MPS Market Plan

8/3/2019 MPS Market Plan

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MARKETING PLAN

FOR

UNITED BREWERIES GROUP VENTURING

INTO

SOFT DRINK BEVERAGE SEGMENT

Submitted To:

Submitted ByProf. Sujit Sen Gupta

Shruti Mawkin

Sonakshi Mahajan

Simran Kaur

Sris

hti Garg

Su

mit Bhatria


2/23

Swa

r Rishabh

S

hwetra Verma

Shw

eta Kohli

Ric

ha Khanna

Sunita Mukherjee

Gr

oup no.-8

T ABLE OF CONTENT

S.NO.

TOPIC

1. INTRODUCTION

COMPANYS MISSION

COMPANYS VISION STATEMENT

GOALS

OBJECTIVES

2. EXTERNAL ENVIRONMENT ANALYSIS

PESTLE ANALYSIS

INDUSTRY OVERVIEW

PORTERS FIVE FORCES ANALYSIS OF AERATED

DRINK INDUSTRY:

COMPETITOR ANALYSIS

3. INTERNAL ENVIRONMENT

SWOT ANALYSIS

BCG MATRIX

GE MATRIX

ANSOFFS MATRIX

4. Financial Pay Off


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5. Marketing Mix:

Product

Place Price

Promotion

People6. Organizational Structure

INTRODUCTION

United Breweries Group or UB group is a conglomerate of different

companies with major focus on Alcoholic Beverages Industry. The company

markets Alcoholic beverages under the Kingfisher brand and also have

launch Kingfisher Airlines an Airline services in India with international flights

operating recently. United Breweries is largest producer of beer with a

market share of around 48% by volume. It is owned by Vijay Mallya. UB

group has now greater than a 40% share of the Indian Brewing market with

79 distilleries and bottling units across the world.

The company has assumed an undisputed market leadership with a national

market share in excess of 50%. Through a process of aggressive acquisition

and market penetration, UB Group today controls 60% of the total

manufacturing capacity for beer in India. The flagship brand, kingfisher is

now sold in over 52 countries worldwide, having received many accolades for

its quality. It has achieved international recognition consistently and has won

many awards in international beer festivals. It has also been ranked among

the 10 fastest growing brands in UK.

With plans to become a global player, United Spirits Ltd. (USL), the flagship

of the UB group has purchased Scottish distiller, Whyte and Mackney in May

2007 for Rs. 4,800 crores. This would bring the brands of W&M like The

Dalmore, Isle of Jura, Glayva, Fettercairn, Vladiyar vodka, and Whyte &

Mackay Scotch under its portfolio.


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The UB group is also into manufacture of fertilizers. The group company hasMangalor chemicals and fertilizers have a factory at districts of Karnataka.

UB Engineering Limited is the group's engineering business arm. Itundertakes EPC Projects, Infrastructure, on-site fabrication of structures,installation, testing and commissioning of Electrical etc. The company was

initially established as Western India Erectors in 1963 and came under theUB Group in 1988.

As per the companies latest plans it wants to enter the non-alcoholic

beverage segment in the Indian Market. For the start, they plan to launch

Refresh, a soft drink which would be made available in five flavors. Their

future plans include diversifying their product line into the Juice segment

under the same flagship.

The company would go for full market coverage, attempt to serve allcustomer groups with all the soft drink variants they are offering.

It would position itself as a low calorie soft drink targeting towardsHealth conscious customers.

Differentiation on the basis of endorsement young sports celebrities.

Position the soft drinks as a value based offering that is premium in

nature due to its high quality.

COMPANYS MISSIONOur mission is to be the premier soft-drinks company in India

providing customers the finest quality of beverages.

COMPANYS VISION STATEMENTOur vision is to assumed an undisputed market leadership position in

the soft-drink segment.

GOALSOur goal for establishing the brand would be to Use the brand power

of UB group for introducing & establishing Refresh as being the most

popular soft drink in India.

OBJECTIVESThe company has established four objectives which it plans to achieve in the

next three years

1) Pan India Coverage by 2014


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2) Gross margin of atleast 45% by 2014

3) Net after tax profit above 15% of the sales by 2014

4) Market share of 30%

EXTERNAL ENVIRONMENT ANALYSIS

INDUSTRY OVERVIEW

Soft Drinks have become worlds leading beverage sector. The Indian soft

drink industry stands at around 175000 billion liters per annum and is likely

to surpass 350000 billion liters by 2015. Indian non-alcoholic market is

expected to grow by 20% per annum by 2013, according to report by The

Associated chamber of Commerce &Industry of India. The leading players in

the Indian soft drinks market include coca-cola co., PepsiCo. Parle-agro,

Dabur and Godrej.

India has proved to be perhaps the toughest battle ground for Coca-cola and

Pepsi. Coca-cola was the first international brand to enter India in early

1970s. Until 1990s, domestic players like Parle Group (Thumps up, Limca,

Gold spot) dominated the soft drink market in India. However MNC players

like Pepsi (1991) and Coke re-entered in 1993 shift the control towards them.The market of Soft drinks can be segmented on the basis of types of

products Cola products and Non-cola products.

Cola products account for nearly 61-62% of the total soft drinks market. The

brand fall under this category is Pepsi, Coca-cola, Thumps-up, Diet-coke,

Diet-Pepsi.


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Non-cola products which constitute 36% can be divided into different flavors

such as Orange, Cloudy lime, Clear lime, Mango.

PESTLE ANALYSIS

Political factors:-

The beverage industry in largely affected by the Political factors prevailing

in the country. The sales tax & central sales tax affect the rates for soft

drinks form region to region.But , Vijay Mallya and Roy are famed for their

skills in managing relationships with governments. Those skills come handy

for their diversified businesses sprawling different states with different tax

rules and when they come head-to-head with rivals.

Economic factors:-The rising per capita income has lead to an increasing consumption of soft

drinks. Soft drink business provides attractive profit margins due to the

consolidated nature of the industry. The Nation Council of Applied Economic

Research has projected that Indias very rich, consuming & climbers

classes are growing at a CAGR of 15%, 10%, 2% respectively. Thus, there is

huge potential for growth of the Refresh in India.

Social factors:-

The changing lifestyle, social habits, eating habits has all led to an increase

in the growth of the beverage industry. With increasing urbanization, this

acceptance of soft drink is only going to rise. Also a large proportion of

Indian population is the age group of 20-35 years, which comprises of the

age group where soft drinks are found to be most popular. Thus, the

changing demographics and social trends are favorable for Refresh.

Technological:-


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The beverage industry is not very technological specific. Technology is

mainly used for developing new packaging, to reduce costs and curtail

counterfeiting etc.UB group has huge financial muscle power, it can use its

finance to procure latest technology, and necessary R&D.

PORTERS FIVE FORCES ANALYSIS OF AERATED DRINK

INDUSTRY:


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Threat of Existing Competitors:

A fierce competition exists among the very few dominating players of this

Industry. There is a duopoly in the industry and intense rivalry can be seen

amongst Pepsi and Coke.

Threat of Substitute Products:

There is threat of substitutes, as there are many alternative beverages

present in the market like juices and teas proven to be healthier options.

Bargaining Power of Suppliers:

The Suppliers have less bargaining power as the company has achieved a

strong hold on its raw material and packaging suppliers over the years. The

company has established good relations with suppliers for raw materials

such as sugar corn syrup, sweeteners etc.

Bargaining Power of Buyers:

The buyers exercise a high bargaining power as the switching cost for the

product is almost nil and they have many options to select from when it

comes to the beverage industry.

Threat of New Entrants:

Even though the aerated market is growing fast pace, but still there are

strong barriers for new entrants in the soft drink industry as amount of

capital investment required is high and also exclusive territorization is

required for distribution channel which makes its in whole a cumbersome

and difficult process. A new brand would need a huge muscle power to

compete with the existing big players Coca Cola & Pepsi, but UB group is

expected to doing well in this segment as it has already established itself in

the beverage industry.


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COMPETITOR ANALYSIS

COMPETITORS MARKET SHARECOCA COLA 42.7%PEPSI 56%RC COLA 4%

The soft drink Industry is dominated by Coca-Cola whose market share is

42.7 % (2011) across the globe. Pepsi and Rc Cola together have a market

share of 34.8 % (2011). Hence Refresh has to face stiff competition from

Coca-Cola who is the market leader at this point of time.

INTERNAL ENVIRONMENT

SWOT ANALYSIS


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BCG MATRIX

QUESTION MARK (OR PROBLEM CHILD)

Here, business unit has a small market share in a high growth market. These

business units require resources to grow market share, but whether they will

succeed and become stars is unknown. UB fertilizers come in this quadrant.

STAR

In this quadrant, business unit has a large market share in a fast growingindustry. Stars may generate cash, but because the market is growing

rapidly they require investment to maintain their lead. If successful, a star

will become a cash cow whenits industry matures.

CASH COW

Kingfisher

airlines

UB Breweries

UB

Fertilizers

UB Spirit


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In this quadrant, a business unit has a large market share in a mature, slow

growing industry. Cash cows require little investment and generate cash that

can be used to invest in other business units. Kingfisher Breweries falls

under this quadrant.

DOG

Here, business unit that has a small market share in a mature industry. A

dog may not require substantial cash, but it ties up capital that could better

be deployed elsewhere. Unless a dog has some other strategic purpose, it

should be liquidated if there is little prospect for it to gain market share.

Kingfisher airlines fall under this quadrant.

GE MATRIX

GE MATRIX FOR UB GROUP


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(+) high

(-) low

Based on the analysis of the GE Matrix we can say that UB group is high in

industry strength and high in market attractiveness in the breweries

segment (as it has maximum + in this segment). They lie in the green

section of the matrix, in the grow penetrate section. The companys

decision to invest in this segment is correct. Thus, the companys new

venture to enter into soft drink segment has great growth potential.

ANSOFFS MATRIX


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The Ansoffs matrix provides four different growth strategies:-

1. Market Penetration2. Product Development3. Market Development

4. Diversification

The new product Refresh features in the second quadrant of the Ansoffs

matrix where UB group is offering a new low Calorie soft drink product in an

existing the market. The strategy for growth that they have used is the

Product Development Strategy, where they have come up with a new

product which they offer to a market who is already consuming soft drinks.

This strategy would help them differentiate their product from other

competitors.

FINANCIAL PAY OFF

Profitability Analysis Of Refresh:

We have analyzed the projection of Refresh Brand by the following:

Expenses in the production to the sales

Revenues

Profit

1. Expenses in the production to the sales:

1) Manufacturing Costs- Theirmanufacturing cost is divided into

two:

i. Variable Cost: They have the expenses incurred in the

purchasing the raw materials, manufacturing the bottles,

making the soft drink.

ii. Fixed Cost: Buying the machineries to make the soft

drinks and bottles


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1) Administrative Cost: Hiring of the employees, providing the

salaries to them

2) Selling Cost: Variable Cost and the fixed cost. Salary to the

sales people, incentives (variable)

3) Advertising and marketing Budget: There will be the fixed

cost in which we will decide how much budget to spend on TV

advertisement, print media and the online media, hoardings etc.

1. Revenues for Refreshing Brand: The revenues of the products can

be achieved by 300 ml bottles targeting the whole India and the cans

specifically in the tier-1 and Tier-2 cities. The market for the soft drinks

or the carbonated drinks are approximately Rs 8000 crore and recent

data shows that Pepsi has earned 56% market share of this market.

So, we have planned to get at least 3- 4% of the share to start, thenwe grow according to that.

Projection Analysis In detail

2012 2013 2014Revenues Rs 1.5 Crore Rs 1.8 Crore Rs 2.2 CroreManufacturing

Costs

Rs 38 Crore Rs 41 Crore Rs 43 Crore

Advertising

Costs

Rs 58 Crore Rs 54 Crore Rs 53 Crore

Distribution Rs 39 Crore Rs 41 Crore Rs 43 CroreAdministration Rs 19 Crore Rs 19 Crore Rs 19 CroreDepreciation Rs 2 Crore Rs 2Crore Rs 2 CroreOperating

Income

Rs 8.75 Crore Rs 2.1 Crore Rs 12.66 Crore


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We have analyzed that our 2013 would be the breakeven year for us

and payback period is the mid of the year of 2014.

Our Assumptions:

Initial Sales 3 % of marketGrowth of sales 10%Advertising

Assumptions

Trial Rate 0.05

Frequency 10.00Rate per 30 sec spot

ad

1,00,000

Reach to target

audience

0.10

Target Audience 0.03

Print Ads andHoardings

Rs. 5 Crore

Distribution Rs. 3 per can and 2

per bottle + fixed

cost of Rs. 2CroreOther promotion

activities

Rs. 25 Crore

MARKETING MIX

1) PRODUCT -

The UB GROUP has a variety of products available in their kitty. They have a

wide range of product line to attract the customers and to have a major


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share of the market. So the new product line of Refresh would be available

in the following flavors:-

Refresh Cola: This beverage would be in regular cola flavor, but with astrong fizz, black color, available in 335 ml for its Can and Plastic bottle sizes250ml, 600ml , 2 Lt & 200ml in glass bottles.

Refresh Lemonie: This thirst-quenching beverage features a fresh, lightlemon-lime taste, cloudy white color, available in sizes 335 ml for its Can andPlastic bottle sizes 250ml, 600ml, 2 Lt & 200ml in glass bottles.

Refresh Orange: This beverage is driven by the brand's fun and playfulpersonality, which goes hand in hand with its bright orange colour, bold fruittaste and tingly carbonation, bright orange color, available in sizes 335 ml

for its Can and Plastic bottle sizes 250ml, 600ml, 2 Lt & 200ml in glassbottles.

Refresh Mango: This beverage would be mango flavored, available ingolden yellow color, in sizes 335 ml for its Can and Plastic bottle sizes 250ml,600ml, 2 Lt & 200ml in glass bottles.

Refresh Apple: This beverage would be apple flavored, in reddish browncolor, in sizes 335 ml for its Can and Plastic bottle sizes 250ml, 600ml, 2 Lt &200ml in glass bottles.

Main USP of the product is that it has calories as low as 8.0 kcal. Thesedrinks are for people who want no calories, but plenty of taste. Its a healthybeverage for weight conscious people, which has calories as low found in acup of tea


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Main USP of the product is that it has calories as low as 8.0 kcal. Thesedrinks are for people who want no calories, but taste like the carbonateddrinks. Its a healthy beverage for weight conscious people, which hascalories as low found in a cup of tea.

2) PLACE- distribution channel, institutional sales,

DISTRIBUTION CHANNEL IN URBAN AREAS:

The UB group can adopted a model DSD that is Direct Store Distribution. In

this company directly supplies its product to the retailers which helps them

to save the margin, which they give to the wholesalers and it also ensuresquick availability of the product to the retailer. Also, it can generate the sale

by distributing to the various cafes and youth restaurants where most of the

youth can come and get the taste of it.

Based on various distribution models they can offer its products and services

to customers in other countries also. But in the initial year they should focus

on Indian population. They can use Direct Store Delivery (DSD), Broker

Warehouse Distribution (BWD) and Vending & Food service (V&FS) systems.

Distributors: 3 to 5 % is the profit marginRetailers: 10 % to 16 % is the profit margin

Thus, we i.e. the UB Group can have two ways of hierarchy:


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1) Direct to the retailers:

2) Distribution to the wholesalers first:

1) PRICE-

PRICE STRATEGY:

The pricing strategy of our product would be different from the other

carbonated drinks. There are two reasons behind it:

To differentiate the product from other soft drinks

Making it a high range product because our product has a same

flavor like Pepsi, fanta etc but it is a healthy drink.

As we have categorized the drink as per the sizes of the bottles and cans. So,

we have different pricing for different bottles. For bottles, we are taking the

price of Rs. 13 for 200 ml and Rs. 25 for cans.

Trade Promotions:

Incentives to the retailers: We will provide the special margins and

discounts to our retailers so that they can show case our products in front in

their store and people can view and buy our product via impulse buying.

Also we will provide the discounts to our distributors as well.

1) PROMOTIONS:

Promotion Strategy

Since the product is new the following promotional strategies would be

followed by UBS:

1. Push & Pull promotion strategy

Extensive distribution:

Push Strategy:


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Refresh of UB Group would use this strategy by using its sales force

and promotion money to induce intermediaries to carry, promote and

sell it to end customers.

Pull Strategy:

Example for the pull strategy: UB/ Refresh cooling tools like fridge and

deep freezer in super market and hyper markets

2. Create attractiveness from advertising

Placing adds on bill boards/ hoardings:

TV Advertisements:

Press Releases:

Cost- Effective Promotion:

As UB Group is a much known brand, so we believe that there should

be a press conference after the launch and should spread in all over

the news channels.Free trial of the drink in shopping malls /local shops

Sponsor too many events such as cricket matches award functions

trade fairs.

Social media marketing: They should make the separate official on

Facebook etc for Refreshing brand.

Internet Marketing: Spreading the awareness through various

websites search engines etc.

Other strategies

Getting Shelves: They get or purchase shelves in big departmental

stores and display their products in the front side of shelves so that to

attract the customers.

Eye Catchy Position: Salesman of Refresh Company positions their

freezers and their products in eye-catching positions. Normally they

keep their freezers near the entrance of the stores.

Sale Promotion: Company can also do sponsorships with different

college and school's cafes and sponsors their sports events and otherextra curriculum activities for getting market share.

B2B promotions

Hosting many functions

The group can have tie-ups with schools, offices and restaurants to

adhere to its target audience.


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Region

Vice

President

AGM/AOD

Unit 1

AGM/AOD

Unit 2

AGM/AO

D

Unit 3

AGM/AO

D

Unit4

Region

Finance

Region Human

Resource

Region Customer

Service

Region External

Affairs

Region Cold

Drink

Region

Legal

Region

BSG

Region Director/Manager Market

Execution

Region Capability

Management

Region

Channel

1) PEOPLE-

The organization Structure will be a vertical hierarchical one, since almost

equal number of personnel is involved in production and in management.

There are 5 main functioning groups within this SBU of UB group: Production,

Sales and Marketing, HR and finance.

Production involves the actual manufacturing of the drink & bottling and

packaging it. Sales and Marketing will handle the promotion and scheduling

of drink newly launched Refresh drink under the UB banner .Hr would cater

and manage facilities like recruitments payroll training & development and

other HR functions. Finance / accounts will manage functions like profit

calculation , investment needed, preparing balance sheets and profit n loss

account to know where does the unit stand today and where will it go in

future.

Organization Structure :


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ORGANIZATION STRUCTURE OF THE SALES DEPARTMENT


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AGM/AO

D

Plant

Manage

r

Route

to

Market

Human

Resourc

e

Manage

r

Finance

Manage

r

General

Sales

Manage

r

Area

Sales

Manager

Channe

l

Manage

r

Area

Capabilit

y

Manager

Sales

Executiv

e

Sales

Trainer

s

Market

Develope

r

Distributors

AndSalesmen

Marketin

g

Key

Account

s


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REFERENCE

www.ubgroup.com

www.financialtimes.com

HRM by TN Chabhra
http://www.ubgroup.com/http://www.financialtimes.com/http://www.financialtimes.com/http://www.ubgroup.com/

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