THE MARKETING PLAN: HOT- EDGE KNIFE PDF

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THE MARKETING PLAN: HOT- EDGE KNIFE Submitted by: Aishwarya Sagar P36095 Mayank Pratap Singh P36130 Prakhar Ranjan P36130 Shefali Gupta P36155 Suvish S P36168 Tony Thomas P36170 Contents 1. EXECUTIVE SUMMARY................................................................................................

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THE MARKETING PLAN: HOTEDGE KNIFE Aishwarya Sagar

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THE MARKETING PLAN: HOTEDGE KNIFE

Submitted by: Aishwarya Sagar P36095 Mayank Pratap Singh P36130 Prakhar Ranjan P36130 Shefali Gupta P36155 Suvish S P36168 Tony Thomas P36170

Contents 1.

EXECUTIVE SUMMARY................................................................................................................. 1

2.

SITUATION ANALYSIS ................................................................................................................... 2

3.

ANALYZING THE ENVIRONMENT ............................................................................................. 4

4.

ANALYZING COMPETITION ........................................................................................................ 6

5.

CONSUMER BEHAVIOUR .............................................................................................................. 7

6.

MARKET SEGMENT...................................................................................................................... 11

7.

DEMAND ESTIMATE..................................................................................................................... 11

1. EXECUTIVE SUMMARY "We are in a brilliant age for margarine utilization", specified TIME magazine in its January, 2014 release. To be sure the worldwide situation has seen an expansion by a wide margin in the utilization of margarine throughout the years. As per a report by the American Butter Institute, in 2013 spread utilization in the US came to its most abnormal amount. Indian situation has been comparable with normal spread utilization having a 6% Year-on-Year development since 2001. The expansion in utilization has been the aftereffect of an adjustment in customer inclinations towards basic, all-common margarine as a spread and cooking fixing, far from 'spread like spreads'. In India, the normal family unit and their reliance on spread has been satisfied for a considerable length of time by organizations like AMUL. Amul has charmed the Indian buyers with their slogan of 'Totally Butterly Delicious Amul. In India, spread is viewed as the best element for breakfast and is considered as a corresponding item with bread. Then again, there are a few circumstances which makes the use of a staple item like margarine an issue. The frosty, solidified margarine turns into a strong spread which is hard to spread on the bread and brings about tearing the toast to spreads. This provoked us to continue with the production of an electronic buttering blade which makes spreading icy solidified margarine simple. We began building our item 'Hot-Edge blade' by investigating the needs of the consumers. We started with the situation analysis in terms of market need identification in segmenting the consumers on the basis of usage and their purchasing power.

2. SITUATION ANALYSIS a. Market need Identification In India, the average household and their dependency on butter has been fulfilled for decades by companies like AMUL. The late entry of such big FMCG companies into this segment signifies the lucrativeness of this market. In India, butter is regarded as the best ingredient for breakfast and is considered as a complementary product with bread. According to Amul's Vipul Mittal, "The consumption of butter has improved significantly in smaller towns, as increase in income levels has created a whole new class of butter consumers in the country. Then proliferation of refrigerators at home and improvement in availability of cold chain in the country has also led to spike in butter consumption in the country." The middle-class professionals working in cities prefer a quick and healthy breakfast and bread-butter can do it well. However, there are some situations which makes the usage of a staple product like butter a problem. The cold, frozen butter becomes a solid spread which is difficult to spread on the bread and results in ripping the toast to spreads. This prompted us to proceed with the manufacture of an electronic buttering knife which makes spreading cold frozen butter easy.

Have you faced trouble trying to apply butter on bread after taking it out of refrigerator and it happens to be frozen? 7, 9% Never.. I'm too hot for the butter to stay frozen Yes! And its irritating!

75, 91%

Source: Household Survey Would you like to own a Knife having selfheating capabilities in its blade? Imagine you press a button and the knife-edge starts getting heated up by itself?

NO! 14, 17%

68, 83%

YES! Exactly what I was looking for...

Source: Household Survey From the survey data, it gets clear how much is the necessity of this new product line. Majority of people are irritated and require such kind of product. b. Market Summary India is by far the largest producer and consumer of butterfat: on a per head basis consumption is 3.5kg/ head, just below the EU average but more than in the US at 2.2kg, and growing by around 7% a year. Both FAPRI and FAO/OECD forecasts tip butter demand to grow faster than any of the other main dairy products, almost all down to growth in India, and world

trade is also expected to grow, by l%-2% a year. Amul has wooed the Indian consumers with their tagline of ‘Utterly Butterly Delicious Amul’. Recently, Nestle entered the butter market, and Britannia also dipped its finger into the butter dish. Taking into account the facts mentioned above, there is a growing need to make the butter spreading easier. No other product like “Hot-edge knife” exists in the Indian market. Hence, launching this new type of product to pacify an immediate need, will attract our target segment. c. Product Characteristics Product looks like an ordinary knife having an insulated handle. The cutting edge of the knife will contain a heating coil made of tungsten which will produce minimum amount of heat required to melt the butter to a semi solid state. There will be a pushbutton switch on the handle to turn the heating ON/OFF. Position of the switch will be at a place where the thumb lies through natural handling of the knife. Next to the switch will be an LED indicator which will glow when the switch is on and turn off when the switch is off. The entire product is water sealed so that water doesn’t enter the electrical circuit. With an ergonomic design and ease of usage the product can become revolutionary.

Prototype of Hot-edge knife

3. ANALYZING THE ENVIRONMENT

The PESTLE environmental forces which affect our firm and product are as follows-

 Political forces:

Government policies with respect to competition policy, employment laws, orientation towards privatization and liberalization, regulatory framework and taxation policy affect a firm significantly. The current government of India and Gujarat state government are perceived as business friendly. The ‘Make in India’ campaign is aimed reducing entry barriers for the international and national firms in Indian market and to make favorable climate for firms to do business in India. This will lead to increase in competition and will affect the prospects of our firm in future in terms of potential competitors, market share and profitability.  Economic forces:

Growth forecast for India in FY 2016 is as followsInstitution World Bank Government of India Reserve Bank of India

Growth forecast for India in FY 2016 7.3% 7.6% 7.4%

If we consider the most pessimistic forecast i.e. of World Bank and take some safety factor and consider a figure of 7% for growth forecast for India in FY 2016 then the disposable income of our target segment is bound to increase. When the disposable income of a household increases then it spends the additional income first to fulfill necessary needs and then on things which enhances living status or convenience and the rest of the income goes to saving. Our target consumer is likely to have its necessary needs fulfilled already and is likely to spend a part of increased disposable income on convenience items. Hence the economic forces are favorable for our firm.

Average Butter Consumption 6000 5000 4000 3000 2000 1000 0

20.00% 15.00% 10.00% 5.00% 0.00% 1

2

3

4

5

6

7

8

9

Domestic Consumption

10

11

12

Growth Rate

Figure: Average butter consumption in India – YOY basis  Sociocultural forces:

13

14

15

16

As we discussed in economic forces, good economy prospects will bring more people under the influence of globalization and as the disposable income of people will increase it will affect their lifestyle and dietary habits. This will lead to increase in consumption of items like milk, butter, ice-cream, paneer etc. So there is potential of increase in market demand of our product which will in-turn result in increased demand of our product in the market.

 Technological forces:

There is possibility of some disruptive innovation in the field in which our firm is targeting to operate. E.g. there is a firm in United Kingdom which manufactures a knife (Named ‘Spread that’) which transfers the body-heat of user to the knife and uses it to spread the butter. If such technologies become cost effective for the end-user then they have the potential to disrupt our market. So our firm needs to keep a check of the technological innovations taking place in the world and try to innovate better than them.  Legal/Regulatory framework:

Legal/Regulatory framework set the rules of the business. An unfavorable regulation can make a firm go out of business pretty quickly or a favorable regulation can make it an overnight success. India’s ranking in World Bank’s ease of doing business list has improved from last year’s 142 to 130 this year. Similarly the rank in starting a business has gone up to 155 from last year’s 155. This shows that legal and regulatory framework in the country is moving towards more favorable direction for businesses. This can affect our firm in two waysa) It will be easier for our firm to establish business in India and do it comfortably without worrying much about legal/regulatory framework. b) Business enabling legal/regulatory framework will make the entry of potential competitors easier in to our target market. Hence there are always chances of a new competitor entering the market and reducing our market share.  Environmental forces: Today’s consumers are aware and conscious about the environment. Firms who are perceived as damaging environment face flak from the customers. So our firm will need to adapt eco-friendly measures e.g. reduce the use of raw materials, reuse the inputs if possible and recycle the used products. The firm will also have to take care of small things like minimal packaging which can result in eco-friendly operations.

4. ANALYZING COMPETITION Any firm’s product which provides similar benefits as our product is our direct competitors. Right now in our domain area we have no direct competition for the “HOT-EDGE KNIFE”. It is going to be one of a kind product and could prove to be a breakthrough in the

coming time. What we are concerned with is the indirect competition and are targeting the similar functions in different products. They are the real challenge. But in doing the market research we have found out that there is perfect competition in the field of Knives and there is a huge capability in some present competitors who could advance with time to emerge as market competitors. The ones having already established a niche in the field of utensils and knives are behind us owing to the product innovation. The difficulty they may face is to catch up with us with time. What we are offering is a product that is ready to be distributed in the market. So, we are bound to have first mover’s advantage in the market of Ahmedabad, Anand and Baroda districts. Also, with no other product in the market of this kind, we believe that it will bring the competitors on their toes with a rich response from the people. And then they could be in problem of responding quickly to the market. In the long run, with a fruitful response, there won’t be any monopoly and the competitors will either better their product or launch a new line to match ours. Probably treatment of butter in winters could be done more efficiently. This is probably the logical thing expected from the market. In the short run, the changes depend on the success and popularity of our product. It could lead to a panic and launching of similar products from others. We will also need to map the trends in this field, if any, and act accordingly. To successively map the product and its growth, we can map the reactions of people towards the product and improve the features of this product likewise. Also, we need to highlight the outstanding feature of the hot-edge and its working. We need to illustrate it and probably some nice advertising campaign in the future might be the way to go. This could be done by dropping leaflets through the cafes and butter outlets in the city, like Amul cafés could be targeted.

5. CONSUMER BEHAVIOUR

a) Macro level Customer

Direct Customers

Resorts,Hotels Other Customers

Influencer/ Advisor Organizations

Cafes,Snack Bars,Hostel Mess

Retailers Shops,Super Markets

End User House Wives

Chefs Purchasing Agent Family Members

Purchase Decision Map

Identifying the Macro level customer is the prime task in gaining insights about the customer in the market arena for our product. The Purchase decision map has been provided to identify different sorts of entities at macro level. We have brainstormed three potential influencers which includes chefs in leading resorts and hotels which has the power to influence in decision making and purchasing agents of super markets which actually involves influencing the needs of the customer as well as family members that may pursue house wives to buy one. Out of the whole customers the main customers is the hotels and resorts as well as the retailers which include supermarkets and shops that may influence various guests and customers who visit them to get the product for themselves. The end user which is the house wife and it holds the target segment as it constitutes the major share of the product to be sold.

1. Purchase decision process Purchase Decision step

Questions asked

Recognizing problems

How do these customers recognize the problem that a purchase will solve?

Acquiring information

What sorts of information the customer seek

Evaluating alternatives

How do these customers evaluate alternatives

Post purchase processes

What sorts of decision these customers make after purchase?

Behaviour of customer type Resorts

Retailer

House wives

Guests discomfort handling butter during dining Handy, quality, visually appealing Battered butter

Need of the customers during winters

Rush hour breakfasts

Quality and market demand

Quality ,lifetime and utility

Oven

Introducing Hot edge to the guests

Highlighting the product as new technology

Oven and heating butter in stove Replace normal knives

After identifying different customers in the purchase decision. We have tried to identify the customer type for the purchase decision and walk through their buying process. To identify the

most important macro level customer type we have supplemented the secondary data which is the survey to narrow down to that particular target customer type. By this process we have identified that the resorts, hotels and retailors are our direct customers whereas the house wives is the indirect customer which we need to concentrate upon to increase the sales volume. The customer insights learned needs to be narrowed down to house wives and their needs. The purchase decision process has given insights about the macro level customer to study upon.

b. Roles in the purchase decision process Name Mother,Father,Children Father Neighbour- takes three cruises annually Mother Live in housekeeper Family members Friends ,Neighbours, Chefs Children

Role in the decision process (B2C Consumer) User Buyer Coach Decision Maker Gate Keeper Influencer Information Provider Specifier

We have narrowed down to our most important macro level customer type. Now we have identified the roles in the decision process of the customer house wives or mothers. The family members have high degree of influence on the decision process. The most important segment to target here is the decision maker, buyer and the information provider which comes under the general population. Of course, many purchases decisions are made not by individuals but by groups of individuals acting together so the marketing plan needs to be oriented to the whole family.

c. Benefits and values for customers

Consolidated required customer benefits (needs) list 1. Well-designed knife with quality metal 2. Proper heating of the knife edge 3. Battery life 4. Comfortable button position to hold while use 5. Good grip

In this we have identified the benefits and values for the macro level customer. We have brainstormed the benefits and values required in general by customers in market. These benefits listed are functional, psychological and economic. After brainstorming the list has been narrowed down to the five benefits which we believe will influence the consumer behaviour and his buying patterns. The overall demand narrows down to quality as an important benefit which needs to addressed in the first part.

d. The Features/Benefits/values ladder Features/attributes and work up the ladder Quality Long life Proper heat transfer to cut butter Good grip Well-designed knife with quality metal

Customer values Benefit 3 Benefit 2 Benefit 1 Features/attributes/values

Values and work down the ladder Recognized need satisfaction Utility of a knife Proper heating for cutting Long battery life Quality assurance

The Values ladder has helped us to think deeper about the customer benefits/values in the previous exercise. We have obtained a greater insight on addressing the needs of the customer which would influence their behaviour. We have narrowed down to quality and the utility of the product. The knife should cater the basic uses of a normal knife with additional benefit being a butter knife also such that the macro level customer is prompted to replace their normal knives for our product hot edge. To ensure it the quality needs to of high standards, design should be really appealing and cost effective. e. Economic Value for the customer

Maximum price of the knife

350

Negative differentiation value 200

Positive differentiation value Total Economic value

60 Reference value

0

ILLUSTRATION OF ECONOMIC VALUE TO THE CUSTOMER

The economic value for the customer is one of the most important factors which is the first criteria a customer uses to evaluate the product psychologically. The economic value needs to be cost effective and needs to be take care of the market competitors. The reference value which is the price of a normal knife which is the most directly competitive product is around...