Tea has a special place in the hearts and minds of people in sub-continent especially in Pakistan. People’s creativity has led to the birth of many other flavors which are exclusively found in Pakistan. And other parts of the world. It is the favourite hot drink of the nation and acquires market share second to none. People consume at least two to three cups of tea any given day. Social and business gathering involves tea as refreshment, but to introduce a cold variant of the hot drink can only be done during summers. Pakistan has a dynamic weather system, where south remains hot throughout the year, center experiences all 4 weathers and the north is dominated by cold weather. Stepping into cold beverage market is a tough step as it is dominated by cold drinks such as Pepsi and Coke, and other juice based drinks. Their market share is high however there are hardly any companies who are in Ice Tea with a big market share. Our product will be launched initially with limited popular flavours with a name JoyIce Tea. ( Abbas et al.2011)
JoyIce will be offered in many flavors, such as Original, Kashmiri, Lemon and Rose. Ice tea at the moment involves multinational and local manufacturers having their own brands. In terms of Ice Tea the two main competitors are Nestle and Lipton ice tea but their flavors normally focus on fruits and because of the price, they still haven’t got enough market share as available due to lack of awareness about the advantages of Ice tea for people. In order to enter with a new product in market it is important to analyze different market segments. Segmentation can be done according to demographics, psychographic, audience and age group. (www.highbeam.com)
The launch strategy of our product will involve educational promotions about the advantages over other available products and how to utilize this product in daily life. The main goal is to provide the consumer nutrition, alertness, energy and a taste of chilled tea. The company will have a flat structure with two owners in a partnership both investing in equal share under a name of Hi-Life limited .The main plant of production will be rented in North Karachi industrial area which is located in Karachi on 200 acres as per estimate. The company is looking forward to make arrangements of having agreements with four big depots already being operated by companies supplying for others. With four depots in major cities of Pakistan which are Karachi, Lahore, Islamabad and Quetta we will be able to supply according to required demand. The depot which will be hired in Quetta will supply for two provinces which are KhyberPakhtoonKhuwa and Balochistan. Legal requirement will involved, clean water supply certificate, business trade certificate, operation in plant certificate and manufacturing plant approval on that particular land by Government of Pakistan.
Mission Statement: JoyIce tea is aiming to reach consumer demand in their busy life and to provide them with a drink which can make them enjoy the refreshing taste and relax low calories and less sugar but a quality product in taste. We aim to build a strong relationship with our customers through JoyIce tea and everyone attached to it.
Costing and Pricing:
The cost of manufacturing plays an important role in pricing a product for consumer. Ice tea will be marketed in two volumes with 250 ml and 500ml.A 250ml will be available in cans and 500ml in bottles. The average cost of competitors in the market is Rs 30.Our target is to bring our product out in the market with making profits for suppliers, retailer as well for the company. (Kamerow, 2010)
PRODUCT COST PRICE
Ice Tea in 250ml Can Rs 11.00 Rs 25.00
Ice Tea in 500ml Bottle Rs 16.00 Rs 40.00250ml x 4 RS 75.00
Fig 1: Cost and Price
For the initial months or a year, the sale projection will be focused on getting our product more and more to the consumers and building a good reputation of taste and quality. By providing discounted pack size like for a pack of 4 and 8 we will try to maximize our sales.
Fig 2: Sales Projection
Sales projection suggest that the business will rise steadily after getting started in 2015.With the increase in sales in each year we are expecting a high rise in sales during 2018 and 2019 as by this time after years of promotions and marketing our product will be trusted by customers with quality and taste.
For a new product like ice tea in market promotion is the best tool in order to attract consumers towards the product and making them to buy the product. Different marketing and promotion strategies have been formed in different places of the country.
‘ Road Promotion: Different cars and vans with ice tea drinks on various spots can provide free small samples to people in order to taste the product. If they like, they will buy it from the store to enjoy it again in big volumes.(Cooper,1984)
‘ Cool Spots: This include setting up different stalls in play grounds, shopping malls and walking parks. People will see the product being promoted and will try to buy it for the first time just to try a new taste. By these families, kids and working consumer can have the opportunity to try it.
Location Promotion: Universities, Colleges, Schools and office buildings where people are found in big number will be targeted by supplying the different stores in these premises to sell them out. Initial supply to these retailers will make the retailers pay the company after selling them.(Cooper,1984)
JoyIce Cafe: We plan on establishing a caf?? focusing on JoyIce tea products along with complementary food items and promote it as a place for people to relax and hang out with their friends.
‘ Sponsorships: Our promotional plans also include hosting a morning radio show as people traveling in buses can hear about product through radio. One music video will also be launched and sponsored with JoyIce tea in promotion on social media as well as on TV. JoyIce tea sponsored stores will be also be a part of promotion for few stores in a city depending on the population of that area and consuming capacity.(Abbas .et al,2011)
‘ Club Programme: Hi-life club will formed for ice tea users to participate in different events either sponsored or held by them. This would involve small gathering and some exclusive events in town.
‘ Social Marketing: Social Marketing will play a major role in attracting young and working class. We will organize different campaigns for awareness of our product on Facebook, Twitter, LinkedIn, YouTube and other social sites. (J.Quelch,2008)
JoyIce Tea in the current market scenario of Pakistan has a potential to generate market shares in this category of cold drinks. Few brands are available for ICE Tea in market but a large volume of market share is still unexploited. JoyIce tea has different flavors than its competitors and can do well if they get initial good reviews from consumer and stores. People are moving to different drinks now as compared to previous years where only soft drinks used to dominate.People are looking for healthy, refreshing and energizing drinks and it comes in ice tea then people will havemore options to choose from. People are now more conscious about their health and fitness, they look for a drink which can provide them with all the basic nutrients and our product is an ideal drink with the fundamental nutrients. (www.euromonitor.com)
‘ Working Class
‘ College and Universities
‘ Social Gathering organizer and events.
‘ Sports Clubs.
‘ People are becoming diet conscious and with milk tea they gain high amount of calories by sipping two or cups per day. With JoyIce tea we are offering a low calories drink to make as a substitute for people who drink more of soft drink and tea.
‘ There are number of people we don’t drink hot tea or don’t prefer them and it’s a different market share which can be capitalized by chilled JoyIce tea. They not only quench their thirst but also enjoy the flavor of tea.
‘ Tea Flavors are used in JoyIce tea rather than using fruit flavors. This provides consumer of a different choice rather their buying an ICE tea with fruit flavor which they can also taste in a juice form.
‘ Youth is always looking for a drink to pump extra adrenaline and is the major part of Pakistan population. Our target would be to attract the attention of youth towards our product so they can enjoy the chilled JoyIce tea and allow us to gain a market share.
Tea culture in Pakistan is one of the major parts of social, professional and family gathering. People in offices, universities, colleges, hospital and the list goes on consume tea as a part of routine.Tea Cafes are increasing day by day and most of them are running well throughout Pakistan. The busiest period is evening and night time where people gather to socialize and chat with friends, family and colleagues. People love tea of all age groups. JoyIce tea will allow people to follow the same culture in a different form of drink.
Male 65% and Female 35%
Age Group from 18-45 years
Income: Average per state income.
Locality: Urban area
Cities: Karachi, Islamabad, Rawalpindi, Lahore, Quetta and Peshawar
Lifestyle: Working,studying, events, restaurants, cafes, events and gathering
JoyIce tea is a new company and its competitors have a reputed names with market share in thie industry. In terms of Ice tea in Pakistan, Lipton and Nestle are the biggest threats as they are leading brands of the world. Their ice tea is available in different flavors all over Pakistan.They have various depots installed in different parts of Pakistan. Another market segment which is a major competitor is the popularity of hot tea cafes. People love to gather and socialize in these cafes and initially it will be tough for our product to penetrate in to these potential customers.
Secondary competitors are soft drinks,energy drinks and juices. People of every class drink them a lot .Some are cheaper in price and some are really good in taste. Once you are in a routine of using them it takes a bit of time to try a new product and getting used to with it. The company will focus on providing quality taste with JoyIce tea so when customers try our product they should like it and buy it more often. (White,2004)
Hi-Life is planning to form four different departments with their own team headed by the department
Fig 3: Organization Structure
Human resource and Management:
Company is planning to have five member of Human Resource team including Head of HR. Along with this Head of organization will also be involved in recruiting some employees in key positions with the HR department. Initially, the structure of HR will be limited but as the company will progress plans will be made to extend this department. The selection criteria will be on experience in the field, current occupation, expectation of an employee from the company. Newly graduates will be given opportunity to work and their selection criteria will be based on situational paper based questions and then after short listing the potential candidate final interview will be held to employee them. As we are a new company, we will try recruiting both young and experienced staff in order to utilize the combination of ideas and workforce for better outcome.( T.Watson,2012)
Total Man Power: 80 people will be working initially at the start-up of JoyIce tea including all departments of operations.
Motivational Schemes for employees
‘ Annual bonuses depending on companies’ progress
‘ Promotions on yearly basis.
‘ Team events
‘ Offering holiday packages to best employees.
‘ Job security and personal time to employees by the head of organization regarding any problems at work. (www.hrps.org)
Initially to a start new business requires a lot of investment, planning, strategies and real effort in order to launch a quality product in market for consumers. Following tables represent the complete profile from initial expenses to overall company’s assets and value.
Expenses in Start-up Amount
License and Certifications Rs 1,50,000.00
Promotions Rs 10,0000.00
Insurance Rs 5,00,000.00
Rent Rs 1,00,000.00
Plant and equipment Rs 50,0000.00
Others Rs 150,000.00
Total Rs 60,0000.00
Start-up Assets Amount
Required amount in Cash Rs 150,0000.00
Inventory Rs 200000.00
Long-term Assets Rs 100,0000.00
Other Assets Rs 300000.00
Total Assets Rs 2,00,0000.00
Fig 3: Expenses and Assets
Funds for start-up Amount
Funds for Expenses Rs 60,00000.00
Assets to Fund for Start-Up Rs 2,000000.00
Total Required Funds Rs 260,0000.00
Fig 4: Funds for Strat-Up
Current Borrowing Rs. 1,000,000
Long-Term Rs. 2,000,0000
Outstanding Payable Rs 0
Other Liabilities Rs 0
Total Rs. 3,000,000
Involved Capital Amount
Investment by Owners Rs. 16,000,000
Other Investors Rs. 1,5000,000
Bank Loan Rs. 0.00
Extra Investment Requires Rs. 0.00
Start-Up Expenses( Loss in Capital) Rs. 6,000,000
Total Rs. 25,000,000
Total Liabilities & Capital Rs. 280,000,000
Total Required Funding Rs. 260,000,000
Fig 5: Capital, Liabilities &Total funding Required
The Tax returns for rental production companies is 25% and rental plant expenses have been added in the finance projection table.The total amount being invested in this project is 280,000,000.00 and the major capital is invested by the two brothers .Other small investors are also providing their shares in this amount. Initially the plant for production is being rented and company will plan to buy a separate land depending on the sales and capital return in the following fiveyears. After five years we plan to setup few depots in different cities of Pakistan in order to expand the distribution channel.
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