29421310-knorr-final

Marketing Plan of Knorr PastaMarketing Management CourseApril 08, 2010 Prepared By, Muhammad Tahir khan (2908) Syed Hassan Raza Taqvi Syed Mukarram Hussian Badar Jiwani

Submitted to, Sir Sanatullah

Marketing Management Report on Knorr Pasta

Table of Contents...............................................................................................................................................1Introducing Knorr Pasta..................................................................................1 Term Paper on the Launch Strategy of Knorr Pasta..............................................1 Table of Contents............................................................................................2 Background.....................................................................................................4 About Knorr.....................................................................................................4 Product Concept & Proposition........................................................................6 About Pasta.....................................................................................................6 The Instant Pasta Concept................................................................................6 Target Market Analysis....................................................................................7 Target Segment Identification (Ideal Consumer Profiling)....................................7Demographics......................................................................................................................7 Psychographics....................................................................................................................7 Consumer/Buyer Behavior....................................................................................................7 Passion for Flavor ................................................................................................................4 Key Facts .............................................................................................................................4

Market Potential...............................................................................................8Symbols...............................................................................................................................8 Calculating N ................................................................................................................................8 Determining Q ....................................................................................................9 Determining P ......................................................................................................................9

Competitive Positioning.................................................................................10 Brand Values..................................................................................................10 Positioning Statement.....................................................................................10 SWOT Analysis..............................................................................................11 BCG Matrix....................................................................................................12 Financial Forecasts........................................................................................13 During Test Marketing Period...........................................................................13Test Market Details............................................................................................................13 Socio Economic Classification.............................................................................................13 Test Market Potential .........................................................................................................13 Assumpt i ons .......................................................................................................................13 Pr i ce ..................................................................................................................................13

Post Test Marketing ....................................................................................14 Revenue and Operating Profit Projections.............................................................15Basic Parameters........................................................................................................................15 Forecasted Sales (Units) .....................................................................................15 Forecasted Sales (Rs.).......................................................................................................15 Forecasted Operating Profit................................................................................................15

Pricing Strategy............................................................................................16 Distribution & Sales Strategy.........................................................................16 Background: Knorrs Brand Strategy Today...................................................18 Communication Campaign.............................................................................19 Campaign Objectives..........................................................................................19 Communication Message .............................................................................19 Advertising Strategy......................................................................................20 Electronic Media .........................................................................................20 Press Media....................................................................................................20 Out of Home (OOH) Media...............................................................................20

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Marketing Plan on Knorr Pasta

Activation Strategy........................................................................................21 Out of Home (OOH) Activation .....................................................................21School / College / University Activation......................................................................21 Mall Activation........................................................................................................22 Planet Knorr - Point of Purchase (POP) Activation.....................................................22 Surprise Pasta @ Cineplex.......................................................................................23 Canteen/Cafeteria Branding.....................................................................................23 Branded Mobile Vans...............................................................................................23

Leisure Activation...........................................................................................23

Sales Promotions..........................................................................................24 Consumer Promotion......................................................................................24 Trade Promotion............................................................................................24 Marketing (Communication) Budget..............................................................25Instant Pasta Recipe Contest....................................................................................24


BackgroundThis report forms the launch plan for Knorr Instant Pasta in the Pakistani urban market. The launch plan has been constructed as an academic project for the course titled Principles of Marketing. The plan contains our views on the overall product concept and proposition, the products target market, positioning, communication, distribution, pricing, and a broad based business model that outlines projected financials subsequent to the launch of the said product.

About KnorrKnorr believes in the power of the cooking woman. Cooking is more than just transforming raw ingredients into a dish. It is the creation of flavor into food, which sparks delight into everyday meals. With the power of cooking in their hands, women create relationships and strengthen bonds. This conviction lies at the heart of Knorr's success - it is Unilever's no. 1 brand.

Passion for FlavorA passion for good food goes right back to Knorr's earliest days. The business was formed in 1838, when founder Carl Heinrich Knorr pioneered experiments in drying seasonings and vegetables to preserve their flavour and nutritional value. Since then Knorr has become an international brand offering a wide range of bouillons, soups, seasonings, and other cooking aids that is every cooking womans kitchen partner. Soup is at the heart of good food and good nutrition - and the heart of Knorr. Soup naturally enjoys a healthy nutritional profile, can help consumers increase their daily consumption of vegetables and will help them look good, feel good and keep fit. It is well known, for instance, that people who eat more soup tend to have: A lower Body Mass Index Lower fat intake Lower energy intake per day Better cholesterol values Better nutritionally balanced breakfasts, lunches and dinners Soup is a nourishing dish offering an almost primitive comfort. That is why Knorr will continue to create delicious soups, based on its long experience of producing soups of all kinds and flavors.

Key FactsKnorr is a trusted and popular brand, recognized and appreciated all around the world: It's Unilever's no. 1 brand, with annual sales of more than 3 billion. Knorr products are currently sold in more than 80 countries and it is growing fast beyond its European heartland, particularly in Latin America, Africa, the Middle East and Asia.

Marketing Plan on Knorr Pasta.

Product Concept & PropositionAbout PastaA 1/2 cup serving of cooked pasta (spaghetti) contains a mere 99 calories, less than half a gram of fat, and less than 5 milligrams of sodium. 1 Pasta is high in complex carbohydrates, which helps give us energy. Instead of a quick burst of energy, complex carbohydrates provide a "time release" of energy. Athletes who take advantage of "carbo-loading" eat complex carbohydrates to save up the energy in their body. The carbohydrates become glucose stored in the muscles. The glucose energy is then released when needed during long, tiring exercise, like longdistance running or biking. Pasta comes in many different shapes and sizes. There are simple string-shaped pasta like spaghetti and vermicelli, ribbon-shaped ones like fettuccine and linguine, short tubes like elbow macaroni and penne, decorative fancy shapes like farfalle and rotelle, large sheets like lasagna, and hollow pasta stuffed with filling, like ravioli, manicotti, and tortellini.

The Instant Pasta ConceptToday's consumer has redefined traditional eating. This "on-the-go" generation has created a demand for nutritional pasta that is quick to prepare and portable. In recent years, research indicates that young urban Pakistanis have continued to find lesser and lesser time to actually cook the food they eat, while its demand for tasty and healthy food that can be conveniently prepared at home continues to grow. Therefore, we would like to introduce the concept of Instant Pasta in order to capitalize on this market dynamic. The concept can be described as follows: [Knorr] Instant Pasta is an alternative and faster way to make great tasting pasta in half the time taken to make it using traditional recipes. [Knorr] Instant Pasta comes in a variety of flavors, shapes and packaging. It is very simple to make and the preparation time is very low.


Target Market AnalysisTarget Segment Identification (Ideal Consumer Profiling)After careful analysis of the market as well as consultation with the Knorr brand team, we have identified the following market segment to be targeted as ideal consumers for Knorr Pasta:

DemographicsBuyer Density Age Gender Family Size Lifecycle Stage Minimum Household Income Urban 30 35 Female 4+ Married with children Rs.25,000/Graduate Occupation Housewife/Working Woman Kids/Early Teens N/A Primary/Secondary School Students [Same] 8 15 Male/Female Consumer

PsychographicsBuyer Social Class SEC A1, A2 or B (Middle, Upper Middle, Lower Upper and Upper Upper Classes) Lifestyle Personality Believers Ambitious, trendy Achievers Extrovert, confident [Same] Consumer

Consumer/Buyer BehaviorBuyer Occasion Mostly commonly bought during daily/weekly groceries by the house wife or the chief wage earner. Consumer School lunch break, evening/general snacks, school night dinner (especially when the main course is not liked), alternative to lunch.


Benefits Sought

Great tasting alternative to Good health and great taste in the food that can be already available/unavailable prepared quickly and Food in the house. conveniently which her children would readily eat and thus facilitate her in raising them to the best of her abilities. Regular Buyer Instant Noodles Regular Consumer Instant Noodles

Status Average Usage Rate(s) Loyalty Attitude

6 packs a week Medium Low Involvement, Positive, Habitual

3 packs a week Strong Habitual, Enthusiastic

Market PotentialSymbols1. TMSD: Total Market Segment Demand. 2. N: Number of Buyers in the Market Segment. 3. Q: Quantity purchased by an Average Buyer per Week. 4. P: Price of an Average Unit. Where, TMSD = N X Q X P

Calculating N

? The total population of Pakistan is 160 million, according to unofficial estimates.? The average household size is 5 in the target market segment identified above.2

3

?

Hence, there are a maximum of 32 million households in Pakistan, (assuming that the average household size stays constant across various geographies in the country.) ? According to human development index (HDI) statistics provided by UN, 15% of Pakistani population is below the poverty line i.e. in absolute poverty. ? ? Hence, (100% - 15%) x 32 million yields 27.2 million households across Pakistan The urban and rural split in the countrys population is 35%:65%3

3

Source: Economic Survey of Pakistan, Chapter on

Population


~ Hence,

35% x 27.2 million yields 9.52 million urban households or 9.52 million

urban housewives

Determining QBased upon the buyer and consumer behavior mentioned above, the average units bought per week per buyer is 6.

Determining PKnorr Pasta would be sold at the price at Rs.15/- per unit. The total market segment demand per week i.e. market potential per week is as follows: TSMD = = = NxQxP 9.52 x 6 x 15 Rs.856.8 million

Note: According to estimates received from Unilever, Knorr Noodles currently has 30% share of this potential market.


Competitive PositioningAt Knorr, we want people to enjoy good food, any day, any time. This is why we would like to functionally describe Knorr Instant Pasta as follows: Knorr Instant Pasta is a ready to make, healthy and tasty meal specifically developed for children and teenagers. It is quick and convenient to prepare and comes in a variety of flavors.

Brand ValuesWe intend to communicate what Knorr Instant Pasta should mean to our profiled ideal buyers (i.e. housewives within the targeted market segment) and consumers. It is much more than merely an instant meal. It is a passport to world cuisine, adding new ideas and new twists to old favorites. The challenge is to make our products the healthy choice for consumers without compromising taste, convenience and affordability. Knorrs value statement is as follows: Great food is exhilarating. It elevates us out of the everyday. No matter what your background or cooking skills, we believe that everyone should be able to create an incredible meal without having to spend hours in the kitchen. That's why we've taken some of the world's greatest pastas and put them right in your home - inspired by different recipes that stimulate the senses. Knorr believes that good food matters. It adds untold pleasure to our lives. And everyday meals can be just as magical as special occasions. Food is not just fuel, it really is the glue of life.

Positioning StatementBased upon the above, Knorr Instant Pasta will be positioned in our target market as follows: A food solution that elevates you out of everyday life and provides you the exciting ability to create an incredibly tasty meal without any hassles and thus ensure your familys good health while remaining within your budget.


SWOT AnalysisStrengths~ ~

Weaknesses~

High Brand Awareness Levels (Recall) Association with quality, innovation taste,

Low Brand Salience Levels (Consumers are not really aware of the brands benefits, despite reasonably high recall) Limited Distribution Offering suitable for urban only markets

~ ~ ~

Strong brand heritage. Expanding distribution network. Wider variety of taste offered to the consumers. Health consciousness on the rise in consumers. Opportunities

~ ~

~

Threats~

~

(Net) disposable income has increased over the past few years, thus increasing the consumers purchasing power. Awareness of healthy, hygienic and conveniently packaged food is on the rise. Consumer exposure to foreign Products has also increased.

Influx of other foreign brands in the same category can give rise to sterner competition Frozen foods can curtail the sales.

~

~

~


Financial ForecastsDetailed financial forecasts are enclosed in the attached annexure. These forecast have been made based upon the information provided below

During Test Marketing PeriodTest Market DetailsTest Market Activity Duration Total Test Market Population Average House Hold Size Total House Holds Karachi 6 Months 16,000,000 5 3,200,000

Socio Economic ClassificationSEC A1 A2 B C D E %age of Population 2% 3% 15% 20% 35% 25%

Test Market Potential~ Potential

(Targeted) House Holds: 640,000

AssumptionsTrial Purchase Rate Repeat Purchase Rate Repeat Purchase Frequency 20% 50% Weekly

PricePrice per Package (PKR) 15.00


Post Test MarketingOnce the test marketing stage is over, the average monthly volume for Karachi will be taken as benchmark and the following volume split is expected across the country. City Karachi Lahore Islamabad Fa isa la bad Others Volume %age 50% 30%

20%


Revenue and Operating Profit ProjectionsBasic ParametersAvg. Monthly Vol. (Units) Annual Sales Increase Operating Profit 981,333 10% 40%

Forecasted Sales (Units)Period Test Marketing Year 1 Post Test Marketing Year 2 Post Test Marketing Year 3 Post Test Marketing Karachi 5,888,000 5,888,000 12,953,600 14,248,960 Lahore & Islamabad 3,532,800 3,886,080 4,274,688 Faisalabad & Others 2,355,2 00 2,590,7 20 2,849,7 92 17,664,000 19,430,400 21,373,440 Total

Forecasted Sales (Rs.)Period Test Marketing Year 1 Year 2 Year 3 Post Test Marketing Post Test Marketing Post Test Marketing Karachi 70,656,000 70,656,000 Lahore & Islamabad 42,393,600 Faisalabad & Others 28,262,400 31,088,640 34,197,504 211,968,001 233,164,801 256,481,281 Total

155,443,20 0 46,632,960 170,987,52 0 51,296,256

Forecasted Operating ProfitPeriod Year 1 Year 2 Year 3 Operating Profit (Rs.) 84,787,200/93,265,920/102,592,512/-


Pricing StrategyKnorr Instant Pasta will be priced along the corporate policy of having sustainable and premium profit margins. The average operating margin for all Knorr products sold in Pakistan is 40%. Knorr Instant Pasta will be sold in a single serving pack. Assuming that the Overall Cost of 1 Pack Sold is Rs.10/- we would price Knorr Instant Pasta at Rs.15/- + GST per pack. Customers usually have a reference price in their mind for a particular product and therefore they might compare the price of knorr instant pasta with the price of knorr noodles. Therefore we have priced it for Rs.15 as in knorr instant pasta we have kept a pasta sauce rather than a powder which makes it different from the knorr noodles and also the cost production increases.

Distribution & Sales StrategyKnorr Instant Pasta will be distributed in the market using standard distribution mechanics for all existing Knorr products. Distribution is carried out as follows: 1. The exclusive distributor for Knorr buys from Unilever and sells it to various whole sellers in the target market cities. Since these are high volume sales, per unit margins are relatively low. 2. These whole sellers then sell to retailers at a higher margin but lower volumes. 3. Retailers then sell to consumers. Along with the abovementioned, the Sales Force for Knorr is structured to facilitate the entire process. The structure is as follows: Position Territory Sales Officer~ ~

Role Revenue Target Driven Responsible for a location/area within the targeted city Liaison with retailers Ensuring product placement, availability and merchandizing at POP/POS Liaison between the retailer and whole seller/distributor Responsible for a cluster of territories Managing various territories Personnel Management Conflict Management & Problem Resolution

~ ~

~

Area Sale Manager

~ ~ ~ ~


Regional Sales Manager National Sales Manager

~

Responsible for a collection of areas usually comprising of more than one city. Responsible for the sales within the entire country for the brand.

~


Background: Knorrs Brand Strategy Today Relatively efficient Use of ATL Media: Electronic (min 45 sec TVC to break into the clutter) Radio Ads in selected magazines and Occasionally in Newspaper

Merchandizing activities through: Product placement at Eye Level Strategically designed POS material with particular emphasis on in store branding material particularly buntings

Store Converter Activity: Trial are generated by placing branded Kiosk at outside the selected superstores and shopping malls

Trade Activities: Ensure that Competitive margins are offered to trade in order to retain their interest in the brand Also to maintain maximum trade barriers for new rivals

Marketing Plan on knorr Pasta

Communication CampaignCampaign Objectives Create a strong brand association by means of an emotional theme in communication highlighting the important role the brand plays in terms of care and health of the family. Own a unique position in consumers mind through elaborating the functionality of the product and try establishing the position as in the positioning statement.

Leverage on the brands heritage (Its from Knorr its healthy and gives you happiness because its Premium and unique) Use best practices and techniques for developing greater brand awareness, interest, and trial generation. Maintain consistency in visual presentation to establish strong brand recognition.

Communication MessageSee: Positioning Statement


Advertising StrategyAt the launch phase, emphasis should be placed on BTL marketing activities that will be supported by ATL at the follow-up stage.

Electronic Media? A slice of life TVC for 45 seconds will be developed to thematically portray the positioning statement in a creative and engaging manner. ? ? ? Subsequently, shorter adaptations of the TVC will be developed. The TVC will also be adapted into a radio commercial. Radio will also be used to deliver branded content via content sponsorships

Press Media? ? The electronic media will be adapted visually The headline will come from the creative idea used for the TVC

? The body copy will be formed using the positioning statement and adapting it to the creative idea ? The Knorr tagline will be retained as is.

Out of Home (OOH) Media? ? Billboards POP/POS Material


Activation StrategyOut of Home (OOH) ActivationSchool / College / University ActivationVarious leading educational institutions i.e. schools, colleges and universities in major cities will be activated for infusing product awareness as well as generating trial. Product awareness will be given via a branded kiosk/stall placed inside the cafeteria/near the tuck shop. The kiosk attendant will be responsible to educate potential customers as well as generating interest and desire while inducing trial. A non exhaustive list of educational institutions where the activation will be conducted is as follows: Karachi~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Karachi Grammar School Beacon House School System The City School Foundation Public School Aga Khan Higher Secondary School DA Degree College Baharia College Institute of Business Management Institute of Business Administration FAST NU Baharia University SZABIST Iqra University Top 3 Secondary Schools Aitchison College Lahore University of Management Science (LUMS) Lahore School of Economics (LSE) National College of Arts (NCA) Top 3 Secondary Schools Top 3 Colleges Top 3 Universities

Lahore

~ ~ ~ ~ ~

Islamabad

~ ~ ~


Mall ActivationThe activation of educational institutions will be replicated at various shopping malls across the city. Along with awareness and trial objectives, interest in the products offering will be enhanced through various competitions, games and prizes. This activity will be conducted at the following venues: Karachi~ ~ ~ ~

Park Towers Forum Millennium Mall Dolmen Mall Pace HKB Fortress Stadium M. M. Alam Road Jinnah Market

Lahore

~ ~ ~ ~

Islamabad

~

Planet Knorr - Point of Purchase (POP) ActivationPOPs of super stores and super markets will be activated using Knorr. The details are as follows: A particular segment of the Super Store will be dedicated as would have: an idea called Planet Planet Knorr, which

? A branded wall to give it a creatively distinct look from its surroundings ?A store converter an educated and pleasant female promoter that will pitch to every (potential) consumer that ventures to that particular area. She will inform them about the product, induce tasting, and persuade for trial purchase by attractive introductory/ discount/special price offering.

? Electronic Screens in Super stores that run the TVC for Knorr Instant Pasta. ? ?Floor graphics/Direction stickers at super stores / supermarkets directing to planet Knorr for an attractive offerings. Attractive POP to be placed at strategic locations of all the major outlets. These would include lamas, shelf talkers and wobblers.

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Leisure ActivationSurprise Pasta @ CineplexPotential consumers visiting Universe Cineplex, Karachi will be tapped using the branded kiosk approach. However, the difference here is that there will be no sampling. However, Knorr Instant Pasta will be served in a pre-cooked form on a per serving basis. Furthermore, an unannounced lucky draw will be conducted at every shows interval and the winners will receive a free serving of Knorr Instant Pasta.

Canteen/Cafeteria BrandingCafeterias/canteens and tuck shops of selected schools/colleges/universities will be activated via branding using the communication campaigns visual adaptations. Furthermore, since Knorr Instant Pasta will be served at these venues at subsidized prices, it is likely to generate greater trial and repeat purchase.

Branded Mobile VansDuring the test market stage, branded Vans will be deployed in targeted areas near offices (e.g. II Chundrigar Road, Shahrah-e-Faisal, etc) during lunch hours, near parks (e.g. Nisar Shaheed Park, Hill Park, Sea view, Race Course Park etc) during peak hours, to serve Knorr Pasta at introductory prices.

*


Sales PromotionsConsumer PromotionInstant Pasta Recipe ContestPost launch, a press and radio driven consumer promotion will be designed to invite consumers to share their own innovations and customizations to Knorr Instant Pasta Recipes. Consumers will be asked to share their recipe for a variation of Knorr Instant Pasta. The recipe will be sent along with 2 used packages of Knorr Instant Pasta and a copy of the consumers CNIC. The first prize would be Rs.100,000/- along with recognition in the form of the recipe being printed on the packaging along with the customers photo (if they so desire).

Trade PromotionRetailers will be provided a lot of branding and merchandizing material including customized dispensers. Also, tiered trade discounts will be given to retailers to increase their off take vis--vis Knorr Instant Pasta. The trade terms will not simply be 2 N net 30. However, a special trade discount structure during the launch period will comprise of: X N net Y Where, X 2% 3% 4% Price ceiling: Y 30 days 25 days 20 days


Marketing (Communication) BudgetThe launch year marketing budget is as follows:

Knorr Instant Pasta Launch Budget - Marketin g Communications 105,984,0 Ceiling 00 Advertising Television Production Cost Media Subtotal Radio Production Cost Media Subtotal Newspaper s 0 0 0 0 Magazines Production Cost Average Tariff Media Subtotal Out of Home Billboards Merchandizing Subtotal 0 0 0 20,000,00 10,000,00 30,000,00 0 0 0 15,00 75,00 750,00 0 840,00 7,365,00 15,00 350,00 7,000,00 0 0 200,00 2,000,00 0 2,200,00 0 0 0 10,000,00 40,000,00 50,000,00

Production Cost Average Tariff Media Subtotal


sales Retailers cost trade promotion disc of cups and spoons 2% amount given to each institution Subtotal 14719995 stall If 255146.58 Subtotal disc 4% Subtotal sales 588799.8 cost of cups and spoons cost of putting up a stall Activation Subtotal school/college/university 47250 28350 for putting up a 14175 mall activation 303750 182250 50000

14464848.2 14131195.2

61425

536000


ConclusionThis report outlines the marketing plan for Knorr. With existing demand for Knorr products presently met by minor competition in the form of independent Pasta, this report puts forward the viability of launching the Knorr range of products in various flavors. Taking into account the absence of any existing brands in the market this report presents growth potential and profitably in serving this untapped market.

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29421310-knorr-final

Documents

ideal consumer

knorr instant

instant pasta

knorr pasta

market potential

market segment

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planet knorr