NEW PRODUCT LAUNCH

UB GROUP – SOFT DRINKS

Group 9B

Anjana Satpathy (B09069)

Gaurav Chowdhary (B09079)

Marshal Sonavane (B09089)

Pathikrit Basu (B09099)

Sandeep Singh (B09109)

Group 9B Page 1
 Vijay Khairnar (B09119)

COMPANY OVERVIEW
The UB Group was founded by a Scotsman, Thomas Leishman in 1857. The
Group took its initial lessons in manufacturing beer from South Indian based
British breweries. United Breweries made its initial impact by manufacturing
bulk beer for the British troops, which was transported in huge barrels or
"Hogsheads". At the age of 22, Vittal Mallya was elected as the company's
first Indian director in 1947. After a year, he replaced R G N Price as the
chairman of the company. Kingfisher, the Group's most visible and profitable
brand, made a modest entry in the sixties. With currently into business of
Spirits (United Spirits Ltd.), Wine, Beer (United breweries Ltd.), Engineering
(UB Engineering Limited), Fertilizers (Mangalore Chemicals and Fertilizers)
company has made its mark and presence in each sector it is in.

United Breweries Limited (UBL) - has assumed undisputed market leadership

with a national market share in excess of 50%. Through a process of
aggressive acquisition and market penetration, The UB Group today controls
60% of the total manufacturing capacity for Beer in India. The flagship
brand, Kingfisher is now sold in over 52 countries worldwide having received
many accolades for its quality.

The sub-continent’s Beer market has been equally dynamic, growing by

almost 90% since the turn of the century. Exceptionally high growth was
generated in the northern states of Punjab, Haryana and Rajasthan which
took full advantage of reduced taxes and improvements in the distribution
policy. In contrast to Russia, consumers are displaying a distinct preference
for Strong Beer which has gained market share steadily in recent years and
now accounts for almost 70% of total volume. Kingfisher Strong replaced
Kingfisher Premium as the leading Beer and the Kingfisher brand overall now
holds a commanding position.

Group 9B Page 2
MACRO-ENVIRONMENTAL ANALYSIS
Political Factors
The political forces affect the beer industry to a large extent. The rates of
the beer in various parts of the country are affected by the taxes and duties
applied by the Govt. The political forces also affect the pricing of the beer by
lowering the duties or deregulating the distribution channel. This leads to
lower margins for the distribution channel partners. But, as 75% of the
Indian market is covered by two players, there hasn’t been a reduction in
the margins of the manufacturers. The taxation policies also affect the
consumption patterns.

Economic Factors
India is home to nearly one-sixth of the global population and is one of the
most attractive consumer markets in the world today. The total worth of
Indian Beer Market is Rs 750 crore. This market is expected to expand by
39% by 2010. The beer consumption has been growing at a CAGR of 7%
over last nine years. India provides attractive profit margins due to the
consolidated nature of the industry. Various research studies have shown
that a rise in the income levels has a direct positive effect on beer
consumption. The National Council for Applied Economic Research (NCAER)
projects India's 'very rich', 'consuming' and 'climbers' classes to grow at a
CAGR of 15 per cent, 10 per cent and 2 per cent respectively. Thus, India
gives ample opportunities for the UB Group to grow.

Social Factors
A deep-seated traditional social aversion to alcohol consumption has been a
traditional feature of the Indian society. However, as urban consumers
become more exposed to western lifestyles, through overseas travel and the
media, their attitude towards alcohol is relaxing. Social habits are
undergoing a transformation as mixed drinks are becoming more popular.
The greatest evidence of this trend is the increase in beer consumption
among women. More and more women are consuming beer – the
penetration in metropolitan areas is almost twice as high as the penetration
in other large cities – implying that the greater tolerance towards alcohol
consumption in metropolitan areas facilitates the consumption of beer. With
increasing urbanisation, this acceptance is only going to rise. As a

Group 9B Page 3
consequence of the high birth rates prevalent until the 1990s, a large
proportion of the Indian population is in the age group of 20-34 years. This
age group is the most appropriate target for beer marketers. This population
trend will give a further boost to the growth of beer consumption in India.

Technological
Beer industry is not technology specific. As the UB group is one of the oldest
players in the market, they have achieved economies of scale. Thus,
technological factor is not of great importance for the beer market.

SWOT ANALYSIS

PORTER’S FIVE FORCES MODEL

Threat of new Entrants - Low
In India, beer industry is growing with 11% CAGR making it attractive for
new players. Strong brands like Kingfisher and Hayward’s which are already
established and have strong brand recall will make it tough for new entrants
and they are expected to struggle to expand their consumer base as they
try to penetrate the beer market in India. Foreign brewers have been eyeing
the Indian market for some years now since India is widely acknowledged to
be the last untapped big growth market. Several international brewers have
built brand associations and are marketing their brands aggressively
through various point-of-sale promotions throughout their distribution
networks. But with strong players in the market any new entrant will face
problems of:
a) Economies of scale - For example benefit associated with bulk purchases
and sales – create high barriers to the national and
global markets
b) Cost of entry - For example investment in technology, costs associated
with sales
c) Distribution channel For example ease of access for competitors
d) Government Legislations -Introduction of new laws might weaken have
adverse effects
e) Differentiation - For example certain brands that cannot be copied
f) Supplier power - Possibility of forward integration by supplier

Bargaining power of suppliers – Low

Group 9B Page 4
Due to increasing costs of raw material and decreasing cost of barley
suppliers, bargaining power of suppliers was high but by doing backward
integration, done by acquiring Maltex Malsters Ltd., and shifting their
production of beer on malt the company has achieved a hold on its raw
material and considerably reduced supplier strength and dependency.
Company has also entered into collaboration with Government of Punjab and
Haryana for supply of its raw material.

Bargaining power of buyers - Moderate

This factor measures the extent to which customers are successful in forcing
prices down, or securing high quality or more service at the same price.
Customers tend to be powerful when the quantities they purchase form a
large portion of the seller's total sales. Buyers do have a very clear
understanding about the quality and as there are very few players in the
market the customer cannot influence the price in any significant way. But
while this is true a decline in consumable income shifts consumer
preferences away from premium brands to lower-priced brands since the
switching costs is low. Due to this the bargaining power of buyer tends to
increase.

Threat of substitutes - Moderate

India is predominantly a spirits market and beer has traditionally been a
minority preference for those who consume beverage alcohol. Therefore
substitutes are the biggest threat as preference for beer among alcohol
beverage drinkers is less but also the low penetration in beer consumption
in comparison to international levels offers the potential for substantial and
sustainable growth in demand for beer in India for years to come.

Rivalry amongst Competitors – Low to Moderate

Rivalry is the means through which competitors fight for position by using
tactics such as price, competition, advertisement battles, and new product
introduction, to lower the profits of competitors in the industry. As stated
above CAGR of 11% is expected for beer in the next 5 years due to which
many MNCs are eyeing the Indian market. Currently the major rivals for
Kingfisher Premium are Budweiser, Carlsberg, Foster and Tiger and for
Kingfisher Strong it’s Hayward 2000, Hayward 5000, Palone. SABMiller who
came to India by acquiring small breweries and has made its hold as best-
selling strong beer brand but still Kingfisher has managed to remain the
largest-selling strong beer brand with 29% market share. There are also
some small local players that are in the market but are not much of a threat
to Kingfisher.

Group 9B Page 5
 PRODUCT PORTFOLIO ANALYSIS

BCG MATRIX

STAR
Stars are high-growth, high-share businesses. Very often, they need heavy
investment for financing their rapid growth. Eventually, their growth slows
down and they turn into cash cows.
• Tajmahal Beer - Taj Mahal Premium Lager beer is prepared with finest malt
made at United Brewery own malt house using premium quality barley. It
has a distinct aroma and unique taste. The demand of this beer is mainly in
abroad (Australia, France, and USA) as it is premium priced and has bitter
taste. The demand outside is very good and it accounts for good market
share in the exported beer in India.
• Kingfisher Strong - spectacular growth of 36% is seen in strong beer (against
a market growth of 16%) was witnessed. Kingfisher Strong has now
achieved the number one position in the strong beer segment.

CASH COW
Cash cows are low-growth and high-share businesses. Such established and
successful business lines require less investment to maintain their market
share. They generate a lot of surplus that a company can use to pay its bills,
or invest in other businesses.

Group 9B Page 6
• Kingfisher Lager Beer - it has witnessed a market growth of 13% in
comparison to the lager beer industry growth of 9.4%.in the lager beer
segment, UBL is the market leader in all the 10 largest states of the Country.
UBL commands a market share of around 40% with 67% of the market share
in the lager beer segment.

QUESTION MARK
Question marks are low-share business units, in a high-growth market. They
require a lot of cash, for maintaining the market share. Any business has to
think between building a question mark into stars or whether they have to
be phased out
• London Pilsner - it has witnessed a market growth of more than 20% and
targeting a market share of 15%. (Indiantelevision.com)
• Kingfisher Draught - this beer has less water in comparison to other beer
type. It has good market growth as it is proving success in its 2nd year still
the market share is less. (thaiindian.com)
• Kingfisher Blue - this is launched around 8-9 months before to tap those
customer who wants less alcoholic beer in comparison to strong beer but
more than mild. It has around 6% alcohol content. Since it has launched
sometime before hence the market share occupied is less as strong beer
and lager beer segment is increasing very fast however market growth rate
main up.

DOG
Dogs are low-growth and low-share businesses. They may generate enough
surplus to maintain themselves, but do not hold out the promise to be a
large source of cash.
• Ub Ice Beer - this beer is launched for trendy people in 330ml can. It was
different from the traditional lager beer as it was made using a unique
refrigeration process which involves the formation of ice crystals which were
filtered out giving the brew a crisp, clear and strong taste. It didn’t get good
response as it has very low market growth instead people are drinking more
the lager and strong beer.
• Kalyani Black Label - one of the oldest brands launched in 1969. It has low
market share as it is only popular in east India and it assumed to be
economical. The market growth for this brand is not good as people are
shifting towards other beers such as London pilsner which is also economical
brand.
ANSOFF MATRIX

Group 9B Page 7
MARKET RESEARCH ANALYSIS

➢ Most appealing factor about the MIST:

Out of the five facts mentioned about the Mist, 36% of the people find ‘A
soft drink from kingfisher’ as the most appealing factor about the drink.
The second most appealing factor is the ‘Easy to carry can’ of the Mist.
Rest other factors like high carbonation, high level of caffeine and citrus
flavor are not that appealing as general soft drink consumers are much
concerned about the exact contents of ingredients in it. Thus our promotion
strategy should be focusing upon the Kingfisher as a parent brand and the
easy to carry can of the Mist.
➢ Level of interest in buying Mist:

Based upon the features mentioned, we asked the respondents about their
interest in buying MIST. 48% of the respondents said that they are
somewhat interested. 22% were found to be very interested in buying this
product, while 25% said that they are not sure. This interprets how our
marketing strategy should be. We are directing our strategy in such a way
so as to convert the somewhat interested people into interested ones and to
make the people who are not sure to try the product at least once.

➢ Demand determination:
To find out what would be the approximate demand of such kind of product
in the market, we asked people that how often they consume the products
which are somewhat similar to MIST.

Group 9B Page 8
53% of the respondents said that they consume the products similar to MIST
approximately 2-3 times a week. Looking at this statistic we estimated the
approximate demand (considering the cities in which the product is going to
be launched) and evaluated the sales and profit margins. The details are
shown in the profitability analysis.

➢ Willingness to pay:
As we are going with the value based pricing, we surveyed that how
people perceive the comparatively high cost of a soft drink from kingfisher.
We asked people that given the price of MIST as Rs 24, how much they are
willing to pay. 41% of the respondents said that they perceive MIST as a
high value product looking at the associated brand name and features. They
are willing to pay 5-10% more for the product like MIST. This shows that we
have space to increase the price of the product and increase the expenses
on advertising accordingly.

STRATEGIC FIT OF MIST WITH UNITED BREWERIES

GROUP
The UB Group (United Breweries Group) is a multi-faceted conglomerate with
business interests in Beverage Alcohol, Pharmaceuticals, Media, International
Trading, Aviation, Fertilizer, Research & Development, and Infrastructure
Development with a major focus on the brewery (beer) and alcoholic
beverages industry most of which is marketed under the Kingfisher brand. UB
Group is already planning to venture into the mineral water segment via the
Kingfisher Himalayan Water Brand. Thus strategically thinking Mist will be a
perfect fit in the UB Group’s expansion plans. In fact introduction of a soft
drink will make UB Group present in all versions of drinks and will be a
wonderful way to reach out to customers who admire the Kingfisher brand
but do not consume alcoholic beverages. Launching Mist will be a form of line
extension and will help it respond to customer’s needs favorably.

If we see the attributes of Mist, i.e. adventure, energy, fun and the “Hat Ke”
attitude; it is very much in sync with the existing brand image of UB Group.
Mist being a soft drink, it is very necessary to ensure proper distribution of
the product. This is where UB Group can use its core competency of having a
strong distribution network and bank upon its reputation regarding the
stringent quality control measures it follows. Also if we look at the soft drink
market, the only direct competitor of Mist is Mountain Dew and the market
for soft drinks providing the set of benefits as Mist is in a growth stage. That
makes it a perfect moment to introduce a drink like Mist under the Kingfisher
brand name. Considering the sync between Mist attributes and Kingfisher’s
brand image, we can also use the events held by the UB Group like the

Group 9B Page 9
Derby, Kingfisher Calendar, IPL matches , functions like the Incredible India
Party held last year at Cannes and the TV channel NDTV Good Times to
increase awareness about Mist. It can make use of the cricket and Bollywood
stars already associated with Kingfisher brand to endorse the product and
help build a strong connect with its loyal customers. Added to that serving
Mist in the Kingfisher Airlines will be a great way of making future customers
try out the drink.

PRODUCT INTRODUCTION
Mist is a soft drink that is being launched by UB group under Kingfisher
brand. It is a citrus flavoured drink and unlike other soft drinks, it is more
carbonated and has high levels of caffeine.

MARKETING STRATEGY
SEGMENTATION
Demographic
Segmentation

1. Age A consumer needs and wants change with age.

Hence this segmentation is important for this
product. On the basis of age, we can divide the
population into the following categories

a. 16-25 years

b. Teenagers

c. 25 years and above

This is an important segmentation since both

2. Gender
genders behave and respond differently to same
situations.

Geographic This segment primarily refers to the location of the

Segmentation segments. For our product there will be three
segments.

a. Urban

b. Semi-Urban

c. Rural

Group 9B Page 10
 Under this segmentation buyers are divided into
different groups on the basis of personality traits,
Psychographic lifestyle or values. For MIST, on the basis of
Segmentation behaviour, the following segments can be formed:

a. Excitement, Adventure seeking, Risk lovers

b. Health Conscious

c. Rebellious

d. Fashionable and stylish

For our product, we can begin with demographic segmentation. These

segments would be further divided using psychographic segmentation. The
product is soft drink, but we will not go in for mass marketing and rather
target based on psychographic segmentation. The target would also be
different from those of already existing soft drinks.

TARGETING
Evaluating the above segments on the parameters like Measurable,
Substantial, Accessible, Differentiable and Actionable, the target segment
for MIST would be:
• Individuals (both genders) in age range 15-29 in urban areas (this is because
the promotional activities would be focused on urban areas only).
• Based on market research data, we decided to target people who embrace
excitement, adventure and fun.
Reasons for choosing this target segment are:
• Our market research showed us that there were primarily five different
target groups in the market. There was considerable presence of other soft
drinks in the other target groups.
• Also in urban areas there are very few individuals in the age group 15-29
years who have not heard of Kingfisher; hence this would be our target age
group. This segment in India is substantial and would be profitable.
• Kingfisher already has large distribution networks for selling its other
products in urban areas. Hence there would be little cost of adding
distribution channels.

Group 9B Page 11
• It is also easier to involve people from the aforementioned age group in
various promotional activities and also they are easily accessible through
internet. So it would be easier reaching across to them.

POSITIONING
• Offer from the Kingfisher brand

• Higher price for perception of premium quality and

difference

Salient • Available only in stylised cans

Attributes • Invigorating effect due to higher caffeine

• Tingling taste and flavor

• Selective availability in retail outlets, pubs, clubs,

discos and other socializing places

• Adventure Seeking

• Thrill
Values • Different from competition

• Aspiration for youngsters to be associated with

Kingfisher brand.

As compared to Mountain Dew, we will position

Mountai MIST as an exclusive brand and it will only be
n Dew available through selective outlets. We are
going for value-based offering that is premium
in nature due to higher quality and reflects the
values of aspiration for Kingfisher.

Both Coke and Pepsi are brands that

differentiate themselves on the basis on the
Competitio endorsements eg. Pepsi targets the youth
n market through endorsements from young
Coke celebrities. Price is not a discriminating factor
between these two. We shall charge a higher
and
price as compared to Coke and Pepsi and put
Pepsi forth quality as a prime concern while
manufacturing MIST. This should help us
differentiating from Coke and Pepsi since they
have had troubles in the past regarding their
quality.

Group 9B Page 12
 Media • Extensive promotion schemes across different
Influence media (using teasers, events and web portals)
• Advertisement frequency
• Brand endorsement

Based on the above factors, our positioning of Mist vis-à-vis its main
competitor (Mountain Dew) and other similar lime and lemon flavoured
drinks (Coca cola was also included as a reference) has been quantitatively
depicted in the cobweb diagram below.

Some of the attributes are –

1. Ingredients – Mist is an augmented product over other citrus flavoured
drinks, being packed with higher carbonation and caffeine. So, we rated this
attribute above the other drinks.
2. Awareness – As Mist is a new product to be launched, we cannot gauge its
awareness. However, we intend to bring it to the desired level based on our
extensive promotional campaign which will be explained in the Marketing
Mix. As of now, awareness is being measured based on the current
awareness level for Kingfisher.
3. Availability – Unlike the extensive mass distribution and availability of the
other drinks, we intend to have a selective distribution for Mist.
4. Refrigeration – This is based on the amount of refrigeration required and
the level of service given by the companies by providing refrigerators. As
Mist is selectively available, we intend to provide refrigeration facilities at
all points of sale. This refrigerators will be small and exclusively for Mist. It
will have eye-popping displays labelled with the title Mist and will be
painted in its colours.

Group 9B Page 13
MARKETING MIX
PRODUCT

Functional Great taste

ity
Quench Thirst

Features • Invigorating effect due to higher caffeine

• Tingling taste and flavor

Appearanc Available in Stylised cans

e

PRICING

Competitor based pricing

The price of a can of Mountain Dew and other soft drinks is Rs. 20. We may
choose to price it higher than this since we are not going in for mass
marketing but rather selecting a specific target segment.

Group 9B Page 14
Cost Based pricing
Cost Based pricing is integral to establish the lowest point of a new product's
price range. By accurately analyzing cost per unit and taking into account a
margin that corresponds to the lowest satisfactory return on investment,
companies can define a new product's floor price. If the market cannot
support this price, then the company must reconsider if the product is
feasible.
If we take the major cost components as manufacturing, advertising and
distribution we can come to a rough estimate of the variable cost of Mist.
This will not include the costs associated with machinery installation, R & D
of the product and other associated capital expenses. This shall be collected
through contribution per can.
Using estimates for the major variable cost components we take:
i. Advertising Cost per can – Rs. 8 – 10
ii. Manufacturing Cost per can – Rs. 4-5
iii. Administrative Costs and other overheads per can – Rs. 2-3
iv. Distribution Costs – estimated to be Rs. 1 per level
Therefore the total cost of producing one can comes out approximately to be
Rs. 17-19.

Value Based Pricing

While some benefits have values that can be readily quantified, others such
as brand reputation and premium are more difficult to measure and must be
probed using market research. Since we are positioning Mist as a premium
brand it should be priced higher than its direct competitor (in this case
Mountain Dew) in order for the target group to it as a premium brand. Since
a can of a cola costs Rs. 20 then we will price it at Rs. 24 (we are trying
simultaneously to take advantage of bundles of five pricing and have the
customers perceive it as a premium brand).

As shown by the market research, customers are willing to pay more for a
product like Mist. Moreover, considering the aspiration value of the product
and the parent company, we have decided to follow value based pricing.

PROMOTION

According to the positioning of the Mist, a promotional campaign will be

designed to create awareness and pull in the market. AIDA model will be
followed for the promotional campaign. The steps taken in each stage will
make consumers to “Think, feel and do”. The steps to be taken in each step
of the AIDA model are given below:

1. AWARENESS

Group 9B Page 15
Objective
To create awareness about Mist among its target population

Media Channels
TV: ESPN, Star Sports, Star plus, Sony
Print Media: Autocar, Sportstar, Adventure time, Hoardings

Promotion Strategy
A teaser campaign will be run on TV for creating awareness about the Mist.
The teaser campaign will be such that it will only give the features of the
Mist and clarify its positioning. This will be aired before 4-6 weeks of the
launch. The TV channels targeted will be sports channels, Star Plus, Sony
etc. The shows during which the advertisement will be aired will be likes of
“fear factor”, “Khatron ke Khiladi”, MTV Roadies etc that goes in tandem
with the value proposition of the Mist. The Mist is for those people who
want thrill in their life. In sports channels, the advertisement will be shown
during sports such as Wrestling, Extreme sports, Formula 1 etc. The
frequency of the advertisements will be 10 times during a day for a channel
i.e for MTV channel, in which the advertisement will be shown during
Roadies, Stripped etc. in a day there will be 10 advertisements. In addition
to the advertisements, print media will also be used to create awareness.
Magazines such as Autocar, Sportstar, Adventure time magazine etc will be
used to show print ads. Hoardings and newspapers ads as one of the target
groups consist of those people who are bored of their lives.

2. INTEREST
Objective
Successful launch of the product and generating interest about the product

Media Channel
TV advertisements, Rock Concerts

Promotion Strategy
The teaser campaign aimed at increasing awareness about the Mist will be
run for 4-6 weeks before launch. The campaign will be changed as per the
time. The steps taken in the awareness stage will create the stage for the
launch of the Mist. The launch will made at an occasion which will create a
situation that will cater to the value proposition of the Mist. A grand Rock
Show is ideal for launch of the Mist. The city targeted will be Bangalore as it
has a huge tradition and rock culture. Rock show is an event where people
are on a high and come for a night that relieves them of all tension. The

Group 9B Page 16
amount of crowd gathered at a Grand rock show is more than 50,000
(figures based on average audience in the rock show of Iron Maiden in India
in last two times). The soft drink will be the official drink of the rock show.
This is just regarding the launch. For further creating interest, the soft drink
will be the official sponsor of the college circuit rock fests in India. This is
aimed to create loyalty customers in addition to generating interest.
Moreover, the soft drink will be sponsoring shows such as fear factor and
Khatron ke khiladi, Roadies etc. The frequency of advertisements will be
increased to 15 times for a channel for a day. It will also sponsor the Force
India team.

3. DESIRE
Objective
Create aspiration value for the product

Media Channels
Print and TV advertisements, interactive web portal

Promotion Strategy
After creating sufficient awareness and desire among customers, the
advertisement will now focus on creating an aspiration value of the Mist.
The Mist is from UB group which already has aspiration value among its
consumers. The motive is to move from interest of consumer to sales of the
Mist. For this, campaigns will be designed to make a connection with the
consumers. For example, a normal college student, who is bored of his
routine life and want some change in his life. The advertising campaign will
be about what the soft drink can do for him. The frequency of
advertisements will be increased to 10 times for a channel for a day. A big
step that will be taken to increase the connection of the consumer with the
Mist will be to create an interactive web portal. This portal will contain
interesting games that will throw out the boredom out of people. In addition,
customers will be able to share their soft drink moments with other people.
It will enable them to share their stories, photographs, songs etc. This will
enable us to create a loyal customer base, top of the mind recall and
manage the needs and demands of each customer.

4. ACTION
Objective
Converting the interest about the product into sales

Media channels
Print and TV advertisements, interactive web portal

Group 9B Page 17
 Promotion Strategy
After sufficient desire has been generated in the customer, sales promotion,
celebrity endorsements etc will be undertaken for generating sales. The web
portal will be used for sales promotions. Based on number of times you visit
the site, games won, record set, stories shared etc, winners will be declared.
The winners will get a trip to Grand Canyon, Mount Everest etc. This will
generate more interest, desire etc among customers in addition to
strengthening the proposition of the Mist. The Mist will continue sponsoring
shows which are “out of the box”, thrilling and target the youth.

Measuring interaction
A contest will be run during the shows asking the messages conveyed in the
Mist advertisements. The reward for winning the contests will be kept in a
way so as to motivate maximum number of people to participate in that. The
number of entries received will give us an estimate of number of people
remembering the advertisement and its message and hence the product.
The same kind of estimate will be obtained from web portal also.
INTEREST
AWARENESS
ACTION
DESIRE
d aspiration basedshow
Launch at Rock
Teaser
Sales promotions
TV ads
Sponsoring
web TV shows
campaign
Celebrity
portal-games, and Force
share stories, moments, songs
India endorsements
Print ads
Sponsoring college
Hoardings
Contests festivals
on web
TV ads portals
Sponsoring shows
Organize sports
events

The AIDA model in a Nut shell:

Group 9B Page 18
 PLACE

THI FEEL DO

PLACE

The distribution will be on 2 levels –

• To large retail outlets
• To pubs and other hangouts and places for socialising

We’ll be leveraging on the existing distribution channels for beer cans as

far as clubs and pubs are concerned. As we’re not focussing on mass
distribution, we’ll be channelling our distribution mainly towards large retail
outlets, hypermarkets and key accounts.

The basic flowchart of our distribution channel is shown below -

PROFITABILITY ANALYSIS
Expenses
1. Manufacturing Costs – Variable Cost
2. Advertising and Marketing Budget – Fixed Cost
3. Administrative Overheads –
4. Distribution – Variable and Fixed

Revenues
Right now the only revenues are to be derived from the selling of cans. The
market for carbonated drinks in India is estimated to be worth US$ 1.5
billion which is approximately Rs. 6900 Cr. We hope to capture about 2% of
this market in the first year. Also we assume our growth rate to be at the
rate of 10% which is in line with the market growth rate.
Also we have assumed that there will be no Cap-Ex since the company can
use its existing capacity to bottle cans. If it is required to set up a bottling
plant then approximately Rs. 20 Cr. plant can be set up and it will have a
capacity worth Rs. 200 Cr. This will be depreciated on a straight-line basis
and will increase the costs by 2 Cr per year.

Group 9B Page 19
 Year 1 Year 2 Year 3
1,38,00,00,00 1,51,80,00,000. 1,66,98,00,00
Revenues 0.00 00 0.00
Manufacturin 34,50,00,000. 37,95,00,000.0 41,74,50,000.
g Costs 00 0 00
Advertising
and
marketing 58,00,00,000. 55,90,00,000.0 54,69,50,000.
costs 00 0 00
Distribution 37,25,00,000. 38,97,50,000.0 40,87,25,000.
Costs 00 0 00
Administrativ 15,00,00,000. 15,00,00,000.0 15,00,00,000.
e Overheads 00 0 00
2,00,00,000.0 2,00,00,000.0
Depreciation 0 2,00,00,000.00 0
-
Operating 8,75,00,000.0 12,66,75,000.
Income 0 1,97,50,000.00 00
We see here that our break-even year is Year 2 and payback period is
approximately 2 years 6 months.

Assumptions
Initial Sales 2% of market
Growth of sales 10% of market
Trial Rate 0.05
Frequency 10.00
Rate per 30 sec spot 1,00,000.0
Advertising
ad. 0
Assumptions
Reach to target
audience 0.10
Target Audience 0.03
Print Ads + Hoardings 5,00,00,000.00
Rs. 3 per can + fixed cost of
Distribution 200000000
Other Promotion
Activities 25,00,00,000.00
10,00,00,000.00 first year
Second
Website Development
5,00,00,000.00 year
and maintenance
subsequent
1,00,00,000.00 ly

Group 9B Page 20
Advertising and Marketing Costs
These costs constitute the major part of a soft drink company. Here these
costs include advertising, website development and maintenance, print ads
and other promotional activities carried out each year like in order to
increase sales such as conducting sporting events etc.
The costs break up is already given in assumptions and the costs for
advertising in Rs. 18 Cr. which would include air-time and all other costs
such as fees of agencies etc.

Group 9B Page 21
ANNEXURE

1.Test market survey

This survey is about the new product concept which is described as follows:

Mist is the soft drink that is being launched by UB group under the kingfisher
brand. It is citrus flavored drink and unlike the other soft drinks it is more
carbonated and has high levels of caffeine. Mist is not just any ordinary cola
drink but it is the symbol of thrill, passion and fun.

It comes in the standard 240ml chilled can.

Ingredients: carbonated water, natural flavor, citric acid, sodium benzoate

(preserves freshness), caffeine, sodium citrate, gum arabic, calcium disodium
edta (to protect flavor), brominated vegetable oil, panax ginseng root extract,
blue 1, red 40

Nutrition Info:

Per Serving(240 %
ml) DV*

Calories 140 -

Total Fat(g) 0 0

Sodium(mg) 40 2

Total 35 10
Carbs(g)

Sugar(g) 27 -

Protein(g) 0 -

Group 9B Page 22
 Not a significant
1. Below are lists of features that are part of source of other
Mist. How important is each for you? nutrients.
Extr Imp NeutrDaily
*Percent unim Extr
Values
m (DV) al p
are based onunim
a
imp 2,000 calorie diet p

a. Citrus flavor

b. High level of caffeine

c. High level of
carbonation

d. Easy to carry can

e. A soft drink from

Kingfisher

1. Based on the description, how interested would you be in buying Mist if

priced within your budget?
a. Not at all interested
b. Not very interested
c. Not sure
d. Somewhat interested
e. Very interested

1. Please mention the name of the particular product(if any) that you recall
based on the description above
2. What is it that you like most about the Mist(mention as many items as
you can)
3. What is it that you like least about the Mist?
4. How often do you feel the need of this kind of product?
a. More than once a day
b. Once a day
c. 2-3 times a week
d. Once a week
e. 2-3 times a month
f. Once a month
1. Given the price of a MIST can (240ml) as Rs 24, how much you are willing
to pay?
a. 20-30% more
b. 5-10% more
c. No more or no less
d. 5-10% less

Group 9B Page 23
 e. 20-30% less

1.A FEW PRINT ADS

Group 9B Page 24
Group 9B Page 25
Group 9B Page 26