INTRODUCES NEW FLAVORED JUICES

Dedication
For our esteemed parents who supported us while formulating this Project Proposal and they also had been our inspiration when it comes to proficiency in the desired field. It is by virtue of their hard work and above board grooming that we stand in good stead.

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ACKNOWLEDGMENTS
This report would not have been possible without the strenuous efforts of many people, starting from our esteemed Sir M. Umer. His vast spectrum of knowledge and proficiency in Fundamentals of Marketing has served us in big number in order to give life to our potential thoughts. Moreover Sir M. Umer has also tailored and polished us a lot in the past and as consequence to that we are quite clear in our minds and certainly heading towards the right direction. We take our above board teacher as an inspiration and it gives us motivation and strength.

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Executive summary
Pakistan is a tropical country and has accorded a favorable reception to thirst quenchers such as fruit juices and aerated drinks. Ready to serve new flavored juice is a beverage prepared from clarified Fruits. When chilled the RTS beverage makes for a nutritious and refreshing drink. The nutritive value of real fruit beverages is far greater than that of synthetic products, which are being bottled and sold in large quantities throughout the country. If real fruit juices could be substituted for these synthetic preparations, it would be a boon to the consumer as well as the fruit grower. Pakistan is a market of diversity diverse with regards to incomes, price points of products, culture and preferences and a marketer has to get use to these diverse characteristics of the market. Drinking juice is not a part of our culture. We drink water with our meals but in the West one starts the day with breakfast and a glass of juice. Juice is to a great extent considered as a luxury not a necessity in our society, surely but slowly things are changing mainly in the urban and semi urban areas, where the population is getting more and more health conscious and are realizing the important nutrient values of fruit and are making them a part of their daily diet. The companies in this Rs. 2541 million industry will have to organize various promotional activities from time to time mainly to increase sampling and to educate the consumers about packaged fruit juice that it is as pure and nutritious as fresh juice which is perceived as fresh as it is extracted in their presence i.e. actual or assumed. There are three main brands in this segment of non- carbonated drink markets; they are Fruita vitals from nestle Shezan,and Olfrute from olpers. These three players command around 80% market share in the organised sector. We can observe this industry growing and new players entering the market. In recent times we have seen the entries of some international brands, like Rani Juice [Middle East], Ballantine [Australia], and Tipco [Thailand], with the intention to strengthen their hold in Pakistan and to grow with the market.

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Company
FMSFT Enterprises Pvt. Ltd will be entering the food processing industry with its first launch i.e. Tetra pack juices. Four of the Five investors have full operational responsibilities. FS FH and MD are the co-founders and have entrepreneurial and industrial experience. SR brings operational management and financial skills to the operation. FMSFT Enterprises Pvt. Ltd has a Strategic Alliance with the New Zealand based company Zespri International Limited to supply some fruits to Pakistan. Pursuant to our company policy stating "Quality First, Credit Prominent", we process our Juices with strict production standard, quality control and sophisticated processing technology, we at all time provide our consumers the natural and healthy fruit juice. Our Start up costs, listed below, has been financed to date by the investment from its owners. Following are the parameters:

Particulars Land & site development;[x[ acres @ Rs. [y] lakh per acres Building and civil works Plant and machineries Miscellaneous Fixed Assets Preoperative expenses Preliminary expenses Technical know-how and engineering fees Contingencies @ 10% Capital Expenditure Margin money for working capital Project cost

Amount xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxxx

Market Analysis
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Market Analysis Summary:

One can sense an evolution that the industry has seen with development in the tetra- pack market, there also has been a natural progression from drinks to nectars to juices and while traditionally fruit drinks were aimed at children, the new brands like Minute maid, Rani, and Life have focused on young adults and professionals. Although fruit drinks focus strongly on out of home consumption, the juices and nectars have been concentrating on takeaways or in-home consumption with more choice coming in, the tetra- pack market is likely to witness further segmentation. Packaged fruit juices are getting recognized as social drinks now, with dominant consumption being observed in the company of family and friends. The results of the research can be briefly put as follows: Among packaged fruit beverages, the awareness to trial, ratio of Nestls juice brand has been rated the highest. Up to 17% of the respondents were aware of Tropicana, while the brands trial stood at 11%, also, 8% of the respondents stocked the brand at their homes. Other parameters where Tropicana edged out competitors included taste, health, purity and nutrition, according to the study, Tropicana was also perceiver as reasonably priced. The average Pakistani may have a legendary weakness for mango, but when it comes to preference of fruit-based juices; his choices are in tune with international trends. Therefore it is orange juice that is the most preferred fruit juice flavour in Pakistan, followed by apple, Grapes and mixed fruit. The findings indicate that most packaged juice drinking consumers travel abroad on holidays.

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Other attributes of branded juice consumers include employment of domestic help, ownership of assets and credit cards, and health consciousness with 80% respondents going to aerobic classes or working out at gymnasiums. Understandably therefore, awareness and trial levels of packaged juices are higher within the Sec A category, than among Sec B consumers, the majority of whom rated these as aspirational. Awareness levels are similar in both Karachi and Lahore; more trials are generated by Karachites than their counterparts in Lahore. The consumers are starting to perceive fruit juices at home. While 55% of the respondents consumed 1- litre packs at home, 45% consumed 200ml packs. The fruit beverage market has more acceptances in big cities like Karachi, Lahore, Islamabad, Quetta and Peshawar, which is due to the more awareness there with relations to the rest of the country.

Market Segmentation
There has been no general acceptance of the product forms in the fruit beverage market. The consumer is basically concerned if it is a fruit juice or synthetically constituted product. Product segmentation, therefore, should be clearly delimited. Under the fruit drinks the first segmentation is between real fruit drinks and synthetic drinks. The real fruit drinks are based on natural fruit pulp or juice. The synthetic drinks are synthetic products with fruit or other flavors. Broad taste preferences could be another way to define the market. The market is at present also segmented on the basis of fruit pulp content. For the purpose of segmentation, on the basis of fruit pulp content, market can be segmented as:

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Fruit juice with pulp content more than 80%. Brands falling in this category are Nestle, shezan, Tropicana, etc. Fruit Nectar with pulp content between 40% to *0%. Maaza come in this category. Fruit Drinks with pulp content less than 40%. Frooto and Tops are the popular brands in this category. Segmentation could also be on the basis of the benefits provided to the consumer: One benefit could be the nutrition content it gives to the consumer so one market could be the health-conscious segment. Second benefit is thirst quenching, so the other segment could be those buying the drink or nectar for satisfying the thirst. Another very broad segmentation can be on the type of situation in which the drink or nectar is used: People who are on the move i.e. Outdoor use e.g. those traveling. People who are using it on the breakfast table as a part of their menu i.e. in-house use.

Market Needs:
Consumers usually, are not going to accept something that doesnt taste good even if it is good for them or has certain benefits. Companies working to bring a new food product to the market have two questionsdoes it taste good and will consumers buy it?

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Market Trends:
Tropical fruits and flavours dominate the market, yet some consumers are still hesitant to try unknown exotic flavors like litchi, gray fruit, papaya and berry. Companies have found the best way to introduce exotics is in combination with familiar flavours. A flavour combination that began in the new age, 5% to 10% juice category, and has spread to other beverage categories as well as to other products like kiwi, strawberry, etc. stating that it was a small company that took the risk and won.

Industry analysis
The Rs. 2541 million packaged fruit juice market is estimated to be growing at 20% to 25% annually, with Tropicana and Real holding 40% market share each. The market can be categorized in terms of product content and there are three major product contents available. Drinks: Juice with pulp content less than 40%, Nectars: Juice with pulp content between 40 - 80%, Juices: Juice with pulp content more than 80%,

The canned juice market initially covered by international brands. But they did not make a mark in the market due to reasons such as high price, unattractive packaging and lack of right promotion programme. Nestle, introduced a mango drink in the tetra pack in 1985 and since then has been a leader in its segment. The market has suddenly picked up since 1994-95 and a few players have emerged as market leaders.

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Leading Manufacturers** of Fruit Beverages in Pakistan

Company
1. NESTLE

Brand
Fruita vitals

flavours
Mango, Guava, Pineapple, Apple, Red grapes & Orange etc. Apple Orange, Nature Sweet, Apple, Grape, Pineapple, Mixed Fruit etc.

Appy 2. PEPSICO LTD. Tropicana

Slice 3. SHEZAN Real

Mango, Litchi, Orange & Guava. Grape, Guava, Orange, Pineapple, Apple, Mixed Fruit, Mango. Orange, Apple Mango, Guava, Pineapple, Apple, Red grapes & Orange

4. OLPERS

**The mentioned list consists of the brands noticeable in metros and as such there are a large number of small canning units scattered all over the country catering to niche markets.

Real Active Olfrute

5. Coca Cola

Maaza Frooto

Mango Mango, Apple, mixed fruit,

6. FROOTO INDUSTRIES (PVT) LIMITED 7. MURREE BREWERY

Tops

Mango, Apple, mixed fruit,

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Imports
With a whole range of product lines opened up for imports over the past 14 months, these exporters have now full freedom to exploit the huge Pakistani market. The fruit juice market in Pakistan is not yet large enough to justify investing. Today the consumer has got a wide variety to choose from as many foreign food and personal products can come in unrestricted now. The Pakistani market place has seen a dramatic increase in the range and quality. There is expected to be some level of competition in these areas. Quality will have to improve and manufacturers will have to be more cost effective. Consumers belief in Pakistani products too is going up; earlier issues were of durability and poor shelf life. Now, Pakistani products have moved up to the next level. This could make it tough for imported products to make a dent in established categories, especially where there is a substantial price difference.

Problems with imports:

The imported products on offer in most stores stocking foreign foods reveal that they are close to their expiry dates. Most such products available now come through the grey market. Most of these products, especially those that come from South-East Asian countries, are imported by agents who supply to stores. The other problem that retailers face is that since they are dealing with agents there is a problem of returns of products when they are past expiry dates. Pakistan is a difficult market mainly because of delays at the docks, tariffs and duties on various products, bribery and corruption and the lack of a cold chain (for horticulture produce).

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Substitutes
Fruit juice companies have to face a two level competition i.e. on the first level with the substitutes and the then the players within the industry. The NESTLE is comprised of the following player with respect to Pakistan.

Soft Drinks (both carbonated and Non- carbonated soft drinks)

Soft Drinks are divided into carbonated and Non- carbonated drinks. While Cola, lemon and oranges are carbonated drinks mango drinks come Non- carbonated category.

Flavored Milk (energy, MILO, OVALTINE etc.)

Just like fruit drinks Flavoured milk is also positioned on the health platform. Companies are trying to project it as a fun drink with added flavours and innovative packaging.

Mineral Water

Fruit drink sellers consider even mineral water as substitute to their offerings. The main assumption is that packs ensure quality delivery.

Other products
Milk by- products like buttermilk and lassi also serve as major substitutes. They compete in terms of low price as well as easy availability. These drinks are also considered important from the health perspective.

Distribution patterns
Distribution network and reach are vital factors for success of the brands in the fruit beverage market. It is mainly the distribution strategy that the companies are focusing upon.

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The distribution is mainly done through stockist. Below the figure shows the many ways the companies in this industry are seen to be operating:

Companys Manufacturing Facilities

Franchises

Stockiest

Agent

Distributor Retailer

End User The urban Pakistani retail sector has traditionally been structured around three small retail entitiesthe grocer, the general store and the chemist. The grocer stocks non packaged, unbranded commodities such as rice, flour, and pulses, as well as branded fast moving consumer goods (FMCGs) The general store stocks only branded, packaged FMCGs. The chemist, a part from dispensing pharmaceuticals products, sells branded FMCGs such as personal care products and health foods. Departmental stores and supermarkets. Others: Bakeries and confectioners Fruit juice/ tea stall/ vending machines

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Ice-cream parlours,

Consumption and buying Patterns

The Pakistani lifestyle has a traditional predilection for fresh fruits and vegetables or those processed at home. People go in for fresh fruits vending from kiosk fountains, which produce instant juices from fresh fruits in the presence of the consumer. Taste is often the secondary consideration in the Pakistani market for beverages. Fruit juices also lose on roughage, which is an important part of fruit nutrition. Few people know the difference between a juice and nectar. At present; Per capita consumption of juices in Pakistani is estimated at a fraction of a litre i.e. 200ml. Consumers go for convenient and economy products. Availability in chilled form and brand awareness plays a crucial role in purchase decision. Brand loyalty is very low, as all the products taste the same. Consumers are money conscious where the purchase of fruit beverages is concern.

Main Competitors:
A host of brands are jostling for thirst space. Not just colas but beverages and fruit juices of all hues are adorning shop shelves.

NESTL FRUITA VITALS: Nestl has been serving Pakistani consumers since 1988, when our parent company, the Switzerland-based Nestl SA, first acquired a share in Milkpak Ltd.

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PepsiCo: PepsiCo, one of the worlds largest food and beverage companies, has offered its products through independent bottlers in Pakistan for more than 40 years.

Product
brown skin, soft green flesh and black seeds. They are rich in many Vitamins, and a flavonoids In of minerals. high amount as

particular, they contain Vitamin C (more than oranges), Kiwi fruits are small oval fruits with a thin much potassium as bananas and a good amount of beta-carotene

PAPAYA

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PAPAYA is rich in Anti-oxidants, the B vitamins, folate and pantothenic acid; and the minerals, potassium and magnesium; and fiber. Together, these nutrients promote the health of the cardiovascular system and also provide protection against colon cancer. In addition, papaya contains the digestive enzyme, papain, which is used like brome lain, a similar enzyme found in pineapple, to treat sports injuries, other causes of trauma, and allergies.

CHERRY

Cherries are one of the very low calorie fruits; yet are rich source of nutrients, vitamins and minerals. Both sweet as well as tart Cherries are packed - 15 -

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with numerous health benefiting compounds that are essential for wellbeing. Cherries are pigment rich fruits. These pigments are in fact polyphenol flavonoid compounds known as anthocyanin glycosides. Anthocyanin are red, purple or blue pigments found in many fruits and vegetables, especially concentrated in their skin, known to have powerful anti-oxidant properties.

LYCHEE

Delicious and juicy Lychee or "Litchi" reminds you the arrival of summer Litchi, like citrus fruits, is an excellent source of vitamin C; 100 g fresh fruits provide 71.5 mg or 119% of daily-recommended value. Studies suggest that consumption of fruits rich in vitamin C helps body develop resistance against infectious agents and scavenge harmful, pro-inflammatory free radicals. It is a very good source of B-complex vitamins such as thiamin, niacin and folates. These vitamins are essential since they function by acting as co-factors to help body metabolize carbohydrates, protein and fats.

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Product Description
This product is actually a mix of 80 percent pure juice, water, and cane sugar. With a strong, accurate flavor, this could actually turn out to be a pretty tasty orange juice substitute a possible motivation for placing a high-visibility Vitamin C label across the front of the package.

1) Fruit Juice in 250ml PET Bottle

Description: Juice Packing: 24 X 250ml Gross Weight: 12.5kg Approx. Qty per 20ft FCL: 1400 Cartons Product code: KS250ML

The well-designed packaging ensures that it stands out whether it be displayed in normal shelves or walk-in chillers. Stored at an ambient temperature away from direct sunlight or heat, the product has a shelf life of one (1) year from date of production. It should be consumed immediately upon opening and JUICES are best served chilled. MRP of this 250 ml bottled drink will be Rs. 30.

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2) Fruit Juice 1.2 liter Concentrate
Product code: KC25FFM Description: JUICE Packing: 12 x 1.2lt Gross Weight: 16.5kg Approx. Qty per 20ft FCL: 1008 Cartons

This product comes attractively packaged in a 1.2 Litre PET Bottle with a recommended dilution rate of One (1) part concentrate to Seven (7) parts water. This variant offers value for money and convenience for those with large families or entertains frequently.

3) Fruit Juice Drink in Tetra Brik Aseptic 1litre and 2 litre Slim line Re Cap

Product code: KS01TPSL Description: Kiwifruit Juice Drink Packing: 12 X 1lt, 12 X 2lt Gross Weight: 13kg Approx. Qty per 20ft FCL: 1350 Cartons

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This Tetra Brik variant is UHT processed, contains no preservatives and comes with a convenient re-sealable non-drip spout. It is an ideal choice for active families or individuals who want a convenient yet nutritious thirst quencher .Future Products: BERRY JUICE GRAY FRUIT JUICE

Packaging
Juices can be found in every type of packaging. In early days, cans and glass bottles were the only available types of packaging. Today, the assortment includes PET bottles, sports bottles and brick packs.

Key Success Factors

Processing and Packaging

technologies used:
State of the art production and packaging technology is a must in this industry. This gives an edge in packaging and ensuring freshness of product besides enhancing the image.

distribution strategies, logistics and reach in the market:

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A strong distribution network is essential for ensuring availability to fight competition from the other players and also the substitute that have a strong distribution reach.

Sourcing of raw materials:

Global sourcing strategy will give an edge over other players in terms of both cost and quality advantages.

Flexible mix:

and

effective

marketing

The product mix, promotional mix, pricing mix and distribution mix should be made effective and should be flexible in all sense it should help us to combat the primary competitors

strategic ventures:

alliances

and

joint

Strategic alliances and joint ventures help in gaining competitive advantage in packaging, distribution and product formulations.

SWOT Analysis
Strengths:

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Innovative flavors hence we are bound to get the attention with proper communication. Committed, capable and ambitious management. Flexibility in our operations as initially we will be confined to few cities so can focus our efforts on the tasks.

Weakness:
Our distribution set up initially will be weak when compared to the others in the market. New in the market and not all people take the risk of experimenting with taste. Our financial constraints with respect to our competitors demand that our resources are used optimally.

Opportunity:
The market is in a growing stage and fairly small in terms of market share as compared to other. The market has a presence of only few players and they are not too aggressive in their acts. More and more people in the urban areas are getting health conscious and are making fruit juice a part of their daily diet. Hence the market is growing. These fruits can be then cultivated in Pakistan, to cut down the cost of imports of the fruit.

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Threat:
Our competitors are deep pocketed and they could harm us by getting aggressive in their promotional activities. The competitors have strong brand images in the market because of their other businesses and their presence in the market from an early stage. Others can adopt the flavour and the value of a unique flavour could be neutralized soon.

Marketing Strategy
Marketing Summary:
Pursuant to our company policy stating "Quality First, Credit Prominent", we process our Juices with strict production standard, quality control and sophisticated processing technology, we at all time provide our consumers the natural and healthy fruit juice. New flavor in the market and the company is also new so its marketing budget cannot be limited. So the strategy will be to enter the market with a big bang. Developing visibility and brand equity is the key. FMSFT juices will be advertised in different media with respect to our target market .In addition to the advertisements which will be used to drive consumer sales, FMSFT juices will leverage a networking campaign with respect to the distributors and

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sale promotion at the points of purchase i.e. local restaurants, gyms etc. to drive commercial sales. FMSFT juices will be on the shelf in all markets by 15th February, the company will start supplying its stock by 6th February. The promotional activities will start from 12th February.

Mission:
FMSFT juices mission is to provide the highest quality of fruit juices. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. We will ensure that our products will exceed the expectations of our customers.

Marketing Objective:
Maintain positive and steady growth each month. Experience an increase in new customers. Generate brand equity at the markets we are catering to as well as within the supplier and distribution networks.

Financial Objectives:
Realize a 3% increase in the gross profit margins through efficiency gains every year. Reduce the logistic cost associated with product delivery by 10% by the end of the first five year of operation.

Target Markets:
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The women of the house Children The teenagers In-home consumption Out of home consumption

Positioning:
FMSFT JUICE will position itself as a no compromise drink where a person does not have to make any compromise with the fun element of having the refresher and the health element and that it is also socially appreciated/ accepted.

Brand Logo:

Strategies:
The single objective is to position FMSFT juices as the natural and healthy fruit juice in the cities it is served, commanding a 30% market share within 5 years. The marketing strategy will seek to first create customer awareness regarding product, develop the customer base and work towards building customer loyalty.

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The advertisements will be for the purpose of building and registering FMSFT juices as natural and healthy fruit juice and not only for our introductory flavour but also for the flavours in future. The ads and the promotional activities will be concentrating only on the cities in which FMSFT juices is served hence the main weight age will be given to the local media and advertisement on the national level only to the objective making our presence felt.

Marketing Mix
Marketing mix comprises of approaches to price, distribution, advertising and promotion.

Pricing:
Price is the marketing mix element that produces revenues, the others produce costs and it is also one of the most flexible elements as it can be changed quickly, unlike product features and channel commitments. Pakistan is known as a price sensitive market i.e. an Pakistani customer wants more value at low price.

FMSFT juices will be priced as follows: 250 ml Rs.30 01 liter Rs. 90 1.2 liter Rs. 130 02 liter Rs. 180 05 liter - Rs.400

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Distribution:
The distribution or reach factor is a marketing mix element that needs to be monitored over a period of time. The company FMSFT Enterprises Pvt. Ltd has its FMSFT juices manufacturing and packaging plant in ISLAMABAD. The fruits will be imported from New Zealand based company Zespri International Limited. The initial launch will be in the following cities: KARACHI LAHORE ISLAMABAD QUETTA PESHAWAR

The transportation to the cities will be basically through rail and road depending on cost effectiveness. To keep the channel active and result oriented following initial steps will be taken; They will be given discounts on cash purchases. The goods will be available on credit basis also.

Retailers have to be segmented based on Volume, exclusiveness, complementary products handled and basic requirement of refrigeration facilities, which is a must for our product. These factors will be given consideration before incentive schemes are worked out. FMSFT juices will be marketed through different channels. All different sizes will be available at places where buyer buys products in greater volume;

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Supermarkets Discount stores like Big Bazaar, Apna bazaar, etc. Hyper Mall Petrol pumps Chemists, General and Convenience stores Health clubs, Gym, Gymkhanas, Ice-cream parlors etc. Entertainment zone: Theaters, Cinemas, Parks, Amusement parks. Hotels & Restaurants Bakeries

The effectiveness of our channel will only be known when we assess our chosen channel on the following criteria: Are the customers expectation been met by us? Are the channels serving the targeted segments? Are our intermediaries motivated?

Future thought on distribution:

In the plan to go international our FMSFT juices will be available in Japan, France, Greece, Hong Kong, Macao and China mainland in the future.

Promotional Strategy:
The promotional efforts will be on two fronts i.e. on our direct customers and the end consumers. This should - 27 -

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ensure FMSFT juices a push from the distribution and a pull from the customers. All our promotional efforts should serve some basic criteria like the activities should carry a feel good appeal and should enhance emotional attachment of the target with FMSFT juices. FMSFT juices will be advertised in cost effective media like newspapers, radios, hoardings, at bus stands, and the most important and effective will be through TV advertisements.

ADVERTISING
Advertising will be exercised with a media mix, which will consist of:

print media:
Print Media will be used in the form of news papers of various languages. Print media will be mainly used with a purpose of communicating and complimenting our sales promotion schemes to pursue and gives us visibility.

Audiovisuals:
Television as a media will be used to inform the qualities and benefits. The combinations of TV channels will be used at different intervals. The channels will be selected keeping in mind our target

Audio:

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Radio will be a key element in our media mix as it is cost effective and will cover our catering cities precisely. Under the brand name we will be running contests, sponsoring programme, etc. This will help us reach out to our target audience and the influencers.

Outdoor:
Outdoor communication will be done to help us get the visibility i.e. with the help of Hoardings, which will be placed at areas that are prone to traffic jams and at toll Stations.

Posters:
Posters will be created by the company during the events and will be carrying the company logo, brand name and the picture and the tag line.

Public Relation:
The company will be a part of events and/or will also be organizing its own events. The events will be chosen on the core values of community relation and whole family participation.

World Wide Web:

We will make our presence felt on the internet by hosting a website for the brand which will be named www.FMSFTFOODS.com .

Time frame
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An assortment of promotional tools will be used to increase visibility but the promotional activities will be concentrated differently with relation to the seasonal pattern in the country.

Marketing communication budget:

In the initial period the marketing communication budget approved by the company is Rs. 80 lakh to maximum of 1 crore. Later when our product portfolio is expanded i.e. within a span of one and a half years from commencing operation the company will adopt the percentage of sales method i.e. the company plans to spend 15% of sales on promotional activities.

Marketing Research:
During the development of the marketing plans, several focus groups will be used to gain insights about our customers. These focus groups will provide us with helpful insight, which will compliment the decision making process. An additional source of dynamic market research will be the feedback mechanisms with the help of our website www.FMSFT.com.

Conclusion:

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