This is a marketing plan of a new product called CHEW-DEN. Four rising entrepreneurs have established a new company Leading India Pvt. Ltd. They want to be the market leaders in health related consumer products. The first product that is to be launched is a chewing gum called CHEW-DEN which would not only provide long lasting freshness but also provide dental care. According to research the chewing gum market is India is huge and is growing day by day. There are few International companies that are doing very good business India like Wrigley’s and Perfetti but our new product has few special ingredients that make CHEW-DEN the healthiest chewing gum in the market. We want to offer very reasonable prices similar to other available products in the market.
2. Mission Statement
We want to produce and market health beneficial and high quality products for customers and provide them value for money.
3. Situation Analysis
Leading India Pvt. Ltd is a new company established by four rising Entrepreneurs (Avik, Millind, Mayank, Fasi). The company was set up in 2009 as an inspiration to promote a Healthy India. The main focus of the company is capturing the consumer market with different health related products.
As of now the company is working on mouth freshener chewing gum, CHEW-DEN, which is helpful in controlling tooth decay and bad breath.
Leading India has its production plant at Uttarakhand and also a distribution center at Delhi, India.
Our current product is Chew-Den, which is a chewing gum specially made for oral care and long lasting fresh breath. Our product is different from all other products in the market because of the addition of few special ingredients that makes our product the healthiest chewing gum. The product will have a value as mouth freshener and in tooth decay prevention.
Indian market includes hard-boiled candies, toffees, sugar-based candies and gum based products.
The global market continues to grow, despite of the fact that certain sectors of the confectionery industry have reached maturity in many parts of the world. Most of this recent growth has come from developing regions and countries by growing base of increasingly affluent consumers in places such as Russia, China and India. In the developed world, much of the market’s recent growth can be attributed to sectors, such as low-fat, low-sugar and organic products. New product innovation remains critical to future success within the industry, with many of the world’s leading suppliers investing heavily in this area.
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Size of the Gum Market in India
India has one of the fastest growing gum categories worldwide. According to AC Nielsen, the size of India’s total gum category is around Rs 1,000 crore. Chewing gums and bubble gums account for approximately 44% and 56% of the category respectively. In India the bubble gum segment is larger than the chewing gum segment, whereas in the rest of the world it is the other way round.
According to the Nielsen report, in 2008 the gum industry in India was growing at about 20% per annum.
The $122 billion gum market is growing by 3 per cent a year, a decent rate for food but within that, sales of sugarless gum are rising by 15 per cent a year. The magic ingredient in modern sugarless gums is Xylitol, a sweetener made by a Danish firm from silver-birch pulp. A study in the Journal of Medicine found that Xylitol cuts tooth decay by 70 per cent by inhibiting growth of oral bacteria. The sweetener is central to a battle in Asia to find the next cure-all gum.
The gum category in India is growing at a healthy 20%.
Market Segmentation (Age wise) pie-area
Market Segmentation (Area wise)
If we look at the per-capita consumption of chewing gum in India it is only 8 per year as compared to 2000 per year in U.S.A & 1000 in Russia. Market share of gums has increased by 20% in 2008.The current size of the Indian chewing gum market is estimated to be about 1000 Crores (INR) and it provides wide opportunities to new arising companies. It has risen as the new style-of-living market having great market potential.
According to the survey, more emphasis can be given to the west zone but other areas are also potential market. The target customers are youth and our target market also includes people who belong to middle-middle and upper-middle class families as confectionary items specially chewing gums are normally luxury items.
After the market segmentation, our next task is to identify the competitors of our company. After analyzing the market we came to know that Perfetti is our major competitor. Because “Happydent” the product produced by Perfetti is providing some similar substances as in Chew-den at almost same cost.
Analysis of Perfetti
The Indian confectionery market is divided in three categories: Candies and toffees, gums and mints. Perfetti’s advantage is that it is the only company with products for each of the three categories. Perfetti puts humour (Mentos and Center Fresh), emotion (Alpenliebe), bizarreness (Happydent and Chloromint) and fun in liberal measures in all its commercials. One way to create a difference in the mind of consumers, Perfetti has realized, is to coin taglines for all its flagship products. Like, there is “Zubaan par rakhe lagaam” for Center Fresh, “Dobara mat puchna” for Chloromint and “Dimag ki batti jala de” for Mentos. These are all expressions borrowed from everyday usage of the youth, who are bulk of the confectionery buyers. Perfetti have also done a clever thing by giving its products to retailers in plastic jars. This makes life convenient for the retailer and gives the company the opportunity to place its brands prominently at the outlet.
The Perfetti is looking for maximizing its profits, sales growth and market share. Perfetti also intends to work for children, to provide health service and to impart vocational training. Their aim is also to target the youth through advertisements that involves a fun and happy-go-lucky attitude.
The biggest strength of Perfetti is that it has already broadened its market by launching products in different categories. The other one is that it has more market knowledge and a good position in market. The company already has a established name in market and holds a 40% of market share of confectionary segment.
The company is providing all the benefits to the customers but their product is not able to protect the teeth from teeth decay and mouth odour.
As we are new in the market so we do not have a huge number of market share. Thus we will be looking for making our market share. That’s why we come under the market follower category. Our company comes under the category of imitator because we will provide our product with some differentiation factor of packaging and advertising. So our primary aim is to make a value in the market and making the maximum profit by establish our product by acquiring customer satisfaction.
Threat of intense segment rivalry: Wrigley’s, Perfetti
Threat of new entrants: both entry and exit are high
Threat of substitute products: candy like chloromint, Mintofresh
Identifying competitors: Wrigley’s, Perfetti van de melle, Cadbury and many more
Creating customer value & satisfaction
In our business a customer can easily switch the brand because the product price is not high. So our prime motive is to maintain healthy relation with customers by providing them best quality product and services in this segment.
Customer perceived value
It is the difference between the prospective customer’s expectation of all the benefits and all the costs of an offering and the perceived alternatives.
We will offer price as per the market and add cloves, Xylitol and cardamom as ingredients which helps in tooth decay and breathe freshening. We will maintain supply chain management to create a value delivery network. We will do survey on monthly basis initially to know the customer perception about our product.
Other Macro-environmental Forces
People from all age group in terms of size, location, age, gender, occupation, consume Chewing Gum.
Social and Cultural environment
Made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviours.
Allows the existing products to be made more cheaply and thereby expanding the market for such products by lowering down prices.
Allows new and easy methods of distributing goods. It also provides new opportunities to communicate with the targeted customers.
Consists of laws, government agencies and other groups that influence or limit various organizational activities.
Long Lasting Freshness.
Strong SCM (Supply Chain Management).
High Quality and Value for Money.
New in the Market.
Growing chewing gum market of India.
People have become more health conscious.
International competitors like Wrigley’s and Perfetti.
Popularity of substitutes like candies like Chloromint.
New market entrants.
Penetration into the target market – we should use promotional tools like personal selling tools, participate in college fairs to spread awareness and advertise in health magazines such as prevention, men’s health.
Financial stability – we have contingency plan in case we run out of funds, additional $ 2,000,000 is in the reserve to keep the company rolling.
Human resource factors – Loss of key personnel can delay the goals of marketing plan. In fact, we should add an additional member to the marketing plan to ensure success.
Competition – There is intense competition in the chewing gum market as international brands like Perfetti and Wrigley’s already exist.
Imitations – In India, duplication and adulteration of brands exist. Our packaging will have a unique hologram that will control duplication.
4. Marketing Objectives
Evaluate the needs and requirements of consumers through different surveys
Select targeted market (consumers)
Increase product awareness among the targeted audience by 20-30 % every year through effective promotional tools.
Inform the targeted consumers about the features and benefits of our gum products
Maintaining healthy competition in the perfect competition market.
5. Marketing Strategies
a. Target markets
Our main target is the fast growing gum market in India. We want to target the main metropolitan cities in India like Mumbai, Delhi, Kolkata, Bangalore, Chennai, Hyderabad, Ahmedabad and Pune.
b. Product strategies
Our main focus is to offer a product that would be having all basic qualities of the chewing gums available in market plus it would also offer oral care. The product would be available in 6gm in form of strips and 2 gm in pouch form.
c. Pricing strategies
We would offer real value for money for our customers. We would offer 9-10% margin to the retailers and 12 to 14 % to the wholesalers.
The product will be available in pillow packets at Rs.1 and in 6 strips pack of Rs.5.
d. Promotional strategies
For promotion of CHEW-DEN we would like to start awareness through newspaper, posters, hoardings, television advertising and F.M radio broadcasting.
We are also looking to tie up with Indian Premier Cricket League and other sporting events in India.
6. Financial Projections
Break-even analysis is a technique, mainly used by production management and management accountants. It is a method of categorizing production costs between the variable costs that change according to the number of units produced and fixed cost which is not directly related to the volume of production.
Here, total variable costs and fixed costs are compared with total sales revenue in order to determine the level of total sales volume at which the business neither makes a profit nor a loss. It is called break-even point.
Sales forecasting is the most critical process in business. It is one of the most difficult areas of marketing management. There are mainly two types of forecasting that can be described as macro and micro. Macro forecasting is more concerned about evaluating the present level of marketing demand for the existing products and forecasting the market demand of the same in future. Micro forecasting is concerned with determining the present number of units produced and forecasting sale of units in future. It is also about determining product’s market share in the industry and forecasting the position of market share in future. Sales forecasting process is mainly used to make the decisions regarding,
Labour force requirement
Investment required for increasing the production capacity
Evaluate the future demand of the existing products
Additional investment required to meet the expenses of new promotional activities for marketing the products in future.
Determining what will happen to the market share of the product in future.
Expense forecast is a must for every organization to evaluate the present investment on production cost and forecasting the relative increase in different costs in order to increase the production volume. Salaries, raw materials, business taxes, office rent, equipment leases, phone bills, postage and other expenses are associated with running a business. It mainly includes the forecasting of the following costs
Start up costs such as deposits, office furniture, leasehold improvements, signage, licenses and permits.
Variable costs such as raw materials, supplies, packaging and transportation. Direct labor costs, such as sales commissions, also fall into this category.
Fixed costs such as taxes, office rent, utility bills, phone bills, insurance, legal and professional fees, postage, supplies, salaries and advertising and marketing costs.
8. Evaluation and control
Leading India Pvt Ltd evaluations will be based primarily on meeting sales and market share expectations as described in the report. We will be conducting sales analysis after every 3 months to ensure that we are not deviating from our targets and accordingly changes will be made to our promotional budget. For each zone, sales team will be given fixed targets to achieve in order to maintain high standards within the organization. Company’s promotional schedule will be reviewed quarterly to meet its deadlines.
It is important for Leading India Pvt Ltd to meet total quality control. Leading India Pvt Ltd works
in accordance with government regulations in order to meet quality standards.
Such standards will be met through employees checking 2 in every 15 packets about similarity in taste and hygiene standards are maintained. Quality in charge and management staff will document progress in
order to continually improve quality of all production units.
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