Marketing Plan for Free Power Set

(Customized Solar Generators)

ACKNOWLEDGMENTSBy the grace of Allah Almighty, we have successfully completed the term report on our marketing management project "SOLAR GENERATOR."

The project was assigned to us by Mr. Hammad Ur Rehman. We are thankful to him for giving us a chance to learn about marketing strategies. This will help us in enhancing our entrepreneurial and creative skills.

In successful launch of our SOLAR GENERATOR, we are thankful to several people without whom the launch would not have been possible. We thank our families for their support and coping up with our absences. Our class fellows and friends also helped us with their suggestions and ideas.Finally, the members of the group are thankful to each other for supporting and complementing each other whenever need be.

TABLE OF CONTENTSS. NoDescriptionPage No.

1.Acknowledgments3

2.1.1 Executive Summary5

3.Strategic Focus And Plan6

4.Mission And Vision6

5.Core Competency And Sustainable Competitive Advantage7

6.National Power Sector at a glance8

7.Solar Generator Mechanism9

8.Solar Viability in Pakistan11

9.Free Power Set by Power Generator12

10.Marketing Mix13

11.Promotion Channels13

12.Market Segmentation Strategy15

13.SWOT Analysis17

14.PEST Analysis18

15.BCG Matrix18

16.Competitor Analysis19

17.Customer Analysis19

18.Financial Plan21

19.References25

20.Tax exemption letter, government of Pakistan26

EXECUTIVE SUMMARYThis report is about the launch of our new product SOLAR GENERATOR. The report consists of variable aspects of marketing plan which will be practiced in the launching and later invigorated for the promotion of the product. There are few solar products that could satisfy the needs of natives in Karachi. They need products through which they will not only live a healthy life but should add confidence to their personality.Nowadays, electricity is a necessity. High-tech machines that business factories operate need energy; else their operations will be paralyzed. To add, entertainment-giving gadgets need to be plugged into electrical outlets to function. Air conditioners and other devices giving comfort and convenience need electricity to be useful. Everywhere you go, electricity is in high demand. Yet due to this high electricity demand, the nonrenewable sources of energy are being utilized in large amounts. These sources are considered as unfriendly to our environment. These are the propane, petroleum, coal, and natural gas. The good news is that the discovery of solar energy as an alternative energy source has provided a good option to electricity consumers. Current Situation-Electricity Crisis.

Use of UPS/Generators leads to high utility bills.

Our aim is to reduce expenditures on light and ensure savings on replacement costs.

Solar energy is freely available without caring for utility expenses.

No import duty on solar chips-reduction in expenses.

STRATEGIC FOCUS AND PLAN

Power generator aspires to an agent of change by providing efficient power products to satisfy consumers need while understanding the importance of environmental sustainability. The companys short term approach is to inculcate customized solar systems in Pakistan which can address the needs of all the valued corporate and domestic customers.

MISSION and VISION The vision is to make the total cost of solar energy economically workable for everyday use, so that all Pakistani will benefit from this clean renewable energy resource

CORE COMPETENCY AND SUSTAINABLE COMPETITIVE ADVANTAGE

Core Competency: Customized solar generators for all kinds of usage.

Sustainable Competitive Advantage: Low cost and low maintenance efficient energy production

national power sector at aglance

Pakistan has two integrated public sector power utilities, the Water and Power Development Authority (WAPDA) and the Karachi Electric Supply Corporation (KESC). WAPDA supplies power to the whole of Pakistan except the metropolitan city of Karachi, which is supplied by KESC. The system of WAPDA and KESC are interconnected through 220 kV double circuit transmission lines. The country has a total installed generating capacity of about 19522 MW. The installed capacities owned by various agencies operating in the country. These are:

Water & Power Development Authority (WAPDA): 11327 MW

Karachi Electric Supply Corporation (KESC): 1756 MW

Pakistan Atomic Energy Commission (PAEC): 462 MW

Independent Power Producers (IPPs): 5977 MW

WAPDA was established in 1958 and entrusted with a massive agenda, which included generation, transmission and distribution of power along with irrigation, drainage and flood control etc. It owns about 58% of the countrys total power generation capacity and serves about 88% of all the electricity customers in the country. It serves over 13 million customers.

KESC was incorporated in 1913 and is responsible for the generation, transmission and distribution of electricity in Karachi and its adjoining areas. It has nearly 1.5 million customers, predominantly urban consumers. In order to promote fair competition in the electricity industry and to protect the rights of consumers as well as producers and sellers of electricity, the Government of Pakistan has enacted act the Regulation of Generation, Transmission and Distribution of Electric Power regulation Act, 1997. Under this act the National Electric

Power Regulatory Authority (NEPRA) performs three main regulatory functions i.e., licensing of generation, transmission and distribution of electric power, tariff determination and prescription of standards and rules for conduct of business.Between 1984/85 and 2004/05, Pakistans total installed power generating capacity increased nearly fourfold, from 5229 MW to 19,522 MW, but then this trend was not duly followed which has resulted in energy crises.solar generator mechanism

Solar power is the technology of obtaining usable energy from the light of the sun. Solar energy has been used in many traditional technologies for centuries and has come into widespread use where other power supplies are absent. For example in remote locations, and in space.Pakistan being unlucky country with regards to fuel reserves has to switch over to solar energy ultimately for its ever growing needs.According to energy experts, with the current rate of supplies, the total reserves of oil and gas in Pakistan will last 12 years, coal will take 200 years to exhaust which can face tough resistance from environmentalists while hydro power can meet one-fifth of the present needs.

With this situation, for the requirements of 14 million people living in cities and villages of Pakistan should adopt renewable energy. Among renewable energy, solar energy is the most abundant and widely spread in Pakistan.

At present, Pakistan faces serious energy problems: significant part of its electricity generation comes from hydropower, which becomes less productive during the driest, hottest months of the year and cannot keep pace with the sharp rise in energy demand. If the current growth trend in the energy supply and demand continues then it is estimated that Pakistan would be facing a shortage of 31 percent of energy by the year 2020, which will seriously affect the balance of payment position of the country and would make it difficult for the economy to continue moving on the present growth trajectory.On the other hand, Pakistan covers 796,095 square kilometers of land between latitudes 24 and 36 north and longitudes 61 and 76 east. That means solar energy has excellent potential in central parts of Pakistan that receive high levels of solar radiation throughout the year. Every day, for example, the country receives an average of about 19 mega joules per square meter of solar energy.

The total amount of solar energy incepted by the earth every minute is greater than the amount of energy the world uses in fossils and fuels each year. Solar power is pollution free during use. Production end wastes and emissions are manageable using existing pollution controls.Solar electric generation is economically competitive where grid connection or fuel transport is difficult, costly or impossible. Examples include satellites, island communities, remote locations and ocean vessels.

solar viability in pakistan

As is becoming painfully evident with summer around the corner, Pakistan is an exceptionally sunny country. If 0.25% of Baluchistan was covered with solar panels with an efficiency of 20%, enough electricity would be generated to cover all of Pakistani demand. In all provinces the AEDB has created 100 solar homes in order to exploit solar energy.

Solar energy makes much sense for Pakistan for several reasons: firstly, 70% of the population lives in 50,000 villages that are very far away from the national grid, according to a report by the Solar Energy Research Centre (SERC). Connecting these villages to the national grid would be very costly, thus giving each house a solar panel would be cost efficient and would empower people both economically and socially.

In many Pakistani villages, wood and animal dung is used for cooking fuel; however, this is causing widespread deforestation. Women are also forced to walk for many miles each day to gather wood. Then, their health suffers from the smoke emitted from cooking on wood fires. The AEDB completed a project whereby villagers that received solar panels were also given solar cookers. During the project, deforestation decreased by 80% near the villages and the cookers were also made in Pakistan, which generated local economic growth.

The average temperature of the country remains extremely hot most of year which can be a remarkable breeding ground for solar energy. The success of this idea has been evident throughout the country, particularly in Baluchistan where solar power generation on both domestic as well as commercial level has served as cost saving incentive for government as well as social and economic escalation for the people.

free power set by power generatorBrand name plays a significant role in the success or failure of any product. Being in accordance with the product type and companys mission and vision, it would be marked as Free Power Set. The philosophy behind the brand name reflects the potential customers both corporate and domestic who are engaged in various problems due to shortfalls of electricity and are being empowered by POWER GENERATOR to resolve their issues in a socially responsible manner.

PRODUCT LOGO AND TAGLINE

Reliable energy source that you prefer1.1.1 MARKETING MIX

Product In response to the customers needs the business shall strive to lead with innovations both in product design and services which are unequalled in this specific market and industry.

Price

Price penetration will be used to penetrate in the market and quality sales will be focused rather than escalating prices

The business will be intended to earn 20%-30% profit only making it affordable by the target market.

Products (solar generators) will be distributed by technicians to the site.

Transport companies will be hired to assist in this process.

Promotion The business will be engaged in direct marketing to companies, governmental institutions and NGOs.

Billboards and print ads will be most suitable for this purpose.

PROMOTION CHANNELS

Promotion being the one of the most essential part of the marketing, deals with the actual selling, advertising, or publicity of the product; it entails communications with the customers and trying to convince or persuade them to purchase companys products and services. This could be done through various channels including television commercials, magazine ads, direct mailings to residences or businesses, and billboards.

Channels adopted for promotion:

Power generator will adopt various channels of promotion through TV, Newspapers, magazines and hoardings, online promotion etc.

1. Television Advertisement:

TV channels like GEO, Express, Ary, Dawn would be preferred and the time slots would include the News Bulletin, at 8:58 & 9:05. And it would be a continuous pattern; 1st and 2nd week, and then would pulse; once a month. And in the followed by every 1st week of every month continuously.

2. Newspaper and Magazines: Regular advertisement will be published in widely circulated newspapers i.e. are Dawn, The News, Jung etc. However, after the product has sustained in the market, the advertisement will be relatively lowered.

Popular Magazines and yellow pages will be used for publishing advertisement in which the green element and relieve from load shedding will be highlighted. Social networking websites including face book, twitter and various other websites like Dawn.com, express tribune etc are important mediums of effective advertisement to the target markets.

3. Billboards: Branding will be done on billboard on various locations in the city including II Chundirghar Road, Balouch Colony Flyover etc.

Market segmentation strategy

During the segmentation of our market we divided it into the following segments.

Consumer Markets

Business Markets

Consumer Markets:

For segmentation of our market we examined the market to determine the energy needs of the people satisfied by wapda, KANNUP, Sui northern and different dams of Pakistan and those as well where we can exploit the market i.e. those needs which are not yet satisfied by wapda and other power generation companies. During our market research we found that a large number of our population residing in rural and remote areas is completely devoid of electricity. those that are getting electricity are paying electricity bill monthly and are quite frustrated with the fact that wapda fails to provide them the assurance about electricity. People desire to have a more safe electricity provision. In storms, thunders and lightning and rains the voltage wires are short circuited and cause lot of damage to property as well as human life. Secondly they are oriented toward getting energy at lowest possible cost because the average income per capita is $2600, which is not sufficient to afford the energy bills and the diesel they have to buy to draw water.

We can make the purchase of solar panels easy for them by providing them panels at lease. As the people in villages are not all very well off so they cant afford to buy panels.

From the above research we found that our project has a lot to offer to these groups of people because the average temperature of Pakistan is sufficient and useful in the implementation of solar energy at domestic as well as commercial level. As the large percentage of Pakistan is devoid of electricity so it can prove to be a potential target market. Being an agricultural country electricity or diesel is needed by Pakistani farmers for running turbines, threshers and harvesters etc. The current rate of diesel oil is 106/liter, this is not cost effective.

Business Markets:

During our market research we found that there are a large number of investors eager to invest in solar panels. As the quality manufacturers of solar panels a large number of local as well as foreign distributors have shown interest in our business. As they prefer quality products and on time delivery we have taken a great care in the establishment of our location in the market. This has minimized the cost of transportation to the buyers.

Even the cities of Pakistan can also be potentially targeted for solar energy implementation. Especially the hot areas of Pakistan such as Multan, Sibbi, Kohat, Karachi, Lahore, Jacobabad and Mardan that receive sufficient energy.

Targeting Strategy

Socially responsible target marketing is responsibly of marketing the companys product. Various targeting strategies customized for domestic, commercial, urban and rural population will be adopted to reach all the potential customers in their respective societies. The USP of the product will be customization, cost effective and maintenance free green power solution.

SWOT ANALYSIS

Strengths

Almost no maintenance cost.

Highly cost effective

Efficient power generation

Completely renewable resource. Solar cells make absolutely no noise at all.

Solar energy generation creates absolutely no pollution of all sorts.

Solar powered panels and products are typically extremely easy to install. Wires, cords and power sources are not needed at all, making this an easy prospect to employ. Solar power technology is improving consistently over time.Weaknesses

Initial cost of the equipment used to harness the suns energy. Solar energy technologies are a costly alternative to the use of readily available fuel technologies. A solar energy installation requires a large area for the system to be efficient in providing a source of electricity.

Pollution can be a disadvantage to solar panels, as pollution can degrade the efficiency of photovoltaic cells. Unavailable market channels

Opportunities

As the price ofsolar panelsdecreases, an increase in the use of solar cells is predicted to generate electricity.

The decline of natural resources globally is encouraging the convergence to solar.

Prevailing energy crises and shortfalls

Increasing unit rates of electricity particularly for commercial consumers.

Companies aspirations to become a Certified Green Business.

Increasing awareness on non- disposable nature of earth

Increasing government and NGO projects of solar energy in various villages across Pakistan.Threats

Governmental inferences.

Decreasing price of solar equipments may result in diminishing margins.

Global variations in weather.

Political influences

Future tax and import duty imposition

PEST ANALYSIS

Political Tax and duty free import

Encouraging governmental stance

Economical

Diminishing cost of solar equipments particularly solar cells

Large market potential

Broad investment horizons

Social Japans nuclear power plant incident are encouraging investors to plug money into secure solar projects

Boast in agriculture activities in villages due to solar electricity

Technological Increasing efficiency of solar cells and inverters

From PV cells to c-Si cells.

BCG MATRIX

Free Power Set is an innovative product introduced by Green solutions and thus it will maintain its stance in the question mark face. The growing market potential and product need may result in cash cow in a short term future time.COMPETITOR ANALYSIS

Our product will be competing mainly with Green Biz Co, First solar and various small solar products vendors directly as these companies are importing and/or selling solar panels. Power generation and distribution companies including Wapda and K.E.S.C will be classified as indirect competitors. From reports we know that Wapda is providing 58%of the total energy being provided. There is currently load shedding of 700 MW a day because of shortage and poor transmission capabilities. This means that wapda is not being able to meet the requirements of electricity of people. So in this matter our product will be competitive with it and will surely provide electricity more economically. It might prove uneconomical in the short run but it will run out profitable in the long term. They also incur much less operation and maintenance costs and have a longer lifetime as compared with other sources of energy which Wapda provides.

CUSTOMER ANALYSIS

There are about 19211738 (www.statpak.gov.pk) house holds in Pakistan and there are 6.80 individuals in each home on the average and the persons per room are 3.13. With a high rate of growth of population we can expect Pakistan as a big market of solar energy converters. We can distinguish the population in rural population and urban population.

Rural Population:

The 67.5 % population of Pakistan is living in rural areas. Their major earning factors are agricultural activities, jobs in cities, jobs in army, small shops in rural areas and etc. Also in many rural areas of Pakistan the electricity is not available. If it is available in some areas then it is too expensive to afford by rural areas population. We can focus on these rural areas. We can motivate them to buy our products because after buying the solar energy products they will not have to pay heavy electricity bills. Moreover in many rural areas people have to go to nearly towns to pay electricity bills if they are given electricity. This is a big problem for rural areas people. To motivate them our mobile team can go to almost very village and tell the people the importance of the solar energy converters they can tell the benefits of using solar energy converters and we should keep on communicating with them. Remember that people are interested deeply in that thing which they see working in front of them so we can show them some equipment working live. I can say here that rural areas of Pakistan are a big market of solar energy converters.

The Urban Population:

About 32.5% of population of Pakistan is living in urban areas. We can see that in Pakistan there is a severe summer and winter season. People use Electric heaters in winter and air-conditioners in summer season to escape from the violence of season. Major population of Pakistan belongs to middle and lower middle class and electricity is more expensive in Pakistan. People of the urban areas have to pay electricity, telephone, water bills. Some have to pay their monthly house rents. Some additional expenses such as High tuition fee of children, constantly increasing inflation rate, low increase in wages, dependent parents, brother & sisters and parents, health care expenses, etc. It is very difficult for a middle class person to bear all these expenses at time. Therefore we can focus on this middle class people to attract our products which can escape them from high electricity bills. This middle class population can easily be convinced for buying our products. We just have to tell them that this is the cheapest way of getting electricity.

FINANCIAL PLAN

COST OF SOLAR GENERATOR:

SolarPanel:

Solar cells from china: Rs. 60 x 1 Watt.

Costing of 100 Watt Solar Panel:63 x 100 =6300Tempered Glass @ Rs 250 feet

8' x 2' = 16'

16 x 238=3808Other materials including EVA Sheet & electricaljunctionbox

Approx:1700TOTAL PRICE OF 100 watt SOLAR PANEL IN PAKISTAN:11,808Costing of ChargeController:Locallymanufacturedcharge controller:9,000Costing of 12V dry cell / jell batteryImported from China:11,500Costing of 100 Watt Inverter:Locallymanufactured100 wattinverter:4,500TOTAL COST OF COMPLETE SET OF SOLAR GENERATOR:Rs. 36,808

Price per Unit:

Cost of 100 Watt Solar Panel (100 units)636300

Cost of tempered glass (16 Units)2383808

EVA & Junction Box (1 unit)11700

Total Cost of 100 Watt Solar Panel11808

Cost of Charge Controller (1 unit)90009000

Cost of 12v Dry Cell Battery (1 unit) 1150011500

Cost of 100 watt Inverter (1 unit)4500 4500

Total Cost of Generator -36808

Gross Profit Margin 20.00%7361.6

Price before NGO donation 44170

NGO Donation (per unit) 3%1325.088

Consumer's Price45495

Total Fixed Cost:

Fixed CostAmtqtymonthTotal

Office rent5000630000

Warehouse4500627000

Salaries Expenses5000026300000

Sales Person120002672000

Motorcycle12000212000

Transportation expenses10000660000

Utility Expenses6800640800

Promotional Expense50005000

Entertainment Expense2000612000

Fixed cost558800

Total Variable Cost:

Description VC/unit Units Total

VC50341.20450025170602

Total Cost:

DescriptionAmount

fixed cost558800

Variable Cost25170602

Total Cost25729402

Total Promotional Budget:

Bill board500000

TV promotion

Add making expense1000

On air expense3000

News paper(20x3 Dawn) once in a month for 4 month36500

Out door promotional expenses150000

World call expense25000

Total711500

Total Revenue (units 500 x 45495 price /unit)22747500

Break even:

Profit (TR-TC)4475598

Profit of a month (Profit/6)745933

Break even (FC/Price - VC)

Break Even In Rs55.501255

Sources of Finance:

The sources of financing for the product are the four members of the solar generator group, who have agreed to invest in the product on an equal share basis.

Referenceshttp://solarlighting-s.com/solar-generator/http://www.pcb007.com/pages/zone.cgi?a=56814http://www.hebesolar.com/portable-solar-power-generator-systems.htmlhttp://www.tbl.com.pk/the-feasibility-of-renewable-energy-in-pakistan/http://www.energytribune.com/articles.cfm?aid=864http://www.rural-electrification.comhttp://alternate-power.org/http://www.clean-energy-ideas.com/articles/disadvantages_of_solar_energy.htmlhttp://www.mobilesolarpower.net/

Tax exemption letter, Government of Pakistan

http://www.aedb.org/Downloads/exem.pdf

Currently

Page 25