Smart Candy

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First Choice Company

First Choice Company’s mission is to make,distribute and sell the finest quality productsin a wide variety of innovative style to operatethe company on a sound financial basis of profitable growth, increasing value for ourstakeholders and create career opportunitiesand financial rewards for our employees. Tooperate the company in a way that activelyrecognizes the central role that business playsin a structure of society by initiating innovativeways to improve the quality of life of a broad

community.

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Executive Summary

“First Choice Company (PVT) Ltd.” is new comer company in theindustry of food. First choice company’s primary line of business is themanufacture and sale of sugar free candy named as smart candy. This candy istargeted to three segments, weight conscious people, sugar patients and kids.The smart candy will be approved by Ministry of Health Pakistan. So that thetarget segments will use it without any fear.

Founders believe on opportunity exists in food industry because there isno such candy available in the market. So there is no competition available for the company in the market. Company at initial stage will provide free sampling of smart candy to get confidence of target segments. Company at initial stage willoperate in Pakistani market only.

Expected sales volume of company for first year will be 1,00,000 packs of candy, each pack will contain four dozens of candy. Break even is at 48,000packs and growth is 4 to 6 percent. Initial market research has beenencouraging. Research from all target segments has been conducted. A supplier selection is complete and the company has secured production facilities in westcorner of Faisalabad.

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Introduction

The Industry

Our product is fall in food industry. In food industry many opportunitiesexist. No company has introduced the sugar free candy so, we find that it isrationale opportunity to introduce a different product as sugar free candy namedSmart Candy. In food industry highly competition is there and need high strugglefor survival. After the success of our smart candy we shall introduce other product as same industry for long term survival and capture the shares of themarket.

The Company

“First Choice Company” is producing Sugar Free candy and speciallytargeting diabetes patients and weight conscious people. There are several foodcompanies which are producing various tastes of candies but our Unique SellingProposition is sugar free and providing delicious taste to our customers.According the current growth rate of this disease no company was producing thiskind of candy.

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We are making efforts to adopt all new technologies so that it can savetime and cost and give better quality products to customers according to their requirements. For kids chocolate candy is attached at lowly pop at the end of Ledpencil for their attraction. We have made commitment with a pencil

manufacturing company. Our Main purpose is not only producing this candy butalso build long term relationship with customers for survival of company and gainloyal customers base through customer centric business.

Trade Mark:

The Product

Our product is tangible including some innovative features. Genericname of the product is Smart Candy .Our product is specialty good. After surveywe conclude that there are large number of users to adopt this product. Our product “Smart Candy” is categories based product. Its idea already exists in themarket but we introduce new characteristics in this product. That does not existin the market. Our product has different features and it has its own identity. Theconsumer is willing to forego accessible substitutes to search for and purchasethe desired brand. There are lots of different brands but we are developing a newinnovative brand with the help of “New product Strategy”.

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Market Research

&

Analysis

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Market Research and Analysis

Smart candy from the house of First Choice Company (PVT) Ltd. Will have twomajor target segments, weight conscious people and sugar patients, however company will also target kids who love to eat candies. Following is a descriptionof major characteristics of each:

Sweet is a major instrument that results the increment in weight of people. Currently in the market no candy was available that was for weight conscious people. Smart candy is one that will definitely helpweight conscious people to control their weight. There is no age limit,they may be of 25 years or so on age. Smart candy will providesatisfaction to all weight conscious people.

As the name suggests sugar free smart candy the next target segmentwill be sugar patients. Sugar patients they are bound to cut-off from anysweet items. They have very few options regarding food items becausemore than 90% have sugar inside. The disease of diabetes is mostly findin people who have 40 or more years of age. When they look any personeating sweet items they cry to eat it also. Smart candy will provide them aunique taste that will not be harmful. They can use it without any fear because it will be approved by ministry of health Pakistan.

Kids who are always found of eating candies will also be a targetsegment. Smart candy from the house of First Choice Company (pvt) Ltdwill also provide a special benefit to this segment, candy will have no sideeffect on the teeth of kids. Other sweet candies have side effect on theteeth of kids that’s why parents do not allow them to eat such candies butsmart candy will free from such side effect because ministry of healthPakistan will approve it.

Findings of research Conducted from Target segments:

1. Weight Conscious People

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Total People In favor of Candy Against Candy No Response

100 75 20 5




75%

20%

5%

In Favor

Against

No

Response

2. Sugar Patients

Total Patients In Favor of Candy Against Candy No Response

100 90 8 2

90%

8% 2%

In Favor

Against

No

Response

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3. Parents of Kids

Total Parents In favor of Candy Against Candy No Response

50 39 7 4

78%

14%

8%

In Favor

Against

No

Response

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Marketing Plan

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Marketing Plan

Advertising and Promotion

Advertising and promotion strategies are linkeddirectly to the channel being targeted. End user sales will be sough with printmedia, electronic media and out of home (OOH).

Print Media

News papers it is most popular and power full media of advertising. We decide to run blind campaign for the promotion of our product“smart candy” through news paper. The coverage of print media is easy for ruralarea and directly approach to customers. We shall produce attractive adsthrough agencies. Company also introduce smart candy in magazine like SundayMagazine. Following news paper select for print media as fallow:

• Jang Newspaper

• Local Newspaper in all cities

• Sunday Magazine

Electronic Media

Electronic media is good choice to communicate their message amongtheir target audience. In geography we want to introduce the product all over thecountry (Pakistan). So, TVC is the best option. In TVC national and local channelselect for advertisement. Company also has priority to introduce the smart candyon internet because users of internet increase day by day. Following channelsselect for TVC ads as fallow:

• PTV

• Geo

• Cable channels

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Advertising Plan

Promotion:

We are on introductory stage, so any urgently need of promotionally policies. First of all introduce our product through differentcommunication options. If advertising strategy will not properly support to theproduct then we shall make different strategies for promotion. It is advantage thatthere is not competitor in sugar free candy. So, we shall easily promote our smartcandy in to the market. We can give discount to distributor and retailer. Companyhas a plan to held survey about their smart candy time to time for create strongrelationship with their customer. We also give incentive and compensate to our

sales persons for better services. After the passage of time Company introducedifferent schemes for distributor, retailer and end users.

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Advertising Budget(100%)

Print Media(30%) Out of Home(20%) ElectronicMedia (50%)

Newspaper (20%)

Magazine(10%)

Points of Purchase

(10%)

Television

(45%)Internet

(5%)




Distribution:

The different environments in markets force to adjust their distributionsystem, because marketing institutions, such as various types of retailers areresponses to the environment. They can also provide an opportunity toexperiment with new strategies. We use two level distribution channels. Thissmallest distribution channel is manufacture to distributor to retailer to end-user.Because we want our product use many consumers with less problems andeasily. We select indirect distribution channel for better management and lesstaking risk as:

Various aspects of physical distribution in marketing are quite different fromanything found on the domestic scene. Physical distribution expenses accountfor a much large share of the final selling price in foreign markets than indomestic

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Manufacture Retailer Distributor End User




Manufacturing

&Operation Plan

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Manufacturing planFCC will locate in west outside the Faisalabad city where the price of land

is empty and the entire infrastructure is available. And there will be no issue of environment because the land is situated out side the city. Second reason for theselection of the land is that the cheap labor will be available from the nearestvillages. Third will be that we can expand the factory in the future. Fourth reasonto select this land is that supplier can easily reach and the finished goods caneasily distributed to the retailers because the land is out of city but every on caneasily approach the factory. All if these factors would help to reduce the cost of goods sold directly it would help to increase the profit of the company.

Manufacturing policy

First of all intensive training will be giving to the employees so that thewastage of raw material reduced. And it will also help full to meet theinternational standards. For that purpose contacts will be made for thosecompanies who will engage in this field. Second our inventory system is basedon the FIFO system. State of the art technology is imported from the china. Andthe foodstuff, which will be used in the process, is passed from the fooddepartment and also according to the international standard standards.

Operating cycle

The operating cycle will short because the candy cannot remains in storelong time built for that reasons to decrease the problem of storage and increasethe life of the candy in summer the air conditioned storage will used. For thatreason our inventory system will consist of five days one day for order secondday for shipment and third day for the manufacturing and fourth and fifth day for distribution.

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Order received

Distributedto

wholesalers

Order tosupplier




Supplier’s selections

Best suppliers will be selected who will supply the material to the largestcandy manufacturers. But we will purchase the raw material at low cost ascompared to the others manufacturers .to increase our relative bargaining power we will chose at the time four suppliers for all these contents used in themanufacturing. This cause our low cost of production and also increase the profitof the company.

As we use the state of the art technology in the factory so our completeoperation will be computerized from the begging. Order processing,

Manufacturing, accounting m and purchasing will be automated. That’s why wewill choose the suppliers who are the international certified who will meet our requirement.

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Goodsmanufactured




First Choice Company (FCC)

Management

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FCC Management

The management team of FCC consists of such persons who have very goodacademic records and all members have MBA degrees from University of Agriculture Faisalabad and experience in their relevant fields. FCC is making a

candy which is without sugar but people are in the habit of eating candies full of sugar and this is the responsibility of management team to make this companysuccessful by getting the success of sugar free candy in the market. FCC'sBoard of directors is listed below:

Board of Directors

Key executives by function:

Products

Sales

Legal Advisor

• Mr. Shahbaz Ali, Advocate

Finance

Business Operations

Auditor of FCC

• Riaz Audit Company

FCC's Banks

• United Bank Limited• Meezan Bank Limited• Fysal Bank Limited• Habib Bank Limited• Bank Al-Falah Limited

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Break-Even Analysis

Break even is a point where a company starts to get profit on selling itsunits and it is calculated as follow

Break-even= Fixed Cost_____________ = Units

Sale price per unit-Variable cost per unit

FCC has its break-even on the sale of 48000 packs of its sugar free candy andthe company will get its profit on sale of its 48001 st unit for year 2009.

Rs.

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Critical Risks

At present the all industries in Pakistan is facing many risks and problems

• Increasing cost of production

Now it’s a market trend that price is increase day by day rate of variation in price increase so, in future the price of raw material mayincrease and its effect our per unit cost and company should increase theprice of product. So this risk may decrease the share of the company.

• Increasing fuel prices

In a world market the prices of the fuel increase day by day. Fuel priceaffects the price of other products. Our transportation cost will beincreased and raw materials also increase. So this type of risk does notignore by the company.

• Shortage of energy resources

In future a hazard of energy resources, if electricity short then itdisturbs all the operation of the business and we must plan for hurdle in

the process of production. It will also become the cause for increasing theprice of the product.

• Political Instability

This type of risk does not ignore by the company. Our business existsin instable political environment. So, instability of political environment

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disturbs the supply and demand and become the cause to change thepolicies of the company.

• Increasing labor cost

It is a reality that per capita income increase by any fiscal year andgovernment imposed that increase the basic salary of the employees. So,if labor cost increase its mean overall cost of production increase andaffect the volume of the business.

• Changing policies from Government

When any imbalance condition government changes the policies. Itsmay relate to tax policy, import and export policy and etc. some time thesechanges favorable for company and some time unfavorable. So, themargin of this risk must be measure when making any strategy for

business.

• Chance of failure of the sugar free candy

If all above risks occur and against the company then higher chance of failure of our smart candy. Consumer behaviors may be changed and varyfrom our research.

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Documents

Smart Candy