Marketing Plan on PRAN Ice Cream

Executive Summary

PRAN Group was born in 1980, is the largest processors of fruits and vegetables in Bangladesh. At present PRAN group is doing business with PRAN  juice, water, pickle and jam jelly, confectionary, Dairy products and drinks. As an extension of its business PRAN’s management authority has decided to introduce a Guava Grape flavored ice cream named Ripple milk bar in addition to drinks and water. PRAN’s new product is entering a market place crowded with offering from Igloo, Polar, Quality, Savoy, and other ice cream manufacturers. PRAN has been around for many years becoming popular in all districts in Bangladesh.

Ripple milk bar much different than a traditional ice cream in that it is made by a small counter top machine rather than grinding it like a sno-cone machine, which results in ice so fine that it rivals real snow! The snow is then placed in bowl or cup or mug or box, supplied from handicrafts marketing project, which may be used as a showpieces and filled with high quality tropical fruit flavor. Since the syrup is absorbed into the snow, it must be eaten with a spoon instead of a straw.

Because Ripple milk bar is so tender and made with the thickest, best tasting tropical fruit flavors, adults and children of all ages and ethnic background prefer it.

As a marketing executive of PRAN I am assigned to prepare a marketing plan for a ice cream and following sections are covered with a hypothetical financing plan for the coming year.

Current marketing situation:

In Bangladesh there are two types of ice cream producer. One type of producers is producing quality product, considering the demand of upper class people of the society. On the other hand there are some other types of producers who are located in the local areas of Bangladesh considering the demand of the rural area’s low-income people. They are usually habituated having ice cream for TK 1 or 2. So PRAN mainly targets former market segment of the society. And as a marketing executive of PRAN group I am analyzing the current marketing situation of the quality ice cream producers.

In ice cream industry, as a leader IGLOO is dominating higher market share of 34 percent, offering 1000000 units of ice cream per year. As a market challenger Polar is dominating 28 percent market share, offering 700000 units of ice cream per year. Ice cream made by other company like Milkvita, Quality, Savoy etc. currently account for less than 15 percent market share.

In spite of the intense competition, PRAN can rely on the numerous strengths, which are mentioned in the SWOT analysis.

Opportunity and issue analysis:

The overall evaluation of a company’s strengths, weaknesses, opportunities and threats is called SWOT analysis. SWOT analysis helps explore the areas of possible changes in marketing activities. A brief discussion of PRAN’s internal and external environment is as follows:

Internal environment analysis:

Every business organization needs to analyze its internal capabilities for developing strategy that it in line with its mission. To fulfill its mission, PRAN is committed to capitalize on its key strengths and overcome its major weakness. The strengths and weaknesses of PRAN ice cream is summarized below:

SWOT Analysis of PRAN ice cream:

Strengths:

  •        PRAN has a great company reputation.
  •        Domestically brand image.
  •        Customer loyalty.
  •        Availability of capital.
  •        Use of modern technology.
  •        Financial stability.
  •        Achieved HACCP Certification for food safety.

Weaknesses:

  •        Insufficiency in information system for efficient supply chain management
  •        Insufficiency in distribution channel management
  •        Lack of promotional programs
  •        They may suffer from geographical coverage

External environment analysis:

Monitoring the trends of micro and macro environmental forces is also a key concern for management of any organization to avoid the major threats and gain advantages of promising opportunities. The major opportunities and threats of PRAN ice cream are given below:

Opportunities:

  •        Increasing demand of ice cream
  •        Increasing rate of population
  •        Mature retail market in Bangladesh
  •        Expanding awareness of people towards quality foods
  •        Increasing demand for fast food shop in the city.
  •        Availability of raw materials
  •        Introduction of advance technology
  •        Imposition of higher tax rate on small business enterprise
  •        Possibility of economic depression

Threats:

  •        Too many ice cream manufacturers in the market
  •        Introduction of advance technology
  •        Imposition of higher tax rate on small business enterprise
  •        Possibilities of economic depression
  •        Legislation to reduce number of ice cream factory

PRAN’s objectives:

  •        Earn annual rate of return on investment of 15 percent after taxes over the next five years.
  •        Produce a net profit of at least TK l,00,00000 by the next three years of operation with a target profit margin of 10 percent on total sales revenue’ of Tk 100000000.
  •        Achieve first year total sales revenue of TK4,50,0000, based on an average price of TK.100 per unit.
  •        Sell 20 different tropical and Mexican flavored ice cream.
  •        Sell other products such as drinks and milk products.

PRAN’s MISSION:

PRAN will produce and sell Ripple milk bar with 20 different flavored ice creams to consumers in Bangladesh. Retail customers will be in the middle- to upper-income people, and will range in age from children to adults.

MARKETING STRATEGY:

PRAN has- decided to market Ripple milk bar all over the country especially in the city areas. It considers both sides the customer side and the business side. On the customer side the target market is middle to upper class people. On the business side the target market is small to large size retail shops that want to help their products stay in touch.

PRAN’s overall marketing strategy will be to create an image of offering the highest quality snow cream all over the County. The business will be located in a high traffic area of the city. Customers will be reached through advertisements such as magazines ads, newspaper ads; and through its grand opening ceremonies.

A special marketing program will also be incorporated by offering special coupon prices for nearby restaurants, motels, city pool, the shops, and the bus stations to customers who purchase any product at PRAN.

A highlight of PRAN’s marketing strategy:

Positioning strategy:

Consumers typically choose products and services that give them the greatest value. In that sense PRAN has decided to use more for less positioning strategy. It will introduce better quality product at comparatively lower price for a given level of performance. PRAN claims that its Ice milk provides the best tent and everyday low price. It likes to position as a testy and supper saver for all family and individual users.

Product management:

Raw Ripple milk will be packed in an air and heatproof box, mug, cup or bowl. Finished bar will be stored in freeze with great care until served to the customers. A spoon will be given within the box for easy use. As all the existing ice creams are melted when they come with the heat, so to solve this problem is used chemical which makes it intact until consumption.

Main products to be sold through the PRAN will be ice cream topped with tropical and Mexican flavored in three main sizes: small, medium, and large.

Product description (Raw materials):

One major product will be sold through PRAN ice cream which will include Ripple milk bar topped with tropical and Mexican flavored syrups Twenty different tropical and Mexican flavored syrups will be sold and include the following(Raw materials):

Wild Watermelon, Pina Colada, Pint Lemonade, Cherry Jubilee, Root Beer, Kiwi, Strawberry, Blue Bubble Gum,Raspberry Red, Luscious Lime, Bodacious Banana, Tamarindo, Jamaica, Hortacha, Melon, Papaya, Manzana, and Limon.

Ripple milk bar will be manufactured in an automatic machine imported from Germany. Ingredients included in the Ripple milk bar are:

Flavor, syrup, sugar, vegetable fat, milk fat, food grade color and milk solids.

Pricing Strategy:

PRAN will use cost based pricing strategy. In case of cost plus pricing it will add a markup to the cost of the product. Different prices for different bar. In market consumers will be offered three sizes Ripple milk bar such as small, medium and large.

PRAN will be offered at the following prices:

       Small TK 100

       Medium TK 150

       Large TK 250

Distribution Strategy:

PRAN will be used marketing intermediaries to bring Ripple milk bar to market. It will use a distribution channel like:

In the city area PRAN will sell Ripple milk bar by using small pickup van for commission basis. Major marketing will be conducted through newspaper, magazine advertisements, TV ads. and local retail shop distribution during the first three months of operation.

Sales strategy:

Sales strategy will be directly linked to marketing programs since all sales will be through the business facility only. Consumer sales will start in April 2007 (or sooner if construction is completed before the targeted date) with a grand opening anticipated by then.

Marketing communication mix includes advertising, sales promotion, personal selling, public relation and direct marketing .In that sense PRAN will create an advertising campaign to build brand awareness and differentiate the product from competitors, use trade promotion to support distribution strategy, and develop a high profile product launch strategy to generate publicity and media coverage.

PRAN has conducted a marketing research for understanding the market situation of ice cream. It will also conduct marketing research to measure brand awareness before, during and after marketing campaign, study consumer satisfaction and identify opportunities for future product development efforts.

ACTION PROGRAM:

PRAN ice cream will carry out its marketing strategy and achieve its objectives through a variety of scheduled programs. At the beginning stage PRAN plans to initiate a TK 500000 trade sales promotion to educate dealers generate excitement for the product launch in the next year. As part of this trade promotions PRAN takes following initiatives:

  1. Lea (let distribution to consumers’ homes).
  2. Newspaper advertisements will be purchased during the first three months of business until a image is built.
  3. PRAN will offer discounts to recreational groups such as children/adult cricket teams and football teams who play in nearby facilities.

4.      Promoting products for an introductory price at its Grand Opening.

5.   PRAN will “adopt a school” and provide to individuals who are selected for having excellent attendance, good grades, and good citizenship. Other incentives will include sponsoring a good attendance program by purchasing a bike and raffling it to students with the best attendance. This will be a promotional strategy to encourage business.

We want to finance growth mainly through cash flow. We recognized that this means we would have to grow slowly. Monthly sales are the largest indicator for this business. There are some seasonal variations with the months of match through September being the highest sales months.

General AssumptionsYear   2006
Current interest rate

13.50%

Long term investment rate

0.00%

Tax rate

25%

Others

0

A hypothetical financial plan of PRAN ice cream is given below:

Income statement

For the year ended 31st December 2007

Narration

2007

 

Revenue from sales

Gross Revenue

Taka

Taka

45000000

45000000

Cost of goods sold 

31800000

Gross profit 

1320000

Operating expenses:

Rent

Sales and distribution

Administrative salary

Miscellaneous

Advertising expense (13200000*10%)

Depreciation

Total Operating Expense:

 

1000000

912000

366000

320000

1320000

75000

3993000

Operating Profit Before Interest and Tax:

(-) Interest expense

Operating Profit before tax

(-) Income tax 25% on profit before tax

Net Profit

 

9207000

1200000

8007000

2001750

6005250

Profit and loss statement

For the year ended 31st December 2007

Narration

2007

 

Revenue from sales

Other revenue

Gross Revenue

Cost of goods sold

Gross Profit

Taka

Taka

45000000

0.00

45000000

33400000

11600000

Operating expenses:

Rent

Sales and distribution

Administrative salary

Miscellaneous

Internet expense

Depreciation

Advertising expense (12600000*8.5%)

Total Operating Expense:

Profit before tax

Income tax 25% on profit before tax

 

1000000

60000

366000

320000

3000000

75000

1071000

 

6432000

5168000

1292000

Net Profit 

3876000

Balance Sheet

Fort the ended 31st December 2007

2007

Taka

Taka

1. Current Assets

Cash and Bank

(Less) Payments (Total operating expense-Depreciation)

Net Cash and Bank

Accounts Receivable

Inventories

Total Current Assets

18000000

6357000

44000000

1600000

11643000

4560000

57243000

2. Fixed Assets

Equipments

(Less) Depreciation

 

 

Investment

Total Fixed Assets

Total Assets (Total current assets + Total Fixed Assets)

750000

75000

675000

9000000

9675000

66918000

Liability and owner’s equity

Taka

Taka

1. Current liability:

Accounts payable

(Less) Income tax

2. Long Term liability:

Bank Loan

Owner’s Equity:

Capital

Retained earnings

 

Total Liability and owner’s equity

33000000

1542000

102500

416000

34542000

18000000

14376000

96918000

 IMPLEMENTATION CONTROL:

This marketing plan includes a detail budget, schedule and managerial assignment for every action program. Keeping mind that a great marketing strategy can be sabotaged by poor implementation, marketing executive of PRAN has taken necessary steps for implementation. For control purpose this plan follows month-by-month comparison of actual versus projected sales and expenses.

PRAN Ice Cream