Business Plan for a new soft drinks Essay

1.0 Company description1.1 Brief History and Pre direct State command shroud Drinks introduced itself in 2012 as a roadside succus selling endeavor in Dhanmondi, capital of Bangladesh. Initi eachy we had two outlets with no any administrative say-so and all the administrative activities were conducted over the communication via phone and social media. Gradually, we expanded our business throughout the Dhaka city establishing as a private restrain participation and today we scram 200 mobile retail outlets serving raw fruit juice and drinks, mainly sugar idlere juice and lemon soda, to the pack pedestrians of the city. predominate quiver has to a fault settled in a corporate office situated at 23/4, Dhanmondi 4/A, Dhaka-1215. We as well as have a small storage house, at Ashulia, Savar, Dhaka, for keeping inventories and machineries. The union is now at the initial stage of transition with the plan to produce and sell canned beverages to the confectionary and crack stores with the parvenu name occult Chill Beverage Ltd.Our conducted feasibility compend reveals a huge guide for our current intersection point at home or other convenient smirchs with currently non reflecting due to lack of health and hygiene concerns of roadside food harvest-feasts. Our research and development group has come up with the countrys first canned sugarcane juice drink that is vi adequate to(p) to create buzz in the grocery. We entrust set up a big manufacturing plant in Gazipur where beverages leave be produced and packaged in a healthy environment following a computerized automated puzzle out by imported equipments.1.2 MissionMission Statement overtop Chill Beverage Ltd. wants to see itself as the top trustworthy host of fruit juice ground beverage drinks in the market place. Our current growth in the raw fruit juice market al jell proves us reliable in providing quality ambrosial drinks to the mass. Now we want to ensure that our crossing is healthy, hygi ene, and quite durable so that we can serve all kinds of people in the market of fruit or soft drinks two home and outside. Initially we reserve enter the market with the position of niche market and in a few years we impart be able to capture the juice and soft drinks market and hopefully backsheesh the market in 10 to 15 years.1.3 Existing Organizational social organizationThe current Eclipse Chill Drinks has a very simple diamond-shaped organizational structure with operation and sales being its major functional atomic number 18a.Figure 1 Organizational structure of Eclipse Chill Drinks 2014 (Source self) We also initiated an outsourced Research & suppuration team for product development purpose, which is overseen by our product development head Mehedi Hasan.2.0 analysis of juice & soft drinks industryThe beverage industry is an established industry that is still growing because of many different new products it brings in the market and also because of the substantial summation in buying power of people. Globalization is another factor that plays its role in the steady growth of the beverage industry. Because of its establishment, the competitors atomic number 18 able to hold a steady return while the overall industry return is al demeanors mettlesome because of the industry growth. The industry comprises of several genres of products such as juice, soft drinks, null drinks etc. However, we pull up s dissipates be competing in the fruit juice drinks genre with our beverages originating from natural fruits.2.1 Competitor AnalysisSince we exit sell juice drinks products, out main competitor punctuates leave behind be ACME, Pran Frooto, Frutika, Shezan, and Slice. However, these brands mainly sell orange or mango ground juice products while our company will be selling unique products based on sugarcane, grape, lemon, pee melon etc. based drinks. From that perspective, those brands be more like substitute products in the market for our c ompany and our direct competitor in that sense is the Appy Fizz drinks. However, we will consider the previously mentioned brands as our direct competitors since they be the major players in the market and thus that makes more sense from the market viewpoint. The list of our major competitor companies are give belowi. Pran (Fruit juice and drink)ii. Akij Food and Beverage (Fruit juice)iii. Globe downlike Drinks and Beverage (Fruit juice and drink)iv. Abul Khair Consumer Goods (Fruit juice and drink)v. Partex Beverage (Fruit drink)vi. Hashem Foods (Fruit juice)vii. Transcom Beverage (Fruit juice)viii. Acme Agrovet & Beverages (Fruit juice)ix. Pepsico (Slice)Figure 2 Bangladesh fruit juice and drinks industry market share (Haque, n.d.) 2.2 Industry attractive featureAccording to Porter (1980) there are five major competitive forces (Rivalry among firms, Threat of new entrants, Threat of substitutes, Bargaining power of suppliers, Bargaining power of buyers) in the market that determ ines the potential of an industry and its firms in terms of profitability since they significantly affect pricing. Following Porters competitive forces model analysis, we have effect the following feedback for the industry.Table 1 Porters five competitive forces analysis (self)Our findings suggest that the industry we want to operate into is very lucrative and imprecateable as it mostly poses a moderate level of threat to overall industry profitability. 3.0 market analysis3.1 securities industry definitionWe have more devolve and specific information about the market and we are also aware of the customer demand and choices. The juice and soft drinks market always expect new quality products. Based on our Research and Development, we are determined to serve our customer needs and wants with a amount of moneyly new taste of juice drinks like Canned Sugarcane Drinks. Our initial market consists of Dhaka city with a population of around 10 chronicleion and our luff market incl ude .80 million of that population.3.2 SWOT AnalysisWe have identified some factors that define our strengths and weaknesses of our business that will affect the market and some opportunities and threats that the market face ups to our business.3.2.1 StrengthsWe have a smart and experienced management team that will whiz us to success. We also have a very good relationship with our suppliers and other stakeholders. Our core stimulation products are manufactured or found locally in the country so we can make believe them quickly and easily also the price will be cheaper while the transportation cost will be minimized. We already have a reputation for providing good quality raw juice products.3.2.2 WeaknessesWe are entering the beverage industry as a new name so we will face a lot of competition and also our intuition will take time to get established. We will introduce ourselves with only one product. This less of product septification is not going to reach all of our target ma rket. We also have challenges to carry the product safety and quality since it is a foodproduct and any little mistake may lead to lawsuit problems.3.2.3 OpportunitiesThe beverage market expects new taste and flavor which we are going to bring. The industry is of high growth rate and it is still increasing with the increase in peoples income and need for quality life. Countrys infrastructure of communication, transportation, and media is improving that will make things easy for our business. The positive economic bm also helps our cause.3.2.4 ThreatsThere are already major rivals competing in the industry unfluctuatingly. Moreover, there are operational substitute products in the market which takes away the go of pricing a little from us. The political unrest in the country also poses threat to our business and the overall industry. As the product is new and innovative, the company has to consider some critical issues, which are as follows- The products sales growth will be slo w and our company may face loss in the very first year of their operation.Thus the company has to hold the products position for first 12 month, which is admirable. As the product is new in the market, it will take too much time to stay in the heart of the consumer and the beginning consumers will be innovators. Thus attractive and effective marketing will be needed to attract, grow, and retain the customers. The marketing objectives will be to create product sentience and trial. The company must use heavy sales promotion to entice trial that is matter of investing huge amount of money. The products cost per customer will be high, as the product is lunching ab initio4.0 marketing planOur marketing objective is to initially attempt to introduce the product in the market and establish a brand compute, and to achieve a sales target of 68, 9850 units per year. Initially it may take 2 to 3 years until we reach such level but that is the target we want to meet.4.1 Market Segmentation a nd Target MarketWe will segment the market using several geographic, demographic, psychographic, and behavioral variables.4.1.1 RegionalRegionally we will segment the market in rural, urban, and suburban parts. We select urban and suburban areas as our target market since rural people are not likely to get a product with a good price that comes from a product they produce in mass.4.1.2 Age groupThere are people of different ages in our target market. It includes children, teenagers, young adults, and middle aged and elderly people. We select children, teenagers and young adults as our target market since they are the people that are fond of juice based soft drinks. Middle aged and elderly people are excluded because most of them suffer from diabetics and ours is a sugar based product.4.1.3 Income levelThe income of people ranges from low, lower middle, middle, higher(prenominal) middle, and high income. We want to target from middle income level to high income level people because p eople with lower income than that will feel the product highly priced.4.1.4 salubrious-disposed classThere are lower class, lower middle class, middle class, swiftness middle class, upper lower class, upper class, upper upper class etc. in the society. We want to target people from middle class to upper class because the can product will suit their class. Upper upper class people generally do not like new local brands.4.1.5 User statusUsers can be divided into categories based on their use of a new product. It consists of potential user, first-time user, regular user etc. We want to target the first two groups for now since regular user will not try our product until it becomes a trend.4.2 Marketing StrategyThe greatest objective is to establish our new brand in the industry. The marketing strategy will seek to first create customer awareness regarding the product and establishing connections with targeted markets and work toward building customer loyalty and referrals. The speci fic marketing strategies include4.2.1 Increase awareness and brand imageInform the consumers about our new product Canned Sugarcane Drinks. Throughadvertisement, leaflets, events we can increase awareness of the product and establish image of our product.4.2.2 Cross sellingWe can use our existing distributors to distribute our new product. We will also be able to cross sell our new product with our existing products. This will help us promoting our new product to the market.4.2.3 Quality and cost leadershipOur strategy is for being the quality and cost leader in the market. We will offer the best quality unique drink in the market which will make us differentiated quality leader in the market. We will also be reducing our cost through the use of local raw clobbers through existing suppliers, latest technology, and economies of scale.4.2.4 Mass production and distributionWe will also going for mass distribution of our product. We want to distribute our product each and every corner of the country. We hope to make our product available to all the customers within 2011. Consumers will get the drink where ever he or she goes.4.3 Marketing MixThe marketer E. Jerome McCarthy proposed a four Ps salmagundi in 1960, which has since been used by marketers throughout the world (Needham, 1996). It includes strategies in product itself, pricing, place or distribution, and promotion. Our planned marketing mix follows4.3.1 ProductOur product will enable our customers to have a different experience to taste in juice based soft drinks. They will be able to differentiate our product in quality and test which are unique in the soft drink market. They will not be able to feel the same way for the other soft drinks in the market. Our first product is a canned sugarcane based drinks called the Eclipse Sugarcane Pop. It is a quality sugarcane based cold drinks beverage that includes many nutrition factors and comes with a 250ml attractive package. It is the first of its kind in t he market.4.3.2 PriceThe other juice drinks, soft drinks, and energy drinks products of same sizecharge more than 25 taka while we are going to price our product at exactly Tk. 25 per 250ml can. It does carry its brand value along with a competitive price offer.4.3.3 PlaceAs mentioned earlier, we will be doing mass distribution through building a strong and coordinated distribution network. We will provide sales based incentive programs to motivate our distributors to sell more. Bottled soft drinks are distributed through different channels out front reaching the consumer. A small proportion of goods go through distributors, who serve as middlemen, facilitating further distribution and warehousing. Up to 50% of soft drinks are purchased by the consumer in supermarkets and general retailers. Other retail outlets include fast food and drinking venues convenience stores and gas stations vending Machine trading trading operations smaller outlets (such as drug stores, community cente rs) and exports. We can use either rail or road for transporting our products for distribution.But in case of By Road, we will maintain a contract with a specific petrol pump. We will receive the bill of petrol through fax, e-mail or SMS and the bill will be cleared by banks through Electronic Data Interchange (EDI). After receiving and checking the consignment we will store some quantity of juice in the Dhaka office and rest of the product will be sent to the warehouse. The Dhaka office will contact with the warehouse through mobile. Though we are not using any distributor the retailer will collect carrot from our Dhaka office. So, we can say that the Dhaka office will be our bear down of Selling (POS).4.3.4 PromotionAs we are new in the industry, our major marketing strategy is to make extensive promotional campaigns in order to get recognized in the market. There are many media through which we can achieve that. We strongly prefer television, billboards, print and online social media to do our promotional activities. We can also visit school, college, universities and other crowded places to offer free samples of our product.5.0 management team and new company structureThe management team of a extend up business typically consists of the founder or founders and a handful of key management personnel. It includes thefounders, board of directors, board of advisors, managers, key personnel etc. A management team represents some of the most talented and experienced professionals in the industry.5.1 Executive OfficersMasrur Ahmed Roman, CEO and Co-FounderAs chief executive incumbent of Eclipse Chill Beverage Ltd., Masrur Ahmed Roman is responsible for companys top management decisions, generally reflecting in all business function areas. He co-founded the Eclipse Chill Drinks. He holds a Masters of Business Administration degree from IBA-JU and has an overall 10 years of industry experiences.Subrata Howlader, CFO and Co-FounderHe is the chief financial officer of the company who will oversee the accounting and finance department. He will be responsible for the arrangement of funds, financial projections etc. He also co-founded the Eclipse Chill Drinks and also holds a MBA degree from IBA-JU. He worked as a senior finance officer in a reputed company for more than 5 years. Saiful Islam, Executive DirectorAs executive director, he is responsible for the external matters of Company building partnerships and broader business relationships, government outreach and technology thought leadership, as well as advising the CEO and senior leadership on business and policy issues. He has the experience of being the Assistant Managing Director of a reputed company for 10 years and also holds a masters degree from Dhaka University. Mahamud Hasan, Senior Vice President, Corporate Development and Chief Legal Officer He leads company global teams for legal, public policy, communications, corporate development/mergers and acquisitions, and product quality operations. He also serves as chairman of Companys investment. Mahamud Hasan has a LLB degree and also got a masters degree from Dhaka University.5.2 Board of DirectorsMasrur Ahmed Roman, Chairman of the board, CEO, Co-founderHe has successfully led the Eclipse Chill Drinks since its origin and now will lead the board of directors of Eclipse Chill Beverage Ltd. TusharChanda, Co-founderHe has been the head of sales and marketing department of Eclipse Chill, holds MBA degree from IBA-JU, and co-founded the company. Minhazul Abedin, Food and Beverage ExpertHe has got a masters degree in agricultural studies from Japan. He will provide the technical expertise and advice regarding the beverage products and its quality.5.3 Board of AdvisorsKhondokar Mominul Haque, Co-founderHe has been successfully managing the operations department of Eclipse Chill Drinks. He will now also serve as an advisor of the Eclipse Chill Beverage Ltd. Al Masud, Co-founderHe has been the head of Human Resources department of Eclipse Chill Drinks, holds a MBA degree from IBA-JU, and co-founded the company. He is also a co-founder of the Eclipse Chill Beverage Ltd. Maruf Ahmed, Managing Director, Shahjalal BankHe will provide financial and capital related advice and help. Irine Sultana, Vice President, Agro GroupShe will provide product and market related advice.Mehedi Hasan, Co-founderHe is overseeing the Research and Development team and will lead the product development besides being an advisor to the firm.5.4 Other ProfessionalsOther professionals include our attorney, who will provide legal advice and assistance, our accountant, who will record the financial activities and prepare financial reports, a management consultant, who will provide management consultancy, and a banker, who will help deal with bank transactions issues. 5.5 New Company StructureFigure 3 New Organizational Structure of Eclipse Chill Beverage Ltd. (self)6.0 operations planFormally, an operation is the process thro ugh which resource inputs are converted into useful outputs (Viehland, 2005). It outlines how the business will be run and how your product or service will be produced and distributed. It is a useful way to illustrate how your business will be rundescribing it in terms of back stage (unseen to the customer) and front stage (seen by the customer) activities.6.1 command Approach to OperationsIt illustrates the back stage view and the front stage view of the operations. Our operations plan includes a manual for operations. The technical approach to the operations manual is illustrated belowFigure 4 Operations manual for Sugarcane drinks production (Seleghim, n.d., p.22) We already have a good relationship with the suppliers who provide us a large amount of raw sugarcane regularly. Our supplies mainly come from Rajshahi, Faridpur, and Kushtia districts. We have already obtained the required business license from the government and the Dhaka City deals. superfluously, we have acquired the permit from Health Ministry and Dhaka City Corporations. Our operating hours will be standard 8.5 hours of work including two breaks of 15 minutes each and a lunch break of 30 minutes. We will be extracting raw sugarcane juice and process it to produce a nutritious drink that will be canned for distribution, all in an automated process. The distribution network will be based on Dhaka.6.2 Business LocationOur manufacturing plant will be located in Gazipur. We have acquired a piece of 5acres of land on lease in Gazipur. It is not far from the highway and therefore the transportation for both raw materials and final products will be easier. It includes an artificial pond where our soft industrial wastes can be dumped. For heavy industrial wastes, we have contacted the Gazipur City Corporation for help and guidance. We have also acquired a permit from Gazipur City Corporation.6.3 Facilities and EquipmentWe have contacted the a Chinese equipment manufacturer who is ready to make a d eal to provide us with required quality machineries and agreed to keep a back up for major machineries in case of our emergency need. The manufacturing plant will have all the necessary safety and security measures and equipment. Our legal advisor is already working on creating a safety related guidelines and policy. The production process has got updated with a new technological advancement. We will be taking this chance and set up thefacility accordingly.7.0 product design and development plan7.1 Product DescriptionEclipse Chill Beverage Ltd. will sell a 250ml canned nutritious drink based on sugarcane juice that is enriched with Vitamin C. The product is called Eclipse Sugarcane Pop and it is totally a new product coming from the result of our outsourced R & D team effort. The juice is obtained by crushing unsanded sugar cane in a mill. It can be a hand cranked machine, or powered. Then this raw juice will be sent to sterilization machine for sterilization, addition of nutritiou s elements, and packaging, all in an automated process.Table 2 Nutrition facts in Eclipse Sugarcane Pop (self)7.2 Additional IngredientsSugar, or other sweeteners such as high-fructose corn syrup (HFCS), fruit and carbonated water (constituting on average 94% of a soft drink) are the main ingredients of our soft drinks and are used in varying quantities. Other minor ingredients added in very low concentrations include flavorings derived from fruit (such as orange used in Fanta) acids (most commonly citric acid) additives to enhance flavor texture aroma appearance emulsions (most commonly gums and pectin) to enhance appearance and preservatives and antioxidants (BHA, ascorbic acid, or other course occurring additives) to maintain color and flavor. Sugar production in mills requires a significant amount of energy and water and is only economically viable in very large scale sugar mill operations. Citrus fruit is the most processed fruit for soft drink production.7.3 PackagingThere are three types of packaging associated with the industry primary packaging, which is the soft drink container secondary packaging, which is the packaging used to group together individual primary packaging and ordinal packaging, which is used to group together secondary packaging. This is due to the raw materials, energy, water and waste involved in production/recycling and the impacts of disposal such as littering, landfill space and the pollutants produced when incinerated from waste to use asenergy. Primary packaging of Eclipse Sugarcane Pop includes teen can with appropriate encompass design and labels. secondary winding packaging includes hard paper box cartoons. Tertiary packaging includes hardboard boxes.7.4 Product Development7.4.1 Product desirabilityBangladesh has a tropical monsoon-type climate, with a calefactive and rainy summer and a dry winter. It has warm temperatures throughout the year, with relatively little variation from month to month. January is the coolest m onth with temperatures averaging near 26C and whitethorn the warmest with temperatures from 33 to 36 C. It is warm and humid. In general, the temperatures ranging from as low as 3C during the night in the winter season to as high as 40C in the summer season (Haque, n.d.). Bangladeshi people tend to be thirstier due to the warm temperature. So they prefer to take soft drinks and juices most of the time. At present people are used to drink sugarcane juice from local vendors.Vendors extract juice from sugarcane and present it to the customer in a glass. These vendors usually sit in open places and are not concerned about hygiene factors. So from the preparation to manifestation of sugarcane juice an unhygienic approach is followed by the local vendors. Thirsty people are drinking the juice as no more sugarcane juice providers are in the market currently providing hygienic sugarcane juice. So desirability for hygienic sugarcane juice drinks is very high.7.4.2 Product demandIn Banglades h, almost 9 months of a year is summer. So there is always existence of the demand for soft drinks, juice, energy drinks etc. Consumers of these are ready to buy 250 ml, 500 ml and 1liter packages. However, initially we are considering only the 250ml package until it creates enough demand for our product in the market. It has been found that 15 furnish (200 ml per glass) of sugarcane juice are being sold per summer hour. The highest sale of the traditional sugarcane juice available right now is 400 glasses in a 10-hour day that is 40 glasses per hour. The lowest sale is 80 glasses in a 10 hour day that is 8 glasses per hour. Normally the lowest sales days are the rainy days (Haque, n.d).7.5 ManufacturingIn this product manufacturing process (usually referred to as the bottling process) water nicety takes place to ensure that the flavor and quality of the beverage are not affected by bacteria or unwanted substances. A series of water purification processes take place such as coagul ation, flocculation, filtration and sterilization. Reverse osmosis is increasingly used as the main final treatment process. Dissolved sugar, juice and flavor concentrates are pumped into batch tanks where they are carefully mixed making syrup. Some syrup, such as the fruit-based syrups, is sterilized. The whole bottling process uses between 2 and 4 liters of water per liter of soft drink that is produced, and between 0.5 and 1.0 mega joules per liter of soft drink creates energy in human body. Additional information regarding the manufacturing process has been covered in the Operations Plan section.8.0 financial projectionsThe Eclipse Chill Beverage financial picture is quite promising. Eclipse Chill Beverage is operating a immediate payment business the initial cost is significantly less than many start-ups these days. The financial investment in its employees will be one of the greatest differentiators between Eclipse Chill Beverage Ltd and its competitors. The Eclipse Chill Bev erage Ltd anticipates the initial combination of investments and long-term financing to carry it without the need for any additional equity or debt investment, beyond the purchase of equipment or facilities.The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are1. sales Revenue Yearly 689850 Unit 25tk per unit = 17246250 TK .Sales revenue will be increase as 2nd year-6%, 3rd year-10%, and 4th year-15% 2. Cost of goods sold Our COGS are determining 50% of the sales price. In manufacture overhead we include two things direct labor & direct material. Direct labor = 768000 TK (Yearly), Direct material= 7281750 taka Yearly & Factory overhead cost yearly is =472000. So, Total cost of goods sold = (768000+7281750+472000) =8521750 & Ending inventory for the 1st year is =1040250 tk. 3. Advertising expense present include TV, Radio, Newspaper, Internet, Leaflets, Visiting card Allover advertising cost is =35800 0(yearly).But this will be increase at the 5% from the 2nd to 5th year 4. Salaries our total worker salary is =1152000Tk.It will also increase if profit is increase.5. Insurance Total about is 15000000Tk and for this our insurance is 8000000Tk for the 10 years =8000000/10 =800000(yearly) 6. Deprecation Our depreciation is 20% of the total equipment cost. Our total equipment cost AC cost=40000*6 =240000, Purchase fun= 1200*6= 24000, Computer cost= 30000*6 = 1800000, Purchase cover van=1000000*2 =2000000. Total cost =2444000. 20% of the total cost =2444000*20% =485000/10 =48500(Yearly) 7. Loan Payment We take 6000000Tk loan from the bank with the interest of 14% for 10 Year 60000000*14%=84000.So ,Principle+ Interest=600000+8400=684000 (Per year) 8. Utilities bill Utilities bill includes Gas, Electricity, and Water. In this Gas and Water bill is fixed and Electricity bill is not fixed.