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Workshop on Entrepreneurship





Neo Life Mini Portable Fridge

A Business Plan




Faculty Guide:
Prof. B. S. Revankar




Submitted by:

Group AD1

Debdripta Sengupta
Harsh Mohan
Hirangi Pandya
Mohit Sethi


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Executive Summary

People from all walks of life always feel the need of a product that helps them improve their
lifestyle. Sometimes that very product may not be the ultimate need of the consumer but still
if provided forms a very strong part in their day to day life.
Neo Life - 12 litres Mini Fridge Warmer Cooler and Portable is a compact and portable
thermo-electric refrigerator cum warmer designed to be used in vehicles, houses, offices, etc.
It has a gross capacity of 12 litres and it can comfortably hold four 4litre bottles of water or
16 cans. It guarantees excellent chilling and keeps ice cubes intact. It not only keeps your
drinks chilled but it also warms up your food effectively whenever you need it to do so. It
comes with AC and DC connection and features triple insulation. This fridge cum warmer
does not have any compressor, refrigerant gas or coils and is completely CFC free. Featuring
a versatile design, it does not require any installation. Place it either vertically or horizontally
and simply plug it in. This small wonder enables temperature setting via digital control. This
refrigerator also features a removable partition panel.

Fridge cum Warmer is an effective solution to the needs of students and office goers who
need cold drinks or warm food during their long working hours. Udupi and Manipal have a
huge number students and working people who would be benefitted by this product. The idea
is to design a marketing plan to effectively market the product in the diverse town of
Manipal. It is known fact that Manipal is home to citizens from all across India and if a
product do well in this small yet diverse market, there is always a high probability that the
product will do well in the real market across India.
We have made a humble attempt to try our knowledge and make a draft business plan for this
unique and diverse product.







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Table of Contents
1. The Product ....................................................................................................................... 4
2. The Management .............................................................................................................. 4
3. Company Goals ................................................................................................................. 4
4. Current Scenario .............................................................................................................. 5
5. Customer Expectations and Needs .................................................................................. 5
6. Environment Analysis: ..................................................................................................... 7
7. Marketing Goals ............................................................................................................... 8
8. Estimating market demand ............................................................................................. 9
9. Challenges........................................................................................................................ 10
10. Summary of different marketing strategies ............................................................. 10
a. Sales strategy ............................................................................................................... 10
b. Competition strategy .................................................................................................. 11
c. Growth strategy .......................................................................................................... 11
11. Budgeted sales and expenses ...................................................................................... 11

















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1. The Product

Neo Life - 12 litres Mini Fridge Warmer Cooler and Portable is a compact and portable
thermo-electric refrigerator cum warmer designed to be used in vehicles, houses, offices, etc.
It has a gross capacity of 12 litres and it can comfortably hold four 4litre bottles of water or
16 cans. Based on NASA technology, it guarantees excellent chilling and keeps ice cubes
intact. It not only keeps your drinks chilled but it also warms up your food effectively
whenever you need it to do so. It comes with AC and DC connection and features triple
insulation. This fridge cum warmer does not have any compressor, refrigerant gas or coils
and is completely CFC free. Featuring a versatile design, it does not require any installation.
Place it either vertically or horizontally and simply plug it in. This small wonder enables
temperature setting via digital control. This refrigerator also features a removable partition
panel.

Fridge cum Warmer is an effective solution to the needs of students and office goers who
need cold drinks or warm food during their long working hours. Udupi and Manipal have
students and working people who would be benefitted by this product.
Our business plan will include the details of our business operations, from the process of
manufacturing till the delivery.

2. The Management

a. Key Employees:
Rahul Singh, President. Rahul Singh has worked in the electronics goods industry since the
mid-1990s. In the year 2002, he opened an electronics goods company in Bangalore. He
worked for the company full-time for five years. In 2007, Rahul joined a Mumbai-based
electronics goods company as a sales associate for 5 years, earning recognition as the top
sales associate every year. He will be the President of Neo Life.

b. Associates:
In addition to the above employees, Neo Life has one full-time sales associate and a part-time
sales associate. Yet with the rapid growth of Neo Life, we plan to hire more sales associates,
an administrative assistant, and packing specialists next year.

c. Advisory Board:
Neo Life is in the process of forming our advisory board. We have already secured sales
associates and an Advertising Creative Director to serve on our Advisory Board.

d. Management Structure:
President is involved in all aspects of the day-to-day operations of Neo Life. He works
closely with the Vice-Presidents to support activities over which they have specific
responsibility. Each Vice-President is given a wide degree of decision-making authority in
their area of the company.

3. Company Goals
The goals of Neo Life:
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1. To become the leading manufacturer in the 10-15 liter cooler-cum-warmer in
Manipal, Udupi and Mangalore region.
2. To expand our business in other urban cities like Bangalore in next 2 years
3. To provide excellent customer service
4. To differentiate our services by providing great packaging and with energy efficient
products

4. Current Scenario
Manipal, often known as the University City is home to some of the esteemed educational
institutions like Kasturba Medical College, Manipal Institute of Technology, T. A. Pai
Management Institute, etc.,
Today, Manipal has more than 70,000 students graduate and has an ever increasing enrolment
number of more than 15,000 students out of which most of students are hostel residents.
The climate in Manipal is humid and warm between November and May and wet and cool
during the monsoon months from June to October. It has a tropical climate characteristic of
coastal plains in the West of India. Manipal, being located on an elevated place near the
seashore, has fine breeze throughout the day and the temperature ranges from 24 C to 38
C for most part of the year.
Though products like tropicool, which are the competitors, are easily available online, the
high cost of such products make them unattractive for the students. Moreover, the location of,
Manipal makes it a little inconvenient to order online. Thus a local dealer which is easily
accessible will be more attractive for the students as well as local residents of Manipal.
The product being as small as 12 litres is easy to fit in hostel rooms, bed-rooms as well as
cars, making it a very useful product for students, working people and frequent travellers.
Apart from this, the CFC free Fridge cum Warmer complements the pollution-free, clean and
green environment of Manipal.

5. Customer Expectations and Needs
The 12-ltr fridge cooler-cum-warmer is a good example of the way in which different groups
of customers can have different expectations. According to the online survey, we conducted
with respondents spanning age range of 18-50 years, we found that consumers believe this
product to be useful in office or cars or hostel rooms or living rooms.

Question Yes / Like No / Does Not Like
People who prefer drinking coffee/soft drinks while
driving
62% 38%
People who like the portability concept of this
product
60% 40%
Need of a fridge at Office / Hostel / Car 59% 41%

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Based on the survey shown above, we have identified the customer needs which can be filled
by our product. In the Udupi/Manipal/Mangalore region, there is an unmet need of a product
which can act both as cooler and as warmer, yet will be portable, lightweight, economic and
eco-friendly.















Origin Need
Drink beverages while driving and also use the fridge in
office, hostel and car
Psychological Need and Performance Need
Consumers like the portability feature of the product
Students prefer to have beverages multiple times in a day
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6. Environment Analysis:



Opportunity Threats


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Affordable Price

SO SO

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Portability

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Useful in all seasons SO

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Uses less electricity

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Light weight

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Eco friendly SO



W
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Cannot be used for
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Very less awareness WO

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Complicated for
some users


WO WO

Students may find it
costly


WO

WT
Limited temperature
range


WT



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7. Marketing Goals
a. Segmentation of the customers
The customers are segmented based on three factors:
Demographics 20-40 years old
Mostly students and office-goers
Geographic Initial launch in Manipal / Udupi / Mangalore
Further plans of expansion in Bangalore
Psychographics People prefer having their drinks hot or cold

b. Identification of the target segment
We will be targeting the following customers:
Students residing in hostels
Office-goers as well as people who drive to office or go on a long drive
Family persons who prefer to use it in their rooms
c. Positioning the product
Our product will be an economic and widely accessible to all the customers. More
specifically, the product will be positioned as follows:
Eco-friendly energy efficient and economic
Multi-usage of keeping beverages cold and foods (or beverages) warm
Small size, portability and good design to accommodate multiple items will
position the product as useful for students in hostels, office goers or people going
on a long drive in a car
d. Inventory in Udupi
A small storage facility (around 800 sq feet) will be taken on rent. The finished products will
be stored in this storage facility. There will be a small office room here for daily operations.
The sales personnel will take the products to the nearby retailer shops from this storage
facility.
e. Plan method of distribution
The collection of finished products will be done once a week, however, if the demand is high
in few months (as forecasted during the months of May and June), the frequency of
collection can be increased to twice per month. The distribution to retailers will take place in
Mini Goods carrier or tempo.
f. Promotion plan
When the product will be launched in January, there will be promotional fair in Manipal to
create awareness. During May and June, there will be another promotional fair to attract the
new students coming to Manipal. Also, during the month of September, there will be another
promotional fair in Bangalore to create an impact before entering the Bangalore market in
October.
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There will be other promotions like online advertisements and social media ads along with
ads in print media.
g. Long term plan
1. Expanding into Bangalore
We will enter the Bangalore market after 9 months of operation in
Udupi/Manipal/Mangalore region. There are existing competitors in Bangalore, so
retailer commission will be higher as compared to Manipal/Udupi region.

2. Opening a storage facility in Bangalore
Another storage facility will be opened in Bangalore
once we enter Bangalore. This will incur more cost,
however, it will help us to respond to the market
demand quicker.

3. Online distribution channel
There are long term plans of expanding our distribution
channel to online shopping destinations like Flipkart,
Rediff Shopping and e-Bay. This will happen once we
expand our business in larger cities like Bangalore.









8. Estimating market demand
The demand of 12 ltr fridge cooler-cum-warmer in the Manipal/Udupi region is tabulated
bel
ow.
It is
fou
nd
that
in
the
full
mar
ket
pot
enti
al
the total demand is Rs. 68, 73,057.


Market Demand
Percentage of people willing to use the product 57.2%
Total number of students and other potential buyers 2000
Number of potential buyers 1145
Average number of buyers per month (assuming no repeat
purchase)
95
Quantity purchased 1
Cost of one unit of 12 ltr fridge cooler cum warmer 6000
TOTAL MARKET DEMAND Rs. 6873057
Will
Buy
57.2%
Not
Buying
42.8 %
Willingness to buy
People willing to use
People Not willing to use
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9. Challenges

i. Less awareness
The product being new to market, not many people are aware about it. Less
availability of similar products in local stores makes the awareness even less. Thus,
the marketing strategy begins by creating awareness among potential customers about
the product and thereby increasing the customer base.
ii. Complicated for some users
The dual feature of cooling and warming in the same box makes the understanding of
product difficult. It takes time to understand the working of the Fridge cum Warmer
taking into account all the safety measures.
iii. Cost Issues
Students, who are yet to earn on their own, find it costly to spend an amount of
Rs.6000 for a Fridge cum Warmer of the capacity of 12 liter. Especially, when the
usability of product is mainly during the two- four years duration of their course after
which the product might not serve its original purpose.
iv. Limited temperature range
The temperature range provided by this Fridge cum Warmer is -5C to 65C limiting
its capability to freeze or boil.This limited range makes the product less attractive to
customers thus making it a challenge for the marketing manager to sell.
v. Competitors
Online available similar products are primary competitors, Tropicool being one of the
major of them. Also, substitutes like ice-cool box, which are easily available in the
market and low on maintenance, can be considered as competition.
vi. Sales dependent on time of year
Sales are at its peak in months of June-July when new students enroll in colleges after
which the demand decreases drastically.

10. Summary of different marketing strategies
a. Sales strategy

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Sales would be done through local retail stores which are available in large
numbers in Manipal/Udupi/Mangalore region
This would pay off as most of the students/office goers visit the retail stores to
buy other products and also due to the absence of many supermarkets in this
region.
Retailers in Manipal/Udupi and in Bangalore will get a commission on 10% and
12% for each unit sold.
2-year warranty for the customers.
b. Competition strategy

Use first mover advantage: There are no close substitutes for the product in the
Udupi/Manipal market.
Manufacturers like Tropicool have their presence in Bangalore. So it will be
challenging to gain market share in Bangalore. Also, major players can enter the
Udupi/Manipal market soon.
c. Growth strategy

Promotional fair in Manipal to be conducted in January (when the product is
launched) and in June (when new students arrive in Manipal for college
admissions), also in Bangalore a promotional fair to be conducted in September
to create an awareness before the product is launched in October in Bangalore.
Customers and distributors will be given demonstration on the usage of the
product by the sales and marketing personnel.
Post-purchase behavior of the customers will be monitored and proper servicing
and maintenance will be covered under the warranty scheme.

11. Budgeted sales and expenses
Assumptions:
Manufacturing cost = Rs. 4500
Retailer Commission = 10% in Manipal & 12 % in Bangalore

Jan Feb Mar Apr May Jun
Sales Units 60 60 70 80 80 90
Revenue 360000 360000 420000 480000 480000 540000
Product Manufacturing Costs 270000 270000 315000 360000 360000 405000
Rent 8000 8000 8000 8000 8000 8000
Distribution 10000 10000 10000 10000 10000 10000
Salaries of Sales & Marketing
Personnel
20000 20000 20000 20000 20000 20000
TA/DA 5000 5000 5000 5000 5000 5000
Online Advertising/Print Media 5000 5000 5000 5000 5000 5000
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Social Media 2000 2000 2000 2000 2000 2000
Promotional Fairs-
Manipal/Udupi/Mangalore
15000

15000
Retailer commission (@600 Rs/Unit)-
Udupi/Mangalore/Manipal region
36000 36000 42000 48000 48000 54000
Demonstration expenses 6000 6000 7000 8000 8000 9000
Miscellaneous 6000 6000 7000 8000 8000 9000
Total Costs 383000 368000 421000 474000 474000 542000
Profit/Loss -23000 -8000 -1000 6000 6000 -2000

Jul Aug Sep Oct Nov Dec
Sales Units
100 100 100 200 250 300
Revenue
600000 600000 600000 1200000 1500000 1800000
Product Manufacturing Costs
450000 450000 450000 900000 1125000 1350000
Rent
8000 8000 8000 23000 23000 23000
Distribution
10000 10000 10000 40000 40000 40000
Salaries of Sales & Marketing
Personnel
20000 20000 20000 55000 55000 55000
TA/DA
5000 5000 5000 15000 15000 15000
Online Advertising/Print Media
5000 5000 5000 5000 5000 5000
Social Media
2000 2000 2000 2000 2000 2000
Promotional Fairs-Bangalore

50000

Retailer commission (@600
Rs/Unit)-
Udupi/Mangalore/Manipal region
60000 60000 60000 54000 54000 60000
Retailer commission (@720
Rs/Unit)-Bangalore

79200 115200 144000
Demonstration expenses
10000 10000 10000 20000 25000 30000
Miscellaneous
10000 10000 10000 20000 25000 30000
Total Costs
580000 580000 630000 1213200 1484200 1754000
Profit/Loss
20000 20000 -30000 -13200 15800 46000