Principles Of MarketingPrinciples Of Marketing

Presented By:Haleema InamMoomal Sara Kanza RashidAtta IlahiShadab MughalArifa KhalilJibran Qureshi

Company ProfileCompany ProfileFauji Cereals, a fully owned Project of Fauji Foundation

It was incorporated as a Public Limited Company in 1954 and initially started its operations in collaboration with Quaker Oats England

Fauji is a comprehensive enterprise that specializes in processing, packing, trading of cereals, and foodstuffs

Fauji offers the best product, quality and more competitive price to the customer

Mission, Vision, ObjectiveMission, Vision, Objective

Fauji Vision is to be the leading food company in Pakistan by providing consumers with healthy food at affordable price

Fauji focuses on bringing our best to consumers each day

We strive to operate our company on a sound financial basis of profitable growth and increasing value for the firm and creating career opportunities and financial rewards for our employees

ProductProductProduct Name: Fit Bite

Available flavors: Chocolate and Strawberry.

Product Objectives & Product Objectives & StrategyStrategy

Objective: To provide the consumer with high quality, healthy and stomach filling breakfast with nutritional benefits and which provides excellent health and strong body.

To create a high and premium quality product that offers the best alternative to consumers in comparison to other brands in terms of health.

To emphasize the key benefit of the product i.e. .health and fitness. Our breakfast bar offers stomach filing and healthy breakfast especially for people with hectic and tight schedule.

Marketing ObjectivesMarketing Objectives

Capture Market share up to 3% in the first year

Second year we intend to capture 5%

Market SituationMarket SituationBreakfast products are one of the most competitive

categories of consumer products. Karachi’s current population is13million The city's population is estimated to be growing at

about 5% per year On the basis of the population rise we can state that

the breakfast market is increasing in size since increasing number of people consume food.

Competitor AnalysisCompetitor AnalysisDIRECT COMPETITION

Our direct competitor continues to be Kellogg’s which is a global market leader and upcoming brands like Nestle, Quaker Oats, General Mills cannot be ignored.

INDIRECT COMPETITION

The Indirect competition consists of alternative breakfast options that include Scrambled Eggs, Halwa Puri, Biscuits, Sandwiches and Fresh Fruit.

MARKET SHARE

Fauji= 70%, Kellogg's= 20%, Nestle= 5%, Weetabix= 3%, POST= 2%

Industrial CharacteristicsIndustrial CharacteristicsThe ready-to-eat (RTE) cereal industry is characterized

by high concentration, high price cost margins, large advertising & introduction of new products

The cereal industry can be segmented into ready-to-eat (RTE) cereals (cold cereals) and hot cereals.

The latter sector includes both traditional porridge oats and the newer `instant' varieties.

Breakfast cereals can also be classified by category of product, i.e. staples, children's, health, adult indulgence and muesli.

The brand enjoys a clear-cut market leadership position in Wheat and Barley Porridge with over 70% market share.

The brand enjoys a clear-cut market leadership position in Flakes with over 80% market share.

Globally, the cereal industry is an oligopoly with four large companies and a few very small niche companies.

The breakfast cereal industry has gross profit margins of 40-45%

INDIRECT COMPETITORS

DIRECT COMPETITORS

Market SegmentationMarket SegmentationThe market for Fit Bite breakfast Bar holds

many different sets of buyers coming from different demographic, cultural and psychological backgrounds

Healthylicious Breakfast Bar’s market can be segmented on the basis of three categories:

Children and youngstersWorking men and womenHealth conscious people

MARKET SEGMENTATIONMARKET SEGMENTATION

Health freaks Live to eat Eat to live

Age group 30-60 25-30 15-24

Income 150000 and above 40000-70000 15000-25000

Lifestyle High living standard

Status Oriented economical

Demographics Upper class Upper middle class Middle class

Purchase behavior Frequent buyer Twice in a week They don’t really bother

SWOTSWOT

STRENGTHSSTRENGTHSBreakfast bars are suited to modern eating trends.

Breakfast bars are now more popular amongst consumers specially the younger generation.

We will use existing grocers as channels of distribution for chomp fit bite.

Our pricing strategy is below most of the competition, giving fit bite a competitive edge with consumers looking in terms of value.

The company has a sound finacial base because it

has 70% market share as shown below at competitor market Share table.

Experienced and skilled staff because we will be using our previous staff. We will not be hiring &training the new one.

The first locally produced breakfast bar to promote general health in the market.

A new and a better brand image can help attract more sales.

WeaknessesWeaknesses

The taste is not so good as compared to our competitors because meal replacement bars cannot be sweet like corn flakes.

People may take time to adapt it initially because the industry of meal replacement bars is not common in Pakistan.

Product if it doesn’t meet customer demands, will most probably fail to succeed and might not meet the positive return on investment in terms of revenues

OpportunitiesOpportunitiesFirst locally produced breakfast barPlenty of space for more growth in the market. Consumer demand for healthier foodA new and a better brand image can help attract more

salesBreakfast market and industry is growing

continuouslyLack of quality products in the local cereal industryExport Market

ThreatsThreatsOvercrowding in the market could cause sales

to fall Product may not meet customer demandsMight not meet the positive return on

investment in terms of revenuesCompetition might entrench our differential

advantageOther strong and competitive brands in the

market

Marketing StrategyMarketing Strategy

The aim of this strategy is to concentrate efforts towards acquiring a good number of buyers by converting consumers into healthy eating individuals, through the Mass Media.

PRODUCT PPRODUCT Positioningositioning

Features: It is a complete breakfast for all age groups; it provides all the attributes present in other breakfast products

Design: It is attractively designed. Available in 3 different flavors.

Product Positioning: To provide with a convenient source of a healthy and nutritious breakfast.

PricePriceObjective: The price of an item is clearly an important

determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale

Pricing Method: the strategy which we are going to use in order to sell Fit Bite under the brand name of Fauji cereals is the penetration pricing strategy so that our product can grab the market share of other local brands like of nestle and imported breakfast cereals like Kellogg's

Pricing strategy: Competitive Pricing

Price Break Up And Cost Distribution For Price Break Up And Cost Distribution For HealthyliciousHealthylicious

Category Percentage Rs.

Raw Material 38% 31.54

Overheads 6% 4.98

Administration Expense 6% 4.98

Promotion Expense 40% 33.20

Profit Margin 10% 8.30

  100% 83

Sales Tax 21% 17.43

Price after Sales Tax 100.43

PLACEMENTPLACEMENTFit Bite will be made available to all major Superstores,

Supermarkets, and Convenience stores initially in Karachi only. As Healthylicious will be operating and manufacturing in Pakistan, therefore, we have outsourced its distribution to PTN (Perfect Transport Network) which is one of the largest and trusted distribution networks of Pakistan.

Regions General/Medical

Stores

General Stores Large Stores Bakeries Total

Karachi 4,292 19,802 642 190 24,926

Distribution ChannelDistribution Channel•People involved in distribution will be Manufacturer(Fauji), Wholesaler, Retailer, Distributor•We will have three distribution channels as shown below

PromotionPromotionPromotion is how the business tells customers

that products are available and persuades them to buy.

Promotional Objectives:To successfully implement the product adoption

process in the selected target marketTo differentiate Fit Bit on the basis of its characteristics

and quality.To create brand loyaltyIncrease in the product consumption and salesTo establish brand equity

Continued..Continued..Long Term Objectives Build loyal customers To make breakfast bar an in thing for status conscious

individuals To gain the highest market share Aim at profit maximization

• Short Term Objective To increase the market share by 3% every year. To increase sales of our new products. Providing our consumers with a broad line of our products

compared to companies with specialized lines

Promotional MixPromotional MixFit Bite will be promoted through the following

mediums and activities:Television CommercialsNews Paper and MagazinesRadio AdBillboardFree Sampling

Media Type Percentage Share

Amount (Rs)

Television Commercials

10% 600,000

News Paper 40% 2,400,000Radio Ad 5% 300,000Free Sampling 5% 300,000Billboard 40% 2,400,000

Our promotional Budget is Rs 6,000,000