AMIGO

Flavored Milk





Syed Mohammad Hassan
Noukhaiz Aslam
Awais Ahmed
Abuzar Khan


07-May-14



Submitted To: Ms. NOOR UL AIN



Quaid-e-Azam School of Management Sciences
QAU, Islamabad
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ACKNOWLEDGEMENTS

All praise to the gracious ALMIGHTY ALLAH WHO blessed us with the courage to
complete this project. This work would not have been possible without the support and
encouragement of our Marketing Management course instructor Ms. NOOR UL AIN.
We express our gratitude and deep sense of indebtedness for her valuable advices and
encouragement, and for giving us very useful information that helped us in completing
this report.











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Table of Contents

Sr. No Contents Page No.
1 EXECUTIVE SUMMARY 3
2 INTRODUCTION 4
3 SITUATION ANALYSIS 5
4 SWOT Analysis 6
5 MARKET SEGMENTATION 7
6 TARGET MARKET 7
7 PRODUCT LIFECYCLE AND TARGET STRATEGY 7
8 PRODUCT/MARKET PENETRATION 8
9 TYPE OF CONSUMER PRODUCT 8
10 MARKETING MIX 9
11 REFERENCES 16



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EXECUTIVE SUMMARY
The purpose of this project is to develop marketing plan for a product to be newly
launched. The product chosen was "Flavored milk".
In this marketing plan, we have covered Industry analysis, target market, market
segmentation strategies. This report intends to cover most of the aspects of marketing
plan indicated in the outline. The Marketing Mix was discussed in detail and covered all
the budget and promotional strategies to create brand equity in the market and take the
share from the market. The four Ps of the marketing mix were elaborated keeping in
mind the current market trends and the value out product will provide to the consumer.
It will be a high quality distinguished flavored milk charged at a markup price
channelized through distributors/wholesalers to retailers and eventually reaching the
consumer.








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Introduction
The flavored dairy beverage business is poised for unprecedented growth in a category
that previously positioned milk as a commodity rather than a drink. There is a market
growth projection for the flavored dairy beverage business, which encompasses
refrigerated and shelf-stable flavored milks and milkshakes, coffee-milk drinks, dairy-
based drinks, yogurt beverages, smoothies, milk flavorings, hot cocoa mixes.
Innovations in flavors, packaging, and manufacturing, are some of the driving forces
behind new product development. Single-serve bottles, licensed characters, cool flavors,
carbonation, and old-fashioned wholesomeness are making milk and milk-based
beverages the drink of choice for today's healthy lifestyle-seeking, grab-and-go
consumer.
Flavored milk is available in numerous forms and varieties. It can be sold as a powder to
be added to plain milk, such as Nesquik, or bought pre-mixed alongside other milk
products. Some flavored milk products are designed as dietary supplements, such as
Blenders, Horlicks, Nestl Milo, Ovaltine and Instant Breakfast drinks such as Up & Go,
usually include additional vitamins or minerals.








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Situation Analysis
Although there are several techniques and tools which can be used to carry-out a
situational analysis for a particular product, yet we use the C framework and SWOT
for our analysis.
Customer
With calcium and eight other essential nutrients, flavored milk offers the same great
nutrient-rich package as white milk and can help improve overall diets. Kids are in a
calcium crisis, with more than half of children ages 2-8 and three-quarters of
children ages are not getting the recommended daily servings of low-fat or fat-free
milk or milk products. Flavored milk can help close the gap because children prefer
it and will drink more milk when it's flavored.
The core customers of Amigo flavored milk are the individuals between the age
group of 7-22 years old. The youth we are targeting come from households with
incomes ranging from moderate level to high level. Therefore people belonging to
statuses of upper and upper middle class to high class will be able to afford this
beverage.
Competitors
Our product will have both direct and indirect competitors. Direct competitors
include all the existing flavored milks available in Lahore including Owsum, Oolala,
Nesquik, Milo, and Candy-up. Indirect competitors include all other type of
beverages namely Colas, Fruit juices and Energy drinks.



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SWOT Analysis
Strengths
We are offering the flavors which are not currently available in the market.
Attractive plastic bottle packaging.
Good taste.
Healthy ingredients.
Wide variety of flavors.
Weaknesses
Initially we are facing higher packaging cost as we are outsourcing these
operations.
We do not have our own distribution channels.
Chance of setbacks while matching the demand and supply.
Getting to keep the pace with the backward/forward integration will be
difficult in the milk industry.
Opportunities
Expansion of market in the near future.
Launch new flavors like MARS, Tobelerone and Bounty flavored milk.
We can introduce low fat milk to cater health and diet conscious people.
We can segregate our flavored milk into normal flavored milk and extra rich
cream milk.
Threats
Negative product perception of flavored milk.
Due to immature market there is less product awareness.
Entrance of a new and stronger competitor.
Brand wars.
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Market Segmentation
Geographic Segmentation
The geographic regions which our product will be catering are the high income
groups of Lahore, Islamabad, Karachi, Faisalabad, Multan, and Rawalpindi.
Target Market
The core target market of Amigo flavored milk is between the age group of 7-22
years old. The youth we are targeting come from households with incomes ranging
from moderate level to high level. Therefore people belonging to statuses of lower
middle class to high class will be able to afford this beverage.

PRODUCT LIFE CYLCE AND TARGET STRATEGY
Flavored milk market is an oligopolistic market with few competitors. Most of the firms
are charging more or less same price of their product. The smaller brands follow the
market leaders and respond to their price fluctuations rather than their own demand or
costs. Secondly flavored milk is in the introduction stage of the product life cycle. Most
of the people are not familiar with the product. Therefore product awareness is required
for Amigo flavored milk.
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Sales and Profit ($)
Losses investment ($)
0
Sales
Profits
Time
Product
Development
Stage
Introduction Growth Maturity Decline

PRODUCT/MARKET PENETRATION

Market Penetration Product Development
Market Development Diversification
Existing
Products
New
Products
Existing
Markets
New
Markets


Amigos growth opportunities are identified by the Market Penetration, in which the
product already exists in the existing market. As in the case of Flavored Milk which is an
existing product and market is targeted towards growing kids or sportsmen (which was
its existing market) and to the youth and their milk consumption style.
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TYPE OF CONSUMER PRODUCT:
As Flavored Milk is an FMCG (Fast Moving Consumer Good), it will fall under the
category of a convenience product, as convenience products are those which people buy
for frequent use.
Following are the market considerations for Amigo Flavored:
Customer buying behavior Amigo Flavored Milk is included in the impulse
driven buying category. People will not specially plan to go to the store to buy Milo BIG.
Price Markup Pricing.
Distribution Selected distribution, selected locations.
Promotion Mass promotion is needed to gain the customers attention.
Marketing Mix


Marketing Mix is the set of controllable tactical marketing tools that are product, price,
placement and promotion. The firm blends these tools to produce the response it needs
from the target market.


Marketing
Mix
Product
Price
Placement
Promotion
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Product:
Flavored milk is a nutrient-rich beverage providing the same nine essential nutrients as
unflavored milk, including calcium, potassium, phosphorus, protein, vitamins A, D and
B12, riboflavin, and niacin (niacin equivalents).
Our product is the flavored milk which will be introduced as flavored milk with Hi
calcium content.



Flavors
We are introducing it in five flavors including three traditional flavors including
Chocolate, mango and Vanilla, along with two new flavors namely Toffee
and Oreo as these will be the most liked among the rest of the flavors.
Size
We are only launching Amigo flavored milk in 200 ml tetra pack and 400 ml
Plastic bottle.
Packaging
We are packing our flavored milk in tetra pack and 400 ml stylish plastic bottle.
Tetra packaging is usually preferred because health and safety are directly linked
with the packing material used and people are much concerned about it
increases, secondly the shelf life of the milk and lastly it is easy to handle. The
400 ml plastic is introduced keeping in mind all these safety and health issues.
This bottle will be high quality air tight plastic bottle which will be as good as
tetra pack just to cater the people who would like to consume a larger quantity of
milk and are brand and packaging conscious.

Price
Price is the value placed on goods and services. Price is the amount of money and /or
goods needed to acquire some combination of another and its accompanying services.
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The pricing objective of Amigo flavored milk is to capture the market share. This means
that we have to penetrate in to the market by offering a competitive price. Therefore we
will adopt mark up pricing strategy.

Price of 200 ml tetra pack = Rs 25
Price of 400 ml plastic bottle = Rs 40

Price elasticity
Flavored milk is a product with relatively elastic demand, as the buyer will be
highly reactive to price change because there are close substitutes to the product.

Promotional allowance:
We will negotiate with the retail outlets to let us put introductory stalls and
promotional sets to introduce the newly launched Amigo Flavored Milk to the
incoming customers and will then reward payments or price reductions to the
retailers which will be pre-decided because at the end of the day it is the retailer
who has to sell the product to the consumer and if the retailer is not motivated or
incentivized then it becomes difficult to sell the product at retail outlets.
Placement
CHANNEL AND DISTRIBUTION:
The marketing channel which we will also follow for Amigo flavored milk is the
consumer-marketing channel, which involves the producer, the distributor who
is the business partner of amigo, the retailer who obtains goods from the
distributor, and then finally the consumers who will get Amigo Flavored Milk at
the retail stores. It is an indirect marketing channel as it contains intermediary
levels. We are adopting indirect marketing channel because it reduces the:
Transportation cost.
It reduces handling issues.
Thirdly distributors have more links than the manufacturer itself so it enhances
the distribution.
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Once the product is manufactured its consignment will be settled and negotiated with
distributors. The distribution channel that will be followed by Amigo is somewhat a
conventional distribution channel where the retail outlet is independent of the
sales it makes. We will have control over its distributors as they will have a contract that
binds them; consequently they will cooperate, but will have no control over the retailers
so they can charge any price they feel like.

Transportation affects the pricing of products, delivery performance, and condition of
the goods when they arrive- all of which will effect customer satisfaction. The
transportation medium used to deliver Amigo flavored milk to the outlets will be
through trucks. Distributors will be given a margin to work with in order to cover all
their transportation costs, expenses and profit.

Promotion
Our promotion mix of Amigo will be a blend of these two tools.
ADVERTISING:
Our product will be advertised using both ATL (above the line) and BTL (below the line)
strategies. In ATL we will cover electronic media and print media. In BTL we will
advertise through billboards placed in the areas from where most of school going and
college going students past by.
Manufacturer
Wholesaler
Retailer
Customer
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ATL:`
Electronic Media
Print Media
BTL:
Billboards/ Hoardings
Bus Branding





SALES PROMOTION
We will be offering free samples of our flavored milk in schools and colleges in break
time and after school and college times. We will also organize different sports events
and sponsor sports days in SEC a schools and colleges and promote our product by
setting up stalls in the campuses and distributing free packs to the participants.

Electronic media
Tv channels - AAG TV, MTV, THE MUSIK, Play
TV, Geo TV, ARY Music, Cartoon Network, Pogo,
Nickleodeon
Radio Channels- FM 89 & 91
Print media
Newspapers - The News (Disney Page, US
magazine), Dawn, The Nation, Daily Times, Jang
Magazines - Sunday Magazine, S+,

Outdoor Advertisement
Hoarding, bus painting, pole signs, streamers
Promotional material - calender, key chains
Point of sale material - leaflets, broachures,
stickers, posters, standing banners
event sponsorship - matches, concerts, Sport
Events.

Media Mix
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Promotion Budget













Electronic Media
& Print Media
TVC- 30% of the
budget
Radio Spot- 5%
print Media-10%
BTL
Billboards/Hoardings -
15%
Bus Branding + pole
signs + streamers-10%
Teaser Campaign-15%
School / College
Campaigns
School / College of Sec
A class&Event
Sponsorship- 15%
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PROMOTION MIX STRATEGY




Since our product is a newly launched FMCG, thus we will adopt a push strategy.
Incentives will be given to the distributor to sell and sales volume through his efforts
accompanied by the advertisement and promotional campaigns. The distributor or the
wholesaler will then promote the product because they will get more profit margins by
selling our product and thus push the sales up by increasing sales to the retailers. In
order for the distributor to sell more he will have to give incentive to the retailer, thus
giving the benefit to the retailer as well in selling the product. In order for the retailer to
gain that benefit he will be motivated through the incentive received from the
distributor to sell this product to the customer through personal selling. This strategy
devised above will meet many goals of brand positioning, channel strengthening and
increasing market share and create brand equity.





Producer
Wholesaler Retailer
Consumer
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REFERENCES
References
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th
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Dorling Kindersley, India.

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