LAUNCHING OF POPCORN MACHINE

GROUP 07ANKITHA S J(16127)

KETAN KUNJEKAR(16139)MOHAMMED MASOOD(16145)SAURABH KUMAR RAVI(16163)

CASE STUDY

CASE FACTS• Mr. Sunil Gupta, Director of Durable Product Ltd.• He had an idea of launching “BIG POP”, the popcorn machine.• According to Mr. Sunil Gupta - Consumer shows interest in gadgets leading to convenience and fun. - The product is profitable to manufacture and market the product. - It will take first mover advantage.

Try to use words that will help direct the growth of your company, but be as concise as possible.

COMPANY OVERVIEW

• Company is nearly 30 years old.• Company started with auto ancillaries and diversified into consumer

durable products.• It distributes products all over the country.• Dedicated and loyal sales force of 12 persons.• Company mostly depends on its agents for sales.

PRODUCT DESCRIPTION

• It is an 2 minute pop corn maker.• It is modified version of Japanese model.• Motor and shield are to be imported.• Multipurpose product- Can be use for roasting and frying snacks.• 75gms of corn will given with product.

LAUNCH AND DISTRIBUTION PLAN• Through existing distribution channel.• With the help of companies agents and dealers.• Plans to launch during Diwali.• Agent’s margin will be 5-6%• Retailer’s margin will be 8-10%

PROMOTION PLANNED

• Earmarked 50 Lakhs.• Focus on kids.• Press add campaign in leading newspapers for 2 months• TV ads in national network about 8-10 times.• Banners, cutouts, stickers, name slips at retails points and school

exhibitions.• Demonstrations in selected areas.• Participate in “Living in Style” exhibitions.

SWOT Analysis

Strength• Experience in home appliances.• Distribution network.• Product range.• Dedicated sale force.

Weakness• Limited cash flow.• No market research.• Complexity of the product.

Opportunities• First mover advantage.

Threats• Unsure market response.

SWOT Analysis

Should “Big Pop” be launched?• NO, Big Pop should not launched because of the following reasons.

1. Company did not conduct market research.(high cost coated by marketing research Organization)2. Positive response from agents does not necessarily indicate demand.3. Company has limited sales force team(12)4. Cash flow of the company was just satisfactory.5. Substitution Effect: Presently popcorn in some of the middle class homes was prepared in pressure cookers, Tawa.

The statistics show that the demand for appliances other than essentials is low

LPG stove mixer/grinder Electric fans Microwave electric ovens cooking range0

20

40

60

80

100

120

upto 1000 1001-2000 2001-4000 4001-6000 6001-10000 10000+

Ownership of Household Appliance by Monthly Household income(All India)

Ownership of Household Appliance by town.

LPG stove mixer/grinder Electric fans Microwave electric ovens cooking range toaster0

10

20

30

40

50

60

70

80

90

100

1.Income vs Ownership of Household appliances by town

TOP8 Metros others 10 lakh+ 5-10LAKH 1-5 LAKH BELOW 1LAKH

If launched suggest the price of product?

Popcorn maker machine(given) Suggested price

Particulars in rupees A B

Fixed cost 250000 250000 250000

Variable cost 120 100 100

selling price 600 499 499

Adv. Cost 5000000 3000000 4000000

TOTAL 5250000 3250000 4250000 Suggested Price 499

seller margine 6% 315000 195000 255000 Variable cost 100

dealers margin 10% 525000 325000 425000 BEP SELLS (W/O profit) in units 9449

TOTAL 6090000 3770000 4930000 BEP SELLS (W profit) in units 11811

CALCULATION

BEP(units) 12687.5 9448.622 12355.89

sells in month 1057.291667 787.3851 1029.657

profit 25% 1522500 942500 1232500

TOTAL 7612500 4712500 6162500

with profit they will need to sell in year 15859.375 11810.78 15444.86

in month 1321.614583 984.2314 1287.072

Design an appropriate marketing strategy for launching Big Pop ?STEP1- Conduct market research and estimate the demand of the product.STEP2 - Investigate similar and alternative product, evaluate how Big Pop will be beneficial to people over them.STEP3-Set the price of Big Pop.Pricing strategyA- Earlier similar product was launched by another company but failed due to its low quality and high price. Pricing objective must be used for Product quality leadership.(Affordable Luxuries)B- Cost based pricing of product- Setting price based on cost of production, distribution & selling the product + fair rate of return for effort and risk.C-Maximum market skimming-Price starts at high & slowly drops over time with launch of advanced variant of Big Pop.

Conti… Promotional pricing techniques such as warranties and service contracts: company can promote sales by adding free or low cost warranty or service contracts.• STEP4 –Test the Big Pop machine with focused group of people to

determine there response for promotion.(Beta testing)• STEP5- Evaluate readiness of launch to make sure overall timing is co-

ordinated and product is absolutely ready when it announced. • STEP6- Create timeline in marketing plan & follow up regularly.• STEP7- Train customer service department fully so that employee can

effectively sell the Big Pop machine.

Q3- Identify different market segments that the company could exploit over the life cycle of new product to be launched.

• Geographic-The region of interest of Popcorn maker is whole India with special focus on type A & fast growing type B cities across India.• Demographic Age-Anybody of age between 5 to 60 years. Income-Middle income & Premium group. Occupation- Housewives, employees, etc. Social class- Middle class(<1lakh), upper middle(1-5lakh), lower upper(5-10lakh) & upper upper(10lakh+).

Cont.…

• Psychographic- Those who want to eat easily made popcorn. Movie addicts.

• Behavioural- Quality, price.• User status-First time user.• Buyer- Those who are aware, informed & intend to buy.

Product life cycle

PLC

Introduction stage Growth stage

Maturity stage Decline stage

1-Create product awareness and trial by promoting the product to upper and middle class.2-Offer basic product to customer.

1-Increase sales by Providing offers and extra services2-Expand Big pop to more cities.

1-Provide new advanced variants of Big pop.2-Convert non users to users.

1-Reduce price of big pop.2-Phase out the Big pop from unprofitable outlets.

THANK YOU.