Maline Bottled Water - Business Plan Example

INNOVATIVE /BUSINESS PLAN Table of Contents 0 Introduction 4 2.0 of the productand business opportunity 4 2.1 Trading name and legal format 4 2.2 Products and Services 4 2.3 Mission Statement 5 2.4 Objectives 6 3.0 The Market and Competitors 6 3.1 Market analysis 6 3.2 Competitor Analysis 7 3.2.1 SWOT Analysis 7 3.2.2 SLEPT analysis 8 3.3 Target customers 8 4.0 Marketing plan 9 4.1 Marketing strategy 9 4.1.1 Product 9 4.1.2 Price 9 4.1.3 Promotion 9 4.1.4 Place 10 5.0 Management and human resources plan 10 5.1 Ownership 10 5.2 Staff members and skills 10 5.3 Code of Conduct and Legal considerations 11 5.4 Organizational structure 11 6.0 Operation and production plan 12 6.1 Production facilities 12 6.2 Operating Capital Requirements 12 6.3 IT requirements 13 6.4 Legislation and IPR considerations 13 7.0 Financial Plan 13 7.1 Sources of finance 13 7.2 Costs of production 13 7.3 Breakeven analysis 14 7.5 Forecasted cash flow as well profit and loss for the first 12 months 14 8.0 References 15 1.0 Introduction In this report, there will be an elaborate business plan that the newly established Maline Company will adopt for the realization of its company goals. The report is a comprehensive planning tool that describes the company and its products and services, giving a profile of targeted customers and competitors while identifying the marketing strategies to emulate. 2.0 Description of the product and business opportunity 2.1 Trading name and legal format Maline Company is a newly formed entity that is focused at providing quality product prepared to satisfy the need of the end user both in the local and international markets. Maline, established as a sole proprietorship business entirely owned by Michael Joseph, will be seeking to issue an initial public offer (IPO) that will ensure expansion of capital base as well as increased number of investors. 2.2 Products and Services Maline Bottled water (MBw) is a high quality product that is soon to be launched and introduced into the market by Maline Company. Current changes in the global climate; with most parts of the world experiencing hot conditions that are interfering with day to day activities of the people has necessitated the provision of cold MBw. This will energize consumers who will then embark on their social and commercial engagements that are vital for their economic empowerment. Minding the recent economic downturn across the globe, Maline Company’s new product will be of low price compared to our competitors but without compromising the quality (Aaker, 2008). This is aimed at attracting new customers into the company whose loyalty is in favor of its rivals thus improving the total sales for the company. Worldwide, the use of plastic packets to package various products has increased just as the population grows resulting to an increase in environmental pollution especially in the developing countries. Maline Company is focused at offering recycling services that has twin effects, drastically reduce environmental hazards while at the same time act as a way of reducing costs of packaging. Maline Company logo MLCop Image of Maline bottled water. Source- (Goldstein, 2007) 2.3 Mission Statement Maline Company mission is to become a market leader in the bottled water industry through undertaking an extensive marketing. Through the use of modern technology, the company is focused at providing quality brands that meet the needs of all consumers regardless of their age. Maline product aims at making all our customers equal without being equal to our competitors. 2.4 Objectives The firm has established a number of objectives that will guide it in the local as well as international markets (Doran, 1981). Key business, financial and market objectives are as indicated below. To become a leading company in the bottled water industry in the next 5 years To open 1000-4000 distribution centers in the developing countries in the next 5 years Increase profit margin by 25% in the second year of operations Establish a strong brand awareness campaign in year 1 through the use of various tools of advertising Expanding target consumers in the second year by 50% 3.0 The Market and Competitors 3.1 Market analysis Maline Bottled water, is a unique product being introduced into a crowded market where modern technology is in place. A strategic approach that will attract consumers for its uniqueness is required, and to achieve this, the product will initially be launched by use of traditional as well as online methods of advertising. Sporting activities will have a significant implication on the new brand. In this regard, MBw will be a key sponsor of competitions such as UEFA championship as well as FIFA world cup which attract large crowds and are globally watched. According to Gupta (2006) online marketing will result to improved revenue by 60% in the next 5 years. Additionally, the number of consumers purchasing their products online will significantly increase based on the extensive use of e-marketing. In this regard, Maline bottled water will emulate online advertising that will result to a sustainable growth of the company in terms of market share and revenue generation. One of the major aspects that will make the new product effectively face off its competitors is its uniqueness (Abell, 2009). To attract large number of customers, MBw will be offered in attractive packaging of various sizes that will be easily accessible by customers regardless of their geographic location. 3.2 Competitor Analysis Major competitors include Coca-Cola Company and Pepsi among others. In order to understand its position in the market and the control of the industry by the rivals, a competitor’s analysis has been initiated using 2 major forms. These include SWOT (Strengths, Weaknesses, Opportunities and Threats) and SLEPT (Social, Legal, Economic, Political, and Technological). 3.2.1 SWOT Analysis Strengths Maline owner and other staff are extensively skilled The product uses modern technology The product has clear objectives of becoming a leader in the industry Weaknesses Being a new company, the company has no adequate resources to undertake its activities The company lacks ready distributors Opportunities The product will enter new market in poor regions The product will use modern technology and social media to increase customer awareness Threats Political instability in poor countries may interfere with Maline operations in such countries Reduced customer purchasing power may lower the company sales 3.2.2 SLEPT analysis The first aspect that is covered by the SLEPT analysis is the social factor. As the consumers change their social living standards, the company will embark on providing more products that meet their needs. For example, customers who own vehicles or are working in office prefer to carry their own drinking water. In this regard, the company will open more outlets especially along the highways thus ensuring that such customers are effectively served (Don et al, 1993). To ensure the continuity of its activities in the UK market, Maline Company will ensure that it is inline with the health standard as outlined by the government. In this way, the company will create a good image not only to the eyes of the public but also to the investors and the government. The company will adopt advertising strategies acceptable to the Advertising Standards Authority in the UK. Economic factors that include buying pattern and consumption behaviours are key aspects that a firm cannot overlook. More sales for the company are anticipated as the demand and consumption for clean water increases. Politically, the controls that the government and other political groups may put in the market will be imperative in ensuring a fair ground for the company thus ensuring that no firm is advantaged more than others. The growth of new technology has resulted to a significant growth of local and international markets, leading to low costs of production, effective marketing as well as appropriate distribution channels. 3.3 Target customers MBw target customers within all age brackets without gender or economic bias as well customers in all professions and occupations. Additionally, the company targets family unit -- young families with new babies or mature families with children under the driving age (Goldstein, 2007). 4.0 Marketing plan The lifespan of a product in the market due to stiff competition and newer products require frequent evaluation. MBw will employ appropriate markets mix that covers the 4Ps (product, price, promotion and place) in order to attain a competitive edge. 4.1 Marketing strategy 4.1.1 Product MBw is a quality brand that will create a positive perception and strong loyalty to our customers. Having created a strong reputation, the company will increase awareness of the product by reaching out to new customer segments and supplying product in large volume from selected supply points. 4.1.2 Price In order to increase its market share, Maline bottled water will emulate penetrative pricing strategy. This will entail lowering the initial prices especially when entering new markets where our competitors have not taken control. 4.1.3 Promotion In its effort to increase customer’s awareness, Maline Company will employ various promotional methods such as giving of free samples during the launching of the products. The campaign will be referred to as Buy One Get One campaign. During this promotion, customers who will purchase a bottle of the brand within the first 3 months will get a free bottle of the same quantity. Similarly, the company will use roadside shows where it will educate the society on the benefits of taking its new brand. During the roadside shows in the major towns, customer will participate in dancing competition whereby winners will be awarded by free water and t-shirts with a company logo. The company will also use social media including face book and twitter especially to attract the attention of young consumers who are regular visitors of such social sites. To create awareness and existence of the product, the company will participate in trade shows and sponsor health education forums where participants will be told the benefits of taking Maline bottled water. 4.1.4 Place Maline Company will establish various retail outlets in major towns in UK. As the company expands in other markets, it will enlist a chain of distribution that will go down to the end user (Baker, 2008). In this way, customers in rural areas will easily access their products without travelling for long distances. 5.0 Management and human resources plan 5.1 Ownership Until the completion of the initial public offer, Maline Company will be owned by Michael Joseph who will be responsible for making all decisions ranging from managerial to marketing responsibilities. The owner holds a Masters in Business management and degree in food technology thus making him qualified personnel who will oversee effective running of the company affairs. However, he will sell significant portion of the company shares to the public in his efforts to raise funds. As the company expands it will use the services of a local recruitment agency to recruit other skilled management staff within the first year of operation. The table below indicates other management staff that will be employed. 5.2 Staff members and skills Post Skills Marketing Manager Degree in Marketing, business or commerce Masters in marketing is an added advantage Computer literate 3-5 years experience in marketing Finance manager Degree in Commerce (Finance Option) Certified Public Accountant Computer literate 3-5 years experience in a senior finance position in a reputable firm Internal auditor Degree in Commerce (Finance Option) Certified Public Accountant Computer literate 1-2 years experience as an auditor 5.3 Code of Conduct and Legal considerations To ensure that all the employees are aware of the company ethics, Maline Company under the leadership of Michael Joseph will induct all employees into the company regulations. Such rules will includes maintaining company financial information as secret, reporting early for work, maintaining high level of cleanliness, proper communication with customers and safeguarding company resources. All newly hired management staff and employees in the company will be compelled to sign a contract that indicates all the legal aspects and code of conduct that they will follow during their employment period with Maline Company. 5.4 Organizational structure 6.0 Operation and production plan Maline Company will be located in the city of London. Maline Company will be opening its operations starting from 8 AM and close its businesses at 6 PM. Based on the high number of online customers, the company is focused at creating a chance whereby customers will be ordering their products through the website at any given time. 6.1 Production facilities To ensure adequate production of Maline bottled water, the company will invest in modern technology that will be located in various production facilities within the city of London. 6.2 Operating Capital Requirements Being a new venture that is focused at producing large quantity of products during its initial operations, Maline Company requires £1,500,000. The funds will be useful in meeting the short-term liabilities and legal obligations that the company must comply with before initiating its operations. During the time of low sales, it will be the responsibility of the sales executives under the leadership of the marketing manager to ensure that extensive advertising and promotion is undertaken. In this way, the company will generate reasonable revenue that will be added to the working capital that the company will maintain to ensure continuity of its activities during the time of reduced demand of its product. 6.3 IT requirements Maline Company will use in-house strategies to design its website. To ensure that all its online operations are secured, the company will use security measures including passwords. In this way, confidential information will not be accessible by outsiders. Additionally, the company will invest in modern technology including laptops that will be given to all its employees. 6.4 Legislation and IPR considerations Even though Maline Company has a pending right on its new product, the business owner is working hard to ensure that the company obtains full patents rights in the first quarter of operations. 7.0 Financial Plan 7.1 Sources of finance In order to be successful in its initial operations and future activities, Maline major sources of funds will be bank loan, contribution by the owner, initial public offer and donations from well wishers. Source Amount (£) Bank loan 200,000 Owner contribution 1,000,000 Initial public offer 2,500,000 Donations 300,000 Total 4,000,000 7.2 Costs of production Maline Company will seek the assistance of renowned garbage collection firms who will be responsible for collection of used plastic bottles. The company is focused at producing 5,000 bottles of water per day. Taking into consideration the cost of recycling the used bottle as well as the costs of manufacturing new bottles, the company expects to incur a cost of £25 to produce a single product. 7.3 Breakeven analysis With a daily production cost of £125,000 (5,000*25), the company will have to operate for at least1 year before it reaches a breakeven point. 7.4 Cash-flow and profit and loss forecast Maline cash flow for the first 12 months indicate a good financial position. This is based on the appropriate marketing activities that the company will adopt thus ensuring that customers can easily access their products as well as affordable prices. Similarly, a profit and loss forecast for the first 12 months of operations has been produced. It indicates that due to the high expenditure in the first year of operations, the company will experience a loss in most months but this will be offset by the end of the 2nd year. The company policy is to maintain a profit of 35% every year. 7.5 Forecasted cash flow as well profit and loss for the first 12 months Cash flow forecast(£000)   Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Income                         Loan 150 150 150 100 100 100 100 150 200 200 200 200 Grants 20 50 50 100 120 150 150 150 50 100 150 100 Total income (TI) 170 200 200 200 220 250 250 300 250 300 350 300                                                     Costs                         Advertisement 50 50 50 100 150 100 150 150 150 100 100 100 Training 50 50 50 100 100 50 100 50 25 50 50 50 Motivation 25 25 25 25 50 25 50 50 25 25 25 25 Total costs (TC) 125 125 125 225 300 175 300 250 200 175 175 175                                                     Monthly net cash flow (TI-TC) 45 75 75 -25 -80 75 -50 50 50 125 175 125 Opening bank balance 100 150 200 150 100 50 100 150 100 100 150 100 Closing bank balance 145 225 275 125 20 125 50 200 150 225 325 225 Profit and loss forecast (£000) Profit/Loss forecast  Jan  Feb  Mar  Apr  May  Jun  Jul  Aug  Sep  Oct  Nov  Dec Sales Revenue 50 105 125 120 145 155 185 195 210 225 250 300 Gross profit percentage 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 Gross profit 17.5 36.75 43.75 42 50.75 54.25 64.75 68.25 73.5 78.75 87.5 105                                                     Fixed Expenses                         Office rent 50 30 50 30 65 50 10 10 15 15 15 15 postage 10 20 10 20 15 10 15 10 15 10 15 10 taxes 25 25 25 25 25 25 15 25 25 15 25 15 utilities 35 35 35 35 35 35 35 35 35 35 35 35 Accountancy 65 65 65 65 65 65 65 65 65 65 65 65 Repair & maintenance 55 40 55 40 30 55 40 55 40 30 30 10 Office expenses 60 60 60 60 60 40 40 40 30 30 20 20 Total expenses 300 275 300 275 295 280 220 240 225 200 205 170 Net profit/loss -283 -238 -256 -233 -244 -226 -155 -172 -152 -121 -118 -65 8.0 References Aaker D.2008, Strategic Market Management. Sage: London. Abell K. 2009, Defining the Business: The Starting Point of Strategic Planning, Oxford University press: New York. Baker M.2008, The Strategic Marketing Plan Audit 2008, Cambridge Strategy Publications: Cambridge. Don E. Schullz, Stanley I. Tannenbaum, Robert F. Lauterborn.1993, Integrated Marketing Communications, NTC Publishing Group: New York. Doran, G, 1981, There’s a S.M.A.R.T. way to write managements goals and objectives. NTC Publishing Group: New York. Goldstein D, 2007, what is Customer Segmentation, Wharton School Publishing: New York: Gupta S, 2006.Managing Customers as Investments: The Strategic Value of Customers in the Long Run. Pearson Education publishers: Upper Saddle River. Read More