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    Grenadier Chocolate Company

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    Shariq Khan
    Mr. Ronald Begg wants to start Grenadier Chocolate Company to produce and market an instant chocolate syrup called MilkMate. Market research showed potential for MilkMate as powdered milk modifiers currently on the market were difficult to use. Begg developed a pricing and marketing strategy to target the space between small local brands and large multinational brands. Financial projections over 5 years estimated $5 million in overall profit based on annual sales of 4.6 million units of MilkMate.

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    Grenadier Chocolate Company

    Uploaded by

    Shariq Khan
    392 views18 pages
    Mr. Ronald Begg wants to start Grenadier Chocolate Company to produce and market an instant chocolate syrup called MilkMate. Market research showed potential for MilkMate as powdered milk modifiers currently on the market were difficult to use. Begg developed a pricing and marketing strategy to target the space between small local brands and large multinational brands. Financial projections over 5 years estimated $5 million in overall profit based on annual sales of 4.6 million units of MilkMate.

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    Mr. Ronald Begg wants to start Grenadier Chocolate Company to produce and market an instant chocolate syrup called MilkMate. Market research showed potential for MilkMate as powdered milk modifiers currently on the market were difficult to use. Begg developed a pricing and marketing strategy to target the space between small local brands and large multinational brands. Financial projections over 5 years estimated $5 million in overall profit based on annual sales of 4.6 million units of MilkMate.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    392 views18 pages

    Grenadier Chocolate Company

    Uploaded by

    Shariq Khan
    Mr. Ronald Begg wants to start Grenadier Chocolate Company to produce and market an instant chocolate syrup called MilkMate. Market research showed potential for MilkMate as powdered milk modifiers currently on the market were difficult to use. Begg developed a pricing and marketing strategy to target the space between small local brands and large multinational brands. Financial projections over 5 years estimated $5 million in overall profit based on annual sales of 4.6 million units of MilkMate.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 18

    Grenadier Chocolate company limited

    4/15/12

    Click to edit Master subtitle style

    Group 3

    INTRODUCTION
    Mr. Ronald Begg is an ex-employee of : P&G brand manager Frito Lay National Sales Manager He now wanted to start his own company and after several trials and thought process and looking at available finance the eventual choice was a new, milk modifying, instant chocolate syrup for household use. The product was given the name MilkMate.
    4/15/12

    SYNOPSIS

    Chocolate is the dominant flavour, estimated to account for about 80% of total sales. The competition powdered Milk Modifiers had low solubility, were difficult to mix, and often left a residue in the glass after drinking The new liquid form of product dissolves instantly & completely

    Market researches on Milk Mate gave positive results which gave Mr. Begg encouragement to go for the product
    4/15/12

    CURRENT MARKET SHARE

    4/15/12

    SYNOPSIS

    Pricing and positioning strategies were worked out keeping in mind the competitors Investment and working capital figures were chalked out and banks gave a nod provided the viability of product as well as business was there. Mr. Begg wanted to find a space here where he could combine a small scale product with multi-national marketing techniques.

    The biggest catch was that big multinationals could manage huge brands but not small ones , Canadian companies could manage small brands, but are reluctant to invest in 4/15/12 marketing and promotion support programs.

    To master a particular market requires experience & additional learning Competition


    Durable s
    FMCG

    Offering Markets/Public s Exchange MR Diffussion, Adoption & Innovation

    B2B Govt Mktg Retail Internation al Mktg Social Mktg Rural Mktg

    Broaden to Generic Mktg concept

    Mktg Mgmt

    Formulate Problem

    Determine Research Design

    Design Data Collection

    Strategic marketin g Planning Corporat e Strategy &allocati on

    Configuration (Product) Facilitation (Distribution/place) Valuation (Price) 4/15/12 Symbolisation(Promotion)

    COMPETITION OF MILKMATE
    Which brand? What from of milk modifier do I go for? How do I want my milk? What desire do I want to satisfy? Coconut Water Juice Milk
    Desire Competi tors

    Milk Mate

    Powder Liquid

    Honey Sugar Plain milk Tea Coffee


    Generic Milk Competit Modifie ors 4/15/12

    Enterpri se Competi

    Form Competi tors

    SEVEN DECIDING CRITERIA

    Market Penetration Vs Market Skimming

    Selling Price Trade Margins Advertising and Promotion Supply Chain : Retail Distribution Company salesmen Vs Sales Agents
    4/15/12

    Regional distribution Vs National

    MODIFYING A HABIT

    Form of existing product: Powder of new product: Liquid

    Form

    Methods

    to bring about the change in consum Produce a relevant benefit Liquid that dissolves instantly
    4/15/12 No need of refrigeration

    mindset:

    MARKETING MIX
    X

    Product: Suits the market and comprehensive testing was carried out to come down to final formulation. Price : Market leaders were making losses ($1) per case because of rise of prices of sugar, essential ingredient in the product.
    X

    Advantage to company
    4/15/12 Cost of ingredients, packaging,

    MARKETING MIX
    Distribution Company salesman v/s Salesman on commission Salesman commission : 3 to 10 % Retailers Expectations : 20 % Margin ( margin given by existing players 18 %) X Communication Focus on ONTARIO and QUBEC Efficient advertising: Advertisements on 16 Channels Promotion: Cents-off coupons
    X

    Constraints Limited resources Entire dependence banks for funding


    X

    4/15/12

    PROJECTED MARKET SHARE


    Per pound revenue: 0.99$

    Total Market Size : 23 million pounds


    Expected Total market Expected market Revenue (units million market (units million (Million $) pounds) share (%) pounds) 25.30 27.83 30.61 33.67 37.03 15 25 35 45 50 Total 3.79 6.95 10.71 15.15 18.51
    4/15/12 55.31

    3.75 6.88 10.60 15 18.32 54.76

    PROGRAM OF ADVERTISING & PROMOTION


    Year 1: Extensive Promotion
    TELEVISION: ON CBC NATIONAL NETWORK:
    Class AA Time (Prime) 1 Ad @ $4775 for 180 days

    ON CBC MID EASTERN REGION


    Class B Time (Noon to 6:00pm Weekdays) 1 Ad @ $2303 for 180 days

    MAGAZINES: CANADIAN MAGAZINE (NATIONAL EDITION) - HALF PAGE $7960 for 26 Weeks NEWS PAPER: Toronto star $2.7/line x 15 lines for 26 weeks (once 4/15/12 TOTAL - $ every 2 weeks)

    PROGRAM OF ADVERTISING & PROMOTION


    Year 2 to Year 5
    TELEVISION: ON CBC MID EASTERN REGION
    Class B Time (Noon to 6:00pm Weekdays) 1 Ad @ $2303 for 365 days (Everyday for 4yrs)

    TOTAL FOR YEAR 2 TO YEAR 5 $336237


    Total Advertising Cost for 5 years plus 10% interest on bank loan (assumed) for 5 years is $7,802,001
    4/15/12

    ADVERTISING & PROMOTIONAL EXPENSES


    Advertising Cost: $7820001 Promotional Expense: $15000 Special Promotional Material: $25000 Total: $7,842,001 Total No. Of cases Sold : 4.6 Million Cases (ie 55.31 million units) Advertising and Promotional 4/15/12 Expense Per Case : $1.70

    SELLING PRICE & TRADE MARGINS


    Particulars Ingredients Packaging Manufacturing Distribution Selling Expenses Advertising & Promotion Total Exp. Selling Price to Retailer Profit/Loss * Cost per MilkMate Nestle ($)* ($)* 7.25 6.16 0.75 0.64 0.5 0.425 0.5 0.425 0.5 0.5 1.5 11 11.5 1.70 9.85 11

    0.5 1.15 4/15/12 case (12 packs of 1

    PROFITABILITY OVER 5 YEAR PERIOD


    Overhead Expenses : 50000x5 = $250,000 Initial Investment : $25,000 Total Expense For 5 Years Variable Cost : $45,310,000 Fixed Cost : $275,000 Total Cost : $45,585,000 Sales (Units) : 4,600,000 Sales ($) : 4600000x 11 = 50,600,000 Overall Profit : $5,015,000
    4/15/12

    NK HA T OU Y
    4/15/12

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