Business Plan Of Innovative Green Product Marketing Essay

Business Plan Of Innovative Green Product Marketing Essay The coconut crop is grown in 14.3 million hectares of land which constituted about 1.1 per cent of net crop area of the world. And annual output is around 13.3 billion coconut nuts in the India. In 1000 hectares of land approximately 1,47,000 trees can be planted and which can give 23 million coconuts. India contributes about 15.46 per cent in area and 21 per cent in terms of production of coconut in the world. The coconut crop is grown in eighteen States and three Union Territories. It is concentrated on the West Coast region of the country comprising the states of Kerala, Karnataka and Maharashtra, followed by East Coast of Tamil Nadu, Andhra Pradesh, Orissa and Pondicherry. The coconut cultivation areas also traditionally located in the coastal region of Gujarat, Goa, West Bengal, Islands of Andaman Nicobar and Lakshadweep. Kerala is considered as the land of coconut and holds the key for the development of coconut. Coconut Development Board CDB is a main organization for the expansion and development of coconut industry. It is the main body which is attached to the coconut industry. Coconut Development Board is a statutory body established by the Government of India for the integrated development of coconut production and utilization in the country with focus on productivity increase and product diversification. The Board which came into existence on 12th January 1981, functions under the administrative control of the Ministry of Agriculture, Government of India, with its Headquarters at Kochi in Kerala and Regional Offices at Bangalore in Karnataka, Chennai in Tamil Nadu and   Guwahati in Assam. There are six State Centres situated at Bhubaneswar in Orissa, Calcutta in West Bengal, Patna in Bihar, Thane in Maharashtra, Hyderabad in Andhra Pradesh and Port Blair in the Union Territory of Andaman Nicobar Islands. FUNCTIONS OF THE BOARD Imparting technical advice to those engaged in coconut cultivation and industry. Providing financial and other assistance for the expansion of area under coconut. Encouraging adoption of modern technologies for processing of coconut and its products. Adopting measures to get incentive prices for coconut and its products. Presentation of Data For starting of any business, we required some market research data. Data may be primary or secondary data. Primary data are those which are collected for the first time. And the secondary data are those data which are collected from secondary sources like research paper, circulars, guidelines, magazines etc. We have to gather data which can help us in determining the feasibility of project. Here in this business plan we have collected primary data through questionnaire and interview method. Also we have studied some important data from government agency like Coconut Development Board (CDB), Food Agricultural Organization (FAO) etc. Following are the data was collected. Consumer Survey was carried out. Around 1000 Questionnaire were filled out. 65% respondents chosen natural health Coconut Water Out of this 65%; the proportion of age group of 18-35 years was around 70%. Market Availability/ Market Potentiality The coconut is not only significant in socio cultural needs of our society, but also has gained considerable importance in the national economy as a potential source ofemployment and income generation among the plantation crops. In India soft drink and juice industry is very vast. India has a diverse agro-climatic condition due to which there exists a wide-ranging and large raw material base suitable for food processing industries. India is the largest producer sugarcane, coconut etc. If we set up a plant, the availability of raw materials and infrastructure would be available to the entrepreneur. Indian soft drink market is valued to be Rs.7100 crore: In India soft drink companies have captured a large amount of market for colas and juice products. This is because of two reasons. First is India has a large population which can afford to consume a cola product with a reasonable price. Second is penetration of marketing activities carried out by marketers. In India the market for natural and health drink like coconut water has not surpassed too much. The reason may be lack of advertising efforts and lack of awareness among people about the coconut water benefits. So if we just turn the preference of 1% of the soft drink colas consumers, it will be great or huge market for coconut water. This is the reason of focusing on soft drink market. The carbonated drinks are the mainstay and accounts for 85% of the total soft drink market. There are also around 15% of the consumers prefer juice market. So they can be a less efforts required to shift their preference. Coconut water can be the part of the $19 billion sports drink market globally: In todays fast and stressful situation energy drink and sport drink are becoming more and more famous and favorable choice of consumers. Sports drink is useful to Athletes and sports enthusiasts to replenish electrolytes lost in perspiration. Coconut water contains more nutrition than any commercial sport drink. India being the less developed in nutritional level and governments interest in growing up of nutritional products: Indias rank in health development and facilities is very lower. As the time passes, government is also taking interest in increasing the nutritional product expansion and health of the public gets superior. So it may be steering point for development of coconut water. Benefits of the product First of all to start any of the business, we have to think about the benefits of the products and how it will be marketed so that the maximum utilities of the product can be possible. The water of tender Coconut is a sterile, nutritious, thirst quenching health drink. The pure and sweet tender coconut possesses enormous therapeutic properties and is a thirst quenching refreshing health drink for all age groups. Tender coconut water has the same level of electrolytic balance as we see in our blood. Numerous medicinal properties of tender coconut water reported are:   (Given by Coconut Development Board) Good for feeding infants suffering from intestinal disturbances.   Oral rehydration medium Contains organic compounds possessing growth promoting properties Keeps the body cool Application on the body prevents prickly heat and summer boils and subsides the rashes caused by small pox, chicken pox, measles, etc. Kills intestinal worms Presence of saline and albumen makes it a good drink in cholera cases Checks urinary infections.   Excellent tonic for the old and sick Useful for different diseases Useful to Athletes and sports enthusiasts to replenish electrolytes lost in perspiration. Can be injected intravenously in emergency case. Ingredients Nutritional Facts As everyone knows about health benefits of coconut water. Coconut water is also used for long term benefits like smoothly digestion system, smooth urine system, maintains body temperature etc. In coconut water main ingredients has been elaborated as follows. These all facts about nutrition is taken into consideration per 100 ml of coconut water. Nutrition (Per 100 ml) Potassium (mg %) 247 Sodium (mg %) 48 Minerals (mg %) 0.5 Fat (mg %) 0.1 Calcium (mg %) 40 Magnesium (mg %) 15 Phosphorous (mg %) 6.3 Iron (mg %) 79 Copper (mg %) 26 Protein (mg %) 0.1 Production Process The process from the starting to its final products is very easy. It does not require a high degree of mechanicals or engineering process. Coconut Water of 6-7 month stage is first filtered through pressure filters and then mixed with the desired proportion of additives plus sugar and concentrated to the appropriate level. The water is then packed in pouches/cans and retorted in an autoclave, after which it is cooled in a stream of cold water. List of machinery to be used: Coconut   water collection tank  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚      Autoclave Filter  Ã‚   Additive mixing tank  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   coconut water storage tank  Ã‚   Volumetric filling machine   Baby boiler  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Raw material  Ã‚  Ã‚  Ã‚   10000 Coconuts Final product 3100 litres Driving Forces for Coconut Water At the time of setting up of any business, we have to see possibilities or factors that can help us in developing/expanding our product line. Generally these are called driving forces of the product. Following are the driving forces for the coconut water. Abundant availability of raw material: As we have seen that the India being the 3rd largest producers of coconut nuts globally. This production of crop has spread over the many states and union territories of India. So we can be sure about the continuously supply of raw materials throughout the year. The main season of procuring raw material is monsoon. Convenient in moving to final consumers: Generally, a coconut nut is heavy in weight and sometimes makes it difficult to carry in bulk. Even the time has come for packaged food and processing items. The marketability of packaged food and beverages has increased tremendously since last decades. So if coconut water is packaged in tetra pack or aluminum can or pouch, it will be convenient in carrying at different places for different time. Increasing awareness about health consciousness: In todays time people are tend to be more health conscious and prefer to natural eatable items. More specifically in metro cities or urban areas people have suffered too much from the disease and they are bearing the cost of hygiene foods. It is the result that coconut industry has developed by 2-3 times.Increasing dieses due to the soft drinks have awaked public more. Pure natural and hygiene product by sciences: In todays competitive era, everything has to be prove and get it to be certified and registered with the concerned agency for consumption. Coconut water is declared as pure natural and health drink by science. So it may also increase the chances of convincing people to shifts their choice. Liberal Government policy towards healthier eatable items: Government is also helping for promotion of healthy food and beverages. So for the coconut water promotion government policy may not be as strict as in the case of some others products. Increasing demand of By product like Ethanol coconut oil etc.: It has been increasing amount of petroleum products. Thereby spreading pollutions and decreasing volumes of non-renewable sources of energy. Lignocellulose can be used for this purpose. 9. Target market In the very beginning before launching of any product one has to think about their target market. Who will be their target customers?For the successful launching of Coconut Water in the market, following consumers would be targeted. Youth people [ India being the youngest country in world] Old aged people Patients (Strong Focus) Children Ladies [specially for pregnant ladies] India is the youth nation in the world. And youth people are tend to be more health awareness. Also India has a lot of opportunities for the patients as we have large number of sick people every year. We can also target pregnant ladies. Because even the doctors are also suggesting to drink coconut water as a good medicine. 10. Marketing and Communication As we have studied earlier that the reason for not popularity of coconut water product into the market. So here extremely efforts would be towards the marketing and communication aspects of marketing mix. Here we can consider important factors that affects to the final consumers. i.e. four Ps of marketing viz. Price Product Place Promotion. Pricing: Price of the product is very crucial and determinant of profit from that product. Especially here in the case of coconut water as we have to enter in that market which is dominated by giant companies with their giant operations of efficiency and marketing campaigns. At this stage we can go for two options that is capturing market share with lower pricing and creating awareness among public. And other option is charging competitive pricing with colas companies. Pricing @ introductory stage: Here we go with this option preferably. At the introductory stage of launching of product we have to pull huge customer attention. So we will keep our pricing at lower margin compare to the soft drink colas companies. At the initial stage we have decided price of Rs. 15 per 300 ml bottle. Competitive pricing to soft drinks and colas: As we start to grow our product into market, and research talks about the consumer awareness about coconut water into the market; we will be able to charge competitive pricing to the colas companies. Product: The second P of marketing is Product itself. It states following: How should be the product? How should it be packed in attractive way? How should it be in size etcà ¢Ã¢â€š ¬Ã‚ ¦? How should it be looking externally? Here we will in the initial stage focus on 300 ml packaged in aluminum can. Afterwards in family size of 1 ltr,1.5 ltr and 5 ltr bottle. The main focus is on the external looking of the packing. Place: This P of marketing states about how product should be placed at different places so that there is maximum possibilities of sell. Place for Coconut Water includes following: Hospital region College areas Sports areas Gym Khana Malls Central areas etcà ¢Ã¢â€š ¬Ã‚ ¦ coffee houses or high end snack shops With the hope of moving the product into a more mainstream setting, our distribution strategy aims at selling to larger distributors that directly capture our niche target markets. We plan on expanding from smaller localized grocery stores into mainstream action sport retailers including: Sports Chalet, Sports Authority, larger surf retailers, 24 Hour Fitness, and Golds Gym. Our plans to move into these distribution channels with confidence, knowing the growing demand from our current selective target market. Promotion: Promotion may be of two types i.e. product promotion and sale promotion. Product promotion : Promotion of the products means making products more popular among the general public. Product promotion of Coconut Water includes:- Advertising. Free sample distribution. Health awareness programs. Social networking sites etcà ¢Ã¢â€š ¬Ã‚ ¦ Yoga centers Sales promotion: Sales promotion means how to increase short run sales of the products. It denotes short run increase in sales. For the Coconut Water it includes:- Discounted pricing for big quantities like family pack, executive pack or party packing. Presenting lucky draw prizes. Sponsoring some social events. Point of purchase 11. By products In todays competitive era, cost reduction and maximum utilization of available resources has become very much important. It means in the production process, there should be a minimum wastage. Every component should be utilized as possible as their extent. Following are the coconut by products. Ethanol (lignocellulose waste): Though it is too much difficult to get liquid in terms of ethanol from wastage of shelf that is called lignocellulose waste. The reason for this coconut shelf has a large amount of glucose and minerals. If we are using huge amount of coconut shelf, it will be available for the by product. Coconut oil: There are so many producers in the market who makes coconut hair oil and also coconut edible oil. Coconut oil is used in the country as a cooking fat, hair oil, body oil and industrial oil. Coconut oil is made from fully dried copra having maximum moisture content of six per cent. Steam cooking of copra is also practiced by some millers to enhance the quality and aroma of oil. Refined coconut oil is also manufactured in the country for industrial uses. Refined coconut oil is mainly used in the manufacture of biscuits, chocolates and other confectionery items, ice cream etc. 12. Export Opportunities Today the extent of international trade has increased by many folds. Considering it as an opportunity we can also look forward for export efforts of coconut water in packaged form. The countries like UAE, USA, Japan and UK are the major export destination for the products. Because these are the nations which have applied and maximum users of the product. Even this nations government also plays an active role in marketing of this healthy product. First and foremost we have to acquire IEC (Import Export Code). This code can be availed through the DGFT i.e. Director General of Foreign Trade. Other than this there are so many documents required for fulfillment of the regulations like LC, Leding Letter, GR form, FEC A/c with RBI, quality certificate, contract with the overseas and domestic depository banks etc. We can also set up our plant at SEZ or EOU to avail the various government skims and subsidies. 13.Cost Analysis The very important aspect of any product or service is its price. Cost analysis includes from the beginning i.e. from the procurement of raw materials until it reaches to the final consumers. It is consisting of direct and indirect expenses. Purchase Rs. 4.50 per unit Other Cost Rs. 6.00 per unit 1. Transportation Cost. 2. Marketing Cost. 3. Packaging Cost. 4. Office Cost. 5. Other Cost. Total Cost per Unit: Rs. 10.50 Selling price : Rs. 15.00 Less (Total cost): Rs. 10.50 Profit per unit: Rs. 4 .50 Financial Aspects As we know finance is a blood for any organization. As our body will not work without blood. Similarly business activities cannot be worked or done without availability of finance. Here in this B plan we have taken model for coming five years. We have calculated financial flow for five years. Because at least we should be clear about next five years about our business, though not at all sure. Investment: Total machinery cost : Rs. 12 lakhs Other Fixed cost : Rs. 20 lakhs (Including Working Capital) Total cost Rs. 32 lakhs Total revenue : Net revenue in 1 year : Rs. 54,00,000 Total net revenue in 5 years : Rs. 3,22,82,700 Here machinery cost includes different types of machine required for carrying out the process. Other fixed cost includes land expenses, depreciation expenses, some lease expenses etc. Year wise calculation of revenue and growth Year Sales (units) Per Unit Price (Rs.) Total Value (Amount) % Growth 1 3,60,000 15 54,00,000 2 3,78,000 15 56,70,000 5 3 4,08,240 15 61,23,600 8 4 4,57,240 15 68,58,600 12 5 5,48,700 15 82,30,500 20 Total 21,52,180 03,22,82,700 Here we are setting target of monthly sales of 30,000 units thereby yearly sales in units will be around 3,60,000 units. By multiplying this by sales price of Rs. 15, we get net revenue of Rs. 54,00,00 at the end of 1st year. In the second year, we are setting target of 5% increase in sales volumes in 3rd year 8%, in 4th year 12% and in the last year 20% growth in sales volume. If we sum up, we will have earned net revenue of Rs. 3,22,82,700 in five years of time (assuming that the selling price would remain the same and growth target will be achieved through). Profit Calculation: Net revenue : Rs. 03,22,82,700 Less fixed cost: Rs. 32,00,000 Less Variable cost: Rs. 2,25,97,890 Net Surplus: - For five years Rs. 64,84,810 Average profit per year Rs. 12,96,962 BREAK EVEN POINT: FIXED COST Rs.32,00,000 - = - CONTRIBUTION Rs. 4.50 7,11,111 UNITS =============== BEP means at this stage No profit No loss. So it means till the sales volume of 7,11,111 units we will not have a profit. In second option if we want profit every year, we have to write off equal proportion of fixed cost from profit. 15 .Financial Feasibility of Project Before investing any amount in a project investor will think about its return. For this there are various method can be applied like Pay Back Period (PBP) method, IRR method or Net Present Value (NPV) method. Among this NPV is considered to be an appreciable method as it takes into account present value of future inflow. So here we will use NPV method to analyze the financial viability of project. Net Revenue Variable cost Fixed cost = Net surplus (In Rupees) Year Net Revenue (Rs.) Variable Cost (Rs.) Fixed Cost (Rs.) Net surplus (Rs.) PV factor @ 12% NPV (Rs.) 1 54,00,000 37,80,000 6,40,000 9,80,000 0.893 8,75,140 2 56,70,000 39,69,000 6,40,000 10,61,000 0.797 8,85,617 3 61,23,600 42,86,520 6,40,000 11,97,080 0.712 8,52,320 4 68,58,600 48,01,020 6,40,000 14,17,580 0.636 9,01,580 5 82,30,500 57,61,350 6,40,000 18,29,150 0.567 10,37,128 Total 32,00,000 45,51,787 We will calculate NPV @ 12% rate of return i.e. our required rate of return. We have total fixed cost of Rs. 32,00,00 spreading in five years of life. So per year we will write off equal proportion which is Rs. 6,40,000. So we will get net surplus every year by deducting variables and fixed cost from net revenue. If NPV > 1 project is selected If NPV If NPV = 1 project may be selected Conclusion: Here in this project NPV > 1. So project should be selected. As the total sum of future flow at present is greater than its investment made. Here our NPV is Rs. 45,51,787 and our investment outlay was Rs. 32,00,000. . Challenges/ Limiting factors for growth Market Dominated by soft drinks companies: As we can see in the market that the colas and drinking market is well dominated by giant colas companies. So As a new player in the market it will be tough to sell our product. And specially to convince to try a new one which is not entertaining or any status to the final consumers. So we have to work upon this and have to make proper strategies and programs to capture a market share. High popularity of soft drinks and colas among youths: As our youth people are most consuming colas. There is too much marketing penetration on youth. So Ill be difficult task to make our product more popular. Because unless our product is popular, no one is going to buy it or no one will know about our existence in the market. We have to divert maximum efforts towards the marketing funda. Challenges to maintain health standard of product as it is a natural product: As we are marketing our product as a natural product, we have to be very quality conscious and obey standards set by various laws. If we fail in that, competitors will take advantage of it and they will start spreading wrong rumors into market which will cause our ultimate sales volumes. From the view point of lower income society, it is an Exploiting business. As it reduces their employment: In majority case, coconuts are sold by small vendors on the roadside. Generally they are lower class people. They run their family on daily income basis. So if we start selling coconut water in packaged form, it may happen that small vendors sales will decline and consequently there will be negative impact on the family running. So they may also start a unethical social activities. So we have to find out solution to overcome these challenges. Here we can make them our vendors. And also we can follow the model of supplier and franchise. No longer life/Changes in taste in long period of time: If the coconut water comes in touch with air, within 24 hours it will spoil. We will not be able to drink it. The reason is some important bacteria evaporate from it. So as a solution we have to use scientific preservative technology and packaging techniques. Here we can add some additives which is natural and not harmful. We cant mix any hazardous chemicals like soft drink colas. 17. Laws For doing any business we have to follow the rules and regulations, policies of government laws. Here especially we are in processed and packaged food business. Also we are dealing with agro food as raw materials. So we have to take into consideration various laws. Below is the list of laws that we have to consider. Prevention of Food Adulteration Act (PFA), 1954 The Standards of Weights and Measures Act, 1976 The Standards of Weights and Measures (Packaged Commodities) Rules, 1977 The Insecticide Act, 1968. Export (Quality Control and Inspection) Act, 1963. Environment Protection Act, 1986. The Food Safety and Standards Act, 2006 18. Conclusion As it is a natural and energy product People are becoming more health conscious Coming time is of natural items Market is broad Raw material and environment is appreciable Healthy government policies and subsidies Every coin has two sides. Similarly it has also pros and cons of starting up of unit. But after analyzing facts and situation, the more possible weight goes towards its favorable.