Healthy Straw_ An Innovative Idea

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Marketing Management Report

Marketing Plan for Launch H-Straw Sip Healthy

Report Prepared by Faraz Alam 60142

Sidra Shafiq 60182

Shahzeb Baig 60033

Sharjeel Khan

Talha Mustafa 60066

Submitted to Muhammad Usman Aleem

Course Marketing Management

Course ID 94111

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Acknowledgment

First, and the most we like to thank Allah for everything he rewarded me even if we

are not eligible to it.

No one can become successful without valuable contributions of his/her teacher.

Here, we like to owe our very special thanks to our teacher Mr. Usman Aleem. It is

his effort that we are able to learn a new subject and he also helped us to improve

in all the manners from being a good human being to a professional.

We also like to thank our university PAF KEIT for providing us with opportunity to

use our skills and knowledge in practical way.

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About this Report

The purpose of this report is to develop Marketing Plan for launch of an innovative

product. In this report SWOT analysis and market research both primary and

secondary are included. Then, marketing Segmentation, Targeting, and Positioning

is performed. Four P’s for Marketing Mix are also addressed. Market growth

strategy is explained with BCG matrix and Ansoff matrix. This report also includes

expected Product Life Cycle.

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Contents

1. Executive Summary ..................................................................................................................... 1

2. Company Introduction .............................................................................................................. 1

3. Market Research ........................................................................................................................... 1

3.1. Primary Data ........................................................................................................................... 1

3.1.1. Limitation of Research .................................................................................................... 2

3.1.2. Future Research ................................................................................................................. 2

3.2. Secondary Data ..................................................................................................................... 2

3.3. Pakistan v/s world prevalence of diabetes ................................................................. 3

4. SWOT Analysis .............................................................................................................................. 4

4.1. Strength .................................................................................................................................... 4

4.2. Weakness ................................................................................................................................. 4

4.3. Opportunity ............................................................................................................................ 4

4.4. Threat ........................................................................................................................................ 5

5. Marketing Segmentation .......................................................................................................... 5

5.1. Geographic Segmentation .................................................................................................... 5

5.2. Demographic Segmentation ................................................................................................ 5

5.2.1. Income .................................................................................................................................. 5

5.2.2. Occupation .......................................................................................................................... 5

5.3. Psychographic Segmentation .............................................................................................. 5

5.3.1. Social Class .......................................................................................................................... 5

5.3.2. Life Style ............................................................................................................................... 6

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5.3.3. Personality ........................................................................................................................... 6

6. Targeting ......................................................................................................................................... 6

6.1. Target Audience .................................................................................................................... 6

6.2. Diabetic Patients via Doctors ........................................................................................... 6

6.3. Health Conscious People from Fitness Trainers ....................................................... 6

6.4. Health Conferences and Seminars ................................................................................. 6

7. Positioning ...................................................................................................................................... 6

7.1. Value Proposition ................................................................................................................. 7

8. Marketing Mix ............................................................................................................................... 7

8.1. Overview of Product ............................................................................................................ 7

8.2. Product Name ........................................................................................................................ 7

8.3. Product Design ...................................................................................................................... 8

8.3.1. Filter ....................................................................................................................................... 8

8.3.2. Straw ...................................................................................................................................... 8

8.4. Dimensions ............................................................................................................................. 8

8.5. Competitive Advantage ..................................................................................................... 9

9. Place .................................................................................................................................................. 9

9.1. Distribution Channel ........................................................................................................... 9

10. Price.............................................................................................................................................. 10

11. Promotion .................................................................................................................................. 10

11.1. Promotional Strategy .................................................................................................... 10

11.2. Promotional Tools .......................................................................................................... 10

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11.2.1. Advertising .................................................................................................................... 10

11.2.2. Direct Marketing ......................................................................................................... 10

11.2.3. Personal Selling ........................................................................................................... 10

11.2.4. Sales Promotion .......................................................................................................... 10

12. Product Life Cycle ................................................................................................................... 10

13. Position in BCG Matrix .......................................................................................................... 11

14. Position in Ansoff Matrix ...................................................................................................... 11

15. Budgeting .................................................................................................................................. 11

15.1. Advertising Budget ........................................................................................................ 12

15.2. Return on Investment ....................................................................................................... 13

16. Future Plans .............................................................................................................................. 13

17. Controls ...................................................................................................................................... 14

Reference ............................................................................................................................................... 15

Appendix .................................................................................................................................................... i

Market Survey Questionnaire ........................................................................................................... ii

Results of Market Survey ................................................................................................................... iv

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Figures

Figure 6: Prevalence of Diabetes in adults by age in 2015 ................................................... 4

Figure 1: Position Mapping ............................................................................................................... 7

Figure 3: Top View of Straw (left) and Filter (right) .................................................................. 8

Figure 4: Distribution Channel ......................................................................................................... 9

Figure 5: Expected Product Life Cycle ......................................................................................... 11

Tables

Table 6: Pakistan's Scorecard according to International Diabetic Foundation .......... 3

Table 1: Marketing Segments selected for H-Straw ............................................................... 5

Table 2: Dimensions of H-Straw ...................................................................................................... 9

Table 3: Production Price Model................................................................................................... 12

Table 4: Portfolio of Advertising Budget ................................................................................... 12

Table 5: Return on Investment ...................................................................................................... 13

H-Straw, Marketing Plan for Launch

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1. Executive Summary

Sugar is also called white poison as it leads to many disease including Diabetes and

Obesity. When a person is diabetic or obese doctor ask them to take sugar less

diet. But, it is hard for sweet tooth people. The craving increase when we see soft

drinks, smoothies but cannot take it, because we are restricted.

Our product will satisfy all craving of drinks. With specialized filter (membrane)

sugar is filtered and only drink without sugar is sipped. Moreover, the new straw

has gel technology which makes your drink chill.

This product can be used by any person who wants to avoid sugar.

2. Company Introduction

The vision of TFS3 Company is to develop innovative & dynamic products in the

field of medical science. We are keen to serve the mankind and making our efforts

towards protection from fast growing diseases in this volatile and unpredictable

environment.

TFS3 Company has optimistic experts who want to bring the new concepts to

explore the medical world and define and produce all possible products to serve

the humanity. TFS3 is able to understand several medical filed phenomena which

provide the ideas that lead to produce new products.

Our vision is to serve humanity.

3. Market Research

3.1. Primary Data

We have conducted six surveys in total, where two in Karachi, Lahore and

Islamabad. We conducted survey in Universities, health seminars and Hospitals.

Questionnaire is given in appendix. The survey findings are as under:

In the sample of 1485, 43 percent people were diabetic. They reported that 45%


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has family history of diabetes. The figure was highest in age group of 31-50, while

we still got diabetic patient in age group of 21-30. Obesity was 45% which was an

alarming figure.

50 percent of the people mostly prefer to have soft drink. They contain mostly

student and employees. While Juices was reported as approx. 21% and was highly

preferred by business man. Tea and Coffee was preferred same among all groups

and was 27.27%.

47% consume 1-3 lit. Of preferred drink and 30.7% reported to consume 3-5 lit.

16% have less than one lit. But there were 69 people who drink more than 5 lit in

one month.

97.7% are aware about the diseases caused by diabetes. Only 2.3% were not aware.

84% of the people showed interest in our product.

3.1.1. Limitation of Research

The data we calculated does not represent whole Pakistan’s data as we just

surveyed three cities. We need large sample for more reliable result. The survey was

generalized. People were restricted to share their and their family data especially

for obesity. People were found interested in the product but actually how many of

them will buy the product is not identified.

3.1.2. Future Research

We will conduct quantitative analysis in near future. Our target will be focused

groups. Before entering into new segment a research will be necessary and it will

be more reliable as people will be aware of the product.

3.2. Secondary Data

As Pakistan has no framework for diabetic monitoring and servillience therefore,

for Secondary data we used World Health Organization and International Diabetic

Organization data.

Pakistan ranks seventh among the top 10 countries with diabetes. The diabetes

prevalence rate in Pakistan is 12%. The alarming rate is expected to rise up to 30%


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by 2025, which will position Pakistan 5th country with highest number of diabetes

patients.

The Health budget of Pakistan is very low though a separate share is given to

Diabetes but still it hardly cover even the 50% cost.

Pakistan has the lowest age onset. Youngsters especially in cities have increased

risk. The key factors are type-II diabetes and obesity.

As per Global Diabetes scorecard of IDF, the 2013 date of Pakistan is as following:

Table 1: Pakistan's Scorecard according to International Diabetic Foundation

Adult population (20-79) in 1000s 99,369.82

Diabetes expenditure / person with diabetes (USD) 46

Diabetes cases (20-79) in 1000s 6,712.70

Diabetes related deaths (20-79) 87,354

Diabetes raw national prevalence (%) 6.76

Number of people with undiagnosed diabetes (20-79) in 1000s 3,356.35

Diabetes is the cause of 88,000 deaths every year. Where, women are high in

number. These deaths occur due to heart attack or stroke, renal function failure and

even life threatening infections.

3.3. Pakistan v/s world prevalence of diabetes

The figure describes which age groups in the population have the highest

proportions of diabetes. The dotted line is representing world; the black line for the

region; and Pakistan’s distribution is plotted in the red line.


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Figure 1: Prevalence of Diabetes in adults by age in 2015

Many middle- and low-income countries have more people under the age of 60

with diabetes compared to the world average. Meanwhile, for high-income

countries, a growing population over the age of 60 makes up the largest

proportion of diabetes prevalence.

4. SWOT Analysis

4.1. Strength

Patent Innovative Product

Competitive advantage

4.2. Weakness

No brand recognition

New product hesitation

Low Production

High Cost

4.3. Opportunity

International Market can be targeted

Moving in to new segments

First Mover Advantage


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4.4. Threat

Launch of same technology after Patent expires with less cost

Inflation

5. Marketing Segmentation

As per feature and price we have make the following Segments:

Table 2: Marketing Segments selected for H-Straw

Segmentation Type Segmentation Variable

Geographic Cities

Demographic Income

Occupation

Psychographic Social Class

Life Style

Personality

5.1. Geographic Segmentation

In Geographic, we have selected segment on the basis of cities.

5.2. Demographic Segmentation

In demographic segmentation we have selected two segments:

5.2.1. Income

Those People who have high income level can easily buy it as the cost has high.

5.2.2. Occupation

Doctors specially Diabetologist, Fitness trainer will be attracted to this product

because of the sugar filtering properties.

5.3. Psychographic Segmentation

In Psychographic following three segments can be our potential customers:

5.3.1. Social Class

This segmentation is on the basis of socio-economic basis. Upper Class is the


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attractive segment due to product’s high cost. Also people with top managerial

positions are a good segment.

5.3.2. Life Style

People who are Health conscious are another attractive segment on the basis of

sugar filtering properties.

5.3.3. Personality

As an innovation, people who love innovations and are leader will be in this

category.

6. Targeting

We will go for Niche Marketing for Psychographic segment:

6.1. Target Audience

We have decided to target following segments in Karachi, Lahore and Islamabad:

Diabetic Patients

Health Conscious People

6.2. Diabetic Patients via Doctors

Due to its sugar filtering property, doctors can easily target diabetic patients.

Diabetic patient highly rely on Doctors’ advice due to severe complication that

may occur due to diabetes.

6.3. Health Conscious People from Fitness Trainers

These are our one of the key target as people who want to avoid sugar but still

want to enjoy every drink they want can be recommended.

6.4. Health Conferences and Seminars

These conferences and seminar are golden opportunity to make health provider

plus common people aware of the product.

7. Positioning

Though the price is quite high as compare to normal straw but Health Benefit is the

main distinguish feature.


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Figure 2: Position Mapping

7.1. Value Proposition

The Value Proposition is,

“Sip Healthy”

8. Marketing Mix

Marketing Mix contains four P’s that are Product, Place, Price and promotion.

Marketing mix of our product is as under: Product

8.1. Overview of Product

As per international diabetes Foundation, in 2015, there were over 7 million

diabetic patients in Pakistan and it is expected to increase by 6.9%. Moreover,

number of death due to Diabetes in Pakistan has reached to 86,364. This needs

serious attention. Our product is a step toward safe drinking. We have designed a

special straw which filter out sugar present in the drink before it reaches your

mouth and to make it chill as well.

Take ice cooled sip free from Sugar.

8.2. Product Name

The name of this product is H-Straw. Here, H stands for Health. The name is

highlighting its health benefits.


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8.3. Product Design

It looks like normal straw, but a bit thicker. As shown in Picture 1, it is divided in to

two parts:

Filter

Straw

8.3.1. Filter

This part is placed at the bottom of the straw. It has specialized filter which sieve

sugar from drink. The sugar remains in the container from which a drink is sipped. It

fits with straw just with a click. Following is the Top view of the Filter. Filter is 1 in. in

height.

8.3.2. Straw

The second part is straw which looks like normal straw but thick wall. Between the

outer and inner layer of straw, it have specialized gel which will make the drink,

chill.

Inner Layer The inner part is made from Aluminum to make every sip ice cold.

Outer Layer This layer is made from insulator so you may not frost bite your lips.

Specialized Gel Between the inner and outer layer is a secret gel which starts an

exothermic reaction when it get in to contact with drink and make your drink

chill.

Figure 3: Top View of Straw (left) and Filter (right)

8.4. Dimensions

The Following Length is exclusive of filter.


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Table 3: Dimensions of H-Straw

Part Inner Diameter Outer Diameter Length Usage Life

Straw 0.3" 0.5" 09" 05 years

Filter 0.3'' 0.5' 01'' 01 years

8.5. Competitive Advantage

No such product is available in the market. Sugar filtering property is our highest

competitive advantage. Cooling straw is also another advantage. Currently, in

market there are metal drinking straws are available but you need chill drink or ice

containing drink feel the drink is ice cold.

9. Place

We will make our customer aware about our products starting from Diabetic Cure

Centre and customer can place their orders on product website or via Diabetic

Clinics.

After increase in our market share we will place the product in Pharmacies and

Fitness Centers.

9.1. Distribution Channel

Initially we will make the use the following distribution channel,

Figure 4: Distribution Channel


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10. Price

Cost of the Product is PKR 58,818. It has the Capacity to filter 20 Liters of super

saturated sugar drinks and Expiry of 3 years.

11. Promotion

Diabetologist can be aware from Conference held on Diabetes. Representing this

product in Health Asia conferences.

11.1. Promotional Strategy

We have decided to use Push strategy for this product.

11.2. Promotional Tools

For Promotion we will promote our product using following tools:

11.2.1. Advertising

We will standy in the premises of hospitals and fitness centre. We designed our ads

in two types. First type of ad will highlighting sugar impact on diabetes and will be

placed in hospital. Second, obesity and calories effect due to sugar consumption to

be used in fitness centre.

11.2.2. Direct Marketing

Using this tool we will directly approach potential buyer who are diabetic patients

and health conscious people. In this order we can get information from Clinics to

reach affluent people.

11.2.3. Personal Selling

We will represent our product in health seminars and conference to directly reach

interested people. There we can offer discounted offers. It is good to create

personal relations in such events and convincing potential buyers.

11.2.4. Sales Promotion

When going for exhibitions we are planning to provide package prices and

discounted prices for our audience. We can also involve doctor, paying them

commission for publicity of our product.

12. Product Life Cycle


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Following diagram is for H-Straw. It was in development stage from 2013 and in

2017 it is ready for launch in market. We expect that our market will keep on till

2033.

Figure 5: Expected Product Life Cycle

13. Position in BCG Matrix

As the product is in Introduction phase therefore, it is a question mark. It has high

investment and low market share.

But because of competitive advantage we are hopeful that it will grow to Star.

14. Position in Ansoff Matrix

The product is new to the existing market therefore; it is in product development

category of the Ansoff Matrix.

15. Budgeting

Product price model provides research and development cost. Patent is filed as the

product is innovative, we have added Sales and distribution and initial advertising

expense. We will charge 60% profit margin. Initially we will produce 3000 units. We

have received pre-orders for our 30% straws. The product Price Model is as under:


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Table 4: Production Price Model

15.1. Advertising Budget

We have invested in Advertising and Public relation following is the portfolio of

adverting budget. We have divided market in to two subgroups that is “Market

A” which focus Karachi, Lahore and Islamabad. While “Market B” is rest of the

Pakistan except, cities present in Market A. For Detailed Budget kindly review

Appendix Table 2:

Table 5: Portfolio of Advertising Budget


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15.2. Return on Investment

Following are the calculation s on Return on Investment. Our ROI is 58%.

Table 6: Return on Investment

Units PKR

Revenue 3,000 135,281,688

Less: Cost of Sales

(67,640,844)

Gross Profit

67,640,844

Expenses:

(27,056,338)

Net Profit

40,584,506

INVESTMENT

70,011,750

16. Future Plans

After successful launch of our product we will introduce it to international market.

We will introduce more variants in form of Color, design and sizes.


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17. Controls

All our company members are expecting a lot from this product therefore; we will

closely monitor for all activities for successful launch whether is marketing,

customer service or finance. We will take following majors to control and monitor

our execution plans:

As our product is expected to grow quickly therefore we will keep reviewing

our marketing strategy.

We will set sales target.

We will review whether the return on our marketing expenditure is

increasing our shares or not. We will have monthly, quarterly and annual

review.

We may revise our current strategies, if required

We will keep in touch with our customers. We will reviewing our customers’

demands and will try to integrate it in our strategies.

In case of complain, we will facilitate customers by every possible means

including warranty replacement, to make customer delight.


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Reference

1. Global Diabetic Scorecard (2013), International Diabetic Foundation, pg 69


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Appendix

MARKETING BUDGET PLAN

Projected Subtotal to date: 27,011,750.00

Campaign Type QTY Unit Projected Cost Projected Subtotal

Market "A" SUBTOTAL 1,200,000

Banner Ads 600 PKR 2,000 PKR 1,200,000

Market "B" SUBTOTAL 3,000,000

Newspaper 6 PKR 500,000 PKR 3,000,000

Logo Designing PKR 50,000

Public Relations SUBTOTAL 9,500,000

Public Events 6 PKR 1,000,000 PKR 6,000,000

Diabetic Awareness Seminars 3 PKR 1,000,000 PKR 3,000,000

Conferences 2 PKR 250,000 PKR 500,000

Social Media SUBTOTAL 600,000

Twitter 20 PKR 10,000 PKR 200,000

Facebook 20 PKR 10,000 PKR 200,000

Instagram 10 PKR 10,000 PKR 100,000

Google+ 5 PKR 10,000 PKR 50,000

LinkedIn 5 PKR 10,000 PKR 50,000

Online SUBTOTAL 8,000

Blog 10 PKR 800 PKR 8,000

Advertising SUBTOTAL 8,500,000

Online websites 50 PKR 10,000 PKR 500,000

Print Media 1000 PKR 2,000 PKR 2,000,000

Billboards 60 PKR 100,000 PKR 6,000,000

Web SUBTOTAL 367,250

Development and Management 1 PKR 367,250 PKR 367,250

Market Research SUBTOTAL 3,600,000

Surveys 6 PKR 600,000 PKR 3,600,000

Other SUBTOTAL 186,500

Msc. PKR 100,000.00 PKR 100,000

Business Cards 100000 PKR 0.87 PKR 86,500


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Market Survey Questionnaire

Instructions

Check the box(es) most applicable to you.

1. Your Age (Select only one.) 20 or less

21-30

31-40

41-50

51-60

61 or above

2. Your Gender (Select only one.) Female

Male

Other

3. Your Current Occupation (Select only one.) Student

Employee

House wife

Business Man

Doctor

Other

4. Which drink will you prefer from the following? (Select only one.) Soft Drink

Juices or Smoothies

Tea and Coffee

None

5. How much the above selected drink you consume in 1 month? (Select only one.) less than 1 liter

1 – 3 liters

3 – 5 liters

5 liters or above

Does not apply


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6. Are you Diabetic? (Select only one) Yes

No

Prefer not to answer

7. Do any member of your family is Diabetic Patient? (Select only one) Yes

No


8. Do you or any member of your family is Obese? (Select only one) Yes

No


9. Do you feel sugary drink craving? (Select only one) Yes

No


10. Do you know Diabetic can lead to Heart attack, Kidney failure, Blindness, Leg imputation and other severe life threatening infections?

(Select only one.) Yes

No

11. If we tell you soon a straw will be available, which will filter sugar. Will you buy the product?

(Select only one) Yes

No



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Results of Market Survey SN Question Options Score Percentages

1 Age Group 20 or less 45 3.03%

21-30 555 37.37%

31-40 390 26.26%

41-50 405 27.27%

51 or above 90 6.06%

2 Gender Male 840 56.57%

Female 645 43.43%

3 Occupation Doctor 450 30.30%

Housewife 300 20.20%

Businessman 95 6.40%

Employee 255 17.17%

Student 360 24.24%

Others 25 1.68%

4 Drink Preference Soft Drink 749 50.44%

Juices and Smoothies 311 20.94%

Tea and Coffee 405 27.27%

None 20 1.35%

5 Preferred Drink consumption < 1 lit 243 16.36%

1-3 lit 697 46.94%

3.1-5 lit 456 30.71%

5 lit or above 69 4.65%

Does not apply 20 1.35%

6 Are you diabetic? Yes 645 43.43%

No 700 47.14%

Prefer not to answer 140 9.43%

7 Family History of Diabetes Yes 780 52.53%

No 705 47.47%

Prefer not to answer 0.00%

8 Are you or you any member of the family is

Obese? Yes 673 45.32%

No 839 56.50%


9 Craving for Sugary Drinks Yes 1322 89.02%

No 158 10.64%


10 Awareness about Diabetes Yes 1451 97.71%

No 34 2.29%

11 Interest in Product Yes 1253 84.38%

No 232 15.62%