A Report on Business Plan

Product: Chocolate Toothpaste

Course: Marketing Management
Submitted To:
Mamtaz Akter,
Lecturer,
Dept. of Marketing,
Jaghangirnagar University.

Submitted By:
Team “Creative Cell”
4th Year, 2nd Semester,
Dept. of Marketing,
Jaghangirnagar University.

Date of Submission: 27th December, 2015

JAHANGIRNAGAR UNIVERSITY, SAVAR,

DHAKA-1342

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 GROUP PROFILE

Team:

No. Name ID
1 Md. Shahriar Aman 1390
2 Sania Akter 2284
3 Debasmita Dey 2674
4 Md. Ebrahim Sujon 2518

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 Table of contents

List of illustrations i

Executive summary 1

1.0 Introduction 2- 3

1.1Product offerings 3

1.2 Features and unique selling proposition 3

1.3 Business model 3

2.0 Current Market Situation 4-5

2.1 Market Description 4

2.2 Competitor Analysis 4

2.3 Channels and Logistics Review 5

3.0 SWOT Analysis 6- 7

4.0 Goals and Objectives 7-8

4.1 Vision 7

4.2 Mission Statement 7

4.3 Short-Term Goals 8

4.4 Long Terms Goals 8

4.5 Objectives 8

5.0 Marketing Strategies 09- 12

5.1 Market Positioning 9

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 5.2 Product Strategies 10

5.3 Pricing Strategies 10

5.4 Market Communication Strategy 11

6.0 Project Implementation Schedule and Organizational Structure 13-15

6.1 Project Implementation Schedule 13

6. Organizational Structure 14

7.0 Sales Promotion 16-17

7.1 Marketing Organization Structure 16

7.2 Advertising and Promotional Campaigns 16

8.0 Financial Analysis and Projections 18

8.1 Financial Statement Assumptions 18

8.2 Financial Assumptions 18

9.0 Contingency plan 18

10.0 Appendix 19

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 List of Illustrations

Illustration Illustration name Page No.

No.
1 New Revolution in Dental Care 2
2 Business Model 3
3 List of Product Distribution Zones 5
4 Choco Paste’s SWOT Analysis 6
5 Product Positioning Map 9
6 Choco Paste’s Product Offering 10
7 Wholesale and Retail Price of Choco Paste Products 11
8 Pull Strategy of Choco Paste 11
9 Project Implementation Schedule 13
10 Organization Structure of Choco Paste 14

11 Staffing Needs 15
12 Marketing Organization Structure 16
13 Three Year Marketing Budget 17

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 Executive Summary
Dr. Dent is launching brand new toothpaste in the market, “Choco Paste” which is basically
chocolate toothpaste. The toothpaste offers a unique quality and new way of brushing our
teeth with refreshing as well as yummy chocolate flavored taste. Most of the toothpastes in
the market are with almost same flavor like Mint, Clove, Salt etc. but the new chocolate taste
will bring a new era of brushing our teeth with no boring taste.

We have specific target market for this toothpaste. From the name Choco Paste, some must
be thinking that the toothpaste is only for Children, but it’s not. Because both children and
adults are fond of chocolate all over the world. In our country the preference rate of choosing
chocolate flavored food items are very high. So, the target customer will be both adults and
children. As it will be a lesser fluoride toothpaste so it will not harm children’s tooth, for that
reason we’ll target the both adults and children.

Choco Paste will use pull strategy to make people aware of its products. It will be positioned
as a product of moderate price and high quality. There will be various types of promotional
campaign to make people aware of the product brand and amazing taste it offers. The
marketing tools will include TVC, FM radio ads, newspaper ads, 24/7 help desk etc. Choco
Paste’s marketing budget is estimated in affordable method which will enable it to continue
the huge sales promotion schedule.

As Choco Paste new type of dental care product along with amazing taste, that’s why there
will be a great opportunity to grab the market share with higher demand.

Choco Paste products will be produced in its own production plant in Sirajganj because of
convenient transport and availability of raw materials. Finished product will be distributed
with help of local distributors.

The estimated project cost is BDT 8,493,500 in FY 2016-17 which is financed by 69% equity
from partners and 31% debt from lenders. This report contains projected income statement,
balance sheet, cash flow statement and break even analysis for FY 2015-16, 2016-17 and
2017-18. The projected financial statements portray liquidity and solvency of the firm.

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 1.0 Introduction
Biting into a sugary chocolate bar may not be the best choice for healthy teeth. But a new product
in Bangladesh is taking the stand that not all cocoa-based products are equal.

Choco Paste has introduced the new dental product containing a cocoa extract and other
minerals that developers say strengthens and hardens tooth enamel.

The toothpaste, which will be unveiled in January, 2016, is called Choco Paste and it contains no
fluoride. We say the cocoa extract-based product will revolutionize the way people think about
toothpaste.

“We want people to value the experience of brushing their teeth more,” we say. “They should
care more about what they put in their mouths. Up till now it’s all been sodium fluoride or
fluoride-based. We’ve been brushing our teeth twice a day with one of the most toxic elements
in the periodic table.”

Dr. Tetsuo Nakamoto, professor of Tulane University discovered the link between the cocoa
extract and building tooth enamel in the1980s when he was studying the effects of various
nutritional ingredients on pre-natal teeth.

Part of the fun of introducing the product has been doing the marketing. The paste comes in
chocolate brown packaging because we want the packaging to stand out against the blaring red,
blue and white colors of standard toothpaste brands.

We say “Toothpaste hasn’t changed in 100 years”; “We’re the new kid on the block and we have
a new technology. We have to change the mindset of how people view toothpaste. It’s more of
an oral healthcare therapy.”

Amazing Chocolate Complete Dental CHOCO PASTE

Flavor
+ Care with No
Fluoride

Illustration-1: New Revolution in Dental Care

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1.1 Product Offerings

Choco Paste comes with amazing chocolate color packaging including two types of pack.

 200 Gram Tube

 10 Gram Mini Pack

1.2 Features and Unique Selling Proposition

>Choco Paste is a totally new concept in Bangladesh.

>Choco Paste is a commercially and technically effective solution to brush teeth with no fluride
dental care product.

>Choco Paste helps people to brush their teeth with no boring taste but with an amazing
chocolate flavor.

Cocoa extract with necessary effective dental ingredients will be used to produce Choco Paste.

1.3 Business Model:

Valued
Dr. Dent Firm
Customer

Paste
Choco Paste Money
Ingredients

Illustration-2: Business Model

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 2.0 Current Market Situation
Choco Paste is a paste which provides an amazing taste of chocolate with necessary ingredients
to take care of teeth. Current market is quite subtle because there are many toothpaste brands
available in Bangladesh; like Close Up, Colgate, Fresh Gel, Pepsodent, Sensodine, Meswak and so
on. But none of these toothpastes are offering any kind of UNIQUE taste, all of them are quite
similar to each other and their taste as well. So, the position of Choco Paste will be quite good at
the market we hope.

2.1 Market Description

We have segmented the market into several parts, based on age, occupation, lifestyle etc. The
basic reason for this is to make sure that we can target our market effectively by knowing about
the need of the consumers. So the main target customers will be;

1. The Youth
2. The Children

There is another reason for the segmentation. That is, generally the young generation and the
children are very much fond of chocolates. Moreover they find the conventional mint flavored
toothpaste too much boring and they need something new. And the children don’t even want
to brush their teeth timely. So Choco Paste will be a “Breakthrough” to this problem. As we
mentioned earlier that Choco Paste is a less fluoride toothpaste, so that will be pretty good for
the children as well.

2.2 Competitor Analysis

There are some direct competitors of this product in the market. They are existing in the market
for so long and serving the customer very well with their quality. The main competitors of Choco
Paste will be;

 Close Up: Right now the best selling toothpaste in the market. They have some amazing
flavors like mint, pepper mint, herbal etc. They are grabbing their market by their USP,
the FRESHNESS quality.
 Colgate: Colgate is considered as the oldest toothpaste in our country with basic features
and germ-check formula.
 Pepsodent: This is another important competitor of Choco Paste, they are offering cavity
fighting formula in their toothpaste and doing very good as well.
 Meswak: This is an complete herbal toothpaste in the market. When it came to the
market it was considered as most effective with health issues for its herbal formula.

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Despite this strong competition, Choco Paste can carve out a definite image and gain recognition
among the targeted segments. Our unique taste and packaging will attract the attention of the
customer very well and it will have the recognition to be the most selling toothpaste within 2017
we believe. Because none of us doesn’t want to have a bite of chocolate when we wake up in the
morning.

2.3 Channels and Logistics Review

Choco Paste will be distributed initially to the main 6 divisions and nearby for a test run. And
then we have a plan to spread the reach of this product all over the country. Our country is not
that big but not that small as well; but if we want to reach to our maximum coverage then we
have to have a proper logistics plan with proper supply channel.

ZONE COVERING AREAS

1. Dhaka Metropolitan area and nearby

2. Chittagong Metropolitan area and nearby

3. Rajshahi Metropolitan area and nearby

4. Khulna Metropolitan area and nearby

5. Barishal Metropolitan area and nearby

6. Sylhet Metropolitan area and nearby

Illustration-3: List of Product Distribution Zones

For that we will have to have;

 A Plant in Sirajganj
 A Head office with control room in Dhaka
 12 warehouses; 2 in each zone
 Wholesalers and retailers of our own

With the help of these supply chain we will distribute the product to the targeted area initially.
Then we’ll distribute it all over the country on the basis of customer demand.

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 3.0 SWOT Analysis of Choco Paste

Weaknesses
Strengths
 Distribution highly depend on
 First movers advantage being dealers
unique product  Any small error in production process
 Commercially and technically can hamper production hugely
unique formula and taste  Need aggressive advertisement to
 Subject to fewer government create brand awareness
regulations

Opportunities Threats
 Uncertain acceptance level
 Chocolate lovers will love to  Decreasing purchase power of
have such toothpaste potential customers due to
 Taste + Health benefits of Choco recession
Paste will be the main USP  Production may face losses in early
stages

Illustration-4: Choco Paste’s SWOT Analysis

3.1 Strengths
 As it’s a product which is totally new in the market so it will get the first mover advantage.
 For its unique taste and formula it will be commercially and technically viable.
 As it’s a oral care product so it will face less govt. regulations.

3.2 Weaknesses
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  It’s a completely new product in the market, so it will depend much on the distribution
facilities. For distribution, dealers have to be proper trained and responsible. That’s a
weakness of this product.
 As a new product there should be no error in production, a small error can hamper the
whole production a lot.
 To aware the customer, it will need an aggressive advertisement to create brand
awareness.

3.3 Opportunities
 Chocolate lovers are in a huge quantity in our country. So they will love to have such
chocolate flavored toothpaste.
 Not only the chocolate taste, but also less fluoride and health benefits will be the main
USP of Choco Paste.

3.4 Threats
 For every new product in the market there is always an uncertain acceptance of the
product. It is also applicable for Choco Paste as well.
 At the time of recession of our country, people may not love to have Taste as their main
preference.
 The production of Choco Paste can face bit losses at the initial stage of production.

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4.0 G O A L S A N D O B J E C T I V E S

4.1 Vision

Choco Paste’s vision is to new revolution in oral care products with taste and health.

4.2 Mission Statement

Choco Paste wants to offer its toothpaste with amazing taste and aware people to brush their
teeth with yummy taste toothpaste with proper quality. Choco Paste aims at establishing eco-
friendly work environment and providing better employee incentives as it continues to expand
its business.

4.3 Short-Term Goals:

 To offer quality products at a fair price to capture potential market share.
 To create a demand for chocolate toothpaste as a solution to regular brushing teeths.
 To persuade the target customers regarding the benefits of using chocolate toothpaste
as a complete solution will bring familiarity among customers.

4.4 Long-Term Goals:

 To expand its operation beyond 6 divisions within the year 2017 and further goes for
export.
 To set up new industrial unit in the west region of Bangladesh by the year 2018.
 To enlarge its product mix by adding Chocolate tooth powder and mouth wash.

4.5 Objectives:

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  To attain 20% growth rate by the year 2017.
 To attain net profit margin of 25% in year 2018.
 To repay loans by the year 2020 and lever up the firm with 25% debt by the year 2025.

5.0 M A R K E T I N G S T R A T E G I E S

5.1 Market Positioning

Emotional Factor

Economy Factor Premium Factor

Functional Factor
Illustration-5: Product Positioning Map

Market positioning of Choco Paste will be based on 4 important factors.

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  Emotional factor
 Economy factor
 Functional factor
 Premium factor

Most of the existing toothpaste are targeting economy and premium factors in the market but
Choco Paste will position on the basis of economy and emotional factor as it represents the
chocolate flavor among the potential customers.

5.2 Product Strategy

Choco Paste offers basically two types of packaging. Tube and mini pack. Both of them are same
inside. It contains chocolate taste, fluoride free toothpaste.

The product offering of Choco Paste is shown below;

Packaging CHOCO PASTE TUBE CHOCO PASTE MINI

PACK
Weight 200 Gram 10 Gram

Illustration-6: Choco Paste’s Product Offering

The shelf life of Choco Paste is 30 months for both tube and packet. If the paste becomes popular
among the target customers, then Choco Paste may decide to launch two more product lines
that include Choco mouth wash and Choco tooth powder.

5.3 Pricing Strategy

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As Choco Paste is a unique as well as a new product in the country’s market, we have decided to
use the market-skimming pricing strategy for the product.The reasons behind using this strategy
are:

 68.6% of current customers do love to have such chocolate flavored toothpaste as their
regular mouth washing.
 As the product is totally new for Bangladesh market, competitors are unlikely to emerge
 in the market easily and undercut the high price.

Choco Paste will be introduced to market at Tk.90 wholesale / Tk. 110 retail price for 200 gram
tube. For mini packet, the price is estimated Tk.4 wholesale/ Tk. 8 retail price.

The following price list shows the wholesale and retail prices of Choco Paste products:

200 Gram Tube 10 Gram Mini pack

Wholesale price (BDT) 90 Tk 4 Tk
Retail price (BDT) 110 Tk 8 Tk

Illustration-7: Wholesale and Retail Price of Choco Paste Products

5.4 Marketing Communications Strategy

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Choco Paste uses pull strategy as its promotion mix strategy which is spending a lot on advertising
and consumer promotion to build up consumer demand. It makes the promotion mix efficient
enough to activate customers to ask the retailers for the product. Here is a graphical view of the
pull strategy:

CHOCO Distributors Customers

ORDER and Retailers DEMAND
PASTE

Marketing Activities

Illustration-8: Pull Strategy of Choco Paste

Choco Paste’s marketing communication mix or promotion mix includes all the typical elements
like advertising, sales promotion, public relation, personal selling and direct marketing. Here’s
the detail:

Advertising:
 Electronic media advertisements, such as television commercials, FM radio commercials.
 Print media advertisements, such as newspaper ads, posters and leaflets.
 Point of purchase advertisements, Shelf space advertisements.

Sales Promotion:
 SMS contest
 Price discount at special occasion

Public Relation:
 “Buzz marketing”—by using opinion leaders (Dentists).

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  Written articles about awareness of chocolate paste as fluoride free toothpaste and its
benefits.
 Written features in lifestyle pages of newspapers.
 Sending press release about products.

Personal Selling:
 Temporary selling booth at super stores and campus.
 “Choco Paste quality assurance campaign”— a tour to production plant to know about
the eco-friendly production process.

Direct Marketing:
 E-mail marketing, web marketing.

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 6.0 PROJECT IMPLEMENTATION SCHEDULE AND
ORGANIZATIONAL STRUCTURE

6.1 Project Implementation Schedule

The project will start at March 2016 and the commercial launch is on September 2016. The 6-
month project implementation schedule is as follows:

July’14 Aug’14 Sept’14 Oct’14 Nov’14 Dec’14 Jan’15

License and approval

Product development

Land, building

Machine purchase

Installation

Premise beautification

Pilot Production

Quality testing

Commercial operation

Illustration-09: Project Implementation Schedule

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6.2 Organizational structure

At the initial phase, the operation of Choco Paste is monitored by six department heads categorized
as finance, human resource, manufacturing, marketing, research and development, procurement
and storage. The head of the departments are taken from the partners and requirement for labors,
supervisors and managers are fulfilled from outsource. Following is the organizational chart of
Choco Paste:

CHOCO PASTE

Illustration-10: Organization Structure of Choco

Paste

At the initial phase, the operation of Choco Paste is monitored by six department heads. The
needs of staffs can be illustrated below based on the organizational structure:

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 2013-14 2014-15 2015-16

Finance Unit
Head 1 1 1
Manager 1 1 1
Staff 3 3 3
Human Resource Unit
Head 1 1 1
Manager 1 1 1
Staff 3 3 3
Marketing Unit
Head 1 1 1
Manager 3 3 3
Supervisor 4 4 4
Staff 16 17 17
Manufacturing Unit
Head 1 1 1
Manager 1 1 1
Supervisor 3 3 3
Staff 12 13 13
R&D Unit
Head 1 1 1
Manager 1 1 1
Staff 6 7 7
Storage Unit
Head 1 1 1
Manager 1 1 1
Supervisor 1 1 1
Staff 5 6 6

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 Illustration-11: Staffing Needs

 All the staffs are permanent and recruit by giving monthly wages
 The production unit needs extra staffs each years due to process more raw-materials
 The staffs are giving all privileges stated in “Bangladesh Labor Code 2006.”

7.0 S ALES P ROMOTION

7.1 Marketing Organization Structure
Choco Paste’s head of the marketing department, chief marketing officer holds overall
responsibility for all of the company’s marketing activity. The following figure shows the structure
of eight personnel marketing organization-

Chief
Marketing
Officer
Sales Advertising Promotion
Manager Manager Manager

Regional Advertising Promotion

Sales Analyst Analyst

Regional
Sales

Illustration-12: Marketing Organization Structure

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7.2 Advertising and Promotional Campaigns

Choco Paste’s will be first launched in the market in September 2016. Following is the summary
of the advertising and promotional campaign during the first year of Choco Paste:

 In July, we will start advertising for our product with the help of newspaper ads and
creating Buzz by providing samples to selected product reviewers, opinion leaders, and in
its case, the renowned dentists of our country. Newspaper ads will continue whole year.
Also our marketing staff will use direct marketing by working with retailers to explain
fluoride free toothpaste’s health benefit and advantage.
 There will be television commercials which we will launch at the month of August. These
commercials will create brand awareness among people faster. This will continue
throughout the whole year.
 In July we will hold internal contest among sales persons and the retailers offering prizes
and discount to those who will be able to sell most products in their zone during the four
week period.
 We will launch create our own website and start online ads this in September and there
will be a discount offer for the four week period.
 In December we plan to roll out a massive advertising campaign. We will use celebrity
voices telling how Fluoride free Choco Paste can help us to change our brushing habit.

Following is the three year allocation of our marketing budget at affordable method:

2015-16 2016-17 2017-18

Advertising 2,983200 5,146,400 5,146,400

Sales promotion 150,000 200,000 200,000
PR and personal selling 1,146,600 933,600 1,233,600
Direct marketing 20,000 20,000 20,000
Total 4,300,000 6,300,000 6,600,000

Illustration-13: Three Year Marketing Budget

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8.0 FINANCIAL ANALYSIS A N D PROJECTIONS
8.1 Financial Statement Assumptions

The wages of production staff increased by BDT 300 yearly started from BDT 4200.

 Salaries of employees increased by BDT 1000 yearly.

 Marketing and promotion expense is the highest indirect expense and the marketing budget
is calculated using affordable method.
 Office rent includes the rent of Dhaka office and warehouse.
 Accounts receivable is 10% of sales revenue each year.
 Accounts payable is 35% of the raw materials cost

8.2 Financial Assumptions

 The firm’s initial investment is BDT 8,493,500 which is financed by 69% equity and 31%
debt.
 The cost of capital or discount rate is assumed to be 20%.
 Interest for loans is 15% per annum repayable annually.

9.0 CONTINGENCY PLAN

Choco Paste will use tight control measures to closely monitor quality and consumer satisfaction.
It will enable us to react quickly in correcting problems that may occur. If there comes any crisis
that pushes Choco Paste to exit the market, then we have the following strategies to lessen the
risk-

 Firm’s primary exit strategy is converted into private limited company from partnership
firm to reduce capital problem (if occurs) and skill managing.
 Firm’s secondary exit strategy will be to convert the product from Chocolate toothpaste to
a usual toothpaste. This will lessen the risk of being dissolute.

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10.0 APPENDIX
Choco Pastes’s Product Offerings

200 Gram Tube

10 Gram Mini Pack

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