IV.

Preliminary Marketing Plan

I. The marketing plan

The product is Packaged Milk and the target audience is the population of India. The
majority of the market has been already captured by another local company.
A. Marketing objectives

To make sure that the majority of Indian population is using our product instead
of our local competitors.
1. Target market(s) (specific description of the market)
The target market is every person in India who can afford to buy packaged
milk i.e. SEC A, B and C. There is no age limit so there is a huge target
market.

2. Expected sales 2013

Expected sales till the year 2013 are 1 million units of each SKU that makes
about 65 million Indian rupees.

3. Profit expectations 2013

Expected profits till the year 2013 are about 15 million Indian rupees and are
expected to increase year by year since the startup marketing cost was too
high.

4. Market penetration and coverage

The market would be penetrated through mass advertising, activation, and
distribution of the product. Every state of India would be covered. 80% of
marketing will be done in the SEC A, B and C areas and 20% in the
remaining areas.
B. Product adaptation or modification

The product and packaging is very simple to use. The product doesn’t need any
modification for use. Its milk and it can be used with anything.
1. Core component
The core component in the product is rich creamy milk that is 100% pure and
full of vitamins, protiens and carbohydrates.

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 2. Packaging component: The packaging component is rectangular-cuboid
paper carton with inner foil coating and decanting lid at the top.

3. Support services component

Support services components are cartons and retail shelves.

C. Promotion mix
The following promotion mix would be used:

1. Advertising

a. Objectives
To create awareness among the population about the brand and its
benefits and to reach the sales target

b. Media mix
TV ads, radio ads, newspaper ads, billboards, mall activation and
sampling would be used as the media mix

c. Message
The message would be about the benefits and low cost of the
product with high and preserved quality.

d. Costs
The total media cost will be around 5.5 million Indian rupees

2. Sales promotions

a. Objectives
To establish long term relations with customers, distributors and
retailers

b. Coupons
Retailers and distributors would be given special coupons on
specific number of sales

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D. Distribution: From origin to destination
Since the product has a short shelf life, the distribution should be in a way that takes
minimum time to deliver the product to destination (India) from origin (Pakistan).
1. Port selection
There are many ports in India that are not very far away from Pakistan and we
can deliver the product to India in 24 to 30 hours.
a. Origin port
The Karachi port will be the origin port as we have the production
plant and distribution network here.

b. Destination port
The destination port will be Bombay Port because Bombay is the
hub of India that connects almost every state of India

2. Mode selection: Advantages/disadvantages of each mode

a. Railroads
• We can deliver a high quantity of product
• Cheapest way to deliver
• Unsafe way to deliver
• Will take relatively higher time to deliver

b. Air carriers
• Comparatively expensive way to deliver
• Will take relatively less time to deliver
• Safe way to deliver
• Relatively lower quantity can be delivered

c. Ocean carriers
• Will take very high time to deliver
• A very high quantity can be delivered
• There are minor safety issues
• Costs are relatively lower

d. Motor carriers
• Cannot deliver to distant places
• Costs are relatively higher
• A very low quantity can be delivered
• Delivery can be done in very short time
• Very safe way to deliver

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 3. Packing
The packing will be rectangular cuboids paper carton with inner foil protection
and decanting lid

a. Marking and labeling regulations

The benefits, ingredients, origin, expiry date, manufacturing date,
parent company, nutrition facts and plant location will be marked
on the packing that is required by the law in India.

b. Containerization
Standard containers will be used to deliver the products through
railroads, oceans and air carriers.

c. Costs
The costs of packing and containerization will be about 0.6
million Indian rupees per container.

E. Channels of distribution (micro analysis)

1. Retailers
a. Type and number of retail stores
Retailers include all types of stores i.e. super stores, departmental
stores, specialty stores, small stores and bakeries all over the state.

b. Retail markups for products in each type of retail store

For bakeries, small stores and departmental stores, mark-up would be
87% while for the super stores and specialty stores; mark-up would
be 83%.

c. Methods of operation for each type (cash/credit)

Every retailer will be given the stock on credit and the sales
collection will be done on monthly basis.

d. Scale of operation for each type (small/large)

The stock will be given to departmental stores, specialty stores and
super stores on large scales while for bakeries and small stores, the scale
would be small.

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 2. Wholesale middlemen
a. Type and number of wholesale middlemen
Around 10 different specialized wholesalers will be chosen from the
local market.

b. Methods of operation for each type (cash/credit)

Every wholesaler will be given the stock on credit and the sales
collection will be done on monthly basis.

d. Scale of operation (small/large)

Wholesaler for small stores and bakeries will be given small scale of
stock while rest will be given at least a truckload.
3. Import/export agents
Local import and export agents will be chosen from the market.
4. Warehousing
a. Type
Private warehouses will be bought that will have enough capacity to
store the stock.

b. Location
The warehouses will be located in every state that we are operating
in.

F. Price determination
1. Cost of the shipment of goods
The cost of shipments will be a recurring cost i.e. 10,000 Indian
rupees per shipment.
2. Transportation costs
The transportation cost will be a recurring cost i.e. 5,000 Indian
Rupees per truckload.

3. Handling expenses
The handling expenses will include the warehouse cost, depreciation
cost and the labor for handling.

a. Pier charges will be Rs. 10000 per month

b. Wharfage fees will be Rs. 5000 per month
c. Loading and unloading charges will be Rs. 1000 per container

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 4. Insurance costs
The insurance cost will be around 10000 rupees per year

5. Customs duties
The custom duties will cost around Rs. 5000 per shipment.

6. Import taxes and value-added tax

All taxes will be paid according to the Indian law.

7. Wholesale and retail markups and discounts

All wholesalers and retailers will be given 10% markup on each SKU
of the product.
8. Company’s gross margins
The company will have an average of 25% margin on all the SKUs.

9. Retail price
The retail price for the 250 g pack will be Rs. 10 each, for 500 g pack,
price will be Rs. 19 each and for 1 kg pack, the price will be Rs. 37 each.

II. Pro forma financial statements and budgets

A. Marketing budget

1. Selling expense
The selling expense will be around 0.5 million Indian rupees.
2. Advertising/promotion expense
The advertising and promotion expense will be around 1 million Indian
rupees.
3. Distribution expense
The distribution will cost around 0.6 million Indian rupees.
4. Product cost
The product cost will be arround 28 million Indian rupees.

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III. Resource requirements

A. Finances
The company is a partnership between the owners of the company and all the
finances will be invested by the two partners X and Y. They both will ask for
business loan from the bank. After some time, if all goes good, the company
will be converted into a public owned company.

B. Personnel
The major part of personnel required is the distributors and marketing agents
since the production and other departments are located in Pakistan. Other
operations than the marketing and distribution will be outsourced.

C. Production capacity
The production will be done in Pakistan (Karachi) and the plant will be near
the farms so that we can minimize the cost of inbound logistics.