Business Plan for a new soft drinks

Category: Business Plan, Retail
Last Updated: 28 May 2020
Essay type: Process
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Eclipse Chill has also settled In a corporate office situated at 23/4, Dhanmondl 4/A, Dhaka-121 5. We also have a small storage house, at Ashulia, Savar, Dhaka, for keeping inventories and machineries. The company is now at the initial stage of transition with the plan to produce and sell canned beverages to the confectionary and super stores with the new name Eclipse Chill Beverage Ltd. Our conducted feasibility analysis reveals a huge demand for our current product at home or other convenient places with currently not reflecting due to lack of health and hygiene concerns of roadside food products.

Our research and development group has come up with the country's first canned sugarcane juice drink that is viable to create buzz in the market. We will set up a big manufacturing plant in Gazipur where beverages will be produced and packaged in a healthy environment following a computerized automated process by imported equipments. 1. 2 Mission Mission Statement: Eclipse Chill Beverage Ltd. wants to see itself as the top trustworthy host of fruit Juice based beverage drinks In the market. Our current growth In the raw fruit Juice market already proves us reliable In providing quality tasty drinks to the mass.

Now we want to ensure that our product is healthy, hygiene, and quite durable so that we can serve all kinds of people in the market of fruit or soft drinks both home and outside. Initially we will enter the market with the position of niche marketing and in a few years we will be able to capture the juice and soft drinks market and hopefully lead the market In 10to 15 years. 1. 3 Existing Organizational Structure The current Eclipse chill Drinks has a very simple diamond-shaped organizational structure with operation and sales being its major functional area. nitiated an outsourced Research & Development team for product development urpose, which is overseen by our product development head Mehedi Hasan. 2. 0 analysis of Juice & soft drinks industry The 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 increase in buying power of people. Globalization is another factor that plays its role in the steady growth of the beverage industry.

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Because of its establishment, the competitors are able to hold a steady return while the overall industry return is always high because of the industry growth. The industry omprises of several genres of products such as Juice, soft drinks, energy drinks etc. However, we will be competing in the fruit Juice drinks genre with our beverages originating from natural fruits. 2. 1 Competitor Analysis Since we will sell Juice drinks products, out main competitor brands will be ACME, Pran Frooto, Frutika, Shezan, and Slice.

However, these brands mainly sell orange or mango based Juice products while our company will be selling unique products based on sugarcane, grape, lemon, water melon etc. based drinks. From that perspective, those brands are more like substitute products in the market for our 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 are 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 below: i. Pran (Fruit Juice and drink) i'. AkiJ Food and Beverage (Fruit Juice) iii. Globe Soft Drinks and Beverage (Fruit Juice and drink) iv. Abul Khair Consumer Goods (Fruit Juice and drink) v. Partex Beverage (Fruit drink) v'. 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 Attractiveness According 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 determines the potential of an industry and its firms in terms of profitability since they significantly affect pricing. Following Porter's competitive forces model analysis, we have found the following feedback for the industry. Competitive forces

Threat to industry profitability Medium High Threat of Substitutes Threat of new entrants Rivalry among existing firms Bargaining power of suppliers Bargaining power of buyers Table 1 : Porter's five competitive forces analysis (self) Our findings suggest that the industry we want to operate into is very lucrative and profitable as it mostly poses a moderate level of threat to overall industry profitability. 3. 0 market analysis 3. 1 Market Description We have more clear 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 totally new taste of Juice drinks like "Canned Sugarcane Drinks". Our initial market consists of Dhaka city with a population of around 10 million and our target market include . 80 million of that population. 3. 2 SWOT Analysis We 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 presents to our business. . 2. 1 Strengths We have a talented and experienced management team that will lead us to success. We also have a very good relationship with our suppliers and other stakeholders. Our core input products are manufactured or found locally in the country so we can get 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 Weaknesses competition and also our recognition will take time to get established. We will introduce ourselves with only one product.

This less of product classification is not going to reach all of our target market. We also have challenges to maintain the roduct safety and quality since it is a food product and any little mistake may lead to lawsuit problems. 3. 2. 3 Opportunities The 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 people's 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 trend also helps our cause. 3. 2. 4 Threats There are already major rivals competing in the industry strongly. Moreover, there are available substitute products in the market which takes away the control 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 slow and our company may face loss in the very first year of their operation.

Thus the company has to hold the product's position for first 12 month, which is admirable. As the product is new in the market, it will take too much time to tay 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 awareness 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 initially 4. marketing plan Our marketing objective is to initially attempt to introduce the product in the market and establish a brand image, 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 and Target Market We will segment the market using several geographic, demographic, psychographic, and behavioral variables. 4. 1. 1 Regional Regionally 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 group There are people of different ages in our target market. It includes children, eenagers, 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. . 1. 3 Income level The income of people ranges from low, lower middle, middle, higher middle, and high because people with lower income than that will feel the product highly priced. 4. 1. 4 Social class There are lower class, lower middle class, middle class, upper middle class, upper ower 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. User status Users 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 Strategy The greatest objective is to establish our new brand in the industry. The marketing trategy 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 specific marketing strategies include: 4. 2. 1 Increase awareness and brand image Inform the consumers about our new product "Canned Sugarcane Drinks". Through advertisement, leaflets, events we can increase awareness of the product and establish image of our product. 4. 2. 2 Cross selling We 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 leadership Our 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 materials through existing suppliers, latest technology, and economies of scale. 4. 2. 4 Mass production and distribution We 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 vailable to all the customers within 2011. Consumers will get the drink where ever he or she goes. 4. 3 Marketing Mix The marketer E.

Jerome McCarthy proposed a four Ps classification 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 follows: 4. 3. 1 Product Our 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 the market. 4. 3. 2 Price The other Juice drinks, soft drinks, and energy drinks products of same size charge 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 Place nd 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 before 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 operations; smaller outlets (such as drug stores, community centers); 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" (ED'). 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 "Point of Selling" (POS). 4. 3. 4 Promotion As 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. management team and new company structure The management team of a start up business typically consists of the founder or ounders and a handful of key management personnel. It includes the founders, 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 Officers Masrur Ahmed Roman, CEO and Co-Founder As chief executive officer of Eclipse Chill Beverage Ltd. , Masrur Ahmed Roman is responsible for company's 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 ndustry experiences. Subrata Howlader, CFO and Co-Founder He 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 Director As executive director, he is responsible for the external matters of Company: building partnerships and broader business relationships, government outreach and echnology thought leadership, as well as advising the CEO and senior leadership on 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 Company's investment. Mahamud Hasan has a LLB degree and also got a masters degree from Dhaka University. 5. 2 Board of Directors Masrur Ahmed Roman, Chairman of the board, CEO, Co-founder He has successfully led the Eclipse Chill Drinks since its origin and now will lead the board of directors of Eclipse Chill Beverage Ltd. Tushar Chanda, Co-founder He 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 Expert He 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 Advisors Khondokar Mominul Haque, Co-founder He 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. A1 Masud, Co-founder He 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 Bank He will provide financial and capital related advice and help.

Irine Sultana, Vice President, Agro Group She will provide product and market related advice. Mehedi Hasan, Co-founder He is overseeing the Research and Development team and will lead the product development besides being an advisor to the firm. . 4 Other Professionals Other 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 New Company Structure 6. 0 operations plan "Formally, an operation is the process through 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 run describing it in terms of "back stage" (unseen to the customer) and "front stage" (seen by the customer) activities. 6. 1 General Approach to Operations It 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 below: Figure 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 Corporations. Additionally, 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 1 5 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. Business Location Our 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 Equipment We have contacted the a Chinese equipment manufacturer who is ready to make a 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 the facility accordingly. 7. 0 product design and development plan 7. 1 Product Description Eclipse Chill Beverage Ltd. will sell a 250ml canned nutritious drink based on ugarcane Juice that is enriched with Vitamin C. The product is called "Eclipse outsourced R & D team effort. The Juice is obtained by crushing peeled 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 nutritious elements, and packaging, all in an automated process. Table 2: Nutrition facts in Eclipse Sugarcane Pop (self) 7. 2 Additional Ingredients Sugar, 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 ngredients 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 naturally 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 Packaging There 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 tertiary 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 as energy.

Primary packaging of Eclipse Sugarcane Pop includes teen can with appropriate cover design and labels. Secondary packaging includes hard paper box cartoons. Tertiary packaging includes hardboard boxes. 7. 4 Product Development 7. 4. 1 Product desirability Bangladesh has a tropical monsoon-type climate, with a hot 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 month with temperatures averaging near 260C and May the warmest with temperatures from 33 to 36 oc. It is warm and humid.

In general, the temperatures ranging from as low as 30C during the night in the winter season to as high as 400C 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 presentation of sugarcane Juice an unhygienic approach is followed by the local vendors.

Thirsty eople 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 demand In Bangladesh, almost 9 months of a year is summer. So there is always existence of buy 250 ml, 500 ml and 1 liter 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 glasses (200 ml per glass) of sugarcane Juice are being sold per summer hour.

The highest sale of the traditional sugarcane Juice available right now s 400 glasses in a 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 Manufacturing In this product manufacturing process (usually referred to as the bottling process) water purification 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 coagulation, 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 projections The Eclipse Chill Beverage financial picture is quite promising.

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