MaxEn Bread

7/30/2019 MaxEn Bread

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MaxEn flavored bread company

1. Project on flavored bread2. Group name is NeXt

3. Executive summary4. Main contents of project5. Survey form6. Complete documentation

Executive Summary

The bread and bakery products market, like many others, struggled during2010, with the banking crisis and the consequent difficulty in obtaining

credit adding to pre-existing problems, such as the rising costs of energy andraw materials.

These factors meant that the cost of bread continued to rise throughout theyear. Its status as a staple dietary item within a mature market has caused

problems in the past, with manufacturers having to be continually inventivein order to try to maintain market value. Paradoxically, however, this has atleast cushioned the market from the vagaries of consumer behavior, andconsumer expenditure on bread and bakery products grew by 6.2% in 2010.

The market is segmented into four broad sectors: white bread, brown andwhole meal bread, specialty breads and bakery products. The white breadsector, which had lost sales during the years between 2007 and 2009,recovered during 2010, with consumer expenditure growing by more than10% on the previous year and bringing sales to their highest level of thereview period (2006 to 2010). This could be linked to the current financialsituation, with consumers being more likely to switch to own-label anddiscounted bread, which tends to be focused more on the white than the

brown sector. In terms of market share, however, white bread's shareremains considerably smaller than it was at the start of the review period.

By contrast, the brown and whole meal sector, which saw something of arevival during the middle part of the decade, saw growth slow down during2010, although household expenditure remained considerably higher than itwas in 2008.


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The specialty breads sector overtook white bread as the largest market sectorin 2008, and has steadily increased its share of the total bread market sincethen.

Year-on-year growth in household expenditure on bakery products waserratic over the review period and modest in 2010, and its share of the totalmarket has contracted since 2005.

Overall consumption of bread is almost universal and daily consumption ishigh, but there are significant differences in the types of bread favored bymen and women.

Bakery businesses found 2010 a challenging year. A number of retail craft-bakery chains went into administration and/or were sold, and several larger

companies are finding the current financial climate extremely difficult.Although expenditure is forecast to rise in 2011 and beyond, at least some ofthis will be due to rising prices resulting from increased production costs.

Flavored Bread

This industry is comprised of establishments that make fresh or flavoredbreads or rolls and perishable bakery products.

Survey analysis

1. I enjoy so much that I eat it?

Anytime 44.5%

Only in a while 16.5%

Occasionally 16%

Just about like a snack 5.5%

I avoid bread because it is not allowed for my diet 17.5%

2. I buy bread in the following forms?

Loafs, not sliced 17%

Loafs,sliced 63%

Rolls 11%

Others 9%


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3. I buy bread from the following sources?

Bakers 48%

Local stores 27%

Metro 8%

Marts 11.11%

Distributors 5.85%

Others 0.04%

4. I enjoy the following types of bread?

Plain white28%

Whole wheat 14%

Butter crust 8%

Sugar free 8.33%

Flavored 25.67%

Others 16%

5. Which flavor you like in MaxEn flavred bread?

Chocolate 36%

Vanilla 33%

Strawberry 31%

6. I eat bread because it is?

A good sourceof fiber12%

A good source of energy 33%

It is low in fats 44%

It goes with other 5%

It reduces heart diseases5%

Others 1%

7. I prefer to buy bread in the following packaging? Plastic disposale bags 48%

Paper bags 13%

Heat resistant bags19%

It doesnt matter 20%


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8. About the price of bread?

Idont care much 45% I buy less when the price goes up13.5%

I can pay more for standard 20%

Others 21.5%

9. I bake my own bread

Often 4%

Once in a while10%

Never86%

10. Childern like bread in lunch?

Yes60%

No40%

ContentsTopics

IntroductionExplanation of Innovation


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GAP analysisFulfilling the NeedProduct Qualities (Differentiation)Market Situation Expected Market Size and PotentialMission StatementVisionGoalMarket TrendCompetitor analysisIndirect competitorSubstitute CompetitorsPlacement Strategy:Brand NameLogo

TrademarkFAB analysis:Quality function deployment quality statement:Market SegmentationPromotion StrategyAdvertising strategyUnderstanding the Psycho-Dynamics of the market:Advertising objectiveCampaign themeReachFrequencyMedia VehicleProper Budget Allocation AdvertisingSloganUSPPush strategyPromotional MaterialsPriceMarketing Skimming:

Key People with Specific SkillsPhysical evidenceLand and BuildingMarket entry strategy:Quantitative SWOT matrix analysis:Matching the SWOT matrix:Financial Analysis


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Ratios for MarchConclusion

Introduction

MaxEn Bread is a name that has come to signify quality and freshness inbread products. The enterprise, MaxEn Bread will operate six plants

throughout Pakistan. Initially we are going to launch it in Lahore having

Factory in Muridkey. The Bread distribution network comprises rent 15

vehicles that deliver MaxEn to more than 200 retail outlets daily, making it

one of the largest distribution networks for any product in the country

customers are located in major metropolitan areas, secondary metropolitan

areas and rural areas. The fleet will run approximately 500KM each day to

deliver fresh bread. Peshawar. Multan, Karachi, Islamabad Faisalabad will

be our future destinations to launch our product there.

For purpose of standardization, the company will bring itself in line with

international standards of production, technology, machinery and

formulation. All the MaxEn Bread plants boast of the latest machinery used

in the bread-making process. They will be managed by senior food

technologists with decades of experience, while those manning the

machinery will be provided on the job training in congenial working

conditions.

Taking a responsible place in society, the company is committed to the upliftand development of the society as a whole, and participates in sports and

social welfare activities.

We hope to continue to develop and maintain this relation in the future.


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Innovation

Our product is unique in sense that it provides unique flavored bread first

time in Pakistan. Currently MaxEn have three flavors of breads Chocolate,

Vanilla

Strawberry.

It is also at the same time a product for the health conscious people as well.

The bread industry in Pakistan has seen many changes in the last twenty-five

years. It has emerged as a small-scale bakery processing industry to

numerous industrial bread making units all over Pakistan. The bread

industry in Pakistan is flourishing very quickly and bread products are

gaining much popularity. Bread has been accepted as a popular substitute of

Rice,

Naan,

Paratha.

GAP analysis

Consumers are increasingly concerned about their health and are well aware

of the relationship between nutritious food and optimal health. Various

concerns have caused consumers to monitor their dietary habits closely. The

growing media coverage on health, the rising incidence of health conditions

(obesity, diabetes and cardiac problems), concerns over physical appearance,

changing lifestyle and also soaring costs of healthcare have all contributed to


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the demand for healthier bakery products. In addition, the aging baby

boomer population has had a specific effect in increasing the demand for

healthy foods. Some popular trends in the market are the introduction of

low/light, functional, natural and organic products, as described below.

Fulfilling the Need

Every day, before the sun rises, we begin making our bread from scratch.

The dough is made with natural whole grains and unbleached flour, with no

preservatives. Most of the breads are leavened with a natural sourdough

starter using a long, slow fermentation time. Every loaf is formed by hand

and left to rise naturally. The breads are baked throughout the day, with

patience and care, on a traditional stone hearth.

This is an Old World style of baking, perfected over centuries. It is a process

that brings the most flavors out of the bread creating chewy loaves with a

crunchy, flavorful crust. We bake dozen varieties each day, and all of our

breads are low-fat or fat-free.

Product Qualities (Differentiation)

Our product provides with following type of health related benefits which

provides the better health.

MaxEn Flavored Bread:

The unfitness of our bread is that it is flavored bread. We are going to

provide it in three different flavors i.e. Chocolate, Vanilla and Strawberry.


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Low / Light Bread:

Our bread is with reduced fat and carbohydrates. With the growing

incidence of obesity and popularity of diets low calorie foods have gained

immense popularity which is our core capability.

Functional Bread:

In recent years, enhancement of the nutritional profile in bread products is a

key trend that has gained a great deal of momentum. We will also trying to

enhance the nutritional value of traditional bread products through the

addition of functional ingredients, such as omega-3, multigrain,

multivitamins etc.

Natural and Organic Bread:

Increasing health awareness and concern over the consumption of artificial

ingredients have fuelled the demand for natural products. Bread products

that contain all natural ingredients are likely to thrive in this competitive

market. Organic bread is yet another category gaining impetus in recent

times, and the products are clearly labeled to draw attention to their organic

nature. We will also have a look over it.

Pleasure-

In addition to healthier products, consumers also are purchasing productsthat satisfy their taste buds. The taste enjoyment factor is vital in the

marketplace and we will be focusing on this more deeply. With lifestyles

becoming increasingly stressful, consumers may indulge in food for comfort

eating purposes. Indulgence/luxury products are becoming more pronounced


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as a key trend in the bread industry. Consumers increasingly seek for

premium, gourmet and exotic products to satisfy their desire to indulge

Market Situation Expected Market Size and

Potential

Only 5 % population of Pakistan is using the packed bread so rest of the

market is still to be captured. Here people are wiling to pay extra amount for

the differentiated product. Our main focus wood be

Mission Statement

"This is a family company selling traditionally baked bread with a freshness

and quality you really can taste".

Vision

Our vision is to become Pakistan's favorite bread this is underpinned by our

dedication to continued improvement across all areas of the business.

We are committed to developing the bread market and working with our

customers, that is why we invest a lot of time and money to understand our

consumer's needs.

Goal

Our goal is to ensure that important values such as quality, freshness, and

service are delivered to our consumers in the 21st Century. For us this isn't

just a business. It's a way of life.


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The task ahead is to concentrate on making the cake bigger rather than

fighting for a bigger piece of the existing cake.

Market Trend

Market is currently not using up to dated technology and generally

companies are interested making the breads that remain at low cost. There is

great deal of competition in the market in a congested area of the market.

There is a huge market available where one can hit the target market.

Currently, 5% of the total population of Pakistan consumes packaged bread.

The major factors for such a low percentage of people consuming bread are

mostly economical and cultural. Pakistani diet consists of many substitutes

for bread, which are cheaper and preferred over bread by a majority of the

population. Thepolitical scenario as well as the legal scenario is not posing

any threat to the bread industry growth apart from the price restrictions,

which actually fixed by negotiations between the government of Sindh andthe committee of bread-making.

Competitor analysis

Competitor analysis in marketing and strategic management is an

assessment of the strengths and weaknesses of current and potential

competitors. This analysis provides both an offensive and defensive strategiccontext through which to identify opportunities and threats. Competitor

profiling combines all of the relevant sources of competitor analysis into one

framework in the support of efficient and effective strategy formulation,

implementation, monitoring and adjustment.


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Indirect competitor

Indirect competitors of MaxEn Flavored Bread are:

Different cakes

Biscuits

Cookies

Pastries, etc

Substitute Competitors

A substitute competitor is any competitor that fills the same buyer need you

fill but fills it in a different way. The substitute competitor of Flavored

Bread is:

Dawn Bread

Gourmet Bread

Cakes and bakes

Different bakery breads

Vita Bread

Bunny

Placement Strategy

Brand Name

Trademark

Logo


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Brand Name

MaxEn Flavored Bread a name that has come to signify quality and

freshness in bread products. The purpose of the research is to analyze the

current state on the baked goods market. The main tendencies and forecast

the possible market growth. Prior to the establishment of flavored Bread,

will become largest producer of bread products is the public sector.However, this sector could not cope with the demands of the consumer and

this when, perceiving a change in the eating habits of Pakistanis, Flavored

Bread will envisioned. Flavored Breadbuildsup a reputation for freshness,

quality and taste. Creating awareness plus a demand for bread products, and

started its production in Lahore.

Logo


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Trademark

We have registered our brand in ACCP office with registration number

895988. Now we have legalized it. We have registered our company by the

name of MaxEn & Co.

Advertisement:


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Distribution:

MaxEn distribute on network will be indirect and comprise of over two

hundred company owned vehicles in a distribution system spread all over

Pakistan. On a daily basis, we will distribute our goods to over a 200 retail

outlets. We will distribute in almost all the major metropolitan areas,

secondary metropolitan areas as well as the rural parts of the country, later.

Channels of Distribution:

Channels of distribution will be intensive because MaxEn will operate six

plants throughout Pakistan. The Bakery's distribution network will rent more

than 50 vehicles which will deliver baked products to more than 200 retail

outlets, and will making it one of the largest distribution networks for any

product in the country customers are located in major metropolitan areas,

secondary metropolitan areas and rural areas. We will develop a

manufacturing process utilizing state of the art bakery machinery combining


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it with locally developed equipment. This unique combination resulted in

products which are closer to the actual taste and form that we make at home.

The Product Analysis

FAB analysis:

Features:

A common scenario of MaxEn Flavored Bread in selling is for the sales

person to extol the virtues of the product they are selling by demonstrating

the assorted features that it has.

Another variant of the flavored breads features trap will be when the

customer comes in with a checklist of the features that they want. Anything

that does not have all features is immediately rejected, whilst products with

extra features are ignored. When they have narrowed down their choices to

a set of products that have all the features they want, then they choose

solely on price.

Benefits:

Benefits of MaxEn Flavored Bread will be what the customer gains byusing the product. Selling on benefits thus sells to what they really want,

not what they say they want or what you want to sell. With benefits,

consumer will get them excited and emotionally engaged.

Attributes:


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Attributes are intangibles that are associated with the product, not the

person (and hence are not yet benefits) MaxEn Flavored bread has many

attributes whilst others have far fewer. Our product specifications will be

according to the customer needs. MaxEn Flavored bread will be useful for

stepping-stone between the physical product and the benefits that the

person actually receives and can be used in a sales pitch as such.

Quality function deployment quality statement:

Flour:

Hard wheat flour, or bread flour, is preferred for yeast breads,although soft or all-purpose flours may be used successfully if the procedure

is adapted to the type of flour. Bread flour has high gluten (wheat protein)

content and thorough kneading is necessary to develop the gluten so it can

hold up a loaf of bread. The gluten is elastic and stretches as the yeast

grows and gives off gas, making the bread light in texture.

Soft wheat or pastry flour is weaker flour because it does not contain as

much gluten; therefore, bread made with it needs less kneading than bread

made with bread flour. A blend of the two flours requires a moderate

amount of handling to properly develop the gluten. Over-kneading of

doughs from any type of flour may injure the baking quality of the gluten

and produce a bread of poor texture and volume.

Bread may be made entirely of whole-wheat flour or in combination with

white flour. A mixture of white and whole wheat flours makes a lighter loaf

than whole wheat alone, but the nutritive value increases as the increased

amount of whole wheat flour is used.


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Liquid:Water, potato water, milk or other liquids may be used in making

bread. The bread will be whiter in color and have greater food value if milk

is used. Both milk and potato water prevents bread from becoming stale so

rapidly as bread in which water is the only liquid.

Yeast:Because yeast is very small plants, it must be kept fresh and active.

Yeast may be bought in dry granulated form or compressed cakes or grown

at home in the form of "starter" or "liquid yeast".

Fat: The fat in dough makes the bread tendered and increases its keeping

qualities. Any high quality cooking fat is satisfactory.

Sugar:Yeast plants grow quickly in the presence of a small amount of sugar

as it is food for their growth. A golden-brown color will be given to the

crust by the use of sugar.

Salt:Gluten is made stronger by the salt. Flavor is also improved.

Flavor: flavor gives the bread a real taste.

Quantity:

2 3/4 c. liquid

1/2 to 1 ounce (1 to 2 packages or cakes) yeast

3 tbsp. sugar

4 tsp. salt

2 tbsp. fat

3 tsp. flavor

About 9 cups sifted hard-wheat flour. (More all-purpose or soft wheat flour

will be needed.)


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Market Segmentation:

Market Segmentation is an effort to increase a companys precision

marketing. A market consists of a large identifiable group within a market

with similar wants, purchasing power, geographical location, buying

attitude, or buying habits. We have done the segmentation on the basis of the

following variables:

Demographic Segmentation

Age, Income, Social Class & Occupation

Demographics

Gender: flavored bread can be use by males and females as well

Income: Flavored is basically for middle upper class people and it will be

easily affordable for all type of these people.

Age: Flavored bread will be useful at every stage of life. Young generations

and older ones can also use this delicious bread

Geographic

Area Flavored bread is located in Lahore and it is easily available in all

super stores and general stores.

Psychographic: MaxEn flavored bread is according to the customer needs

and demands. It consists of natural flavors like chocolate, vanilla and

strawberry.


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Behavioral segmentation

Occasions, Benefits, Usage Rate & Attitude

Usage rate

Flavored bread is particularly use by young generations who are very fond

of flavors like generation X they love chocolates and different flavors

products. Usage rate will be high because of these young generations.

Benefits: it consists of Vitamins and fibers so it is quite notorious and have

energy as well

Targeting

After segmenting the market we are targeting the following segments:

Income Groups

We will be targeting all income groups who should afford easily. Flavored

bread, being an established brand with mass appeal and cost effective

pricing, it will not discriminate between income groups.

Youth

A huge potential market for this bread it lies with youth whom we will be

specifically targeting road shows to be held as part of the Add Color

campaign.


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Travelers

It is also available in mini-size factor, so it will be highly convenient to

carry along during large journeys or trips. This is why it will be targeted at

travelers as well.

Promotion Strategies

Product position Strategy

Positioning is what the customer believes about your products value,

features, and benefits; it is a comparison to the other available alternatives

offered by the competition. These beliefs tend to based on customer

experiences and evidence, rather than awareness created by advertising or

promotion.

Marketers manage product positioning by focusing their marketing activities

on a positioning strategy. Pricing, promotion, channels of distribution, and

advertising all are geared to maximize the chosen positioning strategy.

Basic strategies for product positioning that we have used:

1. By attribute or benefit

The flavors that make you feel different. It tastes great and that it is rich.

2. By use or application

The different tastes from the ordinary bread. Use it with butter or eat the

simple loaf.

3. By user


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Everyone who wants to have a different taste may have it.

4. By product or service class

MaxEn bread will competes as an alternative to the ordinary breads. It is

positioned as a lower cost and healthier alternative to the ordinary bread,

while it provides better taste and healthy ingredients.

5. By price or quality

MaxEn wants you to believe that their flavor bread is of the highest

quality.

Positioning is what the customer believes and not what the provider wants

them to believe. Positioning can change due the counter measures taken at

the competition. Managing your product positioning requires that you know

your customer and that you understand your competition; generally, this is

the job of market research not just what the entrepreneur thinks is true.

Advertising strategy

There are two major parts to an advertising strategy.

1) Assessment.

What's going on in the market, whats the history, the current

situation?

What are the major trends in the market?


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What's the future looking like? (With the product. With consumer

attitudes.)

2) Action

What should your customer do about the most significant

opportunities or problems presented by the situation?

What should to do with the brand?

With direct marketing.

With the way the company is positioned.

A SWOT analysis helps in figure out the "What's going on" part. And figure

it out quickly.

MaxEn bread advertising Strategies

A) Position the product:

"Because we are worth it."

B) Investing in creating a stronger brand personality:

It will base on an upscale, character that people will aspire to associate with.

C) Using the Internet / Web site:


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Currently MaxEn dont have any Web site but it will have an internet asses

and web site in future to target and sell younger buyers, new buyers, before

they have established a product.

Ad strategy deals with the big strategic issues:

Branding,

Positioning,

Media.

MaxEn is a new in the world of breads because it is just not that ordinary

bread which has that old milky or simple bread taste. It is different from the

traditional breads because it has flavors.

We have just launched MaxEn in Lahore and we want it to be in every

house, every restaurant, where there is its need. And it does so with simple

action statements describing what you intend to accomplish.

Psycho-Dynamics of the market:

Whats going on inside the brains of buyers, of perspective customers? It

includes, but is not limited to, Consumer Involvement Theory (CIT).

How the consumer relates to the purchase?


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Rational to emotional. High to low involvement. People probably buy

the same brand of breads with a mindless motion at the market.

But besides Consumer Involvement Theory (CIT), there are likely other

issues, perhaps more important issues, such as why people buy the other

brand bread:

People may think that the ordinary bread is of higher quality or more good

in taste or more healthier products.

Or perhaps it's not so much what people think about competitors, but what

they think about our customer: "I don't know if it will be available in the

market easily."

Above the line sales promotion

MaxEn is using above the line (ATL) sales promotion currently, thatis MaxEn will advertise through media such as;

TV

Radio

Newspaper

Magazines

Banners

To promote the brand, major uses include television, radio, and newspaper

advertising and banners ads on different squares (chowks) in the city. This


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type of communication is conventional in nature and is considered

impersonal to customers.

Advertising objectiveMaxEn has clear and specific aim of an advertising or commercial, such as

To earn profits

To compare,

To gain attention,

To inform,

To persuade, or

To remind our customers about our product.

Reach

60% of the television viewers, 70% of radio users and 90% of news paper

readers should be exposed to the ads or commercials which are on media and

media schedule within a period of four months in the big cities of Pakistan

such as;

Karachi,

Lahore,

Islamabad,

Faisalabad,

Peshawar.


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With the time and market conditions these ratios can be reviewed according

to the needs.

FrequencyThe frequency in the beginning will be high. It will keep high for some

months for the period after the soft launch and later it can be decrease. There

will be changes in the frequency with the time and market conditions.

Media Vehicle

The print and electronic medium employed in an advertising campaign used

by MaxEn is as follow.

ELECTRONIC

MEDIAPRINT MEDIA

TV RADIO NEWS

PAPER

MAGZINES BILLBORD

PTV FM 100 THE NEWS YOUNG

WORLD

ALLAH HO

CHOWK

GEO TV FM 106.2 DAWN SUNDAY

MAGZINE

KALMA

CHOWK

AJ 89 FM JANG AKHBAR-

E- JAHAN

MUSLIM

TOWN MUR

A-TV FM 101 KHABRAIN US MAZANG

CHOWKARY FM 99 DAILY

TIMES

MAG MALL

ROAD

NAWA-E-

WAQAT

MM ALAM

ROAD

DEFENCE


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DUBAI

CHOWK

Proper Budget Allocation Advertising

In order to keep the advertising budget in line with promotional and

marketing goals MaxEn have focus on the followings:

Our target consumer are householders (income 10000 or above),

bakers and Restaurants

Those who are interested in change in taste and are health conscious

will be interested in MaxEn Bread advertisements.

Media is the advertiser considering able to reach the target consumer.

The product lends itself to rational appeal.

All these things give MaxEn advertiser are provided with an idea of the

market conditions. Thus, how best to advertise within these conditions. Once

this analysis of the market situation is complete, an advertiser has to decide

how the money dedicated to advertising is to be allocated.

Channel ESTIMATED

COST PER


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AD

PTV 900000

GEO TV 1000000

ARY 950000

Total Budget 2850000

Slogan

Channel ESTIMATED

COST PER AD

FM 100 22000

FM 101 18500

FM 99 19500Total Budget 60000

NEWS

PAPER

ESTIMATED

COST PER

AD

THE NEWS 55000

DAWN 65000

JANG 50000

Total Budget 170000

MAGZINES COST PER

AD

YOUNG

WORLD

35000

SUNDAY

MAGZINE

50000

US 35000

Total Budget 120000


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MaxEnDiscover a Healthier Slice Of Life!

USP

MaxEn The bread which build strong bodies and which has the flavor of

your choice.

Push strategy

A push strategy is used by MaxEn because it is a new product which is

unknown to the consumer. As there is no consumer demand in the product

launch, the product and the information are "pushed" to the consumer by

distribution and promotion.

Promotional Materials

Some of the promotional materials are as follow:

Point of sale(POS) Terminals

MaxEn has place different check out counters in big general stores like AL-

FATEH, City Mart. Plus they have placed very different and unique and

stylish type of racks to the shops, which are very attractive and heart

appealing.

Banner & Hoardings:

MaxEn has placed banners on different squares in the city and they have the

hoarding placed on the malls and stalls in the exhibitions.


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Price

Price is not just the number or tag on the product. But it is the most

important thing.

Marketing Skimming:

MaxEn is using Price skimming strategy. It is a pricing strategy in which a

marketer sets a relatively high price for a product or service at first, and then

lowers the price over time. It is a sequential version of price discrimination

and yield management. It allows the firm to recover its sunk costs quickly

before competition steps in and lowers the market price.

Psychological Pricing:

MaxEn is selling at PRS.30. So they are not using the Psychological pricing

currently. Retail prices are often expressed as odd prices: a little less than a

round number, e.g. PRS19.99 instead of $20. Psychological pricing is a

theory in marketing that these prices have a psychological impact that drives

demand greater than would be expected if consumers were perfectly rational.

Psychological pricing is one cause of price points.

Computing price method

Cost-plus pricing

Cost-plus pricing is a pricing method used by MaxEn. It is used primarily

because it is easy to calculate and requires little information. There are

several varieties, but the common thread in all of them is that one first

calculatesthe cost of the product, and then includes an additional amount to

represent profit.


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The method determines the price of a product or service that uses direct

costs, indirect costs, and fixed costs whether related to the production and

sale of the product or service or not. These costs are converted to per unit

costs for the product and then a predetermined percentage of these costs are

added to provide a profit margin.

Price Elasticity and Customer sensitivity

Price Elasticity:

It is percentage change in quantity demanded as per the percentage change

in price of the same commodity. The price elasticity of demand is a measure

of the sensitivity of quantity demanded to changes in price. It is measured as

elasticity that is it measures the relationship as the ratio of percentage

changes between quantity demanded of a good and changes in its price.

In simpler words, demand for a product can be said to be very inelastic if

consumers will pay almost any price for the product, and very elastic if

consumers will only pay a certain price, or a narrow range of prices, for the

product.

Inelastic demand means a producer can raise prices without much hurting

demand for its product, and elastic demand means that consumers are

sensitive to the price at which a product is sold and will not buy it if the

price rises by what they consider too much.

Demand for bread is elastic because as the price of this flavor bread

increases, there are many substitutions which consumers may switch to.


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Customer sensitivity:

Customers are very sensitive and they want fresh bread in the breakfast and

if they dont get it then they might dislike the product because of the

availability.

Discounts and Rebates

MaxEn in its soft launch of its product will provide special offer which is

buy two MaxEn bread and get one small absolutely free.

Key People with Specific Skills

We have worker who have decades of experience in bread industry. We have

contracts with them to work with us and on our formula.

Physical evidence

The site for the factory is in Muridkey where we can visit to see the desired

place. Exact address is 10 km Sheikhupura road GT road Muridkey.

Land and Building

We will purchase our land in Muridkey for factory. We have cash in hand

for this acquiring.

Location and side details


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It is located in industrial area of Muridkey where other industries are

situated. It is regarded as the industrial are. We are going to have 6 Acres.

Labor is easily available there at a cheaper cost and raw material is also

available there. It is having all the required facilities need for the bread

industry.

Market entry strategy:

1. Guerilla attack:

We will first use guerilla strategy to launch our innovative product. We will

offers different selling offer to the market so that we can capture market

share. We will set price of our product as low as possible. And give also

extra benefit like availability of product as near to the consumer.

2. Soft launch strategy:

We will first launch our product to the discounted shops so that we can

check our products demand in market. This step tells us about the weekly

sales of our bread.

3. official launch strategy:

After the 3 weeks of soft launch we will launch our product officially in big

market. But before it we will create awareness among the people of our

product. We will set our product in every self of every good and well known

shop.

Sponsoring cricket matches:Cricket the most sought after; watched & played game in Pakistan .the game

of cricket has been owned by various brands in the industry for the

promotion of their products over a period of time. It has ranged from

tobacco to lubricants to communication companies to banks to airlines &


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lately to the beverage industry. The competition has become tougher &

tougher as the time has progressed. We will make agreement with Pakistani

cricket team management to sponsors the matches. We realize that fact that

cricket is a very strong element by which we can reach our consumers &

masses invested in the opportunity and launched a massive campaign on

mass media showing all these cricket stars support & flatter our product. We

will introduce adds of our product in which some cricket stars will promote

our product.

Sponsoring Concerts:

We will arrange concerts for the enjoyment of people and also aware them

about our product. We will bring the stars of people close to them. Again the

purpose is same, to create awareness about our product.

4. public relation activities:

Public relation is our most important objective because it is the key thinkto enter and remain in the market. We will do lot of exercise to built

public relation. Like our sale person will stand on the retailing shop to

tell the customer about our product. We already have planned to arrange

different events. The purpose of those events is to create public relations.

5. publicity:Publicity is the important factor to create awareness about any product. We

will also do publicity of our product. We will use newspaper, T.V channels,

and also direct selling. We will also use radio for publicity. This steps will


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helps us to improve our sales. On T.V channels we will choose that channels

which are famous in ladies like, GEO TV etc. and in newspaper we will

choose ladies magazine for publicity.

Quantitative SWOT matrix analysis:

External threats:

1. There are large companies who have brand loyal customers providing

the market with not exactly similar but milky and other breads.

2. Switching brand loyal consumers to a smaller and newer company

3. Rising material, production, and shipping costs for a new, up till now

branch out company.

4. There is open market everywhere means any new company or existing

ones can start the same production that may have more experience or

more qualified staff.

External opportunities:

1. Creating a healthy product that provides options in flavors and

relating to diet value will plot new regulars

2. Healthy component will allow us to break into the diet consumer

3. Being a new company will provide us the chance to set up thrill

Internal strengths:

1. Our ability to produce options keeps more consumer interest and

needs met.

2. Our new production technology will enable us to mass produce

products more efficiently and quickly than other old companies.


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3. Our new taste will attract much such type of consumers who are taste

changer.

Internal weakness:

1. The more flavors we create, the more production costs will increase.

2. New technology and production methods will require greater

preparation and back-up wants.

3. At starting we will not have as such trained staff that has such a

market experience.

Matching the SWOT matrix:

strengths Opportunities

1. Our ability to produce options

keeps more consumer interest and

needs met

2. Our new taste will attract many

such type of consumers who are

taste changer

1. Creating a healthy product that

provides options in flavors and

relating to diet value will plot new

regulars

2. Our new taste will attract many such

type of consumers who are taste

changer

strengths Weakness

1. Our ability to produce options

keeps more consumer interest and

needs met

2. Our new production technology

will enable us to mass produce

1. The more flavors we create, the

more production costs will increase.

2. New technology and production

methods will require greater

preparation and back-up wants


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products more efficiently and

quickly than other old companies.

opportunities Weakness

1. Creating a healthy product that

provides options in flavors and

relating to diet value will plot

new regulars

2. Our new taste will attract many

such type of consumers who

are taste changer


more production costs will increase


more production costs will increase

weakness Threats


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more production costs will

increase.

2. At starting we will not have as

such trained staff that has such a

market experience

1. There are large companies who

have brand loyal customers

providing the market with not

exactly similar but milky and

other breads.

2. There is open market everywhere

means any new company or

existing ones can start the same

production that may have more

experience or more qualified staff.

Financial analysis

Projected startup cost-onetime expense

Asset Price Detail

land 20,000,00

0

Land located near Muridkey, total area 6 acres. At front

there is G.T road. At right and left side there are

garments and other factories.

building 125,000,0

0

We will construct a building which contains 4

storerooms. And 2 big storeroom for plant and

machinery.

Plant &

machinery

75,00,000 Plan and machinery for production of bread and packing

and printing.

furniture 10,000 Furniture require for office.


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Revenue & cash flow projected with estimated sales forecasted.

Price/packet of bread

Ingredients Quantity(kg) Price

(Rest)

flour .50 7.5

sugar .10 1.25

Eggs(piece) 4 9.5salt .10 1

Flavor(chocolate) 1.5

packing 1

Total 20.75

Profit margin

(34.16%)

10.25

Total price/ pack 30


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Expected sales in 1st quarter (approx).

Months Total units

sales

Price/unit total

January 25863 30 775890

February 29310 30 879300

March 31034 30 931020

INCOME

STATEMENT June July August

Sales Revenue(lacks) PKR 20.00 PKR 22.50 PKR 30.00

Less: Cost of Goods

Sold PKR 15.60 PKR 17.55 PKR 2.34

Gross Profits PKR 4.40 PKR 4.95 PKR 27.66Less: Operating

Expenses:

Marketing Expense PKR 11.76 PKR 11.76 PKR 11.76


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General / Admin. Exp. PKR 0.15 PKR 0.17 PKR 0.22

Depreciation Expense PKR 0.25 PKR 0.25 PKR 0.26

Total Operating

Expenses PKR 12.16 PKR 12.18 PKR 12.24

net profit before taxes -PKR 7.76 -PKR 7.23 PKR 15.42

less tax PKR 0.09 PKR 0.07 PKR 0.15

Net loss/profit After

Taxes -PKR 7.85 -PKR 7.30 PKR 15.27

BALANCE SHEET

Current Assets: June July August

Cash

PKR

300,000.00

PKR

320,000.00

PKR

330,000.00

Total Current Assets

PKR

300,000.00

PKR

320,000.00

PKR

330,000.00

Land & Buildings

PKR

32,500,000.00

PKR

32,500,000.00

PKR

32,500,000.00

Machinery and Equipment

PKR

7,500,000.00

PKR

7,496,000.00

PKR

7,492,000.00

Furniture & Fixtures

PKR

10,000.00 PKR 9,700.00 PKR 9,400.00

inventory


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Total Gross Fixed Assets

PKR

40,010,000.00

PKR

40,005,700.00

PKR

40,001,400.00

Less: Accumulated

Depreciation

PKR

25,000.00

PKR

25,000.00 PKR 26,000.00

Total Assets

PKR

40,285,000.00

PKR

40,300,700.00

PKR

40,305,400.00

Current Liabilities: June July August

Taxes Payable PKR 8,500.00 PKR 7,300.00 PKR 14,200.00

Other Current Liabilities PKR 0.00 PKR 0.00 PKR 0.00

Total Current Liabilities PKR 8,500.00 PKR 7,300.00 PKR 14,200.00Total Liabilities PKR 8,500.00 PKR 7,300.00 PKR 14,200.00

capital

PKR

41,061,500.00

PKR

41,023,400.00

PKR

38,764,200.00

net loss/profit

-PKR

785,000.00

-PKR

730,000.00

PKR

1,527,000.00

Total Liabs. & Stockhldrs'

Equity

PKR

40,285,000.00

PKR

4,030,700.00

PKR

40,305,400.00

Ratios for march :

Current ratio:

Total Current AssetsCurrent Ratio = ____________________

Total Current Liabilities


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Current ratio= 330000/14200 = 23.23944

Gross margin ratio:

Gross Margin Ratio = gross profit/net sales

Gross margin ratio= 2766000/3000000 =0 .922

Net Profit Margin Ratio:

Net Profit before Tax

Net Profit Margin Ratio = _____________________

Net Sales

Net profit margin ratio = 1542000/3000000 = 0.514

Conclusion

We are quiet confident to have a successful launching of the bread in themarket.

Documents

MaxEn Bread