Nestle Fruit Yogurt Company

Nestle Fruit Yogurt Company Abstract Nestle Fruit Yogurt is one of the famous product launched by Nestle all over the world. Most of the countries where Nestle has launched it, have accepted the product very well. This shows that product has potential and if marketed properly can do wonder by enhancing Financial statement profits for Nestle. Here we are making an analysis of UAE as Nestlà ©s future destination of launching Fruit Yogurt. In this study we are seeking financial, marketing and Resource planning of Nestlà ©s launching campaign in very first year. This analysis can help Nestle in making deciding whether to launch the product in Emirates and how to launch the product. Executive Summary A marketing plan usually provides a sound framework for development of marketing strategy for any product. There is a list of action items inclusive of objective, sales budget requirement, resource requirement etc. Its very relevant part of the total business plan. In our first submission, we had talked at length regarding cultural and economic analysis related to market and features of offered product. This project submission will be taking us forward from where we had left in the last assignment. Here, We will take closer look at the nuances of running a good business like understanding target market, designing suitable promotion strategy, having total overview of distribution marketing and production processes. The last part has explained in detail about the benefits of the Nestle Fruit Yogurt. It has also explained how it is suitable for UAE climate and how its launch in United Arab Emirates will make a new trend of having healthy snacks and lunch. We, in last part, also analyzed that the market condition of UAE and preference and desires of Emirates. Now, in this study, we are going to study how to market the product how will it work in the UAE.   We are going to analyze fully what will attract Emirates to our product. Traditional approach to look at any product that is based on marketing involves the understanding of: Financial data. Product data Sales and distribution data Advertising and sales promotion data We are going to approach this study in this traditional approach to make a detailed Market launch analysis of the product. (Yogurt) Marketing Plan Introduction Marketing Plan will analyze how to strategize the launch of Nestle fruit Yogurt in UAE. It will check out the advertisement, Promotion and Packaging plans for this new product. The detailed will work as the initial plan for the launch of the product in UAE and it will be subjected to change gradually as the sale will follow the expectation or will deviate from its initial plan. Marketing Objective Target Market Since Nestlà ©s fruit Yogurt will be totally new product in UAE and therefore is not well known. In our last submission, we had highlighted about specifically targeting the age group of 15-35.This was basically based on the consumption trend of this group. Expected Sales Sales objectives define the projected quantity of goods that can be sold. Hence it is very relevant for the success of businesses that realistic and achievable objectives should be set. We are expecting the total sale of 650 tonnages of Nestle fruit Yogurt in United Arab Emirates. Our expectation is very optimistic as it is nearly 60% of the total present market. Profit Expectation As we are planning to have 650 tonnages of sale in UAE, therefore we are expecting Nestle to have at least profit of 9% around on the product which comes in the range of 0.09 percent*650 tonnages *9463 AED per tonnage ~ 553,385 AED which is really decent as we can see that this is just a launch year. Promotion Mix Advertising Objective Main objective of advertisement is that it will be to drawing attention of the health conscious customers towards Nestle fruit Yogurt. Since the Nestle Fruit Yogurt belongs to premium segment where more stress will be provided to attract urban area customers who are willing to use something new. Actually if we start trying segmenting of the people of UAE, we can segregate UAE people into two major categories. One who usually prefers to have new products present in the market and these people are usually called experimenters. Other kind of category which tries to retain their own age-old family used brand which usually bar them from taking any new product. Seeing this, we need to make its Nestlà ©s image to look as fashionable and premium class. To make this image, we can try using some Hollywood star who can endorse our product and which is youth icon famous among Emirates.   Media Mix We are planning to use the media mix in such a way to approach every single people in Emirates to make them aware of this new product coming in the market. Since ours will be the first company launching this product on such a large scale in UAE therefore it can become a tough task to inform to educate consumers about health benefits and differentiation of our product from the entire existing product in the Emirate market. Hence we need to use below given promotion media mix: Kiosks Advertisement in magazines, television and newspapers. TV program. Banners Billboards. The way we are planning to make this promotion is to have it in various phases. Actually, In first phase, we are planning to have awareness program. Then in next phase we are planning to market the real product among the Emirates through use of hoarding, kiosks, banners and all the other media methods. Message Nestle Fruit Yogurt should be aiming to recognized as a healthy food product company. This company wants to be known as a firm which usually provides high quality health products. Idea will be to convey its young and premium image to the consumers. Message should be something similar to â€Å"Taste with Health!!!.. Try me!!†. Cost Advertisement TV Advertisement 40000 Newspaper Advertisement 20000 Kiosk Advertisement 10000 Magazine Advertisement 20000 Banners 10000 BillBoards 10000 Promotion 10000 Advertising Expense $ 120,000.00 Sales Promotion Objective The objective of sales promotion is usually to attract more and more consumer in the very first year. This will be done by the help of affordable micro packaging of size small as 100g. This will be the smallest container that should be available among the customer because tinier than this package can affect the brand image of Nestle which is the last thing Nestle company want to do. Premiums Premium is used in a way in order to associate our product with real use product needed by segment we are planning to target. Since here for Nestle fruit yogurt we are targeting premium segments youth who are really conscious about their health we can offer them some diet free sugar product. Coupon Other kind of consumer attraction tactics that usually comes when some new product is launched is the Coupon Tactics. Here with Nestle fruit yogurt we can plan to give some consumers who are winning lucky draw, a free gym coupon to some posh area gym. Cost Cost allotted with promotional strategy will be less only as company will be targeting more of awareness and less of sales. Therefore company will be stressing more on advertisement and less of promotion which appears from the budget itself which allots $10000 only for promotion activities. Personal Selling In the initial stage company is not planning to sell its product the personal selling as this will reduce the companys brand image which is really good considering the international brand image of Nestle. Other Promotional Method Promotional strategy which Nestle is planning is already mentioned. As of now, Nestle fruit Yogurt product will not be experimented using some strange and innovative promotional technique. May be it can work Nestle will not be taking risk in UAE market. Distribution from Origin to Destination Mode of Distribution Nestle like all of its dairy product will prefer roadways mode of transportation. It will distribute its product to the wholesalers and retailers through Nestle Van which will have freezing facility available with it. Products are of lesser expiry date therefore it will be preferable for Nestle to have its own distribution system to avoid delayed delivery. Packaging Marking and Labeling Regulations Usually, on any package, many kinds of labels are used. Many may include product certifications and trademarks and the food authority approvals. In order to utilize full use of packaging, it is suggestible to publicize the health benefits related with Nestle fruit Yogurt through labeling. Containerization To avoid piracy and ease operational requirement company should always use bar codes, identification and RFID numbers. This should be done for trouble-free shipment tracking of the goods. Another related important aspect which needs to be considered is the container standards. It should be of international standard. Costs Packaging use a significant portion of total cost related with a product. For example, in Dairy Product industry, packaging cost may be as high as 30% of total cost. Whatever be the case company should try to reduce this cost as much as possible. Following international standard of hygiene and maintain a premium quality forces price to increase to go beyond the limits. Therefore company should try to use some beneficial strategy to reduce the packaging cost to be as low as 10% of the product in long term. Price Determination Transportation Cost It will be there as always but usually depends who is going to bear this charge company, wholesaler or retailer. Here it will be borne totally by wholesaler only. Wholesaler will need something in order to take this cost and keep making profit. Therefore company is giving hefty commission to the wholesalers @ 13.5 %. Handling Expenses Handling expense for making the product to reach on board to fulfill the requirement of FOB will be borne by company itself. This cost will be included in other miscellaneous cost. Whole and Retail Mark Up and Discounts Product Cost Percentage of Cost Fruit Yogurt Cost(650 ton) $   1,100,000.00 72.7% Packaging Cost $ 110,000.00 7.3% Selling Expense $ 85,000.00 5.6% Advertising Expense $ 120,000.00 7.9% Distribution Expense $ 93,000.00 6.1% Misc Expense $ 5,000.00 0.3% $   1,513,000.00 Selling price(Profit Margin 8.7%) $   1,644,631.00 Final Price AED price Product Cost $ 1,513,000.00 AED 5,555,736.00 Selling price(Profit Margin 8.7%) $ 1,644,631.00 AED 6,039,085.03 Selling Quantity we are targeting (Ton) 650 Company Price Selling price per ton $ 2,530.20 AED   9,290.90 Selling price per Kg $2.53 AED 9.29 Selling price per 250g Pack $0.63 AED 2.32 Selling Price per 100g pack $ 0.025 AED 0.09 Wholesale Price (@13.5% WS Commission) Selling price per Kg $2.87 AED 10.55 Selling price per 250g Pack $0.72 AED 2.64 Selling Price per 100g pack $0.03 AED 0.11 Retail Price (@13% Retail Commission) Selling price per Kg $3.25 AED 11.92 Selling price per 250g Pack $0.81 AED 2.98 Selling Price per 100g pack $0.03 AED 0.12 (Statistics, 2003) Pro-formal financial Statement and Budget Introduction In this plan we are going to study detailed financials about the Nestle Yogurt Product. The product financial will include product costing and product pricing for the UAE market. Most of the pricing we are doing in $ terms and at last we are converting them in AED terms. Marketing Budget Advertisement/Promotion Expense Advertisement TV Advertisement $40,000.00 AED 146,880.00 Newspaper Advertisement $20,000.00 AED   73,440.00 Kiosk Advertisement $10,000.00 AED   36,720.00 Magazine Advertisement $20,000.00 AED   73,440.00 Banners $10,000.00 AED   36,720.00 BillBoards $10,000.00 AED   36,720.00 Promotion $10,000.00 AED   36,720.00 Advertising Expense $ 120,000.00 AED 440,640.00 Distribution Expense Distribution Cost Store Payroll $ 20,000.00 AED 73,440.00 Store Management $ 10,000.00 AED 36,720.00 Rent $ 10,000.00 AED 36,720.00 Utilities $ 10,000.00 AED 36,720.00 Depreciation $ 10,000.00 AED 36,720.00 Repair $ 20,000.00 AED 73,440.00 Maintenance $ 13,000.00 AED 47,736.00 Total Distribution Expense $ 93,000.00 AED 341,496.00 Product Cost Processing Milk to Yogurt cost Raw product Milk(600 ton) $800,000.00 Processing Variable Cost Sugar Stabilizers Fruit /Flavors Bacteria Culture Fuel Total $200,000.00 Processing Fixed Cost $100,000.00 Final Yogurt product(620 ton) $    1,100,000.00 Product Cost Percentage of Cost Fruit Yogurt Cost(650 ton) $   1,100,000.00 72.7% Packaging Cost $ 110,000.00 7.3% Selling Expense $ 85,000.00 5.6% Advertising Expense $ 120,000.00 7.9% Distribution Expense $ 93,000.00 6.1% Misc Expense $ 5,000.00 0.3% $   1,513,000.00 Selling price(Profit Margin 8.7%) $   1,644,631.00 Final Price AED price Product Cost $ 1,513,000.00 AED 5,555,736.00 Selling price(Profit Margin 8.7%) $ 1,644,631.00 AED 6,039,085.03 Selling Quantity we are targeting (Ton) 650 Company Price Selling price per ton $ 2,530.20 AED   9,290.90 Selling price per Kg $2.53 AED 9.29 Selling price per 250g Pack $0.63 AED 2.32 Selling Price per 100g pack $ 0.025 AED 0.09 Wholesale Price (@13.5% WS Commission) Selling price per Kg $2.87 AED 10.55 Selling price per 250g Pack $0.72 AED 2.64 Selling Price per 100g pack $0.03 AED 0.11 Retail Price (@13% Retail Commission) Selling price per Kg $3.25 AED 11.92 Selling price per 250g Pack $0.81 AED 2.98 Selling Price per 100g pack $0.03 AED 0.12 Other Cost Misc Expense $ 4,000.00 Pro forma annual profit and loss statement (Profit year) Profit And Loss Statement AED Income Revenue $   1,644,631.00 AED 6,039,085 Expense Cost of Goods Sold 800,000.00 AED 2,937,600 Processing Variable Expense 200,000.00 AED 734,400 Processing Fixed expense 100,000.00 AED 367,200 Packaging Cost $ 110,000.00 AED 403,920 Selling Expense $  85,000.00 AED 312,120 Advertising Expense $ 120,000.00 AED 440,640 Distribution Expense $  93,000.00 AED 341,496 Misc Expense $   5,000.00 AED   18,360 Total Expense 1,513,000.00 AED 5,555,736 EBIT $ 131,631.00 AED 483,349 Interest $  55,000.00 AED 201,960 EBT $  76,631.00 AED 281,389 Tax @ 20% $  15,326.20 AED   56,278 Net Income $  61,304.80 AED 225,111 (Ng, 2007) Resource Requirements Introduction Whatever is the marketing plan, until and unless you are not getting your Resource requirement fulfilled, you cannot start a business. This section, we will study about the way the company will be able to get its resources right. Finances Usually Company gets its finances from either debt or equity or through some stake acquisition by some other firm. It will be totally dependent on cost of capital of raising money from the market and cost of debt of raising money from debt. We are assuming to have overall cost of capital as 5%. The launching project will include total requirement of 1.1 million out of which company can plan to have 6 million as debt and 5 million as equity. Personnel Any firm while expanding or launching a new product will require some Personnel. The company should be ready with kind of skills portfolio which company will need for its operation. There can be many skills portfolios which company can look into while planning for the launch of new product like: HR personnel Marketing Personnel Finance Personnel Operation Personnel Sales Personnel Labors Machine specialists Distributor personnel Depending on the scale which we are launching, Companys requirement will be decided. For the 650 tonnages of requirement company will need as per follows: Marketing 60 Sales 600 Operations (including distribution and packaging) 1200 Finance 10 Human Resource 40 Information Technology 5 Production Capacity Production capacity should be planned as per companys aim of expanding in future. As per seeing Nestlà ©s trend of expansion plan in other countries, we can assume following as companys capacity requirement in future. First year 650 tonnages Second Year 900 tonnages Third Year 1050 tonnages Fourth Year 1200 tonnages Fifth Year 1400 tonnages Nestle should have production capacity accordingly. Conclusion As we can see from the analysis, we can conclude that the launch of Nestle Fruit Yogurt in United Arab Emirates will be a sure success. Estimated Income statement of very first year is showing Net Income of

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