Grenadier Chocolate Company
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Transcript of Grenadier Chocolate Company
![Page 1: Grenadier Chocolate Company](https://reader033.fdocuments.us/reader033/viewer/2022061202/547b8553b4af9f854b8b4569/html5/thumbnails/1.jpg)
GRENADIERCHOCOLAT
ECOMPANYLIMITED
Group 3
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INTRODUCTION
Mr. Ronald Begg is an ex-employee of :P&G – brand managerFrito Lay – National Sales Manager
He now wanted to start his own company and after several trials and thought process and looking at available finance the eventual choice was a new, milk modifying, instant chocolate syrup for household use.
The product was given the name MilkMate.
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SYNOPSIS
Chocolate is the dominant flavour, estimated to account for about 80% of total sales.
The competition powdered Milk Modifiers had low solubility, were difficult to mix, and often left a residue in the glass after drinking
The new liquid form of product – dissolves instantly & completely
Market researches on Milk Mate gave positive results which gave Mr. Begg encouragement to go for the product
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Nestle
50%
Hershey20%
Cadbury10%
Other Small Regional Brands
20%
CURRENT MARKET SHARE
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Pricing and positioning strategies were worked out keeping in mind the competitors
Investment and working capital figures were chalked out and banks gave a nod provided the viability of product as well as business was there.
Mr. Begg wanted to find a space here where he could combine a small scale product with multi-national marketing techniques.
The biggest catch was that big multinationals could manage huge brands but not small ones , Canadian companies could manage small brands, but are reluctant to invest in marketing and promotion support programs.
SYNOPSIS
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To master a particular market requires experience & additional learning
Broaden to Generic Mktg
concept
Mktg Mgmt
Formulate Problem
MR
Determine Research
Design
Design Data Collection
Competition
Offering
Markets/Publics
Diffussion, Adoption & Innovation
Corporate Strategy
&allocation
Strategic marketing Planning
Configuration (Product)Facilitation (Distribution/place)
Valuation (Price)Symbolisation(Promotion)
Durables
FMCG
B2B
Govt Mktg
Retail
International Mktg
Rural Mktg
Social Mktg
Exchange
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COMPETITION OF MILKMATE
Which brand?
Milk Mate Powder
Liquid
What from of milk modifier do I go for?
How do I want my milk?
What desire do I want to satisfy?
HoneySugarPlain milkTeaCoffee
Milk Modifier
Coconut WaterJuice
Milk
EnterpriseCompetitors
FormCompetitors
GenericCompetit
ors
DesireCompetitors
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SEVEN DECIDING CRITERIA
Market Penetration Vs Market Skimming
Selling Price
Trade Margins
Advertising and Promotion
Supply Chain : Retail Distribution
Company salesmen Vs Sales Agents
Regional distribution Vs National Distribution
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MODIFYING A HABIT
Form of existing product: Powder
Form of new product: Liquid
Methods to bring about the change in consumer mindset:Produce a relevant benefitLiquid that dissolves instantlyNo need of refrigeration
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MARKETING MIX
Product: Suits the market and comprehensive testing was carried out to come down to final formulation.
Price : Market leaders were making losses ($1) per case because of rise of prices of sugar, essential ingredient in the product.
Advantage to companyCost of ingredients, packaging, manufacturing, distribution lower than competitionLess Raw Material (Sugar) requirement: reduced costCost reduction of 10 – 20 %
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Distribution
Company salesman v/s Salesman on commission
Salesman commission : 3 to 10 %
Retailers Expectations : 20 % Margin ( margin given by existing players 18 %)
Communication
Focus on ONTARIO and QUBEC
Efficient advertising: Advertisements on 16 Channels
Promotion: Cents-off coupons
Constraints
Limited resources
Entire dependence banks for funding
MARKETING MIX
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PROJECTED MARKET SHARE
Total Market Size : 23 million poundsPer pound revenue: 0.99$
Total market (units million
pounds)
Expected market
share (%)
Expected market(units million
pounds)
Revenue (Million
$)
25.30 15 3.79 3.75
27.83 25 6.95 6.88
30.61 35 10.71 10.60
33.67 45 15.15 15
37.03 50 18.51 18.32
Total 55.31 54.76
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PROGRAM OFADVERTISING & PROMOTION
Year 1: Extensive PromotionTELEVISION:
ON CBC NATIONAL NETWORK: Class AA Time (Prime) 1 Ad @ $4775 for 180 days
ON CBC MID EASTERN REGIONClass B Time (Noon to 6:00pm Weekdays) 1 Ad @ $2303 for 180 days
MAGAZINES: CANADIAN MAGAZINE (NATIONAL EDITION) - HALF PAGE $7960 for 26 Weeks
NEWS PAPER:Toronto star $2.7/line x 15 lines for 26 weeks (once every 2 weeks)
TOTAL - $ 1,482,053
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PROGRAM OFADVERTISING & PROMOTION
Year 2 to Year 5TELEVISION: ON CBC MID EASTERN REGION
Class B Time (Noon to 6:00pm Weekdays) 1 Ad @ $2303 for 365 days (Everyday for 4yrs)
TOTAL FOR YEAR 2 TO YEAR 5 $336237
Total Advertising Cost for 5 years plus 10% interest on bank loan (assumed) for 5 years is $7,802,001
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ADVERTISING &PROMOTIONAL EXPENSES
Advertising Cost: $7820001Promotional Expense: $15000Special Promotional Material: $25000 Total: $7,842,001
Total No. Of cases Sold : 4.6 Million Cases (ie 55.31 million units)
Advertising and Promotional Expense Per Case : $1.70
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SELLING PRICE & TRADE MARGINS
* Cost per case (12 packs of 1 pound each)
Particulars Nestle ($)*MilkMate
($)* Ingredients 7.25 6.16 Packaging 0.75 0.64
Manufacturing 0.5 0.425 Distribution 0.5 0.425
Selling Expenses 0.5 0.5 Advertising &
Promotion1.5 1.70
Total Exp. 11 9.85 Selling Price to
Retailer11.5 11
Profit/Loss 0.5 1.15
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PROFITABILITY OVER 5 YEAR PERIOD
Overhead Expenses : 50000x5 = $250,000
Initial Investment : $25,000
Total Expense For 5 Years
Variable Cost : $45,310,000
Fixed Cost : $275,000
Total Cost : $45,585,000
Sales (Units) : 4,600,000
Sales ($) : 4600000x 11 = 50,600,000
Overall Profit : $5,015,000
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THANKYOU