers first choice. They took huge promotional campaign to get the attention of the target group. In order to attract a larger audience and make them aware of this product, creative promotional campaigns with some noises are taken. They are trying to make online campaign interactive and fun. In order to let more people, their target group in particular, to notice that they having a function collaborating with wellknown restaurants in the Dhaka-Chittagong highway.

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Product offerings: Blue Natural Mineral water Our professional hydro-geologists, expert scientist evaluate the quality and movement of water beneath the ground. These professionals study the layer of rock or sediment which carries the water, looking closely at the quantity of water available. Only those aquifers that meet our strict requirements for water quality and environmental sustainability will be considered suitable to become Blue mineral water sources. Product Content: Bi carbonat e Calcium Chloride: Copper: Fluoride: Iron: Magnesiu m Sodium: Potassiu m: Zinc: Colyform Bacteria

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130 m/l 32 mg/l 5.9 mg/l 0.02 mg/l 0.5 mg/l 0.02 mg/l 3.0 mg/l 7.8 mg/l 4.0 mg/l 0.4 mg/l Nil

Marketing strategy Our target strategy will be mainly based on Marketing strategy and Sales forecast strategy. We are implementing the product development technique, existing market, new product. The definition of marketing strategy says, Find the demand of market

Develop your product

Earn profit by customer satisfaction. We have done our survey, we have talked with the distributors, wholesalers, retailers, our potential customers, and we know what demand we have in the market, now it’s time for the implementation. A five liter can is being sold 55-60tk depending on the brand, where as we are launching our own brand on only 55tk as the labor is still cheap in Bangladesh. We will do some serious type of promotional activities, we have to make such a impression that people has to come to us, from branding to launching, from distributor to retailer to customers, we have to be very much conscious to capture their mind and heart. No matter what strategy do we need to follow, we will do, our main target will be maximizing the profit for our organization, if our organization gets benefit, and we get benefit too. We will call the press, TV, radio media on the product launching ceremony, we will give each of the staff a 5liter of Bottled drinking water as a gift, we will try to bring health minister for the launching 18

ceremony, so that people may understand that even the government is also concern for the common people’s health.

Mission: our main mission to be the market leader of bottled drinking water industry in near future. Every company wants to be a giant in market, so do we, currently we are in a position of zero but we have a unique and standard product which will be our key of success. Innovative techniques will be added to capture the market share, that’s why we have hired some of the most experienced sales and marketing team for our company.

Branding: Branding is a very important part of any product, a product always known by its brand name, image and quality. We have chosen this word BLUE because it’s the image of clean and beautiful water. There are typically four levels of meaning conveyed by a brand name. The following is an analysis of what BLUE brand names convey

Level Attribute Benefit Value Personality

Brand BLUE Mineral water Premium quality, high prestige Pure water, Good health Healthy life Dependable, healthy

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Target market: Our target market would be whole Bangladesh including all the division of it, main focus would be on the major cities first, as we are very much new in this market, later on, we will move to different segments.. We are going to introduce the following product lines: a) b) c) d) e) f) g)

20 liter plastic container 10 liter plastic container 5 liter plastic container 2 liter plastic container 1 liter plastic container 500mili liter plastic container and 250mili liter mini pack

Our packaging will be done in a way so that we may target any kind of consumer & business market at a same time. Our target market is segmented in few sections: Business market: 20lts plastic container 10 liter plastic container 5liter plastic container

Consumer market: 5liter plastic container 2liter plastic container 1 liter plastic container 500mili plastic container and 250mili mini pack

We have described who is our business and consumer market earlier, we are packing this big container as the business market don’t buy their raw material every day, specially which products are long lasted, so when they will buy, they will buy in bulk, it would save their time and money if they buy it from us. According to necessity of bottled water like monthly, weekly or daily basis customer may buy our water from our retailers. Business market usually means the offices, hotels, restaurants, community centers and other commercial and social programs where large amount of water is needed in daily basis. And for consumer market is actually for all sorts of people.

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Market Positioning: This would be our first Bottled drinking water launched in Bangladeshi market, there are few large companies who are currently capturing the market of bottled water, a few of them are in top position as market leader and most of them are following the market follower policy. The big companies are dominating cause of their huge investment and promotional activities, their product quality might not be that much of enriched like ours but currently they are in existing market with a major market share. Where we are coming as a new comer and we will follow the market follower strategy for few years but we are not here to be a market follower, our main target would be to be the market leader someday. Company like us cannot challenge them with a unique product right now; we are only going to serve a portion of the total market which is known as niche market but we are going to act as market follower in this case. Right now, our position is in zero. We have to take it higher than others, if we can cross the barrier of 10% of the total market, we will create a threat to the existing big companies and they will definitely change their marketing policies and strategies. We must understand that, we cannot dominant the market right now as the major market share are on regular bottled water; we will create threat also opportunity for them. Only a single advantage what we got is maybe for two to three years we might dominant the niche market for our good will and brand position and for high demand of Bottled drinking water but, after that other companies will introduce same product maybe with our compete price or less as their business is already established. So we can’t just loose our growing market share, in any mean we have to control the market share and grow it as much as possible.

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Strategies Every company takes necessary steps to sell their product in the market, even though our product is highly enriched but without any sales promotion activities or strategy, we can’t get a good response from our target audience. People buy those whom they remember every time when they imagine that particular product; we have to take strategies so that our brand name always stays in their mind whenever they remember bottled drinking water. Whenever they goes to shopping center or local stores, they must remember our brand, that will be our first strategy, and obviously if our product don’t show high quality then these promotional activities won’t have any effect. So our prior strategy will be sell high quality product in a competitive price to the customers. We will apply marketing strategy and sales strategy/ promotional activities, we have done our survey, we have talked with the distributors, wholesalers, retailers, and we know what demand do we have in the market, now it’s time for the implementation. Now the sales promotion activities would be as follow We are taking some strategies for both our target customers and the distribution channels.

For consumer: Website: We will launch a full dynamic website where we will give a full information about our company, about our company’s mission, vision and objectives, messages from board of directors, list of the board of directors, background of board of directors, our product range, our product specification, our standard quality rating certified by different organizations, ISO certificates, our production equipments, our distribution channels, our sales promotional activities, our new product launching section, feedback section, contact section and a full bulletin board and a discuss forum where both employees and customer can interact same time so that we may get live feedback or suggestion from our customers. Even we will have a live chat option, we will give add to some paid popular website like yahoo, msn, Google, Amazon, CNN, 22

bbc.co.uk, gumtree.com, also on some of the most famous websites like cell bazaar, clickbd, bdtradeinfo.com etc, the daily newspapers websites like prothom alo, janakantha, observer, the daily news, BDnews24.com.bd etc. Newspaper: One of the oldest and most effective media is newspaper, will call a newspaper media conference where we will give a detailed idea of our company and our product and for what reason we want to launch this Bottled drinking water in Bangladesh, we will invite all those medias who has a min of 5% of the total market newspaper readers. If it’s possible we would take the media to our factory for having an inspection, photo session will be allowed but not every part of the factory, and we won’t revile our secrets to them as our business policy won’t permit us. Radio: After 2006, radio industry has shown a huge improvement and currently its one of the most famous media all around the country, a huge number of old, young generation are fan of it, we will advertise our product in radio too, maybe as sponsor of a radio program, or any message full commercial related to health awareness. Television: A large number of invest would go on this sector, a full 30 second length of TV commercial will be made by some celebrities and it will be shown of all the television channels, also we will be sponsor partner of two soap opera and four general program, mostly on interval and in news our commercial advertize will be shown. Discount/ scratch card: Time to time for our promotional activities, we will provided 5-10% discount or for cash back, we will give scratch card with the bottled water container from different retailers and shops. Quiz contest: We will do a monthly quiz contest on news paper, a gift voucher of 500tk, 1000tk and 2000tk will be given to the winner.

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Student sponsorship scholarship: We will provide ten students of junior school, ten students of High school, five students of college and two students of university a fulltime sponsorship and scholarship depending on their merits and financial status. Afterward maybe they will be given preference to be a proud member of our company. Social work: Beautification of road or cleaning up the road or areas, tree plantation, or making awareness of Bottled drinking water, smoking, drugs or anti corruption campaign will be sponsor by us.

Wall poster: we won’t stick any poster on the wall, we don’t want to destroy the beautiful walls of the high rising building, we will use posters with thread, all the papers will be made by recycle paper, front page will show our product and advertize and back page will be shown re-cycle symbol and signs for green and healthy environment. Billboard: We will print PVC billboard in the important and VIP roads, Dhaka Chittagong, Chittagong Commila, Commila-Shylhet, Dhaka Mymensing, Dhaka- Rajhshahi highways, we will try to put the billboards on eye level, not too far, not too near, as appropriate as it should be. Banner: Small 4X2 feet banner will be hang on VIP roads all around major cities and Metropolitan areas, and in villages.

Game sponsorship: Bangladesh is a game loving country. We will arrange different type of games as cricket, football and some local games in school, college and in university. Magazines: 24

We will publish a full four colored commercial advertize on the magazine back cover or in inner page with full details of our product and its usefulness. Articles: We will publish the usefulness of Bottled drinking water and our product in details in newspaper, magazine, cooking books and in e-blogs, we will maximize our profit also make people aware about the regular bottled water and our Bottled drinking water. Mobile SMS’s: As this is a very expensive media, we will do this kind of advertizing later on when our company will be properly established, maybe after when we will reach breakeven point, we will consider this strategy. Email: we will send email to different internet community like face book, hi5 etc, also we will try to send email to executives of different companies making aware about our product & usefulness, we will take professional help of different consulting firms to collect the mail ids. Also we will communicate with our wholesaler, distributor, agent, retailer through mail; all the promotional activities or new offering will be announced through mail. Local announcement: one of the oldest and most effective way, where there is no TV or radio or medias, especially in villages, we will announced Micking, it is effective as we have seen different product launching. Public TV ads in road: There are few Road TV’s situated in Dhaka and a few major cities, we will show our 30second long commercial add on there, it will be expensive but it got a huge impact, all level of people actually do look at the TV when they are in the road, especially when there is a traffic jam, they do look at the TV. TV actors: 25

We will use some popular TV/Movie actor or singers to do our champagne, like say a 10seconds jingle for the usefulness of Cholesterol free product and it will be sponsored by our brand. Mainly in TV, magazine, newspaper, or in radio media it will be published or shown or heard.

Free samples: We will provide free samples of 250ml pack to different schools, college & universities, shopping centers especially where the females are gathered. Like girls school, Ladies club, school gates, girl’s colleges. Also we will provide free samples in departmental stores like buy a specific amount of product & get the bottled water free.

For distribution channels: High paid commission: every other bottled water company is paying commission to the retailers or distributors, we will also offer them commission, if the competitor market is giving 5%, we will offer 7% but the scale shouldn’t exceed a scale, because we don’t want to create chaos among the competitors, it might go against us. Sales target gift: We will give sales target to the distributors or the wholesalers, if they can matches our expectations we will great them with corporate gifts, also a very high percentage of commission as gift. We will provide rewards to the distributor like vacation voucher, expensive cell phones, watches, suits, corporate gift items, or vacation trip inside or outside Bangladesh. Reward as best retailer: We will choose ten best retailers among the cities. We will call a ceremonial meeting and will provide gifts like diary, notebook, banner, TV, ac, fridge or cell phones etc.

Awareness by: 26

Doctor: we will do our main marketing through the doctors, we won’t directly ask them to our marketing, we will call conference and it will be covered by different medias, the issue will be hygienic and health and safety, it will be sponsored by our brand and whole auditorium will be covered by our logo, motto, features and product pictures and healthy awareness features. Doctor can suggest the patients to use Bottled drinking water, cause actually this is good for health, we have seen that most of the babies and young generation are getting bulky and fatty for taking regular bottled water and fats, if we can reduce this amount, it will be beneficial for the society too. We have some motivation budget for the Doctors & the related area. NGO: we will take help of NGO’s for marketing our product, NGOO’s do go those places where we might not think to go, they go to the rural and urban areas, their medical facilities might teach the people of the awareness of the Bottled drinking water and also they may help us to distribute this bottled water. Health ministry: we will arrange seminar or conference with Health ministry, where they will discuss the usefulness of Bottled drinking water and also this program will be covered by press and media and we will cover the whole auditorium with our product pictures, motto, logo and product specification, we will take aggressive marketing policy in this cases. Community clubs: We will decorate some part of different community clubs with our 2X5 feet banners in a manner so that it may catch the eyes of the people who visits there, especially it will be displayed in lobby or4 in main entrance. We will print leaflets and give it to the wholesaler, distributor, retailers, and consumers through post mail, by hand, with newspapers or with magazines.

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Market Research Before establishment of this bottled water company, we went to actual market where we have done some research by the following procedure to get some feedback of the buyer & seller through our questionnaires. Our research & development team prepared some questionnaires which is applicable for any kind of consumer from a housewife to officer, businessman to rickshaw puller, in simple word, everyone surrounded. i. How much bottled water do you bye monthly: 1. 5liter 2. 8liter 3. 10liter 4. Others. Please Mention _______ ii. What brand of bottled water do you use: 1. MUM 2. Yes 3. Pran 4. Acme 5. Fresh 6. Others. Please Mention _______ iii. Why are you using this bottled water: 1. For price 2. For packaging 3. For quality 4. Availability 5. Brand image iv. Do you think you are satisfied with your existing brand of bottled water: 28

1. Yes 2. No 3. maybe v. Have you heard the name of BLUE drinking water: 1. Yes 2. No vi. From where did you learnt/heard about it: 1. Newspaper 2. Television 3. Internet 4. Person to person marketing 5. Leaflet 6. Wall poster 7. Educational institutions vii. Do you think BLUE bottled water is good for health: 1. Yes 2. No viii. Do you think bottled drinking water is 1. extremely important 2. very important somewhat important 3. not very important 4. not at all important for our health ix. Are you willing to pay if the price for Bottled drinking water is higher than regular bottled water: 1. Yes 2. maybe x. What kind of packaging would you like to buy: 1. ½ liter 2. 2 liters 3. 4 liters 4. 5 liters 5. 10 liters 6. Minipack xi. Do doctors recommend you regular bottled water or Bottled drinking water: 1. Regular bottled water 2. Bottled drinking water xii. What is the most important consideration of yours when you buy your bottled water: 29

1. ………………………………………….. 2. …………………………………………..

Financials Financial objective: Our total budget of this project is 160,000,000.00 taka including land, factory building, equipments, advertising expense, operating expense; it would also cover the salary of the factory worker to the office manager for onward three months. For our marketing expense we have 30,000,000.00 taka which is sufficient enough. We have a time limit of three years to get in the breakeven point, our expected break even time period would be three years, and it would actually depend on the sales how much we may gain or lose. The breakdown of the marketing cost is listed below

Promotion

Period

Cost

% of total Budget

Newspaper

Yearly

1200000

6.49

Website

Once

500000

2.70

TV

Yearly

4000000

21.62

Radio

Yearly

250000

1.35

Screech card

Yearly

1000000

5.41

30

Quiz contest

6 times in a year

1500000

8.11

wall poster

Yearly

1000000

5.41

Billboard

Yearly

500000

2.70

Banner

Yearly

300000

1.62

Game Sponsor

3 times in a year

750000

4.05

Free Sample

Yearly

7500000

40.54

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Packaging and Pricing Packagin g 20 ltr 10 ltr 5 ltr 2 ltr 1 ltr 500 ml 250 ml

Price (In taka) Per bottle 200 110 60 25 18 10 8

In the case of pricing three types of pricing is available: • Low pricing • Market price • Premium pricing Advantages of Market Pricing • The consumer, so greater chance of accepting the price, accepts the price. • Quality of the product initially would be accepted.

Disadvantages: • No reason for the consumer to shift the product when the price is same. • Product cannot be positioned as a premium product

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Thank You

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