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COMSATS INSTITUTE OF INFORMATION & TECHNOLOGY

PROJECT REPORT Topic: Marketing Strategy for Failed Product Youngs Foods KETCHUP

Group Members: Tariq Yousuf Sana Munir Midhat Batool Atif Talal Lodhi Irfan Zafar Chishti

Submitted to: Ms Aziza Munir

TABLE OF CONTENTS
COMPANY INFORMATION................................................ .............5
BOARD OF DIRECTORS ................................................. .........................5 COMPANY SECRETARY ................................................ ..........................5 AUDITORS ................................................................... ..............................5 REGISTRAR ........................................................................................ .......5 BANKERS.................................................................................. ...................5 AUDIT COMMITTEE ........................................................... .....................5 CHIEF FINANCIAL OFFICER ................................................. ................5 COMPANY MANAGEMENT ......................................... ...........................6

Vision and Mission statement............................................................ ..7


Vision Statement........................................................... ................................7 Mission Statement:.................................................................................... ....7

Companys Product List........................................................ ..............8


Spreads....................................................................................................... ....8 Condiments............................................................................................ ........8 Spreads:............................................................................... ..........................8

Product Failure................................................ ..................................14 Failed Product of the Youngs Food Company.................................15


Current position of the company .................................... ..........................15 Introduction........................................................................................ .........15
Methods of Portfolio Planning...................................................................16 BCG Matrix of Young food.........................................................................18

Marketing Strategies:....................................................... ..........................19


Marketing Strategy Adopted by Youngs Food Company:..........................19 Growth Strategy:..........................................................................................20 Market penetration......................................................................................21 Market development....................................................................................21 Product development...................................................................................21 Diversification..............................................................................................22 Our Proposed Marketing Strategy:.............................................................23

COMPETITORS AND CONSUMER ANALYSIS:.........................24


COMPETITORS:........................................................... ............................24 Competitors Actions over New flavors:........................................... .........24 Competitors Actions over Advertisements: ............................. .................25 Competitors Actions over Use of New Technology:.................................25 Consumers............................................................................... ....................26
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Satisfaction................................................................... ...............................26 Attraction through Advertisements: .............................................. ...........26

Business Feasibility:................................................................ ...........28


Business Feasibility of applied marketing strategy:.................................29

Recommendation and Conclusion....................................................30

Corporate Philosophy
We believe that our organization is responsible to our Creator, our People and our Business Partners. We are dedicated to provide our customers with Halal and Healthy food products that are fresh and continually improving in Hygiene, Nutrition, Taste and Convenience. We pledge to contribute to the betterment of environment and culture in the communities where we produce and distribute our products. Beginning... Present... & Future Young's (Private) Limited formerly Young's Food Products was established in 1988. In the beginning we introduced Mayonnaise, Soy Sauce, Chilli Sauce and Vinegar. The first ever commercially produced and distributed Chicken Spread was launched in 1989. The Young's brand family continued to grow with the introduction of Sandwich Spread, Chocolate Spread and Natural Bee Honey. Young's brand has also proved its dynamism with the launch of Tomato Ketchup. We are thankful to the millions of consumers who have reposed their confidence in our products and continue to give us patronage since our beginning in 1988. Today we enjoy brand leadership and a strong distribution network across 125 towns in Pakistan. We also have presence in Bangladesh, Oceania, The GCC Region, Africa, Europe and North America. Plant Outline Young's (Private) Limited 3

Location : Karachi Pakistan Covered Area Facilities : Over 100,000 square feet Number of Employees : 350 approx. Main Products : Mayonnaise, Chicken Spread, Sandwich Spread, Natural Honey, Soy Sauce, Chilli Sauce and Tomato Ketchup. Facilities available for the Private Labeling to customer specification.

COMPANY INFORMATION
BOARD OF DIRECTORS
Chairman Managing Director / Chief Executive Directors

COMPANY SECRETARY AUDITORS REGISTRAR BANKERS


Bank AI-Habib Limited United Bank Limited Citi Bank NA, Muslim Commercial Bank Limited, Habib Bank Limited REGISTERED OFFICE 12/CL-6, Claremont Road, Civil

AUDIT COMMITTEE
Chairman Members

CHIEF FINANCIAL OFFICER


Director

COMPANY MANAGEMENT
Chief Executive General Manager Corporate Finance General Manager Finance General Manager Trade Marketing Executive Manager Human Resource Executive Manager Inventory & Logistics Executive Manager Procurement Executive Manager Engineering & Development Manager Production & Process Development

Vision and Mission statement

Vision Statement
To be a leader and take advantage of our leadership position in all food product categories.

Mission Statement:
To deliver consistent quality to our customers using pure ingredients, authentic recipes and the best available technology, to maintain close and direct contact with our customers through consumer insights and dedicated service, and also, to promote professionalism at all levels through education, training and development of human resources.

Companys Product List


The Companys Products are divided into two broad categories:

Spreads Condiments

Spreads:
Young's (Private) Limited Spreads represent the fast-paced lifestyles that demand convenience of usage, energy of wholesome natural ingredients, great taste and quick serving all in one food item. The French brand represents a range of tantalizing and mouth watering spreads for everyone.

Mayonnaise Young's French Mayonnaise is an ideal taste enhancing dressing for salads, burgers and sandwiches. Available in glass jar of 250 ml (8 oz), 300 ml, 500 ml (16 oz), 925 ml (32 oz). Also in stand up Pouch of 1 kg and 500 gms.

Honey:

Young's Natural Honey is 100% pure natural honey, collected through Australian honey bees fed on the nector of a variety of flowers. Available in Acacia, Citrus, Sidr and Swat varieties packed in glass jar of 250 gms and 500 gms.

Sandwich Spread:

Young's French Sandwich Spread is prepared from high quality vegetables and Young's French Mayonnaise. Available in 300 ml and 500 ml glass jar.

Chicken Spread:

Young's French Chicken Spread is a unique blend of delicious Young's French Mayonnaise and Halal, Healthy Chicken that offers convenience and nutrition for quick preparation of highly delicious chicken sandwiches. Available in 250 ml, 300 ml, 500 ml & 925 ml glass jar.

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Condiments:
Condiments Products are for the food connoisseurs who demand a home cooked full range of traditional Chinese, Oriental and Western dishes and also have all the time to relish the rich mouth-watering aroma, appetizing and enticing smooth texture and presentation in the comfort of their homes. Our brand offers appetizing and convenient range of cooking supplements for food lovers.

Pickle:

Young's Shangrila Pickle are prepared from superior quality vegetables, mangoes and spices, preserved in Mustard oil and Vegetable oil. Available in Mixed Vegetable, Mango, Garlic, Lemon and Chilli flavors.

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Tomato Ketchup:

Young's Shangrila Tomato Ketchup provides an ideal relish for use with all types of foods especially fried and broasted foods. Available in 315 gms glass bottle, 10 gms portion pack, 100 gms sachet , 500 gms (Stand up pouch) and 1kg (Stand up pouch) aluminum foil packs.

Soy Sauce Young's Shangrila Soy Sauce is prepared by natural brewing of soybeans wheat and salt. It serves as an ideal marinating and enhancing agent for meat, chicken and fish. Available in 120 ml, 275 ml, and 750 ml glass bottle.

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Chilli Sauce:

Young's Shangrila Chilli Sauce (Hot Sauce) is Prepared from the pulp of finest hot chillies of the Pakistan Dandicut variety. This Hot Sauce further enhances the taste and aroma of Bar-B-Que, Mexican, Asian and Continental food. Available in glass bottle of 120 ml, 275 ml and 750 ml.

White Vinegar:

Young's Shangrila Synthetic White vinegar prepared according to wellestablished hygienic standards is consumed lesser in quantity to achieve the desired results as compared to other synthetic vinegars due to its premium quality.

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Product Failure
Roughly speaking, the product failures results due to following basic causes: Product concept, Product design and implementation, Product competitive positioning, Product value proposition Product messaging, Product distribution, Product servicing, Product repeat purchase, Product cross selling, External events.

Generally, this is a product that has had no success in obtaining any or paying customers. A number of excuses are believed to be true. The economy is down. People are not buying. Sales cycles are longer than we thought they would be. The product normally faces numerous larger and more established competitors. Potential Solution There are few solutions for this type of product if the product has been built without market research to figure out what causes people to write checks quickly. The fundamental problem here is that the product concept was probably wrong, the attractiveness of the market was misjudged. No or poor competitive analysis was performed. If there is an opportunity for this type of product, it will typically require: Better understanding of why customers are not buying. Better understanding of market segmentation. Better understanding of what value is for each segment.

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Failed Product of the Youngs Food Company


The failed product of Youngs Food Company is Tomato Ketchup. According to our perception, the reason of failure is due to the lack of variety in the brand. As Tomato Ketchup is coming only in one variety, that is plain ketchup, and the companys competitors are offering many new varieties like hot chili, chili garlic, In this report, we are going to describe their failed marketing strategy and then we are going to make our marketing strategy which is helpful for the company.

Current position of the company


We are going to determine the current position of the company by using the BCG Matrix.

Introduction
The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities. The company must: Analyze its current business portfolio and decide which businesses should receive more or less investment, and Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained.

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Methods of Portfolio Planning


The two best-known portfolio planning methods are from the Boston Consulting Group (the subject of this revision note) and by General Electric/Shell. In each method, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organized. The Boston Consulting Group Box ("BCG Box") Using the BCG Box (an example is illustrated above) a company classifies all its SBU's according to two dimensions: On the horizontal axis: relative market share this serves as a measure of SBU strength in the market On the vertical axis: market growth rate - this provides a measure of market attractiveness By dividing the matrix into four areas, four types of SBU can be distinguished: Stars - Stars are high growth businesses or products competing in markets where they are relatively strong compared with the competition. Often they need heavy investment to sustain their growth. Eventually their growth will slow and, assuming they maintain their relative market share, will become cash cows.

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Cash Cows - Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars. Question marks - Question marks are businesses or products with low market share but which operate in higher growth markets. This suggests that they have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors. Management have to think hard about "question marks" - which ones should they invest in? Which ones should they allow to fail or shrink? Dogs - Unsurprisingly, the term "dogs" refers to businesses or products that have low relative share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.

Using the BCG Box to determine strategy Once a company has classified its SBU's, it must decide what to do with them. In the diagram above, the company has one large cash cow (the size of the circle is proportional to the SBU's sales), a large dog and two, smaller stars and question marks. Conventional strategic thinking suggests there are four possible strategies for each SBU: 1. Build Share: here the company can invest to increase market share (for example turning a "question mark" into a star) 2. Hold: here the company invests just enough to keep the SBU in its present position 3. Harvest: here the company reduces the amount of investment in order to maximize the short-term cash flows and profits from the SBU. This may have the effect of turning Stars into Cash Cows. 4. Divest: the company can divest the SBU by phasing it out or selling it - in order to use the resources elsewhere (e.g. investing in the more promising "question marks").

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BCG Matrix of Young food


The current position of the young food company lies in the star because there is healthy competition due to this reason market growth rate is high and market share is also high.

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Marketing Strategies:
The Company adopts various marketing strategies in an order to maintain a good position in the market. These strategies are: BCG Matrix Growth Strategy GE Matrix Harvesting Divestiture Focus Strategy Cost Leadership Differentiation

Marketing Strategy Adopted by Youngs Food Company:


The marketing strategy applied by the Youngs Food Company for their product, Tomato Ketchup, is a Growth Strategy. The general features of Growth Strategy are described below:

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Growth Strategy:
The Growth matrix is a tool that helps businesses decide their product and market growth strategy. The Growth Matrix suggests that a business attempts to grow depend on whether it markets new or existing products in new or existing markets. The output from the market matrix is a series of suggested growth strategies that set the direction for the business strategy. These are described below:

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Market penetration
Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets. Market penetration seeks to achieve four main objectives: Maintain or increase the market share of current products this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling Secure dominance of growth markets Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors Increase usage by existing customers for example by introducing loyalty schemes A market penetration marketing strategy is very much about business as usual. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.

Market development
Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets. There are many possible ways of approaching this strategy, including: New geographical markets; for example exporting the product to a new country New product dimensions or packaging: for example New distribution channels Different pricing policies to attract different customers or create new market segments

Product development
Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and

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requires the business to develop modified products which can appeal to existing markets.

Diversification
Diversification is the name given to the growth strategy where a business markets new products in new markets. This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risk. Under Growth Strategy, the Youngs Food Company has applied the Market Penetration Strategy. The company has applied the marketing strategy to maintain or increase the market share of Tomato Ketchup. They applied various competitive pricing strategies, advertising, and sales promotion.

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Our Proposed Marketing Strategy:


We propose that if the Company applies Product Development Strategy, they can improve the sales promotion of the product. The ketchup or sauce of their company got failed due to fewer flavors in this category. By product development strategy; in which existing product is being developed and launched in its already catered market, the categories of ketchup which are being launched as a new flavor in this product, company can also be successful in retaining number of consumers in this section too. As the company is having a huge sum of regular consumers in the category of Mayonnaise, bread spread and its categories, so this product can also take place in consumers sense of taste. It requires a lot of cost for the launch of new flavors, but up to and estimate with having many consumers they are able to cover their cost. This can be done by launching new flavors in the product brand. The Company should introduce flavors, like Tomato Ketchup Chili Garlic Sauce Chili Ginger Sauce Imlay Sauce Mexican Salsa Mango Chutney Cooking Paste

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COMPETITORS AND CONSUMER ANALYSIS:


COMPETITORS:
After launching the new flavors in the existing brand product, the competitors behavior is very important. So competitors are being analyzed after the change in the product of one company. Competitors dynamics are taken in consideration, which includes the total set of actions and responses taken by all firms competing within a market. The responses and actions of competitors can be described by the factors below:

Competitors Actions over New flavors:


After launching the new flavors, competitors become dreadful about the new entry of product in market. They develop the feeling of consciousness that they might lose their customers. This means competitors have the idea that their consumers get diversified toward that particular product. Every consumer wants a change in their taste, so they are always looking for the new product.

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Competitors Actions over Advertisements:


Once consumers have in their mind that a product is number one, it is extremely difficult for any other product, even if superior, to take over that number one position in consumers mind. But after watching an attractive advertisement, consumers get tempted to buy that product. Even if there are regular consumers of youngs foods competitors, still those consumers might take a trial of new product just because of being attracted by the advertisement.

Competitors Actions over Use of New Technology:


As the technology is in advancement mode and many new products got success because of the use of new technology. Youngs foods have also used a new technology for performing a product development in already existing product i.e. Ketchup. At the use of new technology competitor again becomes dreadful, and tries to retain its consumers by various means. Competitor could also seek for a development in its product by using a new technology, as it is having a threat to lose consumers.

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Consumers
As the youngs Food Company targeted the middle and upper class. The purchasing power of this particular class is good enough to afford such add-ons with meals that are Ketchup. After the development of this product many flavors have been develop in the market. The people of these classes are having different tastes .So the new flavor of youngs Food fulfills their requirements.

Satisfaction
After the fulfillment of their requirements they move to the stage of satisfaction. As it is said by Scholar, a satisfied consumer is the best marketer. By having the variety of products and their substitutes the consumers has more choice to buy the products according to their income level as well as tastes. Whenever the new product is developed with various changes the consumers attention diversified towards that product, because they always wanted a change in their tastes.

Attraction through Advertisements:

Consumers behavior also changed when they get attracted towards the advertisement of any new product. They are keen to know about the product and when the product is entering in the market they buy the product immediately. This kind of behavior

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commonly find in numbers of consumers. Consumers mostly show very positive behavior toward the launch of product or development of the new product. As every one wants a change, they get attracted and tries the new product, it might not satisfy them but still they wanted to have new things in their life, in result of Youngs foods, consumers have shown very positive response. The regular consumers are the retained consumer, but after new flavors of ketchup in market, company has established new market in new consumers.

As these consumers are the main market of the company through which they have to earn their revenues, complete all the cost and budget, so company provides their best to the customers. The Company is retaining more consumers by providing added benefits. This is the reason hat they have launched new flavors, so that consumers are buying the flavor of their taste. This has comforted the consumers and with added benefits or low prices, consumer always gets tempted towards showing a positive response. And company is retaining more consumers by providing added benefits. 27

Business Feasibility:
A feasibility study involves gathering, analyzing and evaluating information with the purpose of answering the question: "Should I go into this business?" Answering this question involves a preliminary assessment of both personal and project considerations. A feasibility study help entrepreneurs and their supporters judge and evaluate whether an idea is credible. The process of preparing a feasibility plan is a evaluation process of what could go wrong and what needs to go right for an enterprise to start and grow. A feasibility study helps you determine if your business idea should be implemented. Preparing a feasibility study requires a tremendous amount of research and thinking which often leads to significant changes in the original idea. The good news is that the stronger the feasibility study the easier it is to develop your business plan and the more likely it is that your business will succeed. The feasibility study is a very important one. It is your first reality check. Since this is the case the study should be very carefully thought through, extraordinarily well documented, and clearly written. A feasibility plan should at least touch on many issues included in the final business plan, but for the feasibility study the focus is on getting the information and analysis right and evaluating its coherence and the business idea feasibility, rather than on convincing investors and other partners to extend their support. Thus, clarity and evidence are more important for the feasibility plan than convincing presentation. The feasibility study should evaluate and analyze the following areas: Company Overview Product/Service Description Industry and Marketplace Analysis Marketing Strategy Distribution and Sales Strategy Operations Plan Development Plan Financial Estimates

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Business Feasibility of applied marketing strategy:


We are going to analyze the feasibility of our proposed strategy by considering the sales, expenses and profit margins of the product. To do this, we must first look for the profit margins of the company in the previous years Table showing the Sales and Profit Margin of Youngs Food Tomato Ketchup (2000-2002) Sales Cost of sales Gross profit Taxation Net Profit 2000 (Rs) 30,000 20,000 10,000 2,000 5,000 2001 (Rs) 32,000 25,000 7,000 2,500 3,000 2002 (Rs) 28,000 20,000 8,000 2,000 4,000

After the implication of our proposed strategy, we believe that there would be an increase in the net profit of the companys product by 50%.

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Recommendation and Conclusion


We recommend that in an order to create the demand of the consumer and boost up the sales, the company must follow the following steps: The company must introduce new flavors of Tomato Ketchup in the market by adopting the product development strategy. The product should be readily available to the customers and for that it should be displayed in those shelves which are at eyelevel The company should increase their promotional campaigns by adopting both printed and non printed media strategies. They should adopt non printed media campaign strategy, because the companys other products are going well in the market. They can afford the TV advertisements. In printed media, the company can also make advertisements in newspapers, fliers, magazines, brushier, banners, display cards, billboards They can also give free sampling of their products, so that people can get to know about their products. They can give incentives to the consumers, like, giving discounts or through bundling etc.

In today's very competitive marketplace a strategy that insures a consistent approach to offering your product or service in a way that will outsell the competition is critical. However, in concert with defining the marketing strategy you must also have a well defined methodology for the day to day process of implementing it. It is of little value to have a strategy if you lack either the resources or the expertise to implement it. In the process of creating a marketing strategy you must consider many factors. Of those many factors, some are more important than others. Because each strategy must address some unique considerations, it is not reasonable to identify 'every' important factor at a generic level. However, many are common to all marketing strategies.

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