Sugar Cane -Business Plan

BUSINESS PLAN Of FERSCANE

Submitted to: Ather Qader Qureshi

Submitted by: AROOJ IBRAHIM SHIZA NASIR NOMAN KADIR KOMAL IQBAL UMAIR KHALID

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TABLE OF CONTENTS Acknowledgment…………………………………………………………...3 Executive summary………………………………………………………..4 Introduction of the company………………………………………………5 Need to develop new product……………………………………………..5 Competitor overview………………………………………………………..7 SWOT Analysis……………………………………………………………..8 Market planning………………………………………………………........10 Process……………………………………………………………………..11 Production and financial Aspect………………………………………….13 Marketing budget…………………………………………………………..15 Marketing strategies……………………………………………………….16 Conclusion…………………………………………………………………..19

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Acknowledgment I would like to express special thanks of gratitude to my teacher Athar Qader Qureshi. Who provided us the golden opportunity to do this wonderful project of New product development, this report enlightened us and provided us useful information that how you can launch a new product. Then we would like to thank our parents and friends who supported us in doing this project.

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EXECUTIVE SUMMARY Sugarcane Juice is a Marketing idea that we are coming up with. Fresh sugarcane juice obtained from mature cane is sweet and tasty. It is not only a thirst quenching drink but also nutritious due to the presence of several minerals like phosphorus, calcium, magnesium, vitamins, amino acids etc., and has medicinal properties also particularly for the cure of jaundice. Cane juice mixed with the extracts of lemon, mint etc., adds to the taste, helps in better digestion and improved bowel movement .Our product is sugarcane juice in tetra pack packaging. Sugarcane juice is widely used in summer season because it is good in taste and low in cost. But problem with this is that it can’t be preserved for long time. In Pakistan no company has launched sugar cane juice till now in tetra pack. The methodology used in Pakistan is quite old and so many people don’t go for this sector because the risk of the low shelf life. So we have decided to launch a sugar cane juice & we would be using sodium benzoate as a preservative which would increase the shelf life of our product without harming its colour and taste. Because sugar cane juice is naturally sweet, so it can be sold with a little additional processing too. Fresh sugar cane juice has no preservatives, however its tendency to turn black from oxidation soon after pressing is very high, so to secure from oxidation we should pack in tetra pack packaging. The sugar cane juice has several health benefits and medicinal properties most of which remains unknown to the masses. It has direct effect on digestive system and it contains nutrients which are healthful for life It strengthens the stomach, kidneys, heart, eyes, and brain and sex organs. The juice sucked from the sugarcane can prove highly valuable in case of weak teeth due to lack of proper exercise resulting from excessive use of soft foods. It gives a form of exercise to the teeth and makes them strong. It also keeps the teeth clean and increases their life. The target market would include almost all the adults, young & health conscience people & we would initiate our project initially in Karachi in SITE area. .

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INTRODUCTION OF THE COMPANY Mitchell’s is the oldest food company in Pakistan. It was established in 1933 by Francis J. Mitchell under the name of Indian Mildura Fruit Farms Ltd. After the country gained independence in 1947, the company's name was changed to "MITCHELL’S Fruit Farms Ltd." with the brand name of "MITCHELL’S". Since its inception, Mitchell’s has gone from strength to strength, not only expanding its product line but also maintaining quality through the years to become one of the largest food companies in the country. From the procurement of best quality raw materials, fresh from our own farms and orchards to the adoption of latest production techniques. Mitchell’s has always used farm-fresh fruits and vegetables in its products, since its inception. Mitchell’s products retain fruits in their pristine form, thus processing the best that nature has to offer. The result of the efforts is that today they are among the market leaders in all our product categories. Not only that, but our products are also gaining a market abroad with exports to several parts of the world Mitchell’s have come up with many products such as Fruit Punch Fruitica Orange (Instant Drink), Fruitica Lime (Instant Drink) , Ketchup Stand-up Pouch (500g) TopMilk Fruit & Nut, Luxuree 30g ,Apple Jelly Junior, Golden Mist Marmalade Junior, Strawberry Jam Junior Mixed Fruit Jam Junior , Hot & Sweet Sauce, Synthetic White Vinegar, Lychee Fruit Drink and Jaam-e-Hayat .

NEED TO DEVELOPE A NEW PRODUCT Every business needs to innovate to stay ahead of the competition. No business can continue to offer the same unchanged product if they did so, profit would not be maximised and sales would start to fall. Consumer needs and wants a change. Firms should respond to these changes through their products and services. For example consumers are becoming more health conscious, this is forcing companies to introduce low sugar, salt and fat products. Competitive pressures, cost challenges, and increased customer expectations are driving companies to improve the way they develop and introduce products to the market. Whether you’re cultivating internally born ideas, or trying to respond to customer requirements and market demands, the new product introduction process can help. It enables all constituents to speak a common language. It automates tasks, exposes performance bottlenecks, drives consistent execution and continuous improvement. And, it provides management visibility into the product development pipeline. Page | 5

INTRODUCTION Sugarcane juice is used as a delicious drink in both urban and rural areas in many countries. Fresh juice cannot be stored normally for more than six hours due to the presence of simple sugars through Sugar cane juice extractor, which spoils the juice quickly. Fresh sugarcane juice obtained from mature cane is sweet and tasty. Consumption of sugar cane juice has a human history spanning at least the past five thousand years made in Fresh sugarcane juicer machine. This juice is as natural as it gets, and the sugar contained in the product does not turn into fat but leaves your body without creating any fat. The truth is that sugar cane is the healthiest food for a healthier you. Sugarcane juice machine, before it is mutilated into white sugar, is highly beneficial to Human health. It contains protein, iron, phosphorus, vitamins A, B1, B2, B3, and C, calcium, and chromium. The sugar-cane juice and honey help prevent tooth decay because they contain more minerals and other nutrients another beauty of Commercial sugarcane extractor is that when you chew the fibre, it brightens your teeth and strengthens your gums. But due to its seasonal availability and fast deterioration by microbial decomposition, the possibility of its use as fresh juice is very much limited. In order to make the availability of cane juice at all times as a soft drink prepared under electric motorized Sugarcane Crushers hygienic conditions, a simple method of bottling the cane juice has been developed.

INNOVATION The innovation that we have come up with is sodium benzoate. It is a preservative that helps sugar cane juice last longer with no effect on its colour and taste. The maximum duration for sugar cane juice to maintain its colour, taste and freshness is up to 6 months. Unlike the other sugar cane juice that can only lasts for minimum six hours. They are going to add 0.25 ppm of sodium benzoate to preserve the juice. The fresh juice would then be bottled and would have the ability to remain hygienic in room temperature up to the mentioned duration.

MISSION The mission is to provide fresh, clean sugar cane juice and make sure that it is made keeping in mind the hygiene factor. They want to be the first one to make available the fresh sugar cane juice to the sugar cane juice lovers.

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TARGET MARKET The potential customers will be every kind of individuals like:   

Students at every level.(from school to universities) Employees who work the entire day in hot condition. Households, passengers.

In summer season every kind of people with no age limit use this juice, because most of the people avoid unhygienic products. Initially they will only limit the geographical scope to Karachi Lahore and Islamabad and then after initial success they will expand the target segments.

COMPETITION OVERVIEW DIRECT COMPETITORS: The direct competitors of our Product are:  

   

Shezan All Pure (Orange, Mango, Pineapple nectar, Apple, Grape and Tropical) Nestle Fruita Vitals (Orange, Chounsa nectar, Apple nectar, Red grape nectar, Pineapple nectar, Peach nectar, Orange and mango drink and Guava nectar) Olfrute (Orange, Mango, Apple and Red grape) Coca cola (pulpy orange) Rani , slice and All other juices available in the market. The road side vendors that are selling sugarcane juice.

But they are not competing our product with them because they are the competitors of the Juice market and they are only providing the different flavour juices but not the sugar cane juice. INDIRECT COMPETITORS: As the Sugarcane juice is the symbol of the refreshment and nutrition and it is also a substitute for the other soft drinks. So we have compared it with other soft drinks. So in the soft drink market we have the competitors like   

Coca cola Pepsi Other instant drinks

MARKET TRENDS People prefer juices in order to remain fresh and fit, some like to serve their guests with juices as people are now more towards hygiene and consciousness and juice Page | 7

provide more nutrition’s and a good taste. A new research proves that by 2014 every person will consume 95.5 litres juice every year and research suggests that juice market growth and sales is always on increasing trend, customers are more towards nutritious drinks especially during summer.

SWOT ANALYSIS 1. STRENGTHS: 

INCREASED HEALTH CONSCIOUSNESS:

Fresh sugarcane juice is obtained from mature cane and is sugary and tasty. It is not only a thirst quenching drink but also nutritious due to the presence of several minerals like phosphorus, calcium, magnesium, vitamins, amino acids etc., and has therapeutic and medicinal properties. It is completely pasteurized i.e. we place it over shelves after proper sanitization of sugarcane juice with six months guarantee. 

FIRST MOVERS’ ADVANTAGE:

They are the first one to introduce sugarcane juice in tetra pack, so they are having an advantage over market as at initiation we will face no other direct competitors, and up to the time any competitor enters, they will increase the brand loyalty. 

PRODUCT INNOVATION:

The product that they are launching is a good quality product and innovative as well.



NUTRITIOUS DRINK WITH SEVERAL HEALTH BENEFITS:

Sugarcane juice is a wholesome in many aspects: 

Sugarcane juice is a great preventive and healing source for sore throat, cold and flu.



It has a low glycemic index which keeps the body healthy.

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This is one sweet drink even the diabetic can enjoy without fear. It is because it has no simple sugars.

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Due to its alkaline nature, it helps to fight cancer. Studies indicate that it has positive activity against prostate and breast cancer cells.

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It hydrates the body quickly when exposed to prolong heat and physical activity.

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They are excellent substitutes for aerated drinks and cola.

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It refreshes and energizes the body instantly as it is rich in carbohydrates. Page | 8

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It helps in better digestion and improved bowel movement. It can hasten recovery from jaundice.

2. WEAKNESSES: 

LACK OF BRAND AWARENESS:

As they are pioneer in sugarcane juice industry, there is lack of familiarity, so in order to overcome this weakness we will initially invest heavily on advertisements and promotion. They are new to business world, so initially they might have difficulty to understand the ins and outs of today’s aggressive market and for that they require a lot of research and exposure.  LIMITED SHELF LIFE: Sugarcane juice actually is served fresh, people perceive it to have fresh otherwise the colour and odour will be affected due to oxidation, but they are adding sodium benzoate, a preservative in it which would increase its shelf life over to six months.

3. OPPORTUNITIES: 

LOCALLY AVAILABLE RAW MATERIAL:

As Asia grabbed a huge proportion of sugarcane market, India and Pakistan are one of the main producers of sugarcane, so there will be an ease of availability by contracting with local manufacturers.  CHANGING SOCIAL TRENDS: Fresh cane will set a new trend i.e. a trend of health consciousness and purification and to remain fresh and healthy forever.  CAN BE MIXED WITH SEVERAL OTHER FLAVORS TOO: Soon, after market penetration, we will focus to introduce “Fresh Sugar Cane Juice” in other flavours as well, which include: mint, lemon, etc. 4. THREATS: 

POLITICAL SITUATION (GOVERNMENTAL UNCERTAINTY):

They will face problem if government employ extra taxes on us which in future will force us to raise the price of their product. We can have adverse impact, if cost of labour doing work increase. Page | 9

 LACK OF RESOURCES (SHORTAGE OF ENERGY): One of the current problem which Pakistan is facing, this can adversely impact us. Inflation rate is another threat which we can face.

Market Planning They will market our product in:  Tetra pack sugarcane juice They will educate and make aware the consumers of the unique features of sugarcane juice that it can give to human body. Sugarcane Juice Sugarcane juice is acidic in nature. Besides sugar it contains many other organic and inorganic and soluble as well as insoluble substances in varying amounts, together called as non-sugars, to the extent of 3 to 7.5% of total quantity. These insoluble suspended matters make the juice viscous and turbid. The constituents of sugarcane juice as a percentage of total quantity are as given below.

Sugarcane Juice Constituents Constituent

% Of total quantity

Water

75-85

Sucrose

10-21

Other sugars

0.3-3

Other organic substances

0.2-0.6

Nitrogenous bodies

0.5-1

Location and Site They have found that raw material for this project is available in the interior areas of Sindh and Punjab.

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Project Engineering Traditionally the popular local drink sugarcane juice is made with a special machine (like on the picture below) out of fresh sugarcane. The Version of Making and Preserving Bottled Sugarcane Juice. Traditional sugarcane juice, a highly valued local drink, as is shown in the below picture only keeps for a few hours. Thanks to JUCANN’Tech’s process, it can keep for several weeks, or even several months, and it maintains its authentic taste.

PROCESS The process through which the sugar cane stalk would go through is as follows: 1. 2. 3. 4. 5.

Peeling. Crushing. Filtration. Pasteurization. Packaging.

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1-PEELING: In this process the hard skin of the stalk that is not required for the juice is removed with the help of a machine.

2-CRUSHING: In this step the stalk are cut in to small pieces and crushed to produce juice from them.

3-FILTERAING: After the juice is produced filtering of the juice is done to remove the un-needed particles that may have left behind in the juice from crushing.

4-PASTEUTIZATION: In this step the juice is kept under a certain temperature to further remove the impurities from it. This step doesn’t harm the taste, colour and freshness of the juice.

5-PACKAGING: The final step is packaging of the juice in a tetra pack, which is again done with the help of a machine. The tetra pack has the name of the juice.

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PRODUCTION AND FINANCIAL ASPECTS BUDGET The total budget of 3.5 crore rupee is established for this plan. Allocation of the budget is discussed further.

Sugar cane 200 tons/annum Approx

200,000-litres

/

annum

PRODUCTION CAPACITY OF PLANT Projected Quantity: 200,000-litres / annum Installed capacity: 250,000-litres / annum Working days: 250/annum Manpower: 100 workers

Projected Sales From the market demand analysis and other financial analysis we found it feasible to produce and sale around 200000 litres each year.

Cost Allocation: Fixed Cost Land 2000 sq.m. :

8,000,000

Built up Area 1000 sq. m.:

2,000,000

Total cost of Land and Building:

10,000,000

Machinery and Equipment

15,000,000

Office furniture & fixtures:

5,000,000

Vehicles:

3,000,000

Total:

28,000,000

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Working Capital for two months:  Salary : Department Managers (5)

20,000*5

Supervisor (5)

10,000*5

Office Assistant (3)

5,000*3

IT Manager (2)

7500*2

Skilled workers (15)

6000*15

Unskilled workers (70)

4000*70

Total Salary

1,100,000

 Raw Material including packaging materials Sugar cane 40 tons

70,000

Packaging

600,000

Labels

80,000

 Utilities Amount Power

500,000

Water

100,000

Coal

95,000

 Other Contingent Expenses Amount Repairs and maintenance

500,000

Others

200,000

Insurance

420,000

Total Capital Investment Amount

31,665,000

Cash Reserves:

3,335,000 Page | 14

PRICE OF ONE UNIT Total RAW material cost

5

Total packaging cost

4

Production Cost including tax

11

Cost

20

Profit

10

Retailer Commission

5

MRP

35

Our per unit price is Rs. 35. We are making the unit at Rs. 30 which includes the price of raw material, packaging cost and production cost and our profits. We are selling it to our distributors at the price of 30. While the our consumer is getting our 250 ml at the price of 35.

MARKETING BUDGET The marketing plan of Sugarcane juice in tetra pack, have a budget of 1.5 cror rupee to establish our plan. Now we allocate different amount in different parts.

Method of allocation: Creating an annual budget involves 1.5 cror on building and plant and other budget we will use in following manner, Allocation New of budget product on other research uses

Marketing research

Advertisement Sale expense expense

Direct marketing

Public relation

1.5 crore

10 lac

80 lac

10 lac

10 lac

20 lac

20 lac

MARKETING STRATEGIES 1. Positioning strategy: Page | 15

Brand strategy is at the heart of marketing strategy. It is the act of designing the company offer and image so that it occupies a distinct and valued place in the target customer mind. Sugarcane juice is very beneficial for health and provides refreshment. As we are launching sugar cane juice in tetra pack, so we want to create positive and long lasting image in the minds of customers that we are providing hygienic juice because we are also introducing new flavours like mint and ginger etc. 

Point of parity:

Different flavour Tetra packing 

Point of difference:

100% pure juice

2. Product strategy: 

Core benefit

Core benefit means the services and benefits the customer is really buying. The customer fulfils its need of thrust and refreshment by buying our 

Basic product

It’s mean what specifically the actual product is. Our actual product is juice 

Augmented product

Products that include deign, features and packaging that go beyond consumer expectations and differentiate the product from competitors. The juice taste and flavour is according to the customer expectations because we provide 100% pure juice. They will have no compromise with quality Following things include in the sale of product, Design The design of sugarcane juice that it will be in attractive and stylish tetra pack in following size: •250ml Features The features of the product are,

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•Use full for healthy life •Good in taste •Help to digest food Packaging The product will be in tetra packaging which will be attractive and eye catching.

3. Pricing strategy: The price of the product can also influence the buying behaviour of the consumers because In Pakistan there is different level of classes based on the income difference so price is The one of the important factor, some of the consumer can afford the price and others Can’t, so must set the price of the product that is afforded by all the social classes of the region. So they use penetration pricing strategy. Price Structure (Consumer price) 250ml- Rs.35 4. Channel of Distribution: The place of the distribution and availability of the product also influence the buying behaviour because if the product is in reach of the consumer he will prefer it and if it is hard to find the product in the market he will never buy that product. So they provided our product to all the all the distributors and they will provided it to famous retailers of Islamabad, Lahore and Karachi. Because of this the product will be available at more shops and the sales will increase.

ADVERTISING & PROMOTION Our total advertisement and promotional budget limits to 1 crore, at the very start, they will act as an aggressive promoter, i.e. they will invest heavily on promotion in Page | 17

order to create brand awareness. Secondly, the taste of the product is new so they will develop certain market strategies to attract customers towards new taste.

PROMOTION The promotion of the product i.e. the advertisement, sales promotion and other promotional tools can change the buying behaviour because some of the individuals highly influenced by the advertisement of the product. They have decided to use integrated marketing communication in which there will be blend of different marketing promotional tools that will convey clear and consistent message of our product to the customers. These Promotional tools are given below: •

BILLBOARDS:

Billboards will be placed at busy thoroughfares in big cities. Billboards will be the most permanent and long lasting form of advertisement. The total Billboards they will place are in number. •

SALES PERSON:

Around 200 sales people will be appointed which will introduce the product to customers in all the three cities. •

DAY CELEBRATION: They will start the very first day with Day Celebration in order to introduce the brand in an effective manner, plus they can also have an idea about people’s interest towards sugarcane juice.

•

POSTERS: They will put 75 posters in different places in order to grab a large portion of the three cities.

•

TVC: Tele commercials will be aired on sports channels and news channels as the viewer ship of these channels is highly common among the targeted market.

•

INTERNET ADS: Lastly, they will use internet ads to market the product.

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CONCLUSION Mitchell’s promises the quality of its product, which we will also deliver through this product. We have first mover advantage because no other company is offering similar product in the market. We have to aware our customer about the product and have to tell them the benefit of using our hygienic product that comes in tetra pack. Though the initial cost would be high because you have to set machinery buy land and have to invest a lot in the advertising of product, but once you create the positive image in the mind of your customers they will automatically demand the product.

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