Marketing plan for Butterfinger and Crunch

Table of contents
1.0 Executive Summary .................................................................................................. 3 2.0 Situation Analysis ...................................................................................................... 5 2.1 Market Summary ..................................................................................................... 14 2.1.1 Market size ....................................................................................................... 14 2.1.2 Market Trends .................................................................................................. 15 2.1.3 Price ................................................................................................................. 15 2.1.4 Product offering ................................................................................................ 15 2.1.5 SWOT Analysis .................................................................................................. 6 3.0 Market Strategy ....................................................................................................... 16 3.1.1 Mission ............................................................................................................. 16 3.1.2 Objectives......................................................................................................... 16 3.1.3 Target Marketing .............................................................................................. 16 3.1.4 Product usage rate .............................................. Error! Bookmark not defined. 3.1.5 Positioning ........................................................................................................ 18 3.1.6 Advertising Strategy Development ....................... Error! Bookmark not defined. 3.1.7 Communication objectives ................................................................................ 19 4.0 Financial Projections .................................................. Error! Bookmark not defined. 4.1.1 Monthly Sales Forecast Butter Finger. ................. Error! Bookmark not defined. 4.1.2 Monthly Sales Forecast Crunch. .......................... Error! Bookmark not defined. 4.1.3 Profit & loss Forecast........................................... Error! Bookmark not defined. 4.1.4 Break-even Analysis ............................................ Error! Bookmark not defined. 5.0 Controls ...................................................................... Error! Bookmark not defined. 5.1 Contingency Planning ............................................................................................. 20 Appendix 1 ....................................................................... Error! Bookmark not defined.

Company Profile
Name of Business:- Healthy confectionary Pvt Ltd Punch Line :Constitution: We care for your hunger Private limited company

Administrative Office: Plot no, 179,180 G.I.D.C. phase-1, Mehsana. Pin -384 002. Phone 1800 159159159 Tele.fax.no. 091-253441 Website:- www.healthyconfectionary.com

Executive Summary
The Indian confectioner market is a steady growing market. The product market is segmented into 3 product groups namely Enrobed, molded and pieces chocolates. Nestls Butterfinger and crunch regular sized chocolate bars are key players in the enrobed and molded product segment respectively. These two brands currently have a collective market share of 5% (2.52% for Butterfinger and 2.48% for Crunch). The goal of this marketing plan is to increase profit margins by +10% at product contribution margin through grocery stores in anticipation that market share will grow accordingly. Our targeted market segments are young and active people, these segments fall under the group of adults, teens and children. They have two basic needs when it comes to eating chocolate, hunger or craving needs. Both brands respond to these needs and can be repositioned as offering the consumer nutrition and an instant energy boost. The marketing plan will focus on repositioning both brands to target markets, focus on areas where the product is most purchased and in the region where there is market opportunity. From past performance measures we can infer that the southern region will provide an opportunity for Butterfinger and the northern region will provide an opportunity for Crunch. Expected profits at product contribution margin can be reached solely through grocery stores after break even collective sales of $2,088,295. With a marketing budget increase of $3,000,000, the estimated sales response comes to $16,770,000. We will achieve a 10%+ increase in profit margin and market share growth. In effect, marketing efforts will give both brands a competitive edge in retaining loyal customers, in acquiring new markets and gaining market share.

Product offering

Butterdipping regular size

Crunchy Dhamaka regular size

Chocolate coating caramel Crispy, crunchy and peanut-butter taste

Chocolate caramel with crisps rice Creamy and crispy Distinctive taste and texture 1.55 ounce/unit Flow wrap packaging

2.10 ounce/unit Envelope wrap packaging

Toffee and chocolate making process

Ingredients

The basic ingredients required for chocolate manufacture are cocoa nibs, cocoa liquor, sugar other sweeteners, cocoa butter, butter fat (oil), milk powder, milk crumb and emulsifiers.

Cocoa nibs, cocoa liquor These are prepared as described under roasting, winnowing and nib grinding. The type of beans used for both dark and milk chocolate are primarily the bulk or ordinary grade, mostly Forastero. For special high grade chocolate, trinitario, and occasionally Criollo, beans may be employed. It is appropriate here to mention imported liquor, which means that it has been produced in the area where the beans are cultivated.

Sugar and other sweeteners

High-grade sugar should be used in manufacturing chocolate; it must be dry and free from inivert sugar. Certain grade of off white sugar, particularly for chocolate manufacture, is available. Washed raw sugar are sometime used in health food chocolate but they usually contain some and moisture. The presence of moisture and invert sugar causes the sugar to roll into plate, which are detrimental to the chocolates texture and presents difficulties in the subsequent conhing and enrobing processes.

Dextrose and anhydrous corn syrup (glucose syrup) are used as replacement for sugar. Non sugar substances such as sorbitol, mannitol and xylitol are occasionally used as sweeteners in dietic chocolates.

Cocoa butter

Milk chocolate require cocoa butter with a mild flavour. Fracture and contraction also are important to afford good molding and texture.

Milk products

Whole milk product and non fat milk powder are the primary milk product used. In some countries whey is permitted. Butter fat (or oil) is derived from unsalted dairy butter by dehydration and removal of curd. It is used in conjection with non fat milk powder to make less expensive milk chocolate.

Emulsifiers

The most popular emulsifier is lecithin used to reduce viscosity and save cocoa butter.

Flavour

Some of the flavour of chocolate, particularly dark chocolate, comes from the blend of beans used. With milk chocolate milk cramelization play an important part. Flavour also may be added including vanillin, cinnamon, cassia oil, essential oil of almonds, lemon, orange, varieties of balsams and resins as well as manufactured combinations flavour.

Rework

This is the name given to reprocessed chocolates bars and confectionary. It is possible to reclaim misshapen chocolate units in the form of pastes, syrups, or crumb and utilize them as part of the basic ingredients of new batches of chocolates. This practice has been opposed by members of the EEC and codex on the grounds that it opens the way to

adulteration with non chocolate ingredients used in the fillings or centers of chocolate candies.

Chocolate processes

Manufacturing processes, whether for dark or milk chocolate, involve certain basic operations: preparation of ingredients, mixing of ingredients, refining of mixture, pasting or partial liquefaction of the refined mixtures, conching (or an alternative process) and adjustment of viscosity and flavouring.

Preparation of ingredients

Two main ingredients, cocoa nibs and sugar must be pulverized either before mixing or by using a machine with a combined grinding and mixing action. The equipment is now being developed that avoid sugar milling. Cocoa butter and other fats are liquefied and care must be taken to see that they are not overheated when melting and are not stored as liquids for long period, particularly butter fat. Milk fat should not be stored in open hopper and should be used as soon as possible after delivery. Moisture content should exceed 3 %; if over 4%, staling will occur. In some cases, milk powder and cocoa powder may be further dried for mixing, but this is more likely with compound coating.

Mixing In most chocolates plants, the basic ingredients are dispensed by automatic method punched card or computer which deliver the correct quantities according to any given formula. In some instances, the ingredients are metered and mixed continuously, in other it is fed in to batch mixer. There is no doubt that continuous process has many advantages and they being adopted and more in all braches of food industry.

The mixing process prior to refining should produce a chocolate paste of somewhat rough texture and plastic consistency.

Refining

The refining of chocolate paste is an important operation and produce the smooth texture so desirable in modern chocolate confectionary. Exactly what constitute smoothness is debatable, as it is clear that refining is carried out

texture become slimy, particularly with milk chocolate. Another factor concerning particle size is whether the large particle are sugar, cocoa material or milk crumb aggregrates-each produce a different sensation on the palates. Having once decided on the degree of refining for any particular chocolate, the problem is to maintain its consistency. Today roll refiners are precision made machines consisting of five roll mounted vertically with bottom feed roll offset. These steel rolls are centrifugally cast by pouring liquid steel into permanent molds. By rotation of the molds the steel is forced outward, giving a perfect surface free of lighter material, such as slug. The steel of special composition to the hardest possible surface. The rolls are slightly crowned so that when the machine is working, the pressure exerted ensure that a film of chocolate of even is spread over the entire roll surface. The speed of the rotation of the rolls increases from the bottom to top, and this known as the deffrential. It allow the chocolate film to be transferred from one roll to the next in shearing action in the nip of the roll.

SWOT Analysis Strengths Both brands have a superior taste, healthy ingredients, packaging and attributes Brands satisfy segment needs Healthy confectionary is having sound management capability. Healthy confectionary is having geographical advantage for production. Good schemes to attract customers.

Weaknesses Lack of strong brand positioning in high potential markets Strategically balancing communication strategies for both brands New in the market so might face entry problems Product and test is not new for the market Financial Limitations

Opportunities Brands control a certain market segment Overall size of chocolate confectionary market is increasing Overall size of toffee confectionary market is increasing Market growth expected to increase with population Growing perception that chocolate has health benefits Targeting new market segments like mothers

Threats Strong customer loyalty towards established competitors brands Strong competitors brands with solid existing distribution Stiff competition for limited display space in groceries

TOWS Matrix
Today most business enterprises engage in strategic planning, although the degrees of sophistication and formality vary considerably Conceptually strategic planning is deceptively simple: analyze the current and expected future situation, determine the direction of the firm and develop means for achieving the mission. In reality, this is an extremely complex process, which demands a systematic approach for identifying and analyzing factors external to the organization and matching them with the firm's capabilities. The TOWS Matrix indicates four conceptually distinct alternative strategies, tactics and actions. Here T stands for Threats , O stands for opportunity , W stands for weakness and S stands for Strength. In practice, of course, some of the strategies overlap or they may be pursued concurrently and in concert. But for the purpose of discussion the focus is on the interactions of four sets of variables. The primary concern here is strategies, but this analysis could also be applied to the development of tactics necessary to implement the strategies, and to more specific actions supportive of tactics.

(I) The WT Strategy (mini-mini). In general, the aim of the WT strategy is to minimize both weaknesses and threats. A company faced with external threats and internal weaknesses may indeed be in a precarious position. In fact, such a firm may have to fight for its survival or may even have to choose liquidation. But there are, of course, other choices. For example, such a firm may prefer a merger, or may cut back its operations, with the intent of either overcoming the weaknesses or hoping that the threat will diminish over time (too often wishful thinking). Whatever strategy is selected, the WT position is one that any firm will try to avoid.

(2) The WO Strategy (mini--maxi). The second strategy attempts to minimize the weaknesses and to maximize tile opportunities. A company may identify opportunities ill the external environment but have organizational weaknesses which prevent the firm from taking advantage of market demands. For example, an auto accessory company with a great demand for electronic

devices to control the amount and timing of fuel injection in a combustion engine, may lack the technology required for producing these microprocessors. One possible strategy would be to acquire this technology through cooperation with a firm having competency in this field. An alternative tactic would be to hire and train people with the required technical capabilities. Of course, the firm also has the choice of doing nothing, thus leaving the opportunity to competitors.

(3) The ST Strategy (maxi-mini). This strategy is based on the strengths of the organization that can deal with threats in the environment. The aim is to maximize the former while minimizing the latter. This, however, does not mean that a strong company can meet threats in the external environment head-on, as General Motors (GM) realized. In the 1960s, mighty GM recognized the potential threat posed by Ralph Nader, who exposed the safety hazards of the Corvair automobile. As will be remembered, the direct confrontation with Mr. Nader caused GM more problems than expected. In retrospect, the initial GM response from Strength was probably inappropriate. The lesson to be learned is that strengths must often be used with great restraint and discretion.

(4) The SO Strategy (maxi-maxi). Any company would like to be in a position where it can maximize both, strengths and opportunities. Such an enterprise can lead from strengths, utilizing resources to take advantage of the market for its products and services. For example, Mercedes Benz, with the technical know-how and the quality image, can take advantage of the external demand for luxury cars by an increasingly affluent public. Successful enterprises, even if they temporarily use one of the three previously mentioned strategies, will attempt to get into a situation where they can work from strengths to take advantage of opportunities. If they have weaknesses, they will strive to overcome them, making them strengths. If they face threats, they will cope with them so that they can focus on opportunities.

Healthy Confectionarys TOWS matrix

Strengths 1 superior taste, healthy ingredients, 2 Brands satisfy segment needs 3 Sound management capabilities. 4 Geographical advantage 5 Good schemes

Weakness 1 Lack of strong brand positioning 2 Entry barriers 3 Product and test is not new 4 Financial Limitations 5 Lack of strong distribution channel

Opportunity 1 Brands control a certain market segment 2 Increase in overall size of chocolate confectionary 3 Increase in overall size of toffee confectionary 4 Market growth expected to increase with population 5 chocolate has health benefits 6 Targeting new market segments Threats 1 Strong customer loyalty towards established competitors brands 2 Strong competitors brands with solid existing distribution 3 Stiff competition for limited display space in groceries

SO STRATEGIES

WO STRATEGIES

1 Target new market on the basis 1 Launch existing product test in of healthy ingredients (S1,O6) new manner. (W3,O1,O6) 2 Control segment by brand same (S2,O) 2 Do proper marketing efforts to position market in the mind of consumers and make product 3 Use of management capability to health icon (W1,O4,O5 ) penetrate market (S3,O2,O3)

ST STRATEGIES

WT STRATEGIES

1 Use product test to convert brand 1 Avoid competing with giants of loyal customers into our customers market for few segments due to (S1,T1) financial limitation (W1,T1) 2 Take advantages of geographical 2 Use the distribution channel of location and schemes to cut stiff other players to avoid distribution competition. (S4,S5,T3) challenge. (W5,T2)

Situation Analysis
Butterdipping and Crunchy Dhamaka are the name of the two new prodicts that we are planning to launch into the Indian market. Butterdipping is basically a toffee with the test of butter and cream and Crunchy Dhamaka is basically a chocolate with crunchy ingredients. Both chocolates basically satisfy a hunger and craving need amongst other needs. There are few competitors in the same class of trade are controlling more market share e.g. Snickers and 5star(Crunch) which is similar to Crunchy Dhamaka has a market share of 5.28 . Healthy confectionary Pvt Ltd can increase market share of both brands by targeting market segments with a better marketing strategy.

Summary
Market size

Despite its vast population, Indias confectionery market is still very small. With a population about five times larger than the US, the volume size of its confectionery market is more than 20 times smaller. It is valued at close to

24750 million, and is estimated to be 138,000MT. but still with growth expected to
increase with population increase. Specifically for toffee and chocolate industry among confectionary is having 68000 MT and 22500 MT market respectively. Butterdipping and Crunchy Dhamaka target market segment consists of adults, teens and children. According to available statistics they are approx 10 to 12 percent increase in this segment every year.

Market Trends Toffee and Chocolate consumers can choose based on the product segments of confectionary namely enrobed, molded and pieces. Butterdipping and Crunchy Dhamaka are players in the enrobed and molded segments. Todays customer is always on the move either to work, to school, to friends etc. Consumers are searching for ways to increase stamina and perform to peak capacity without having a huge meal. Chocolates popularity as a temporary meal replacement is anticipated to continue being a quick and convenient alternative. Consumers are loyal to competitor brands and strong competition has resulted in looking for tactical ways to attract new and retain loyal customers.

2.1.3 Price Increased competition in the market has resulted in competitive prices. The list price of a regular size for a chocolate and toffee is 5 to 10 RS and for toffee it is 0.50 to 1 RS respectively. This so far is an acceptable price for target customers. The company can continue to cover costs within this price. Our product price for Butterdipping and Crunchy Dhamaka is Rs 1 and Rs 5 respectively.

Market Strategy
Mission The goal of this marketing plan is for Butterdipping and Crunchy Dhamaka to be more appealing to kids, teens and adults and to be the number 1 choice amongst category brands.

Objectives Marketing The key marketing objective of this marketing plan is to grap maximum market and sales of Butterdipping and Crunchy Dhamaka through groceries stores in next 2 years. Financial The key financial objective is to get profits of Butterdipping and Crunchy Dhamaka of at least +10% for the next year.

Target Marketing Butterdipping and Crunchy Dhamaka key target segment are young adults and teens aged 13 49 who love and eat chocolate on regular bases. The target consumers are predominantly females and males aged 18 to 49 with over 75% of both brand consumers clustering around ages 18-25. Consumers here are skilled and manual workers who have responsibility for other people e.g. housewives. High school students and children are also included in this group; consumers are from Lower/Middle income families. Target market Needs The needs that Butterfinger and Crunch chocolate satisfies mainly falls into two of six categories. needs are: Each need category defines a market segment. These segments

Female adults: This segment of consumers needs chocolate basically for mood satisfaction, for children and somewhat for cravings Male adults: Their need for chocolate is primarily for hunger satisfaction and somewhat for energy Teens: Their major need is for hunger satisfaction Children: Children primarily eat chocolate to satisfy hunger needs and somewhat cravings. Market Segment Size: According to needs, our market opportunities lie in those segments that Butterdipping and Crunchy Dhamaka directly satisfy their needs. These are kids, teen and adults aged 18-25. These groups are more than 50% of the total population of heavy users.

Positioning Both brands will be repositioned as a nutritional and superior quality chocolate for the future, chocolate for every household. Based on the present teen and adult positioning of both brands, the goal is to reposition Crunchy Dhamaka more inside the circle towards hunger satisfaction and Butterdipping further up towards craving satisfaction.

Positioning statement for Crunchy Dhamaka For kids and young adults who love chocolate. Crunch is a crave for crispy chocolate bar that gives you an instant energy and nutrition before your next meal.

Communication objectives To create brand awareness for Butterdipping and Crunchy Dhamaka within the enrobed and molded chocolate category in other to increase brand recall and brand recognition. The following promotion launch will be used to create awareness and stimulate purchase which will build equity and enhance awareness Point of Sale (POS) material will be widely used in grocery stores. Creative posters will be made primarily to communicate each brand value and promote awareness. Also, placements of POP material i.e. display stands to ensure visibility at Point of Sale. Magazines: Magazine ad is a good way to reach teens and not very expensive. Teen magazines will be a worthy window to reach active teens. Sales promotion: Buy one Crunchy Dhamaka and get one free Butterdipping, can boost immediate sales. Butterfinger can be reduced for promotion sake to the size of crunchy Dhamaka. Media: Housewives are also a lucrative segment because they tend to buy chocolate for their children and home. We can reach both housewives and children through a short TV ad on favourite programs during school hours for mothers and after school hours for children.

Controls
Marketing teams will ensure the implementation of the advertising Launch as per Brand guidelines so as to avoid costs escalations or poor launch. Brand Marketing will ensure availability of all necessary communication materials before the start of the launch so as to ensure smooth sailing from launch onwards. Marketing Operations will develop Roles and Responsibility guidelines on execution of the Regional grocery activities and ensure that budgets are adhered to. Product Development and Supply Chain will ensure adequate availability of Product on Time for the launch.

Contingency Planning
Some of the risks of the communication strategy include Product unavailability due to limited distribution. This will be mitigated through expansive distribution targeting all stores. Poor Awareness and Visibility through POS/merchandise material which is not effective in market. This will be mitigated through utilising strong ad personnel which will give the brand impact & presence