Assignment on Magic cake
Subject: Marketing | Topics:

SUMMARY OF THE PROJECT

1.      Name of the Project              :           Magic Cake – ATZ Ltd.
2.      Business Type                        :           An cake manufacturing company
3.      Form of Business                   :           Partnership
4.      Source of Finance                 :           Individual Capital & Bank Loan
5.      Product/Service
(We Sell)                     :           Pasty & Cake
6.      Product/Service

(We Buy)                                :           Sugar, Butter Oil, Egg, Different Bourbon Flavors, Custard Powder.

7.      Brands                                    :           Magic Cake
8.      Number of Employees          :           101-185
9.      Main Customers                    :           Customer of Residential Commercial Area in  Bangladesh.

  1. 10.  Factory                                   :           In House
  2. 11.  Management Certification   :           HACCP ISO 9001:2000
  3. 12.  Location                                 :           Our project location is setting in;

Sub Project Area

Location

Project 1House 12, Road 16, Uttara, Dhaka.Head office of “Magic Cake”
Project 2Banani Bazar, Banani, Dhaka.
Project 3Road 27, Dhanmondi, Dhaka.
Project 427 Agrabad, Chittagong
Project 5Rose Vally Road, Sylhet
Project 6Laboni Sea-Beach, Cox’s Bazar
Project 7Nogor Vabon Road, Rajshahi.

Figure-1:        Locations of the Business

13.  Objective        :           We have two types of objective:
Internal Objective:

  1. To earn profit
  2. Wealth maximization
  3. Make a strong Brand

To expand the business in abroad.

External objective:

  1. To reduce unemployment in Bangladesh
  2. To ensure the quality product
  3. Providing scholarship for the poor student

14.  Product items:           Our Production Item is setting in;

Name

Weight

Magic Cake- Milk Flavor .2, ½, 1, 2 and 5 lb
Magic Cake- Chocolate Flavor.2, ½, 1, 2 and 5 lb
Magic Cake- Strawberry Flavor.2, ½, 1, 2 and 5 lb
Magic Cake- Lemon Flavor.2, ½, 1, 2 and 5 lb
Magic Cake- Orange Flavor.2, ½, 1, 2 and 5 lb
Magic Cake- Mango Flavor.2, ½, 1, 2 and 5 lb
Magic Cake- Fruit Chocolate .2, ½, 1, 2 and 5 lb
Magic Cake- Cherry Flavor.2, ½, 1, 2 and 5 lb
Magic Cake- Banana Flavor.2, ½, 1, 2 and 5 lb
Magic Cake- Peanut Butter Flavor.2, ½, 1, 2 and 5 lb
Magic Cake- Pumpkin Flavor.2, ½, 1, 2 and 5 lb

Figure-2:        Product Item for Business

 MANAGEMENT ASPECT
1.      Corporate Set – up: 

Magic Cake is a partnership business. In our project “Magic Cake” is a cake and pasty manufacturing organization. The Managing Director of the proposed project is Tahmina Akter Tani and the Director is Mahmuda Sultana Tania. The particular of Board of Directors:

Name of the Directors
Extent of Shareholding
Status
Tahmina Akter Tani                                                                                                                                                                             
30%
Managing Director
Mahmuda Sultana
40%
Director
Mr. X
30%
Brand Ambassador
Figure-3:        Board of Directors
We expected that, we have enough ability to do well in our business. And we are very      much hopeful because our Brand Ambassador Mr. X is a star cricketer in Bangladesh.
2.      Legal structure of the proposed company:
The managing directors of the company select a structure about the power of selected   employee. The structure will follow a chain of commend rules. Here manager will get  supreme power of the company. But every important issue will submit to the board of      director. Where Managing director, departmental head and also adviser must have the right to give the opinion.

Magik cakeTECHNICAL   ASPECT

1.      Project Land & Location:

We try to form a Partnership business, which create a renowned brand. And for proper distribution of our product we will made seven factories in different location of our country. These are:

                                                                                                                   Tk: “000”

Sub Project Area

Location

Area of Land

Tk. Per Katha

Total Cost (Tk.)

Project 1House 12, Road 16, Uttara, Dhaka.

Head office of “Magic Cake”5 Katha

6,000,000

30,000

Project 2Banani Bazar, Banani, Dhaka.5 Katha (1 floor)

2,800,000

14,000

Project 3Road 27, Dhanmondi, Dhaka.5 Katha

2,750,000

13,750

Project 4Rose Vally Road, Sylhet10 Katha

720,000

7,200

Project 527 Agrabad, Chittagong10 Katha

500,000

5,000

Project 6Labpni Sea-Beach, Cox’s Bazar10 Katha

300,000

4,500

Project 7Nogor Vabon Road, Rajshahi.10 Katha

262,500

2,625

Total

 

          77,075

 

 

Figure-5:        Land Cost per Project

2.      Buildings:

For this business we need building or factory. That’s why in every project we should make 2 or 3 stories building. What we used for store room, production room, managers room, guest room, garage etc.

                                                                                                Tk: “000”

Sub Project AreaStoreyTotal Cost (Tk.)
Project 13 Storey

7,000

Project 21 Storey

4,000

Project 32 Storey

3,050

Project 43 Storey

3,000

Project 52 Storey

2,500

Project 62 Storey

2,500

Project 72 Storey

2,000

Total

 

24,050

Figure-6:        Building Cost per Project

3.      Machinery & Equipment:

            For this project we need foreign and local machinery. We will purchase our foreign            machinery from Italy. The machinery purchase from Italy, are:

                                                                                                                                    Tk: “000”

Machine NameCost Per MachineQuantityTotal Cost
Auto Oven

5,200

10

50,200

Auto Machine for Steam

2,500

7

1,750

Auto Machine for Color Layer

220

8

1,760

Auto Machine for Mixture

180

7

1,260

Fizzer Machine for Store

800

7

5,600

Total

  

60,570

Figure-7:        Machinery & Equipment Cost

 

  • The total imported duty is (60,570,000*9%) 5,451,300 Tk.
  • We also purchase some local machinery which takes more then 15,600,000 Tk.
  • There has some installation cost of Tk. 23,700,000 (7 projects).
  • The amount of IDCP is 2,691,639 Tk.
  • The total amount ofMachinery & Equipment is 108,012,939 Tk.

 4.      Sub contract:

            We also involve in some sub-contract. The main elements of sub-contract are:

  • Cover Box
  • Cake Board
  • Sticker or paper cover
  • Carton for packet
  • Dresses of employee

 Marketing Analysis

1.      Justification of setting up the business:

The demand of the Cake and Pasty in Bangladesh is increasing day by day. Because of, the economical situation and the total GDP of Bangladesh is growing up. It is indicate that our total income level is stronger then previous time. As a result when the income level of a country is increased then we can say that, the demand of luxury product is also increased. Due to our income level situation, a branded Cake and Pasty is not luxury for us. And the demand of ice cream is increasing rapidly. So we belief that set up an ice cream factory is a good decision for us.

 2.      PEST Analysis

  • Political Analysis:

The political situation of Bangladesh is not enough good. The rules and regulations are always changed by changing a political leader. Moreover, Hartal, hindrance, procession and meeting in the road are also a big threat for the organization. As a result, it will very tough for the organization to predict the actual yearly revenue. But it is a matter of hope that, now a days political restless situation is decreasing day by day. And also government takes some initiative against Hartal, procession and meeting.

  • Economical Analysis:

The economical situation of Bangladesh is not so good. There is huge economical discrimination. In the upper class people of city area, the per capita income is very much high where our average per capita income is below 700$. In the rural area people have a very few knowledge about technology and the new food item and flavor. Moreover their income level is very much low. And that is why upper class people is our main target consumer.

  • Social Analysis:

Bangladeshi people are very much voluptuous. So Cake and Pasty is not a segmented product in Bangladesh. All classes of people have the ability to purchase an ice-cream. So we segmented our product price by depending on consumer expenditure level. As a result we think that consumer will like our product. School going children always like to take an Cake and Pasty in their leisure period. And we also try to give a shape of our Cake and Pasty box as a gift pack like birthday cake.

  • Technological Analysis: 

Bangladesh is a developing country. So it is very tough for us to get all kind of technological support from Bangladesh. Moreover there have some shortage of skilled engineer for solving the technical problem. As a result we are bound to purchase our machinery from abroad.

  1. 3.      Cake and Pasty factory and its growth:

The growth of Cake and Pasty factory is stopped in Bangladesh. Because some leading Cake and Pasty factory (Coopper’s, Hot Cake, Mr. Baker and Bakeman ) dominate the Bangladesh Cake and Pasty market. And there are also some small factories. But they are surviving in this sector.

CompanyMarket Share
Coopper’s

30%

Hot Cake

21%

Mr. Baker

15%

Bakeman

10%

Others

24%

Total

100%

Figure-8:        Cake and Pasty Factories Growth in Percentage

4.      SWOT Analysis:

4.1 Strength4.2 Weakness
  • Strong Distribution channel
  • Shortage of enough experience
  • Owner’s equity is not very much strong.
  • A new brand
  • Human resource are not enough skilled
  • Market analysis report are not enough effective.
4.3 Opportunity 4.5 Threat
  • Brand name which can easily create a strong position among the young generation mind.
  • Only few companies captured our total market. 
  • Coopper’s
  • Hot Cake
  • Mr. Baker
  • Others branded cake manufacturer.

Figure-9:        SWOT Analysis for Business

  1. Demand & Supply Analysis of Cake and Pasty industry:

The demand of branded cake in urban area is very much high then the people of rural area. Urban areas people are very much concern about brand. 33% rural people cannot aware about a brand cake where more than 92% people in urban areas people are very much concern about the brand of a cake. So we can say that, in urban area we have Fixed 8% and in rural area 33% consumer can divert into our product, if we can full fill their demand easily. Without these in many area of Bangladesh people cannot purchase an ice cream because of the high price. So, we will provide an economy price for the people of the rural area.

 

Area/Location

Cake and Pasty Brand Market Share

Igloo

Polar

Savoy

Others

Urban Area

56%

24%

12%

8%

Rural Area

40%

22%

5%

33%

Figure-10: Market Share of Different Brand

6. Detail Information on Local Supply:

In Bangladesh the raw materials of cake is available. And the supplier company also ensures the quality of the raw material. The dealer of sub contract organization also ensured the quality of the product. But the availability of machinery of cake is not available in Bangladesh. So for setting up an ice cream factory it is necessary to purchase machinery from abroad.

  • Supply Gap:

In the below we mentioned about the demand, supply and supply gap Cake and Pasty in Bangladesh. Last year the demand of Cake and Pasty was 31,025,000 lb, where the supply was only 17,680,000 lb. As a gap result were 13345. And the gap is increasing day by day.

                                                                                                            lb: “000”

YearDemand SupplySupply Gap
2007 – 2008

25550

15300

10250

2008 – 2009

31025

17680

13345

2009 – 2010

36498

20060

16438

2010 – 2011

42454

22178

20276

Figure-11:           Supply Gap of Ice-cream

  • Present & projected market demand of the project ‘Magic Cake’:

                                                                                    lb: “000”

Year

Demand

2007 – 2008

25550

2008 – 2009

31025

2009 – 2010

36498

2010 – 2011

42454

Figure-12:           Present & projected market demand

  • Present & projected Supply of the project ‘Magic Cake’:

                                                                                    lb: “000”

Year

Supply

2007 – 2008

15300

2008 – 2009

17680

2009 – 2010

20060

2010 – 2011

22178

Figure-13:           Present & projected Supply

  • Present & projected Supply Gap of the project ‘‘Magic Cake’:

                                                                                                                                                lb: “000”

YearDemand SupplySupply GapOur ContributionReal Gap
2007– 2008

25550

15300

10250

—-

10250

2008 – 2009

31025

17680

13345

—-

13345

2009 – 2010

36498

20060

16438

—-

16438

2010– 2011

42454

22178

20276

15000

5276

Figure-14:           Present & projected Supply Gap

Network Technique

In our project we have a lot of small work. And some works dependent works and some are independent works. Our project work is given below by network diagram.

                        Task                                         Predecessor                 Time (days)

            A1- Land Purchase                             ———                         30

            B1- License for Business                    A1                               20

            B2- Other Paper                                  A1                               15

            B3- Building Design                           A1                               20

            C1- Construction                                B3                               120

            C2- Insurance Policy                           C1                               10

            C3- Foreign Agreement                      C1                               30

            C4- Construction of PDB                   A1                               60

            C5- Vehicle Purchase                          A1                               15

            C6- Safety equipment purchase          C1                               7

            D1-Machinery Important                    C1                               60

D2- Purchasing Local Machinery       C1                               30

            D3- Machinery Installation                 D1, D2                                    30

magic cake 1Financial Analysis

1.      Fixed Cost of the Business:

                                                                                                                                                                Tk: “000”

Item

Local Cost

Foreign Cost

Total

Land(7 project: Table 4)          

77,075

 

77,075

Building

24,050

 

24,050

Imported Machinery

60,570

60,570

Imported Duty

5,451

 

5,451

Installation Fee

23,700

 

23,700

IDCP

2,691

 

2,691

Local Machinery

15,600

 

15,600

Vehicles

77,000

 

77,000

Furniture

2,200

 

2,200

Computer

9,800

 

9,800

Office Equipment

700

 

700

Safety Equipment

350

 

350

Deposit to PDB

550

 

550

Pre-operating Expense

400

 

400

Consultancy Fee (0.75% of the Project Cost)

 

2,251

Initial Investment of the Business:

 

 

302,388

Figure-18:      Fixed Cost of the Business

  • Deposit to PDB:

                                                                                    Tk: “000”

Sector

Cost

Gas

140

Water

100

Electricity

180

Telephone

80

Internet Line

50

Total:

550

Figure-19:      Cost of PDB

2.      Financial Plan for Business:

                                                                                                                                                                Tk: “000”

 

Item

Bank’s Investment

Client’s Equity

Total

Amount

%

Amount

%

Amount

%

Land

77,075

100

77,075

100

Building

19,240

80

4,810

20

24,050

100

Imported Machinery

78,550

85

13,861

15

92,412

100

Local Machinery

7,800

50

7,800

50

15,600

100

Vehicles

57,750

75

19,250

25

77,000

100

Others

16,251

100

16,251

100

Total

163,340

 

139,047

 

302,388

 

Figure-20:      Financial Plan for Business

3.      Means of Finance:

Bank’s Investment –             163,340,998       (54.02%)

Client’s Equity –               139,047,975           (45.98%)

Total:                                302,388,973           (100%)

           

4.      Debt Equity Ratio:

Debt-Equity Ratio = Bank’s Investment / Client’s Equity = 54.02: 45.98

5.      Syndicate Finance:

Dhaka Bank is going to participate 55% of total loan amount. It hires One Bank and NCC Bank to for a syndicate for sanctioning the loan. The Co-arranger banks will participate the loan amount by using ratio 6:4

magik cake 2

Figure-21:      Lead arranger & Co-arranger

  • Syndicate Finance in Percentage:

                                                                                                Tk: “000”

Bank Name

% in Syndicate Finance

Amount

Dhaka Bank

55%

166,313

One Bank

27%

81,645

NCC Bank

18%

54,430

Total

100%

302,388

Figure-22:      Bank Investment in Syndicate

Cost of Goods Sold:

                                                                                                                                                Tk: “000”

Item

Total

Raw material cost

41,157

Wages & salaries 

26,340

Depreciation

21,721

Total

89,218

 

Figure-23:      Cost of Goods Sold

Sales Estimate:                                               Tk: “000”

 

 

Product Name

Description

Love (per Peace)

Quantity

(Per day)

Total

(Annually)

Magic Cake- Milk Flavor

14.00

5000

21000

Magic Cake- Chocolate Flavor

11.00

4000

13200

Magic Cake- Strawberry Flavor

10.00

4000

12000

Magic Cake- Lemon Flavor

20.00

3000

18000

Magic Cake- Orange Flavor

07.00

5000

10500

Magic Cake- Mango Flavor

23.00

1500

10350

Magic Cake- Fruit Coktle

60.00

1500

27000

Magic Cake- Cherry Flavor

110.00

2000

66000

Magic Cake- Banana Flavor

205.00

250

15375

Magic Cake- Peanut Butter Flavor

490.00

50

7350

Magic Cake- Pumpkin Flavor

16.00

1000

4800

Total

205575

Figure-24:      Revenue from Sales

Raw Material Cost:                                                  

                                                                        Tk: “000”

Item

Amount

Flour

28,850

Butter Oil

5,300

Egg

2,001

Different Bourbon Flavors

3,006

Others

2,000

Total

41,157

 

Figure-25:      Total Cost of Raw Materials

 

  • Subcontract:

                                                                                                            Tk: “000”

Sl. No.

Subcontract

Total Cost

1Cake and Pasty box

9,120

2Stick of Ice-Cream

2,250

3Sticker or paper cover

3,795

4Carton for packet

5,500

5Dresses of employee

360

 Total:

21,025

 

Figure-26:      Purchasing Price from Subcontract

 1.      Wages and Salaries:

                                                                                                                        Tk: “000”

Description

Persons

Salary (individual)

Salary (annually)

Managing Director

1

42,000

504

Manager

8

30,000

2,880

Top level employee

22

22,000

5,808

Mid level employee

30

18,000

6480

Driver

22

14,500

3,828

Distributor

22

10,000

2,640

Lower level employee

50

7,000

4,200

Total

26,340

Figure-27:      Wages & Salaries Expenses

Depreciation Schedule:

                                                                                                                                                Tk: “000”

Item

Cost

%

Total

Land

77,075

Building

24,050

5%

1,202

Machinery

108,012

8%

8,641

Vehicle

77,000

15%

11,550

Furniture

2,200

12%

264

Computer

320

20%

64

Total             

 

21,721

Figure-28:      Depreciation from Fixed Asset

Administrative Expenses:

                                                                              Tk: “000”

Item

Amount

Wages & Salary

48732

Subcontract

21,025

Bill of PDB

4500

Others

500

Total

74757

Figure-29:      Administrative Expenses

Financial Expense:

                                                                                                                                        Tk: “000”

Item                        Amount                                 % of rate                                   Interest 

Bank loan                 163,340                                       12%                                     19,600

Earning Forecast:

                                                                                                                        Tk: “000”

Description

Amount

Revenue earning

205,575

(-) C.O.G.S

89,218

Gross Profit

116,357

(-) Adm. Expense

74,757

Operating Profit

41,600

(-) Financial Expense

19,600

Net Profit Before Tax

22,000

Tax Holiday

00.00

Net Profit After Tax

22,000

Figure-30:      Net Profit Analysis

Social Cost Benefit Analysis

 1.      Social Cost:                                                                            Tk: “000”

Items

Private Angle

Economic Angle

Imported Machinery

92,412

92,412

Local Machinery

15,600

15,600

Vehicles

77,000

77,000

Furniture

2,200

2,200

Computer

9,800

9,800

Office Equipment

700

700

Safety Equipment

350

350

Cake and Pasty cost

41,157

90,150

Subcontract

21,025

21,025

Salary and Wages

26,340

25,000

Others

550

550

Total

260,794

309,787

Figure-31:      Social Cost Analysis

 2.      Social Benefit:                                                                        Tk: “000”

Items

Private Angle

Economic Angle

Foreign Currency

92,412

92,412

Backward Linkage

127,225

21,025

Contribution to GDP

——-

26,340

Local Demand

205,575

205,575

Total

425,212

345,352

Figure-32:      Social Benefit Analysis

 3.      Net Benefit:

Private Angle              : 425,212 – 260,794 = 164,418

            Economic Angle         : 345,352 – 309,787 = 35,565

Conclusion

From the above analysis we can easily say the project of Magic Cake is going to successful one. The min objective of every is to earn profit by fulfill the demand of customers but in case of our business the first objective is social benefit. And we ensure social benefit through our product quality and supply testy and healthy items. From the market analysis we can see the  demand of our product. We also ensure

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