Feasibility Study On Production of Brown

Feasibility study on production of Brown bread Egg sandwiches –“Delicious Sandwiches”
CONTENTS
EXECUTIVE SUMMARY ........................................................................................................................ 1
INTRODUCTION....................................................................................................................................... 2
1. MARKET FEASIBILITY .................................................................................................................. 4
1.1 Product Identification..............................................................................................................4
1.2 Enterprise................................................................................................................................4
1.3 Product ....................................................................................................................................4
1.4 How Consumer Use and Buy the Product ................................................................................5
1.5 Effectiveness in positioning ......................................................................................................5
1.6 Raw & packing materials to be used & availability .................................................................5
1.7 Plan to test the product ............................................................................................................6
1.8 Plan to expand the product lines ..............................................................................................7
1.9 Market survey .........................................................................................................................7
1.10 Target market........................................................................................................................7
1.10.1 Market segmentation ............................................................................................................... 7
1.10.2. Positioning ............................................................................................................................... 9
1.10.3. End users.................................................................................................................................. 9
1.10.4 Target market........................................................................................................................... 9
1.10.5 Projected demand .................................................................................................................... 9
1.10.6 Targeted geographic area ...................................................................................................... 10
1.10.7 Market size ............................................................................................................................. 10
1.10.8 Targeted market share .......................................................................................................... 10
1.11 Marketing strategy .............................................................................................................. 11
1.11.1 Marketing mix ........................................................................................................................ 11
2. TECHNICAL FEASIBILITY .......................................................................................................... 13
2.1 Technical information about the product .............................................................................. 13
2.2 Additional R & D needs ......................................................................................................... 13
2.3 Industry ................................................................................................................................. 14
2.3.1 Description of the industry ...................................................................................................... 14
2.3 2 Size & growth of the industry ................................................................................................. 14
2.3.3 Demand & supply of the product ........................................................................................... 15
2.3.4. Future trends ........................................................................................................................... 15
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2.3.5 Large forces that drive the market ......................................................................................... 15

2.4. Competition .......................................................................................................................... 15
2.4.1 Porter’s Five Forces Model ..................................................................................................... 16
2.5 Strengths uniqueness & weaknesses of the business ............................................................... 17
2.6 Competitor’s reaction to product & response strategy .......................................................... 17
2.7 Business model ...................................................................................................................... 18
2.7.1. How business generates revenue ............................................................................................ 18
2.7.2. Marketing and sales strategy ................................................................................................. 18
3. PRODUCTION FEASIBILITY....................................................................................................... 20
3.1 Site selection .......................................................................................................................... 20
3.2 Create & delivery of final product ......................................................................................... 21
3.3 Physical premises required .................................................................................................... 21
3.3 1 Size & Location ........................................................................................................................ 21
3.3.2 Conditions ................................................................................................................................. 21
3.3.3 Layout of equipment and facilities ......................................................................................... 22
3.4 Cost estimation ...................................................................................................................... 24
3.5 Manufacturing process .......................................................................................................... 25
3.5.1 Production plan for a day ........................................................................................................ 25
3.5 2 manufacturing process ............................................................................................................ 25
3.5 3 Equipment need & cost............................................................................................................ 27
3.5.4 Utilities ...................................................................................................................................... 29
3.5.5 Quality control................................................................................................................... 30
3.5.6. Inventory Control ................................................................................................................... 30
4. MANAGEMENT & PERSONNEL REQUIREMENTS ............................................................... 31
4.1 Management structure .......................................................................................................... 31
4.2 Responsibilities & background of employees ......................................................................... 31
4.2.1 Manager Responsibilities ........................................................................................................ 31
4.2.2 Baker ......................................................................................................................................... 32
4.2.3 Driver ........................................................................................................................................ 32
4.2.4 Sandwich maker ....................................................................................................................... 32
4.3 Personnel requirements (1-3 years) ....................................................................................... 32
4.4 Salaries .................................................................................................................................. 33
5. ENVIRONMENTAL FEASIBILITY ............................................................................................. 34
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5.1 Regulations ............................................................................................................................ 34

5.2 Environmental problems on property.................................................................................... 36
5.2.1 Disposing organic wastes ......................................................................................................... 36
5.2.2 Releasing waste water to the environment............................................................................. 36
5.2.3 Disposing packaging wastes & other non-decomposable matter ......................................... 36
5.2.4 Plans to address the problem .................................................................................................. 36
5.3 Risk factors & mitigation....................................................................................................... 36
5.3.1. Financial Risk .......................................................................................................................... 36
5.3.2. Physical Risk............................................................................................................................ 37
5.4 SWOT analysis ...................................................................................................................... 38
5.5 PEST analysis ........................................................................................................................ 38
5.6 Mitigation of risk & contingency plan ................................................................................... 39
6. SOCIAL & INSTITUTIONAL FEASIBILITY ................................................................................ 40
6.1 Impact on social ..................................................................................................................... 40
6.2 Responsibility towards the consumer..................................................................................... 40
6.3. Responsibility towards the employees ................................................................................... 40
6.4 Towards Environment ........................................................................................................... 40
6.5 Towards Society .................................................................................................................... 40
7. FINANCIAL FEASIBILITY ............................................................................................................... 41
7.1 Key assumptions .................................................................................................................... 41
7.2 Funding resources for the business ........................................................................................ 41
7.3 Total project cost ................................................................................................................... 41
7.4 Pricing structure.................................................................................................................... 42
7.5 Sales forecast ......................................................................................................................... 42
7.6 Cost of sales ........................................................................................................................... 42
7.7 Projected incoming statement ................................................................................................ 43
7.8 Cash flow projection .............................................................................................................. 43
7.9 Financial ratios ...................................................................................................................... 44
7.10 Net cash flow........................................................................................................................ 44
7.11 Payback period .................................................................................................................... 45
7.12 Break-even point analysis .................................................................................................... 45
7.13 Net present value ................................................................................................................. 46
7.14 Internal rate of return ......................................................................................................... 47
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8. FINAL FINDINGS & RECOMMENDATIONS............................................................................ 48

9. CONCLUSION ................................................................................................................................. 49
ANNEXES ................................................................................................................................................. 50
Market survey analysis ................................................................................................................. 50
Financial feasibility calculations.................................................................................................. 59
Figure 1: approximate nutrition information of the Brown bread egg sandwich ...................................... 13
Figure 2: Porter’s five force analysis ........................................................................................................... 16
Figure 3: brand log of the company ............................................................................................................ 18
Figure 4: Area map ...................................................................................................................................... 20
Figure 5: factory layout ............................................................................................................................... 23
Figure 6: factory layout ............................................................................................................................... 23
Figure 7: Production process ...................................................................................................................... 26
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EXECUTIVE SUMMARY
Sandwiches are a popular type of lunch food, taken to work, school, or picnics to be eaten as part
of a packed lunch. The bread can be used plain, or it can be coated with one or more condiments
such as mayonnaise or mustard to enhance the flavors and texture. As well as being homemade,
sandwiches are also widely sold in restaurants and cafes, and are sometimes served hot as well as
cold. There are both savory sandwiches, such as meat sandwiches, and sweet sandwiches, such as
a peanut butter and jelly sandwich.
Today’s world, the people are increasing the consumption for their different varieties of food due
to the convenience and socio economic factors they prefer to take them from the restaurants and
the rapid advancement in the food industry can be attributed to the growth in technology which
also gave way to fast food. Sandwich also a one of convenience food consumers always ask for.
This study has focus on establishing a sandwich producing bakery which is producing 400
sandwiches under the brand name Delicious Sandwiches. Those are brown bread Sandwiches
having 2 day shelf life in hermitically sealed pack. Planned to sell those products for 80/= through
fast food outlets & school & office cafeterias in urban areas of Colombo & few areas of kaluthara
districts. Also planned to achieve 0.4% market share of prepared food market
As a summary this project is having a positive NPV and IRR over cost of capital. So this is a
project that can maximize the profit while minimizing the risks. In addition to that the study was
carried out in areas of marketing, technical, production, environmental, social and financial. It is
necessary to do further researches and studies, before implementing this study in to real
environment as it is dynamic.
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INTRODUCTION
A sandwich is a food item consisting of one or more types of food, such as vegetables, sliced
cheese or meat, placed on or between slices of bread, or more generally any dish wherein two or
more pieces of bread serve as a container or wrapper for some other food. The sandwich was
originally a portable food item or finger food which began to be popular in the Western World.
Today sandwiches in various versions are found worldwide.
Sandwiches are a popular type of lunch food, taken to work, school, or picnics to be eaten as part
of a packed lunch. The bread can be used plain, or it can be coated with one or more condiments
such as mayonnaise or mustard to enhance the flavors and texture. As well as being homemade,
sandwiches are also widely sold in restaurants and cafes, and are sometimes served hot as well as
cold. There are both savory sandwiches, such as meat sandwiches, and sweet sandwiches, such as
a peanut butter and jelly sandwich.
Today’s world, the people are increasing the consumption for their different varieties of food due
to the convenience and socio economic factors they prefer to take them from the restaurants and
the rapid advancement in the food industry can be attributed to the growth in technology which
also gave way to fast food. Sandwich also a one of convenience food consumers always ask for.
Economists at the National Restaurant Association estimated total foodservice sales for 2011 at
Rs313 billion, representing a 5 percent increase over 2010. That means consumers spent an
average of Rs855 million per day on food away from home.
According to the National Restaurant Association's Foodservice Industry Forecast, fast food
comprised the largest segment of this market, capturing 47.8 percent of the rupees spent. The report
attributes this success to "fast food's ability to meet consumers' desire for value and convenience."
It was further estimated that at least 64 percent of all fast food purchases were consumed off-
premises.
According to Technomic, Inc., a food industry consulting firm, almost half of consumer food
rupees are spent on meals prepared away from home. In addition, food expenditures rise
significantly as income increases according to the Bureau of Labor Statistics' Consumer
Expenditure Survey Data.
Also according to the research conducted on “Fast Foods on the Customers Perspectives- Special
Reference to the Customers in Urban, Semi Urban and Interior Locations in Sri Lanka” by Mr.K.
H. R. Wijewardana and Mr. D. P. G. Siriwardhana of Department of Hospitality Management,
Rajarata University of Sri Lanka. Sixty eight percent of the customers responded that going after
fast foods is because of the habit and as an easy way to fulfil the food need. Whereas 32% of the
customers said that reasons are due to busyness’ easiness, cheapness and as a change
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This significant trend of consumers purchasing of prepared meals is so pervasive that the food
service industry has coined a new term to describe it: "home-meal replacement." Many businesses
are shifting their focus to meet the growing demands of consumers:
 Most supermarkets now include a bakery, and a fast foods section. Eg; Arpico super markets,
keel’s super
 Sri lankan Market has continued to expand its product lines and market share.
 Fast-food chains such as KFC, Pizza Hut and burger king, fab, Mcdonald’s, subway, dinemore
have formed alliances to offer multiple product lines under one roof.
There are also several economic and cultural trends that have contributed to this growing demand:
 Increasing number of women in the workforce

 Increasing number of woman-owned businesses
 Growing number of higher-income households
 Private sector employees working longer hours
 Decreasing amount of leisure time
Also today Consumers are becoming more health conscious and are selective in the food and
beverage products / brands consumed. There is a definite trend towards vegetarian food, fresh &
functional foods. There is also a growing preference for natural food and beverage, as opposed to
artificial products.
If sandwiches are served fresh with good quality brown bread & vegetables to a convenience price
it will be more marketable and have a potential to grow in the fast food industry among health
conscious consumers.
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1. MARKET FEASIBILITY
1.1 Product Identification
Sandwich is an item of food consisting of two pieces of bread with a filling between them, eaten
as a light meal: the filling can be fresh or boiled & mashed vegetables, meat, fish paste, egg or
fruit pastes, pea nut butter also be possible.
However the filling is not universal and common it can be customized as wish. But in this
feasibility study I would like to define exact sandwich as this way. Two slices of brown bread with
a filler of Chopped pre boiled potato, beet & carrot and slices of an egg and mayonnaise, mustard
cream, salt & pepper .
Sandwiches are more preferred for consumption rather other junk fast food such as rolls, pastry,
buns, etc due to the unsafety of fatty foods.
Its freshness will arouse the taste receptors of people and increase the preference for consumption
as breakfast or light meal.
1.2 Enterprise
“Delicious Sandwiches” is a small scale bakery which produce sandwiches from brown breads
established in Meegoda area in homagama municipal council. Breads are manufactured within the
company and vegetables are purchased from direct vegetable suppliers for the Meegoda ecomonic
center, and eggs are from a poultry farm nearby.
The product is packed in a disposable paper box with transparent window. Products are distributed
to identified fast food outlets, school & office cafeterias in Colombo & urban areas of kaluthata
district.
The company consist with 4 workers. They work for five days of week and 9 hours per day.
1.3 Product
Product Name: Brown Bread Egg Sandwich

Major ingredients:
 two slices of brown breads –(whole wheat flour, salt, sugar, fat, dry yeast,
water)
 filling : An egg, chopped carrot, beet & potato, Mustard cream, Mayonnaise,
Salt, Pepper
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Available size: Regular (adequate for a person)

Packing material: heat sealable cardboard boxes
Shelf life: 2 days
Storage condition: Room temperature
1.4 How Consumer Use and Buy the Product

Sandwich is ready to eat meal, most of the people take it as breakfast and some may as light food.in
initial stage those can be purchased from fast food outlets & cafeterias also freshly prepared
sandwiches are sold in bakery
1.5 Effectiveness in positioning

Consumers behavioral & life style changes directly persuaded them for more eating outs mainly
how live away from their home, school children, houses with working women tend to take their
breakfast out.
Today consumers are more health conscious so they would like to have low caloric low fat safe
food even it is a prepared fast food.
Product is free from meats so socio cultural aspects for meat consumption is also not become a
constraint. And product is served for an affordable price
It is packed hermitically preventing contamination & to have considerable shelf life while
protecting its freshness.
1.6 Raw & packing materials to be used & availability

To manufacturing bread whole wheat flour, water, salt, sugar, fat, dry yeast are using as
ingredients.
Salt - It contributes to overall flavour. In bread, it controls the fermentation rate of yeast. It has a
strengthening effect on the gluten protein in the dough. Without salt, bread rises faster and air
pockets enlarge where the gluten has broken, allowing holes to form. Bread made without salt will
taste bland.
Sugar - Sugar or sucrose is a carbohydrate occurring naturally in every fruit and vegetable in the
plant kingdom. It is the major product of photosynthesis, the process by which plants transform
the sun's energy into food. Sugar for home baking is produced in greatest quantities from sugar
cane and sugar beets.
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Whole wheat Flour - Flour that typically has higher protein content than all-purpose flour capable
of producing breads and rolls of excellent quality. The flour is usually made with a greater
percentage of hard red winter or hard red spring wheat which has higher gluten content giving the
bread dough the elastic quality necessary for greater product volume. Protein levels vary from
10.5%-12.0%. The flour is usually malted, enriched and can be unbleached or bleached.
Dry bakery yeast- Many breads are leavened by yeast. The yeast most commonly used for
leavening bread is Saccharomyces cerevisiae, the same species used for brewing alcoholic
beverages. This yeast ferments some of the carbohydrates in the flour, including any sugar,
producing carbon dioxide. Most bakers leaven their dough with commercially produced baker's
yeast. Baker's yeast has the advantage of producing uniform, quick, and reliable results, because it
is obtained from a pure culture.
Water – It converts flour into a dough and dissolve the other ingredients in it.
Fat - It affects the development of gluten in breads by coating and lubricating the individual strands
of protein. They also help to hold the structure together. If too much fat is included in a bread
dough, the lubrication effect will cause the protein structures to divide. A fat content of
approximately 3% by weight is the concentration that will produce the greatest leavening action.
In addition to their effects on leavening, fats also serve to tenderize breads and preserve freshness.
As the initial step plan to purchase these ingredients from a vender how supply in bulk and water
supply is from government water board.
For filling beet. Carrot, potato, an egg, mayonnaise, mustard cream and salt, pepper is used those
vegetables will be purchased from Meegoda economic center, and mayonnaise and mustard cream
& salt will be from Edinborough products distributors.
With vision of future expansion of the business plan to establish a direct relationship with the
vegetable whole seller and wheat flour supplier.
Packaging material- heat sealable cardboard boxes
This primary package will be purchase from whole sellers in pettath.
Label required is designed by myself & printed by a printer in Godagama area.
1.7 Plan to test the product

Initially sandwiches are prepared in small quantity and served to family friends and relation group
and ask for their feedback about sensory attributes (taste, texture, odour, appearance) & overall
acceptability of the product. This sensory group mainly consist with young crowd and results are
mapped in a web diagram to an idea about which areas to be modified.
Based on the obtained results recipe adjustments are practiced to obtain a conforming product.
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Again developed product is test with similar group for finalize the recipe.
1.8 Plan to expand the product lines

Currently egg sandwiches are prepared and in future company wish to expand the production lines
( vertical expansion) by analyzing the demand for different types the sandwiches such as meat,
fish, savory, sweet ( peanut butter, jelly) etc.
Also to increase the production capacity by introducing high capable equipment & increasing the
human resource and expand the distribution system by building relationship with other fast food
outlets.
Also there is a possibility to establish own sandwich shop in urban crowded area.
1.9 Market survey

To help ensure a successful product launch, it’s important that we get feedback from customers.
This survey was helped to gather consumer preference for sandwiches. General demographical
information, specific preferences regarding sandwiches are questioned. The questionnaire is
prepared focusing on product designing, pricing, and to identify the target market & market place.
Market survey was carried out among the respondent of the different market segment through
questionnaires (attached in Annexure I). There are online survey method is carried out using face
book & email groups.
Questionnaires were distributed among more than 150 people among that 73 people have respond
and 97% of them are prefer to have sandwiches
1.10 Target market

Defining of target market is one of foremost activity a new entrepreneur must engage in before
proceed. Available secondary market research data shows that there is tremendous potential for a
high-quality fast food sandwiches which are more healthily and serve fresh.
Target market is the group we interested and serve our products & services. If we are not able to
identify the target group specifically no survival or growth of this business
1.10.1 Market segmentation

Market segmentation is a marketing strategy that involves dividing a broad market place into
subsets of consumers, who have common needs and priorities, and then designing and
implementing strategies to target them.
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Market segmentation is classified mainly into four categories. They are Demographic
segmentation, Psychographic segmentation, Geographic segmentation and Behavioral
segmentation
1.10.1.1 Demographic segmentation

Geographic segmentation is based on variables such as region, climate, population density, growth
rate of population etc. Targeted market based on demographic segmentation can be mentioned as
follows
Age: sandwiches are consumed by children, adolescents as well as adult but most of people in their
dissolution stage will not preferred for this type of fast foods. So this is target to people age below
60. And above 10.
Gender: for both male & female
Income Level: The product mainly targets the high and middle income level people due its price
& quality compared to other competitors.
Education Level: the product purchase decision is not heavily affected by education level, but more
health conscious people and who seek best among fast food
1.10.1.2. Psychographic segmentation

Psychographic segmentation is based on variables such as life styles of people, attitudes and values
of people. People are with busy life style who walk away from home without having breakfast is
mainly targeted
1.10.1.3. Geographic segmentation

Geographic segmentation is based on variables such as region, climate, population density, growth
rate of population etc.
This product is distributed in Colombo district and few urban areas of Kaluthara district
1.10.1.4. Behavioral segmentation

Behavioral segmentation is based on variables such as price sensitivity, brand loyalty, benefits
etc.
Current consumers are seeking for healthily fast foods and which is with good quality. So this
product is serve to them.
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1.10.2. Positioning
The product is positioned as healthier Brown bread Egg Sandwich which be afford to a
convince price compare to competitors.
1.10.3. End users

The people who purchase the product can be the ultimate consumer or in some instances the people
who buy the product may not be the ultimate users.
For an example the parent who purchases the product for their children, where mother, father or
elder person act as primary purchaser while child act as primary user. Also a single character can
play both of this roles at one.
1.10.4 Target market

Health conscious male & female between 10-60 years old live, work and peregrinate in urban areas
and sub urban areas of Colombo & kaluthara district who seek for fast foods as breakfast or light
meal.
1.10.5 Projected demand

The majority of people, especially in urban areas, tend to more eating outs due to their busy life
style and, also children are prefer to have junk and fast foods. Even children demand for fast food
parents do not tend to give them considering the health factor. But when consider about this
sandwich it is more health conscious than others so it is more attractive.
When consider about young adolescent they take their own purchase decisions and highly
influenced by friends.
As this sandwich is marketed through fast food outlets and cafeterias demand can be grown with
minimum effort of advertising. And if we treat our consumers elegantly it will be an indirect mode
of advertising –positive word of mouth.
According to the finds of research on “Fast Foods on the Customers Perspectives- Special
Reference to the Customers in Urban, Semi Urban and Interior Locations in Sri Lanka’ by Mr. K.
H. R. Wijewardana and Mr. D. P. G. Siriwardhana in Department of Hospitality Management,
Rajarata University of Sri Lanka. It is proved that there will be a good demand for this product in
this selected target market
“Survey reveal that 37% of the customers are less than 20 yrs and 44% are
youngers who fall within the range of 21-34. Only about 10%, belonged to 35 to 50
years of the customers, majority (61%) is male. Fourty three per cent of the
customers are belonged to 4 member families and 35 % to 5 member families.
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Residential different of the customers was one of the interesting findings and
showed that 42% of the customers from the urban and others are in order; 34%
from sun urban and 24% from interior places. It was also revealed that majority of
the customers were employed non executives (44%). Average income of these
market segments reported to have more than Rs. 8,000 per month. Average daily
expenditure of a customer on fast foods showed a variation within respect to the
location; At Rajagiriya, 76 /=. At Negambo, Rs 68/= and Chilaw, Rs 48/=.”
Demand forecasting is important in estimating the quantity of the product that will be bought by
the consumers. Demand forecasting may be used in making pricing decisions, in assessing future
capacity requirements or in making decisions on whether to enter a new market. Demand analysis
can be done by conducting a structured market analysis or using current market data.
1.10.6 Targeted geographic area

Initially the distribution is limited only to the urban areas of Colombo & kaluthara district covering
the fast food outlets, school & office cafeterias. Later it is planned to carry on throughout the
country. The reason for initially selecting few district is the high market demand and the
convenience of distributing from the manufacturing place.
1.10.7 Market size

According to the House hold income & expenditure survey for year 2012/13 by Sri Lankan
Department of Census and Statistics Colombo district Average monthly household expenditure on
food in 2012/13 is LKR 19, 246/= among its LKR 3540/= is on prepared foods.
And it is show fast growing during last few years
There is a huge demand for prepared foods in this selected target group and considering the number
of people peregrinate in this urban area supposed to produce 400 sandwiches per day. Covering
0.4 % of demand for prepared foods in this geographical area. Production is supposed to increase
considering consumer demand for sandwiches.
1.10.8 Targeted market share

Supposed to achieve 1% from total market share for prepared foods for Brown Bread sandwiches
within 3 years.
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1.11 Marketing strategy
1.11.1 Marketing mix

When information about who are the main customers, where they are located and how & why they
purchase prepared foods is added to information about the quality and price that consumers expect,
the result is known as the marketing mix. This is often described as the 4Ps‟ - Product, Place, Price
and Promotion. Examples of components in a marketing mix are described as follow
Marketing mix
Product Place
Quality product Clean environment with fresh air
Serve fresh in hermitically sealed pack Popular urban location
Better appearance Dine in and take away facilities
Attractive package Parking facilities
Clear label
More nutritious & healthily
Better sensory quality

Promotion
Advertising –leaf let distribution with week
day newspaper through newspaper agent
Price Facebook fan page & twitter account
Low price compare to other market In shop display
competitors
Special consumer promotions in first week
Affordable to children
Guerrilla and viral marketing activities
Ez cash & m cash payment facilities
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1.11.1.1 Product
Since the company manufacturing whole brad egg sandwiched which is cheaper than sandwiches from main
competitors like subway, KFC subway most of the middle and lower class consumers can consume healthy
prepared foods.
As it is hermitically sealed no possibility to loss its freshness and can have considerably long shelf life
under room temperature condition
Product is free from meats so socio cultural aspects for meat consumption is also not become a constraint.
1.11.1.2 Price
It is in regular size adequate for a person and it is sold for 80/= as at the initial level of the business we
cannot set a higher price and we try to serve better quality product for affordable price and to penetrate to
the market. This price is reasonable and almost all customers can buy this at least to test the product as it is
sold to an affordable price.
Market penetration pricing strategy is applied here.
1.11.1.3 Place
Initial stages product is only made available in urban areas of Colombo district & few areas of Kaluthara
district. The reason for initially selecting few district is the high market demand and the convenience of
distributing from the manufacturing place
1.11.1.4 Promotion
At the initial stages of business somewhat high potion of money should be allocated for the promotional
activities. Both consumer promotions & trade promotions are planned to carried out
Trade promotions:
 For first two months fast-food outlets & cafeterias are offered with more 2/= for each packet sold.
Consumer promotions:
 Leaflets are distributed through week day newspapers with the support of main distributors in
Colombo & kaluthara areas
 In shop display of small flex
 Use of social media-face book, twitter fan page
 Participation to trade fairs like Colombo food festival, good market
 SMS campaign through outlet customer data base
 Viral marketing & guerrilla marketing campaign
Considering the cost of promotions TVs & radio advertisements are not selected also they are not identified
as most effective means of promoting a single product.
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2. TECHNICAL FEASIBILITY
2.1 Technical information about the product
Size- regular size adequate per person

Shelf life- 2 days
Packaging- hermitically sealed pack
Nutrition facts
Sources- potbelly sandwich shop nutrition calculator (http://www.potbelly.com/Food/Nutrition.aspx)

Figure 1: approximate nutrition information of the Brown bread egg sandwich
2.2 Additional R & D needs

Additional R&D needs are important in building a brand as well as diversify the business in order to reduce
the risk of depending on one business area. Initially the company produce only whole bread egg sandwiches.
However in order to carry out diversification and brand extension, research and development must be
carried out in producing several meat, fish, sweet and savory sandwiches, and with the mean of horizontal
expansion of product line can develop low caloric low fat burgers, submarines, breads, bun, cakes like
bakery products.
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2.3 Industry
2.3.1 Description of the industry

Here we are focused to supply high quality whole bread sandwiches for a reasonable price to the customers.
Bread manufacturing: Bread kneading is done by machine & baking also done by electric oven except old
method of hand kneading and wood fire oven. So the crust color & crumb color will be attractive and soft
than bread manufactured from old method so sandwiches are prepared along with the crust. Also the volume
of the bread is high than hand kneading method. Here we prepare 2.5 Kg sandwich breads.
And the filling is prepared according to the recipe developed
2.3 2 Size & growth of the industry

In referring to the current demand for healthy low caloric fast foods in Sri Lankan fast food market there is
a huge potential to grow.
According to the Economists at the National Restaurant Association estimated total foodservice sales for
2011 at Rs313 billion, representing a 5 percent increase over 2010. That means consumers spent an average
of Rs855 million per day on food away from home.
Also according to the National Restaurant Association's Foodservice Industry Forecast, fast food comprised
the largest segment of this market, capturing 47.8 percent of the rupees spent. The report attributes this
success to "fast food's ability to meet consumers' desire for value and convenience." It was further estimated
that at least 64 percent of all fast food purchases were consumed off-premises.
According to Technomic, Inc., a food industry consulting firm, almost half of consumer food rupees are
spent on meals prepared away from home. In addition, food expenditures rise significantly as income
increases according to the Bureau of Labor Statistics' Consumer Expenditure Survey Data
The global healthy foods market is set to hit $ 1 trillion by 2017. This presents a huge new market
opportunity for early movers. According to the ‘Global Health and Wellness Survey’ by market research
firm Nielsen, 50% of consumers around the world say they are actively trying to lose weight, and 75% of
them said they plan to achieve that goal by changing their diet. Much of the recent growth (2012-2014) in
the healthy food category is coming from developing countries; in the Middle East (20% growth), Latin
America (16%) and Asia Pacific (15%). Sri Lanka must tap into these markets, and maybe new FTAs with
ASEAN in Asia and Brazil in LatAm can help boost this market access.
With those secondary data proofs we can confirm that there is a substantial growth in market for health
conscious fast food products and due to this growth potential new players like delicious sandwiches can
enter to the market in order to exploit the opportunities in the market place.
Since “Delicious sandwiches” is a small scale business plans to produce 0.4% of the total fast food
production in Sri Lanka which targets the consumer who are health & quality conscious through a
differentiation and a low cost strategy. The product is to be marketed in western province since a larger
share of high discretionary income holder lives in Western province. Since It is a medium scale company,
the machinery usage is comparatively low than a large scale competitor and some of the processes are
manually based processes.
14
2.3.3 Demand & supply of the product

There is a huge increasing demand for healthy fast food products among urban & sub urban regions on the
country as people gain more knowledge experience about health diets through several means such as
Medias, medical services, nutritional programs, etc. with the time complexity of life increases and available
time send on meal preparation decrease so people attract to those prepared foods.
2.3.4. Future trends

With the development of small & medium scale agriculture and food industry there will be a trend of
producing organic fruits & vegetables also as a solution for limited land availability for agriculture
greenhouse practices home gardening will be emerged. As a company focusing on future growth on this
business we would also be tend to manufacturer vegetables which required for us according to the organic
manufacturing.
Price of the raw materials is fluctuate every moment so important to maintain good vender relationship and
come into trade agreement otherwise we will not be able to maintain good price margin for finished
products.
2.3.5 Large forces that drive the market

There are several forces that drive the market to help it become a success. Some of them are as follows.
 Higher demand for ready to use product

 People highly aware about nutrient value of the food
 People valuing natural less processed foods
 Changing food patterns with urbanization and busy life style
2.4. Competition
The actions of competitors are critical to the success of any business. If a new producer starts up in business,
it is unlikely that the competitors will do nothing: for example, they may react by offering loyalty bonuses
to retailers who continue to promote their products, or introducing special offers, reduced prices, or
increased promotion. As a sandwich producer should therefore be constantly aware of the changes that
competitors make to their businesses in response to his or her actions and take steps to deal with the changes
as they occur
There are several large scale manufacturers who are producing sandwiches in large scale as well as medium
to small scale who serve them fresh and hot or cold serving and with dine in facilities. Major players in the
market have a recognized brand name among consumers whereas medium to small scale producers are
popular among consumers due to their low price.
Competition can be either direct (competing by selling the same products) or indirect (competing for the
same market). The intensity of that competition, whether direct or indirect, will affect the overall potential
for success of the business
15
Direct competitors- Sub way, Dinemore, KFC, Bread talk, Fab, Sensal, P & S, like reputed market leader
Same they serve as indirect competitors by producing several other prepared foods like Burgers, rolls,
Pastries, Buns, etc
2.4.1 Porter’s Five Forces Model

By using porters five force model the company can identify the situation of its immediate external
environment which includes customers, suppliers and competitors. This identifies whether the customers
are powerful, whether the suppliers are powerful and whether the company can fight off competition
Figure 2: Porter’s five force analysis

Threat of new entry
Because of the busy life style of people in urban and suburban areas people seek convenience in every
item they use in their day today life. So there is a big demand for prepared foods. As the health
conscious trend of fast food spread out to the country there is an emerging trend on entering new players to
the market and production of low caloric sandwiches by manufacturers who holding reputed brand name
for other fast foods already.
Rivalry among Competing Products
There are several large scale, medium scale and small scale fast food restaurants & bakeries manufacturing
sandwiches. So there is a huge competition in the market even the consumer demand increases.
Bargaining power of Suppliers:
Bargaining power of the suppliers is relatively high. In present situation wheat is imported & milling in Sri
Lanka. Tax of wheat changing time to time. So the price of wheat flour also changing. Bargaining power
of suppliers is considerable
As we purchase in relative small quantity they pose reluctant to provide deliveries and minimum discounts
and price cuts are given.
16
Bargaining power of customers

Since there are several well established products Sub way, Dinemore, bread talk in the market, the
bargaining power of customers is high
Threat of Substitute Products:

There are lot of substitute products for whole bread egg sandwiches in Sri Lanka. Other bakery items &
hopper spring hopper, roti pittu like traditional prepared foods and pizza, noodles, pasta, rice and curry like
regular consuming products serve as substitutes. Therefore threat of substitute products is high
2.5 Strengths uniqueness & weaknesses of the business
Strengths – “Delicious sandwiches” is a product with the lowest price when comparing the competitors‟
products. It is a healthy and quality prepared food which gives the maximum benefit to the customers for
the money they pay to afford the product. Based on them it can compete effectively with industry giants.
Weaknesses - not having a unique brand image for the product since it is new to the market. Therefore the
customer loyalty must be build up based on the low price strategy. Distribution of the product is limited
only to the western province thereby the company cannot take advantage of opportunities in the other
markets this weakness needs to overcome by widening the distribution network to other provinces as well.
This can be implemented either internally by recruiting employees for distribution network of by
outsourcing the distribution via dealers and distributors
Also company do not obtain accreditations for the hygienic manufacturing of breads & sandwiches. This is
also another weakness to address.
Unique nesses- product which preserved its freshness for 2 days only by a physical mean ( hermitically
sealed package) no any artificial flavors , flavor enhancers ( MSG) and other additives like preservatives.
2.6 Competitor’s reaction to product & response strategy
As prepared food industry is dominated by large number of manufacturers and since this company is a small
scale one with limited distribution, at the beginning they may not consider the company as a threat. With
time, increase in sales volumes, profits and entry into new product lines, they may concern the company as
a threat. The company offers the product at a low price which will be a great advantage
In future, the competitors will also use low prices for their products when they feel the company as a threat.
Also they will use more promotional activities to make their product popular. Therefore the company must
do repeated advertising to recall the product and increase the quality to retain customers. And come up with
new product line to collaborate company strengths
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2.7 Business model
2.7.1. How business generates revenue

The proposed product is cheaper than the competitor’s product. So the company expects the sales of the
product to be increased. If the demand of the product is increased, the price of the product can be increased
in future to increase the profit margins. Also company plans to purchase high efficient sophisticated
machinery to increase the production volume in order to increase the profits.
2.7.2. Marketing and sales strategy
Marketing strategy
Brand name: Delicious Sandwiches
Slogan: MADE FRESH
Brand log:
Figure 3: brand log of the company
Promotions: leaflet campaign, trade promotions and print Medias

Distribution strategy
Distribution strategy is how the firm intends to transfer its products to intermediaries, retailers and end
consumers .The product is to be sold to the end customer through fast food outlets & identified office &
school cafeterias.
Company directly sells the products to them and end users will buy from them.
Pricing strategy
There are several pricing strategies used by industries currently. Out of them, this industry uses Penetration
pricing strategy. It is done by allocating a lower price than the sandwich producers of the market, initially
to attract more customers and capture more market share and thereby increase the price gradually with time.
18
Gross profit margin
𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡 𝑚𝑎𝑟𝑔𝑖𝑛 = (𝑔𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡/𝑖𝑛𝑐𝑜𝑚𝑒 𝑓𝑟𝑜𝑚 𝑠𝑎𝑙𝑒𝑠) × 100
1st year
Description 2nd year 3rd year
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Gross profit 457006.815 457006.815 457006.815 457006.815 2149257.6 3463520
Sales 1755600 1755600 1755600 1755600 7724640 8778000
Gross profit
margin 26.03% 26.03% 26.03% 26.03% 27.82% 39.45%
Other issues
The company is working hard towards supplying high quality products to consumers. If there is market
returns due to the fault of company reject lot will be replaced with newly made products but no cash
payments are made. If there are any customer complaints of the products, they can make those complaints
through the customer care hot line which is especially available for the benefit of consumers
Marketing budget
Promotional
1st year 2nd year
tools 3rd year
st nd rd th
1 quarter 2 quarter 3 quarter 4 quarter
Leaflet 10 000 10 000 10000 10000 30000 20000

campaign
Sales 2500 2500 2500 2000 15000 20000

promotions
Discounts 5000 5000 5000 5000 20000 20000

Total 17500 17500 17500 17500 65000 60000
19
3. PRODUCTION FEASIBILITY
3.1 Site selection
The site selection should be based on several criteria such as.
 Nature of the land

 Regular supply of potable water
 Easy to access raw materials and distribution channels due to better road conditions
 Availability of labor at a fairly low price
 Nearness to the target market area
 Better infrastructure facilities electricity, water, banking, telecom etc.
 Proper drainage facilities
 Waste disposal facilities
 Acceptable climatic conditions (no flooding threats etc)
When consider about the selected site in Meegoda area face to the Godagama, padukka Rd, close to the
Meegoda economic center where vegetables are available in bulk and this location provide easy access to
Colombo, Awissawella, Horana.
When consider about labor cost normally very easily we can find hard working labors for low wages. And
cost of land also low compare to other areas near urban towns.
Figure 4: Area map
Selected land for the premises
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3.2 Create & delivery of final product
Final product is delivered to fast food outlets and identified school & office cafeterias through company
vehicle.
Producer Retailer Consumer
3.3 Physical premises required
3.3 1 Size & Location

The land required for the proposed plant would be 8 perches.
Building for bakery with sandwich preparation area should have enough space for all production to take
place without congestion. Also focus must be on to prevent cross contamination as much as possible
because bakery cause very dusty environment inside (fungus spores in the air which come from wheat).
The investment should be appropriate to the size and expected profitability of the enterprise, to reduce start-
up capital, the size of any loans and depreciation and maintenance charges
The delicious sandwich bakery consist of bakery area, sandwich preparation area, office, outlet, Raw &
packing material store area, workers changing room ,wash room & lunch room, & solid waste collecting
area.
This bakery area consist with Molding & dividing area, proofing area, baking area & finished product
storing area, while sandwich preparation area consist with processing area and finished product storing
area.
3.3.2 Conditions
The layout of the premises should be designed according to the principles of hygienic design. The factory
layout should be designed in a way that it separates the high risk area, low risk area and non-production
area. Processing area is considered as a high risk area.
Roofs and ceilings
Fiber-cement roof tiles offer greater insulation against heat from the sun than galvanized iron sheets do. It
is particularly important to make working conditions more comfortable when processing involves heating,
mainly bakery area. Alternatively these preparation can be carried out on a covered veranda to minimize
problems of heat in the processing room. Paneled ceilings should be fitted to prevent contamination of
products by dust falling from roof rafters, and there should be no gaps or holes in the ceiling that could
allow rodents or insects to enter the room.
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Walls
All internal walls in the processing room should be rendered or plastered so that there are no cracks that
could harbor insects. High-level vents in walls, screened with mesh to prevent insects, allow heat and steam
to escape and encourage a flow of fresh air through the processing room. The lower area of walls (to at least
one meter above the floor), which is most likely to get dirty, should be either painted with waterproof white
gloss paint or tiled with glazed tiles.
Flying insects can readily contaminate products and windows should therefore be fitted with mosquito
mesh. This allows them to be left open and provide a flow of air through the room. Normally doors should
be kept closed, but if they are used regularly there is again a tendency for them to be left open with similar
consequences of insects entering the room. Thin metal chains or strips of material that are hung vertically
from the door lintel deter flying insects while allowing easy access for staff. Alternatively mesh door
screens can be used. Rodents are a particular problem because they feed on stored materials, and storeroom
doors should therefore be close-fitting and kept closed.
Floors
The floors of processing rooms and storerooms should be constructed using good quality concrete, smooth
finished for easy cleaning, and without cracks that could harbor insects. The material should ideally be non-
slip to prevent operators slipping in any spilled oil, and should not absorb oil (e.g. industrial glazed tiles).
Ventilation
As processing operations involve heating, good ventilation is essential. A comfortable worker is after all a
better worker. Large window openings covered with a sandwich of metal mesh it is a good way of allowing
air to get to a building especially if the direction of prevailing winds can be utilized.
Electricity
All electric power points should be placed high enough above the floor so that there is no risk of water
entering them when washing the floor or equipment. Ideally, waterproof sockets should be used. It is
important to use each power point for one application and not plug multiple machines into one socket,
which risks overloading a circuit and causing a fire. Some types of oil extraction equipment require a three-
phase power supply and this should be installed by a competent electrician, with the load evenly balanced
across the three phases.
3.3.3 Layout of equipment and facilities

Sandwich preparation area and bakery area should be physically separate and it should facilitate the minimal
moving of materials.
Toilets and hand-washing facilities should either be housed in a separate building or two doors should
separate them from the processing area
Laboratory facilities are generally not needed in bakery, although a separate table for conducting quality
assurance checks area for samples from each batch should be located in the office or in a separate area of
the sandwich processing room.
22
Molding & dividing of dough occurred on stainless steel table. There is a separate place of raw material
storage & it should be prevented from pest attack. Because wheat flour easily attack by pests. In this raw
material storage area store wheat flour, salt, sugar, baker’s fat only, pepper powder. Baker’s yeast store in
refrigerator.
Vegetables, mustard cram, & mayonnaise for sandwich preparation will be store in refrigerator. Eggs are
store in separate area away from flour stores. Packing material for sandwich preparation will be store in
separate area of stores away from raw materials, if possible physical separation is important.
The entrances to the processing area will have a hand washing facility.
Main processing steps which are involving bread making are dough mixing, kneading, proofing & baking.
Dough mixing & kneading occurs in dough mixer. Proofing & baking occurs in oven with proofer.
Prepared breads are kept on cooling rack for cooling & after they are sliced & used to prepare sandwiches.
Sandwiches are prepared in sandwich preparation area. Vegetable preparation for sandwiches are done in
this area. Boiling, toasting, chopping, mixing, cutting, washing, sealing, labeling like unit operations are
taken place in this area.
Compost and waste disposal bins are placed in order to dispose solid waste. They are situated away from
the plant area within the factory premises. The solid waste mainly includes remaining dough particles,
polythene bags and damaged packaging material. These should not discharge to the environment. Polythene
bags and damaged packing materials are removed by the municipal council. The waste water is mainly
generating from the major processing area, washrooms and lunch room. This waste water should be allowed
to pass through a properly constructed drainage system and discharged into a waste water pit.
Figure 6: factory layout

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3.4 Cost estimation

For a loaf of bread
cost per 1 kg Required amount for

Ingredients (LKR) produce one loaf ( g) Cost for prepare one loaf (LKR)
Whole wheat flour 97.00 1900 184.3
Sugar 80.00 37.22 2.9776
Salt 40.00 37.22 1.4888
dry yeast 425.00 8.9 3.7825
barkers fat 280.00 37.22 10.4216
Total 202.9705
approximately 80 slices from a bread

Cost per 2 slices 5.074
For sandwich filling

Required amount for
cost per 1 kg produce one Cost for prepare
Ingredients (LKR) Sandwich ( g) a Sandwich (LKR)
Beet 90.00 10 0.9
Carrot 110.00 10 1.1
Potato 90.00 10 0.9
Egg 12000.00 1 12
Mayonnaise 1200.00 4 4.8
Mustard cream 895.00 4 3.58
Salt 40.00 1 0.04
Pepper 1520.00 2 3.04
Total cost of the filling 26.36
Total Raw material cost for a Sandwich 31.43
For Packing materials
Type Cost per one

Heat sealable pack 9.74
Label 0.65
Total cost for a Sandwich 41.82
No of sandwiches per day 400

Total raw material cost per day 16729.705
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3.5 Manufacturing process
3.5.1 Production plan for a day

Production operation is start at the 8 am and last until 5 pm of the day. And 400 sandwiches are prepared
per day. Sunday & Saturday also Poya day consider as holidays.
Production is kept at 400 sandwiches per day and it is kept at a constant capacity until receiving a feedback
from the market, because supply exceeding the demand can lead to obsolete of goods which can result in
substantial loses
Weight of the bread 2.5 Kg
No of sandwiches from a beard 40
No of breads required for a day 10
No of breads can be bake at once 5
3.5 2 manufacturing process

Bread making
1. Weigh the ingredients.
2. Initially wheat flour, sugar & dry yeast are mixing in the dough mixer for a minute (low speed).
3. Salt & cool water (7OC) adding & mixing for a minute (low speed).
4. Mixing all the ingredients for 3 minute (medium speed)
5. Fat adding & mixing for 3 minute (medium speed)
6. Kneading the dough for 3 minute (high speed)
7. Resting the dough on stainless steel table for 10 minutes
8. Dividing the dough & again resting for 10 minutes
9. Proofing the dough in proofer 35 OC, medium humidity
10. After achieving 1.5cm rise of the dough, bake the dough 190oC for 25 minutes.
11. Final products keep on cooling racks for cooling & then sliced
Sandwich filler preparation
1. All the potato, beet, carrot required for a day production is boiled
2. Then they are peeled and chopped separately using a blender
3. Chopped vegetables are cooked in a pan separately in butter with salt & pepper up to the taste.
4. Eggs are boiled (one per one sandwich) and sliced using an egg slicer
5. Then bread slices are cut in to two (rectangular shape) and apply mayonnaise and mustard cream
mix in one side of it
6. Then sandwich is prepared by applying potato+ egg, carrot+egg & beet+ egg separately including
4 bread slices (rectangular shape).
Packing
1. Prepared sandwich is packed into a box and hermitically sealed using semi-automated sealer.
2. Finally it is labeled.
3. Those finished product is packed in corrugated boxes (20 per box) and transported to the venders.
25
Weighing of ingredients Weighing of ingredients
Mixing of Wheat flour, sugar

& dry yeast in the dough Boiling of vegetables and eggs
mixer separately
Adding Salt & cool water (7OC) Peeling & chopping of

to the mixture & mixing vegetables separately
Further mixing for 3 min Cooking of vegetables in a

butter with salt & pepper
separately
Fat addition
Cooking of vegetables in a pan

Kneading separately
Resting the dough Slicing of eggs
Dividing
Proofing
Baking
Cooling the bread Slicing of bread
Appling of mayo mustard

mixture
Stacking of sandwich
Packing & sealing
Figure 7: Production process
Labeling
26
3.5 3 Equipment need & cost
Dough mixer Oven with proofer Refrigerator
Cooling rack Weighing Scale Stainless Steel table
Digital Timer Measuring Cup Egg slicer
Bread pans Pressure cooker Non-stick sauce pan

27
Sandwich package sealer Bread slicer Blender
Machineries
Type Quantity Unit cost (LKR) Total cost(LKR)

Industrial bread dough mixer (5kg) 1 102000.00 102000
Bread making oven with proofer 1 230500 230500
Sandwich pack sealer 1 245000 245000
Refrigerator 1 45250 45250
presser cooker 1 14500 14500
Loaf pans with lid 15 410 6150
Bread cooling rack 1 3000 3000
Stainless steel table 3 5000 15000
Gas cooker & cylinder 1 8000 8000
Bread slicer 1 22000 22000
Spoons 5 100 500
Blender 1 13450 13450
Non-stick sauce pan 1 8000 8000
egg slicer 2 450 900
Electric balance(5kg) 1 3640 3640
Electric balance(200g) 1 2000 2000
Digital timer 2 200 400
Thermometer 1 1000 1000
Stainless steel knife 4 250 1000
Cutting board( plastic) 4 150 600
Brush 2 150 300
Measuring cups 3 250 750
Waste bin 3 250 750
Trolley 1 10000 10000
Miscellaneous 10000 10000
Total 744690
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Cost of office items
Type Quantity Unit price (LKR) Total Price(LKR)

Office Tables 1 4500 4500
Fans 1 3500 3500
telephone & connections 1 6000 6000
Office Chairs 1 4000 4000
Miscellaneous 2000
Total 20000
3.5.4 Utilities
1. Electricity
Three phase electrical supply will be used as there would be electrical equipment in processing area
2. Water
Potable quality water is required for the processing and other washing purposes. Water can get from the tap
line.
3. Telephone
There is a monthly rental for telephone charges.
4. Fuel
Use an own distribution system for final product delivery. Also for the cooking
Utility cost
Type Monthly cost(LKR) Cost per Sandwich(LKR)

Electricity 12000 1.58
Telephone 1000 0.13
Water 5000 0.66
Fuel(Diesel) 12000 1.58
Gas 7000 0.92
Total 37000 4.87
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Over heads
Stationaries 2500
sanitary items 1000
Repair & maintenance 5000
Publicity & sales promotion 10000
Total 18500
3.5.5 Quality control
Manager/Owner is the responsible person for quality controlling.

Raw material quality control-
 Quality control of incoming materials is one of the critical point in a food manufacturing
company. Wheat flour, sugar, salt, bakers fat, dry yeast are checked against the company
standards.
 Quality of the vegetables are controlled by buying good quality fresh free from insect attacks
& whole vegetable without cracks or cut end are purchased and they are cleaned well prior to
store in refrigerator.
In process quality control
During weighing the ingredients, the accuracy of the weighing scale should be checked from time to
time in order to measure required ingredients accurately. Inspection is necessary of all processing
equipment which comes into contact with the product.
The quality of bread, mainly depend on the volume of dough. Therefore time to time, the rise of dough
is checking to achieve desirable & constant volume of bread.
The temperature in proofer is critical. Because it affects to the yeast activity. Temperature should be
35OC in the proofer.
The temperature in oven & baking time also critical. Because it affect to the crust & crumb color, taste
of the bread. Therefore, temperature in oven should be 190OC, 25 minutes
When preparing the sandwich filler cooking temperature is very important to destroy microorganisms
and to slow down the deterioration. Random checking of paste temperature 100oC is carried out
Final critical point is sealing of the pack hermitically, preventing the entering of microorganisms
Seal integrity is checked randomly by dipping the sealed sandwich in water.
3.5.6. Inventory Control
Raw materials stored are issued in First in First out (FIFO) method in order to minimize the wastage of raw
materials. Finished goods store also follows FIFO concept
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4. MANAGEMENT & PERSONNEL REQUIREMENTS
4.1 Management structure
Manager
Sandwich
Braker Driver
maker
This is a small scale food business so this type of very small management hierarchy can be observed, owner
act as the helper in bread & sandwich making
4.2 Responsibilities & background of employees
4.2.1 Manager Responsibilities
 Full control of management

 Overseeing the production process, drawing up a production schedule.
 Raw material & packaging material purchasing for routine production
 Supplying machineries, equipment, utilities & all other necessary items
 Monitoring product standards and implementing quality-control programs
 Daily opening, running & closing procedures of office
 Providing facilities required for employees
 Determining the product price & handling pricing decisions
 Handling all financial records of the business & producing long term business plans
 Hiring employees & handling payroll
 Handling marketing operations (developing the marketing plan for the product, promotional
activities etc.)
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Experience & skills required -Qualifications in management/business subjects, Ability to analyze and
understand marketing data, Commercial awareness, Good communication skills, Problem solving skills,
Team working skills , Interpersonal skills, Creativity
4.2.2 Baker
Responsibilities
 Making quality breads according to a schedule
Experience & skills required-At least 1 year experience as a baker, Implementation of bread
manufacturing plant
4.2.3 Driver
Responsibilities
 Distribution the products in identified areas

Experience & skills required-Valid driving license, Sound knowledge about the road and places in target
geographic area.
4.2.4 Sandwich maker

Responsibilities
 Preparation of the sandwiches and ultimate packing of them in cartons

 Maintaining of keeping quality samples
 Serving at the outlet
Experience & skills required-Ability of cooking and inborn talent of taste, ability to work in tied
schedules, multi-tasking
4.3 Personnel requirements (1-3 years)
Personal requirements (1-3 year)

Job title 1st year 2nd year 3rd year
Manager 1 1 1
Baker 1 1 1
Sandwich maker 1 1 2
Helper 0 0 1
Driver 1 1 1
Total 4 4 6
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4.4 Salaries
Salaries
No of Salary per person Total
Job title
persons (LKR) (LKR)
Manager 1 25000 25000
Baker 1 20000 20000
Sandwich maker 1 15000 15000
Driver 1 18000 18000
Total 78000
EPF (Employee’s Provident Fund)

According to the EPF Act, an employee is required to contribute a minimum of 8% and the employer a
minimum of 12% of the total salary of the employee monthly.
ETF (Employee’s Trust Fund)
Employee’s contribution
8% of the total monthly earnings (To be deducted from the Employee’s Salary/Wage)
Employer’s contribution (Company)
An amount equivalent to 12% of the total monthly income of the Employee (To be paid totally by the
Employer) Total contribution per Employee 20% of the Employee’s total monthly earnings
Final monthly salary
Description Amount(LKR)
Total salary 78000
ETF (12%) 9360
EPF (3%) 2340
Total payment 89700
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5. ENVIRONMENTAL FEASIBILITY
5.1 Regulations
As a food manufacturing company, it is bound with many legal regulations & laws. Regulations and laws
may involve in establishing legal food business, industrial safety according to the food act in Sri Lanka,
labor regulations and environmental regulations, etc.
Business Registration & Legal aspects
Name Approval:
 Steps 1 – Decide the company name

 Step 2 – Name approval
 Step3- Pay for name request
 Step 4 – Name verification by DRS (Department of the Registrar of Companies)
 Step 5- Name Approval
 Step 6 -Register at the company’s Registry.
 Step 7 -Register with the department of Labour
The Food (Bread Standards) Regulations
“Optional ingredients shall be -
 Sugar;
 Milk and milk products;
 Tapioca flour, rice flour, kurakkan flour, corn flour, soya flour, potato starch and any other edible
flours and edible oil seeds;
 Gluten: not exceeding two percentage by mass of the flour;
 Vitamin B1, nicotinic acid or nicotinamide hydrochloride not exceeding 0.25 percent by mass of
the flour;
 Malt products: not exceeding two percentage by mass of the flour ; and permitted preservatives”
In the preparation of a bread, where any optional flour is added and the percentage of the added optional
flour is not less than 10% m/m, the name of such optional flour may be named in the bread
Food Act and Label Regulations

There are several regulations under Food (Labeling and Advertising) Regulations 2005 by the Minister of
Health in consultation with the Food Advisory Committee.
Food act, no. 26 of 1980 as amended by food (amendment) act, no.20 of the 1991
34
An act to regulate and control the manufacture, importation sale and distribution of food, to establish a
Food Advisory Committee (FAC) to repeal the food and drugs act (chapter 216) and to provide for matters
connected therewith on incidental thereto.
Food hygienic regulations

Food hygiene regulations should consider according to premises relating to the preparation, storage or sale
of food, every person including the owner and the manager engaged in the preparation, storage sale of food
intended for human consumption shall ensure that the premises or part there of used for the purpose is so
constructed that the windows, internal walls, floors, ceilings, wood-work and all other parts of the building
are maintained in good order and repair so as to facilitate cleanliness and to prevent as far as practicable,
infestation by rats, mice, insects and birds. This also should contain with good manufacturing practice, good
handling practices and the personal hygiene.
Solid waste management
National Policy on Solid Waste Management – The main objectives of the policy are
 to Ensure environmental accountability and social responsibility of all waste generators,
waste managers and service providers
 To actively involve individuals and all institutions in integrated and environmentally
sound solid waste management practices
 To maximize resource recovery with a view to minimize the amount of waste for disposal
and
 To minimize adverse environmental impacts due to waste disposal to ensure health and
well-being of the people and on ecosystems.
Waste management
This is done according to Waste management regulations 2008 (Under The National Environmental act no.
47 of 1980). These regulations;
Emphasizes the need of a license issued by CEA (Central Environmental Authority) to discharge wastes to
the environment.
Specifies the standards & criteria to be in waste before releasing to the environment.
Land usage
This is done according to National land use policy of Sri Lanka. Objectives of this policy regarding to the
industry are;
To promote land uses that will minimize environmental damage.
Conserve bio-diversity, soil and water
35
5.2 Environmental problems on property
5.2.1 Disposing organic wastes

Remaining dough particles, vegetables, egg shells are the major organic wastes result by the process. Other
organic waste includes lunch of employees and other paper waste. Disposing those organic wastes in an
environmental friendly manner should be done.
5.2.2 Releasing waste water to the environment

Cleaning operations will results considerable amount of wastewater per day. This may contain mainly
organic matter, cleaning agent and sanitizers. Releasing them to the environment without treating will leads
to many environmental problems.
5.2.3 Disposing packaging wastes & other non-decomposable matter

Polythene bags from raw material packages should be discarded in a suitable manner.
5.2.4 Plans to address the problem
Solid waste management

All the solid waste generated in the process is segregate as perishable, non-perishables (glass, polythene,
metal, paper) .perishable waste are used for compost production inn home & polythene are handed over to
the municipal council & glass & metal are sold to collectors.
Waste water management

Mainly from the process operation, cleaning, wash room & lunch room are identified as waste water
generate points. Drainage system is used to send those water to septic tank
waste management
Type of waste solution Quantity Cost per unit(LKR) Total cost(LKR)
Solid waste waste bins 5 500 2500
Effluent septic tank 1 15000 15000
Total 17500
5.3 Risk factors & mitigation
5.3.1. Financial Risk

Interest and Exchange Rates Changes in interest or exchange rate could have serious implications on cash
flow projections made. In such cases the enterprise has to carry out proper financial planning as a risk
management strategy to minimize mitigating effects on cash flow or revenue.
36
Asset Protection Financial planning should also ensure protection of assets by taking into account possible
hazards that could result in a major loss or damage to capital items such as buildings, machinery, draught
power, irrigation channels, etc.
Inflation Enterprises operating in conditions of inflationary spiral find it hard to conduct business
transactions in nominal currency since the monetary values are always changing and sometimes by wide
margins. Estimating future price levels or repayment terms for input loans become difficult. One option, if
permitted by government policy, is to maintain cash deposits in a more stable currency such as the US
dollar.
5.3.2. Physical Risk
Raw material supply Price variations of major and minor ingredients. And variable quality of ingredients
used. Especially price of major ingredients such as wheat flour, vegetables egg prices are susceptible to
change dramatically.
Lack of Employee motivation Due to lack of job security employee motivation can be low. This will affect
to achieve the company goal.
Market Risk this results from variation in prices for inputs as well as outputs. A sudden increase in input
prices could influence production costs significantly and result in higher raw material prices, on the product
side, increased output during a good year may depress prices in the market.
Human Risk Besides variation in prices, there is a risk associated with unpredictable behavior of other
people such as traders, competitors, buying and commission agents, international agencies, and government
officials, who make decisions on pricing, etc. Human risk also relates to staff dedicated to delicate tasks
such as sampling, quality assessment, labelling, cleaning processing machines. Management decisions and
actions are also subject to risk. Also accidents during working are greater deal of risk.
Lack of Information Decision-making that is based on lack of complete information or on inaccurate
information is risky to the business
37
5.4 SWOT analysis
Strengths Weaknesses
High quality healthiest product New product & new brand name to
the market
Availability of raw & packing
materials high Limited distribution
Less technology is required Limited production
Capacity for future expansion Absence of quality certificates
Threats Opportunities
High amount of competitors To increase the production capacity
Significant price fluctuation of raw To expand the product lines

materials To have own outlets
Government impose legal barriers on Government sponsors for small
bakery products businesses
5.5 PEST analysis

PEST analysis examine the broad which is organization operating .PEST stands for political/legal,
Economic, Social, and technological factors .these are simply four key areas in which to consider how
current and future changes affects the business
Political
Under political factors tax policies, environmental laws / regulations, trade restrictions / tariffs and political
stability are important, employment legislation high tax rates
Economical
Economic progress, Interest rates, Exchange rates and Inflation rates are important under economic factors.
Purchasing ability of a person depends mainly on economic factors. Due to economic growth, income
increases and as a result, purchasing power also increases.
Social
Health consciousness, Population growth rate, Age distribution, Carrier attitudes and Emphasis on safety
are important factors under social factors. The demand for high quality prepared foods which is ready to
eat is increased. Health conscious people shift their focus from unhealthy junk foods to healthy diets.
38
Technological
R&D actions, Automation, Technology incentives and Rate of technological change are important factors
under technological factors. Due to the fast growth of the technology, nowadays most of the production
processes are automated in order to produce high quality products in efficient manner.
Also increasing of shelf life & freshness of a sandwich through non chemical means of preservation is very
important for the growing of business and serve to the competitive demanded market. High pressure
processing technology like technics can be used to increase the shelf life of filling without deteriorating its
nutritional values.
5.6 Mitigation of risk & contingency plan
There should be an effective contingency plan to mitigate risks of the company in order to reduce losses.
Some major risks faced by the company and the plans to overcome them are as follows;
 Organized employee motivation programs and environment, health and safety training programs to
ensure the personal safety.
 Select the trusted suppliers in order to ensure the quality of the raw materials and establish a
supplier community to maintain a strategic buyer-supplier relationship.
 Be alert about the present market condition and the future trends
 Pay more attention towards the quality of the final product
 Sudden breakdown of machinery can be prevented by having a total productive maintenance
(TPM), which is a system of maintaining and improving the integrity of production and quality
systems through the machines, equipment, processes, and employees that add business value to an
organization
 Pest attacks can be mitigated by practicing pest control methods
39
6. SOCIAL & INSTITUTIONAL FEASIBILITY
6.1 Impact on social

Establishing a bread manufacturing plant will impact on social in several ways for the benefit of the society.
 Creation of employment opportunities,

 Income generation for people live in Meegoda area
 Environment friendly operations
 Maintaining effective relationships with the people who are living around the factory
 Skills development of local community
 Provide a healthy product for a healthy society
 Creation of market for healthy products
 Contribution to the national economic contribution
6.2 Responsibility towards the consumer

 Offer a convenient, alternative for rice for their busy life style
 Affordable price
 High quality product
 Supply according to demand
 Do not make false claims in promotional materials
 Effective customer complaints handling methods
 Offer a healthy and nutritious product
6.3. Responsibility towards the employees

 Fair payments
 Job satisfaction
 Reasonable working hours
 Working friendly environment
 Employment security
 No discrimination (based on race, gender, caste, religion, etc)
 Employee welfare
6.4 Towards Environment
 Effective waste disposal methods
6.5 Towards Society

 Involve to social activities
40
7. FINANCIAL FEASIBILITY
7.1 Key assumptions

 Market returns are in very low level & it does not affect severely for the profit of the business.
 19 working days in a month with 9 working hours
 There are no considerable high damages for machineries and buildings, no any other kind of severe
failures & harmful effects.
 Cost of raw material, labor, utility, overhead increase by 3% annually.
 The Government will not change within next 3 years.
 Income Taxes & other taxes are kept constant during this 3 year period.
 Government taxes will remain constant within next 3 years.
 Employee salaries will not be changed during 3 years.
7.2 Funding resources for the business

100% of the capital that is put into the business comes from the owner’s personal resources or funds
7.3 Total project cost

Total
Description
amount(LKR)
Fixed capital
Land site development 800000
Building 1000000
Machineries & equipment 744690
Office equipment & furniture 20000
Vehicles 1100000
Preliminary & pre-operative
expenses( company registration waste management ) 21000
Water 15000
Telephone 2500
Electricity 15000
working capital (per month)
Raw materials 16729.705
Direct labors 78000
Overhead 18500
Utility 37000
Total project cost 3868419.705
41
7.4 Pricing structure
Price estimation of the product

Description cost per sandwich(LKR)
Raw material cost 41.82
Labor cost 10.26
Utilities 4.86
Overhead 2.4342
Depreciation cost 2.8085
Total cost 62.1827
Profit Margin (15%) 9.327405
Price without tax 71.510105
Tax (8%) 5.7208084
Price to retailer 77.2309134
Retailer profit margin (3%) 2.316927402
Consumer price 79.5478
7.5 Sales forecast

Assumption:- Production volume= selling volume & market returns are very less
Sales forecast
Sales 1st year 2nd year 3rd year
Daily production 400 440 500
Monthly production 7600 8360 9500
Annual Production 91200 100320 114000
Price to retailer 76.54 76.54 76.54
Revenue 6980448 7678492.8 8725560
7.6 Cost of sales
Cost of sales
Type 1st year 2nd year 3rd year
Raw material cost 200756.46 220832.106 250945.575
Direct labor cost 936000 936000 103000
Utility cost 384000 384000 384000
Total overhead cost 222000 222000 222000
COS 1742756.46 1762832.106 959945.575
42
7.7 Projected incoming statement
1st year
2nd year 3rd year
Description Quarter 1 Quarter 2 Quarter 3 Quarter 4
Net Revenues 1755600.00 1755600.00 1755600.00 1755600.00 7724640.00 8778000.00
(-) cost of sales 1298593.19 1298593.19 1298593.19 1298593.19 5575382.40 5314480.00
Gross profit 457006.82 457006.82 457006.82 457006.82 2149257.60 3463520.00
(-) Overhead 55500.00 55500.00 55500.00 55500.00 227000.00 232000.00

(-) Depreciation 64036.00 64036.00 64036.00 64036.00 236973.00 219345.00
Total operating expenses 119536.00 119536.00 119536.00 119536.00 463973.00 451345.00
Net profit before tax 337470.82 337470.82 337470.82 337470.82 1685284.60 3012175.00
Tax (15%) 50620.62 50620.62 50620.62 50620.62 252792.69 451826.25
Next profit after tax 286850.19 286850.19 286850.19 286850.19 1432491.91 2560348.75
7.8 Cash flow projection

1st year
quarter 1 quarter 2 quarter3 quarter 4
Cash balance (beginning) 0.00 337470.82 674941.63 1012412.45 1349883.26 3035167.86
Cash from sales 1755600.00 1755600.00 1755600.00 1755600.00 7724640.00 8778000.00
Total cash receipt 1755600.00 2093070.82 2430541.63 2768012.45 9074523.26 11813167.86

(-) cost of sales 1298593.19 1298593.19 1298593.19 1298593.19 5575382.40 5314480.00
(-) overhead 55500.00 55500.00 55500.00 55500.00 227000.00 232000.00
(-) Depreciation 64036.00 64036.00 64036.00 64036.00 236973.00 219345.00
Total expenses 1418129.19 1418129.19 1418129.19 1418129.19 6039355.40 5765825.00
Cash balance (End) 337470.82 674941.63 1012412.45 1349883.26 3035167.86 6047342.86
43
7.9 Financial ratios
Gross profit Margin= (sales less cost of goods sold/sales)*100
1st year
Gross profit 457006.815 457006.815 457006.815 457006.815 2149257.6 3463520
Sales 1755600 1755600 1755600 1755600 7724640 8778000
Gross profit margin 26.03137474 26.03137474 26.03137474 26.0313747 27.8234015 39.45682388
Net profit margin= (Net profit after taxes/sales)*100
1st year
Net profit 286850.1928 286850.1928 286850.1928 286850.193 1432491.91 2560348.75
Sales 1755600 1755600 1755600 1755600 7724640 8778000
Net profit Margin 16.33915429 16.33915429 16.33915429 16.3391543 18.5444488 29.16779164
7.10 Net cash flow
1st year
Net profit 286850.1928 286850.1928 286850.1928 286850.193 1432491.91 2560348.75
Depreciation 64036 64036 64036 64036 236973.35 219344.7775
Net cash flow 350886.1928 350886.1928 350886.1928 350886.193 1669465.26 2779693.528
44
7.11 Payback period
Cumulative net cash

Year Net cash flow flow
0 -3868419.705 -3868419.705
1 1403544.771 -2464874.934
2 1669465.26 -795409.674
3 2779693.528 1984283.854
Pay Back period=2 years + (795409.674/2779693.528)*12= 2 years & 3 1/2 months
7.12 Break-even point analysis
Description 1st year 2nd year 3rd year

Sales volume 91200 100320 114000
Sales price/Unit 77 77 77
Variable cost/unit 56.94 56.94 57.52
Contribution/unit=Selling price- variable cost 20.06 20.06 19.48
Fixed cost 222000 227000 232000

Break-even point (in units)= Fixed
cost/contribution 11067 11316 11910
BREAK EVEN POINT (in sales)=
Fixed cost/contribution to sales ratio 630144 644336 685043
45
Break even point analysis for Delcious Sandwiches

1400000
1200000
Break-even
1000000
point=11067
800000
Rupees
Total Cost
Sales
600000
Fixed cost
400000
200000
Units
7.13 Net present value
Discounting factor
Discounting
Year Net cash flow at 8%(cost of Present value present value
factor at 10%
capital)
0 -3868419.705 1 -3868419.705 1 -3868419.705
1 1403544.771 0.9259 1299542.103 0.909 1275822.197
2 1669465.26 0.8573 1431232.567 0.826 1378978.305
3 2779693.528 0.7938 2206520.722 0.751 2087549.839
NPV (8%) 1068875.688 NPV (10%) 873930.6358
NPV value is 10, 68875.69 at 8% discount rate and 8, 73930.64 at 10% discount rate.
46
Since the NPV > 0 at each discount rate, the initial investment will be recovered. Therefore, the project
should be accepted.
7.14 Internal rate of return
A –Discount factor 1 A – 8%
B – Discount factor 2 B – 10%
a – NPV1 a – 393,805
b - NPV2 b – 291,279
Internal Rate of Return (IRR) = A + [B-A (a/a-b)]

=8+ ((10-8)*(1068875.69/ (1068875.69-873930.64))
=18.96%
Cost of capital is 8%. The IRR is 18.96% (positive value). Since IRR > cost of capital, the project should
be accepted
47
8. FINAL FINDINGS & RECOMMENDATIONS
Healthy prepared foods have significant demand in the today competitive market because of consumers’
busy life style & health consciousness. So Brown bread fresh sandwiches have high potential to grow.
Higher demand can be observed in Urban & sub urban areas of the country compare to rural areas.
Market feasibility
Under the market penetration pricing strategy demand for the product will be increased day by day. There
for it is feasible to achieve considerable market share in prepared fast food industry.
Year Sales demand in Units(per day)
1 400
2 440
3 500
Technical feasibility
In Sri Lankan context, it is possible to achieve required modern knowledge for bakery products & sandwich
production
Because Government & non-Government organizations are organizing the development activities for small
scale food business also they ready to serve the technologies to the entrepreneurs.
Production feasibility
Selected location provide easy access to suppliers and to the target market. Also there is no huge risk of
waste management as it is a sub urban area. So production feasibility is positively address the situation.
Environmental feasibility & Social feasibility

The industry will not generate and hazards chemicals and will not release harmful pollutants. As at the same
time the business will provide many direct and indirect job opportunities to the local society while giving
best quality product to the customers
Financial feasibility
Payback period= 2yrs 3 1/2months
This means that the initial investment can be recovered within 2years and 3 1/2 months after carrying out
business operations
NPV=1068875.
48
This indicates that that project is worthwhile to be implemented since the net present value of business
operations are positive
IRR=18.96%
IRR implies what project really earns. The cost of capital of the project is 10% therefore the IRR is greater
than the cost of capital. Internal rate of return of the business is greater than the cost of capital of the
business. Therefore project is feasible in financial aspects.
Recommendations
 Increase the total daily production in future considering the market demand
 Purchase high sophisticated machinery in future in order to improve the production capacity and
quality of the product.
 Increase promotional activities.
 Increase the retailer margin and encourage them to promote the product.
 Promote the welfare of the workers.
 Provide more employment opportunities.
 Produce different packaging sizes of sandwiches & different varieties, and different other healthy
bakery products as product portfolio extensions.
9. CONCLUSION
This feasibility study is conducted to identify the viability of sandwich packet production in Meegoda area,
according to the findings this project is feasible in many areas such as marketing, technical, production,
financial, environmental & socio-economic aspects.
49
ANNEXES
Annexes I
Market survey analysis
Preference for sandwich

Preference for sandwich consumption consumption
3%
Majority of respondents (97%) are preferred to eat
Yes
sandwiches, (Number of respondents=73)
No
Survey is proceed with those respondents who preferred to 97%
eat sandwiches
Gender dissemination Gender Dissemination Among

Respondents
Majority of respondents are male (79%) who prefer to
consume sandwiches
21%
Male
Female
79%
Age distribution
Age Distribution
Majority of them are in between 21-30
60
years of age group and considerable amount 50
of demand can be seen with age groups 11- 40 49
Quantity
20, 31-40, 41-50 and 51-60. 30

20
10 9 4 5 6
0 0
0
Below 11-020 21-30 31-40 41-50 51-60 61-70
10
Age groups (years)
50
Geographic distribution Geographical Distribution

This measure is used to identify target groups
distribution in terms of urban, sub urban, & rural 3%
97% of people are live in urban and sub urban areas even 12% Urban
the questionnaire is distributed covering those 3 areas Sub urban
equally considering there residential information. So can Rural
conclude that product is more popular among those 85%
areas
Marital state Marital state

Can conclude that majority of them who prefer for
sandwiches are under the categories of unmarried 0ther
& children.
Children
Among those 90% of children are in A/L classes. And Category
Unmarried
unmarried persons are with under graduate and
graduate level of education Married
0 20 40 60
Count
Preference time of
consumption Prefered time of consumption
30
Majority of them like to eat sandwiches 25

as breakfast while considerable amount 20
of them preferred to have as dinner
Count
among them 15
Almost similar preference among both 10

female & male as breakfast, but 5
majority of who like to have as dinner is
female. 0
Morning Dinnertime afternoon Evening
Male Female
51
Preference on ingredients
40
60
35
45 50
40 30
35 40 25
30
Count
25 30 20
20
15 15
20
10 10
5
10
0 5
Mustard…
Other…
mayonnise
Cheese sauce
Butter
0 0
Spread Type of the bread Filling
Most of them are preferred to have brown bread as the type of bread, vegetable and egg as filling and
mayonnaise & mustard cream and spreads.
Those information are essential in designing the product so product is designed according to those
requirements.
Price preference
Price preference
Majority of people are prefer to serve 61-80
rupees for a sandwich. This help to determine
the price of the product.
41-60 LKR
61-80 LKR
81-100 LKR
101-120LKR
52
Purchasing places of sandwiches

Prefered purchase place
Majority of respondents prefer to purchase
their sandwich from cafeteria or from fast food
outlet. 5%
14%
34% Fast food outlet
cafeteria
Supermarket
47% Others
Purchase for themselves or others Purchase for whom

Majority of respondent are purchase for
themselves.
While 23% of them are purchased for their 23%

children, friends & other family members.
Yes
No
77%
0
Children Friends Other Other
family
members
53
Which factor strongly affect to the purchase decision
Availability of healthy ingredient is most Factors affect to purchase decision

strongly affect to the individuals purchase
decisions as them are more health conscious
in today’s context. 17%
Taste
1%
30% Appearance
Other considerable factors are taste of the
product & price. Healthy
ingredients
Smell
49% 3%
54
Questionnaire used
Survey on consumption of sandwiches

This questionnaire is developed to gather consumer preferences on sandwiches as
convenience fast food. This survey is to be answered anonymously
1. Do you prefer to eat sandwiches?
Yes
No
If yes please proceed with questionnaire helping to gather you preferences

regarding sandwiches
2. Are you male or female?
Male
Female
3. Which range most appropriately describe your age in years?
Below 10
11-20
21-30
31-40
41-50
51-60
61-70
55
4. Which of following best describe the area you live in?

Urban area
Sub urban area
Rural area
5. What is your marital state?

Married
Unmarried
Other(Children, Divorced,
Widowed)
6. What is the highest level of education you have completed?

O/L
A/L
undergraduate
Graduate
Post graduate
7. Which describe very accurately your current state?

Schooling
Employed
Retired
Other
8. What is the most preferred time to eat your sandwiches?

Morning
Dinnertime
afternoon
Evening
56
9. What type of bread do you like to have in sandwich?

White bread
Brown bread
Kurakkan Bread
10.Do you prefer toasted or fresh bread?

Fresh bread
Toasted bread
11.What is your favourite spread to have in sandwich?

Butter
Mayonnaise
Mustard cream
Cheese sauce
Other (please mention)
12.What is your most favourable type of filling among below mentioned?

Vegetables
Meat
Cheese
Fish
Egg
13.How much would you be willing to pay for a sandwich?
41-60 LKR
61-80 LKR
81-100 LKR
101-120LKR
57
14. How much would you be willing to pay for a sandwich?
41-60 LKR
61-80 LKR
81-100 LKR
101-120LKR
15.From where would you willing to buy your sandwich?
Fast food outlet

cafeteria
Supermarket
Others
16.Which factor strongly affect to your purchase decision of convenience

prepared foods?
Taste
Appearance
Healthy ingredients
Smell
Price
58
Financial feasibility calculations
Utility cost
Type Monthly cost(LKR) Cost per Sandwich(LKR)

Electricity 12000 1.58
Telephone 1000 0.13
Water 5000 0.66
Fuel(Diesel) 12000 1.58
Gas 7000 0.92
Total 37000 4.87
Over heads
Stationaries 2500
sanitary items 1000
Repair & maintenance 5000
Publicity & sales promotion 10000
Total 18500
Depreciation Cost
Annual
Description Values (LKR) Rate cost(LKR)
Land 800000 5% 40000
Building 1000000 5% 50000
Machineries & equipment 744690 10% 74469
Office equipment & furniture 20000 5% 1000
Vehicles 1100000 8% 88000
Other fixed assets 53500 5% 2675
Total depreciation cost 3718190 256144
Cost of production of annum
Working capital per year 1802756.46

total Depreciation cost 256144
Total cost of production 2058900.46
59

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Feasibility study on production of Brown bread Egg sandwiches –“Delicious Sandwiches”

2.3.5 Large forces that drive the market ......................................................................................... 15

5.1 Regulations ............................................................................................................................ 34

8. FINAL FINDINGS & RECOMMENDATIONS............................................................................ 48

 Increasing number of women in the workforce

1.1 Product Identification

Product Name: Brown Bread Egg Sandwich

Available size: Regular (adequate for a person)

1.4 How Consumer Use and Buy the Product

1.5 Effectiveness in positioning

1.6 Raw & packing materials to be used & availability

1.7 Plan to test the product

1.8 Plan to expand the product lines

1.9 Market survey

1.10 Target market

1.10.1 Market segmentation

1.10.1.1 Demographic segmentation

1.10.1.2. Psychographic segmentation

1.10.1.3. Geographic segmentation

1.10.1.4. Behavioral segmentation

1.10.3. End users

1.10.4 Target market

1.10.5 Projected demand

1.10.6 Targeted geographic area

1.10.7 Market size

1.10.8 Targeted market share

1.11 Marketing strategy

1.11.1 Marketing mix

Serve fresh in hermitically sealed pack Popular urban location

Better appearance Dine in and take away facilities

Attractive package Parking facilities

More nutritious & healthily

Better sensory quality

2.1 Technical information about the product

Size- regular size adequate per person

Sources- potbelly sandwich shop nutrition calculator (http://www.potbelly.com/Food/Nutrition.aspx)

2.2 Additional R & D needs

2.3.1 Description of the industry

2.3 2 Size & growth of the industry

2.3.3 Demand & supply of the product

2.3.4. Future trends

2.3.5 Large forces that drive the market

 Higher demand for ready to use product

2.4.1 Porter’s Five Forces Model

Figure 2: Porter’s five force analysis

Bargaining power of customers

Threat of Substitute Products:

2.5 Strengths uniqueness & weaknesses of the business

2.6 Competitor’s reaction to product & response strategy

2.7 Business model

2.7.1. How business generates revenue

2.7.2. Marketing and sales strategy

Figure 3: brand log of the company

Promotions: leaflet campaign, trade promotions and print Medias

Gross profit margin

𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡 𝑚𝑎𝑟𝑔𝑖𝑛 = (𝑔𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡/𝑖𝑛𝑐𝑜𝑚𝑒 𝑓𝑟𝑜𝑚 𝑠𝑎𝑙𝑒𝑠) × 100

Leaflet 10 000 10 000 10000 10000 30000 20000

Sales 2500 2500 2500 2000 15000 20000

Discounts 5000 5000 5000 5000 20000 20000