ENTREPRENEURSHIP

BUSINESS PLAN ON TOMATO MASH

Submitted by:

Ahmed Faraz
492-FMS/BBAIT/S08

Submitted to:

Dr. Farooq Hussain

DATE:

22-05-2010
Executive summary:
Mash tomato is a new product that we are introducing in the market.
Tomato is commonly used in our kitchens and everywhere the food is
made. The concept is this that we want every person to enjoy the taste of
tomato when there is no season for tomato. Now people do not like to
store tomatoes in their refrigerators or they are not able to store it. People
also do not have time to go to market daily and buy tomatoes.
So we decided to do a business in making a product that can make people
convenient to use tomatoes whenever, wherever they want.
As this is a new product and there was no as such competitor in the
market so we have to make it as original as the customer wants. Customer
likes the product that is based on the satisfaction of it. And we tried to
make the customer satisfaction at the first priority. As this is the way to
the success of the business. We have to make the quality at its best and
that’s what attracts the customer.
As a new product it’s a bit hesitating far a customer to use it. So we have
to be as original as we can.
Idea screening:
I collected a lot of ideas for our project of new product business plan. Some people were saying
that I should launch a canteen in the university. Some gave the idea to introduce some sort of
jacket which keeps an individual warm in any circumstances, some said that I should produce
toothpaste with all qualities, someone gave the idea to launch fresh juices some one said that
introduce tomato in mash form. After setting the criteria I checked the feasibility of all ideas and
finalized the idea that I will launch" tomato mash" as our new product. This decision was made
after observing ideas through different angles. Because I observed that house wives face a lot of
tension while cooking as we all know that tomatoes are used in approximately all dishes
(Pakistan) and house wives face difficulties in peeling and cutting tomatoes whereas in off
season the rates of tomatoes become very high I have collected the lists of tomato rates which are
also attached with the report form. The results of these lists show that the rate of tomatoes is on
average 6-8 rupees in the tomatoes season and it starts increasing and reach at 70-80 rupees in
the off season. So the basic idea of our product is that I will buy the product in their season and
after mashing it and adding preservatives I will launch it in the market. More ever it is a new
product so we have no direct competitor but our indirect competitors are Mitchell’s and other
multinational companies who are making tomato puree and some other brands of different
countries.

Concept development and test:

In this phase we prepared a questionnaire and gave them to different house wives of different
classes and also from the different cooks, chefs and other male workers who were using
tomatoes. We consumed a lot of time in checking our concept and we collected nearly 100 filled
forms from different peoples and then we observed all the forms to make a result. Our results
shows that 79% people appreciated our product and we also got answers of different questions
other than concept testing. And we also interviewed different customers at Metro who were
using tomato paste and we asked the qualities and problems of other products. And in conclusion
we got different points from the consumer according to consumer’s one of the main flaw of the
other products is that it is stored in the tin and whenever customers opens the tin they have to
store it at other place because rusting is major problem and that it’s price is very high up to
Rs.206/kg and most of the users answered that they only use the product when rates of tomatoes
become very high. And other complains were that the taste of tomatoes were changed in other
brands and there is some sort of sourness in the other products and the product was not easily
available it was only available in departmental stores or super stores.

MASH TOMATO

Mash tomato is a kitchen cooking food item which can be used as

an alternative of tomatoes. It is purely made from fresh tomatoes. Healthier
and long lasting preservatives are added in this product. The Specialty
about mash tomatoes is that it can be use for one month at least after first
use and unopened bag can be use for one year under suitable conditions(1
Celsius to 10 Celsius and closed with the clip provided with the pack). It
can also be use for one week when open and for six months when unopened
under normal conditions. It will be available in plastics bag of three
different sizes that are as follows:

1) 250 gm
2) 500 gm

3) 1000 gm

Every one can enjoy the full fresh taste of our product .our product can remove the hassle from
cooking.

It has been especially designed for the people who do not have much time
to go to the markets and make selection of tomatoes and bring them to
homes and then cut them and then cook them. Mash tomato fulfills this
requirement of selecting tomatoes then bringing it to homes and then
cooking in the dish. It helps people to save time that they waste in making
selection of tomatoes and then cooking them in the dish which almost take
7 to 15 minutes to fully mash (as the result of our questionnaire shows).
This product can also save the money of the people because of the price of
this product. As during off seasons, tomatoes price reach up to 80 rupees
and above per KG (the higher prices of tomatoes can be seen from the rate
list attached with the report). During the on seasons of the tomatoes its
price is very near to the original price of the tomatoes. In fact our product
has all the characteristics of fresh tomatoes as well as it has all
standardized qualities as provided by other multinational food companies
like Mitchell’s (tomato puree) and the LUI (Chinese tomato paste) .The
MAJOON tomatum an Iranian product.

Strengths:

The strength is that in Pakistan not any single company is making the
tomato paste, all the products regarding tomato paste are the imported
products of IRAN, CHINA, and UAE, ITALY. There is only one company
that is making tomato puree which is Mitchells (also a multinational
company, but only its manufacturing takes place in Pakistan) but, that
doesn’t match with our product. And this comes to be our second major
strength of our company.

Weaknesses:
The main weakness of tomato industry in Pakistan is that Pakistan is
unable to utilize all its resources, which also include land and other
m a c h i n e r i e s . According to 2005 report, 5,867 hectares were under tomato in Sindh, while
total area under tomato in Pakistan was 25,653 hectares. The production of tomato in Sindh was
29,826 tones, while in Pakistan total production was 275,811 tones, and yield per hectare in
Sindh was 5,084 kgs, while Pakistan yield per hectare was 10,752 kgs, which is very low as
compared to developed countries where it has reach up to 120 tones/hectare.

Other countries, which are leading in tomatoes industry

(ITALY,USA,INDIA), are not only doing a lot of efforts to lead, but They
are also helping the private sector to come and join hands with government.
But Pakistan is only increasing taxes and duties.
Second weakness is product is newly introduced in Pakistan so it can be
possible that our product can’t make success because a survey shows that
55% of the new product launched disappeared from the market after 5
years of their launching.

T h i r d w e a k n e s s i s t h a t in Pakistan’s illiteracy rate is high and most of the farmers are

illiterate. Few farmers get good money by growing fruit crops, but those farmers growing
vegetable mostly run in to losses and have very hard time to make both end meet. Forth
weakness is that the Farmers are also afraid to take a risk with new varieties, new methods and
new spray chemicals. Same is the case with tomato; every farmer grows tomatoes of the same
variety. They mature at same time. Its peak season is December to March and as a result market
is full with tomatoes and prices come down.

Opportunities:

One of the biggest opportunities of our company is that we are

introducing a product which has no any direct competitors so it can
maximize the profit and get the huge number of shares in the market and
get that position in the market which we expect many foreign indirect and
local indirect competitors are being active in the markets. So a product
showing different features like tomato mash having power to attract new
consumers immediately is required. Our product can be called an
innovative idea from the perspective of availing an opportunity, the
opportunity of getting tomato at low price (up to Rs.6/kg) and selling it at
higher price in processed form, maintaining its quality. There is no doubt
market is saturated however there is always room for new products which
catches the eyes of the targeted customer and its need is there.

THREATS:

If any other company launches same type of product in the market with
more features and lesser price which offers more advantages than our
product then we will face a big threat and then we have to compete.
Another threat is that if our product does not make space in the minds of
people then we have to redesign that.

Number of Competitors:
No direct competitor yet exists in the market of our product. Others
indirect competitors are in many numbers and some of them are following:
Mitchell’s (tomato puree)
450gm is equal to 70RS

SAFA ITALY (tomato paste in canning)

450gm is equal to 84 RS

LUI CHINA (tomato paste in canning)

450gm is equal to 85RS

MARA UAE (tomato paste in canning)

400gm is equal to 90RS

Fresh tomatoes;
By evaluating competitor’s products and their strategies we want to
introduce better quality product, less pricing than their products. Here we
can say that there is Perfect competition in the market, because the targeted
customers and competitors have knowledge about the product.
Proposed Position Of Product:
As our product is newly launched so it may not get that position in the
market which other foreign companies have. But with the passage of time,
our product will get maximum share in the market then it is likely to gain a
distinguish position in the market.
But for the case of our product we will use the following strategies which
will give an image of our product in front of our targeted customers.
Marketing mix strategies:
Short term
As we are introducing our product for the first time so we will do heavy
advertisement through our posters and banners.

We will give extra incentives to retailers and wholesalers. The distributor

will be given a margin of 18.3% of the sale price i.e. Rs11/kg. The
percentage or margin given to the distributor by the highly consumed
products manufacturer may be very low even less than 3% of the sale price.
But as we are launching a new product we have planned to give as much
margin to the distributor as possible to fully place our product. Similarly
the margin given to the retailers is much higher than given by other
products i.e. Rs 10/kg which is 16.3% of the sale price. The marketing
expenses we have devoted in our cost computation are Rs.2/kg sold. That
amount will be given to the sale managers hired for the twin cities to
ensure sale and point of sale material in the retail store. We will keep our
profit maximizing and make lot of efforts on promoting our product .We
will do direct marketing at Sunday markets and in front of whole sale stores
in areas where there is crowd of housewives shopping for their homes. Our
representatives will cook dishes in front of our customers and try to aware
them about our product.
Long term:
If our product achieves initial success share then we will do our
advertisement on TV commercials, we will sponsor cooking shows on
different TV channels and we will give advertisement on cooking
magazines. We will try to maximize our profit and increase our promotional
budget by giving fewer incentives to wholesalers and distributor’s i.e. by
curbing their profit margin. This will be all in our long term strategies.
Incentives:
We have decided to give incentives to distributors (by increasing their margin) wholesalers (in
the form of allowances) and the shopkeepers (in the form of discounts.)
We will run commercials on local cables, give add in news papers in
cooking magazines.

Product quality:

As we know that quality is one of the main things to consider so we have

focused on the quality very well. And as there was the complain of other brands so we highly
focused on the quality and visited a pharmacist named as TARIQ SHAH (USAWA
PHAMACEUTICS, MARDAN) to solve our problem he told us that there are some
preservatives which can secure the taste of the product and further told that sourness is due to the
saving of tomato paste in the refrigerator if it is preserved in normal temperature then it will be
fine. So through this we can maintain the quality of our product and these directions are given on
our packaging.

The unique quality about our product is that Healthier and long lasting
preservatives are added in this product. The preservatives are sodium
benzoate, citric acid (known as vitamin C), and sodium hydroxide (table
salt). The Specialty about mash tomato is that it can be use for one month
at least after first use and unopened bag can be use for one year under
suitable conditions. It can also be use for one week when open and for six
months when unopened under normal conditions. One point regarding the
preservative is that it is only 0.02% of 1kg per 1kg of tomato.
Unique packaging and design:

A picture of package and

Clip.

The main problem in our competitor’s product was that

they were not properly designed and they are only
available in tin due to which rusting is the major issue
Our product will have unique packaging. It will be available in the plastic
bags rather in canning form. Our packaging will have three layers that
will preserve the quality of our product. The first layer is inner layer
made of aseptic (75% polythene) which will save the product from
moisture. the second layer is the product layer and the third layer will be
above the product layer which is made of plastic polythene which will
also prevent the product from all the outer things (air, pollution, dust,
water) The design of our product is very different from other products as
other products does not have any tag line printed, marketing message, that
our have.

Size:
It will be available in plastics bag of three different sizes that are as
follows:
1) 250 gm RS 18

2) 500 gm RS 35

3) 1000 gm RS 60

Price:
The price of our product is very less as compared to indirect competitors as
they are providing their product with a price of 87 rupees per 450gm it is
due to their cost of purchasing tomatoes is 7 to 10 rupees per kg and cost of
canning is 22 rupees. So we will provide our product at a price of RS 60
per 1kg.As our purchasing cost is 5 to 6 rupees per kg and our packaging
cost is 12 rupees.
Listed price and cost computation

 Purchasing cost of tomatoes is 6 RS per kg

 The question is that how can we convince and motivate the farmers
and peasants to grow tomatoes and not other crop.
The reason is that the production of a crop e.g. wheat will make a revenue
of Rs 32000/hectare although a rise in the price of wheat these days.
Rs.1250 multiply 25manns= Rs31200

Where 1250 is the price of wheat per 50 kg's announced by the government
these days
25 manns is the average production per hectare

While the average production of tomato is 10,000 kgs/hectare and buying

on Rs 6/kg from the farmers will give them Rs.60, 000/hectare less 10,000
expenses and a net of Rs 50,000 revenue far more than the revenue made by
the wheat crop.

 Inbound logistic from tomato field to factory is 0.5 RS per kg

 This cost is low because the factory location is near the fields of
tomato and transportation will thus cost lesser.

 Preservatives cost are RS 1 per kg

 As one kg of the preservatives cost Rs.350 and only 0.02% 0f the

preservative is added per kg.

 Packaging cost will be 12 RS per kg

 Packaging cost contains the clip cost which is Rs.2/kg

 Factory expenses will be RS 5 per kg

 Out bound logistic from factory to distributor is 2.5RS per kg

 These days one trip of truck costs Rs.7500 from Mardan to

Rawalpindi and can carry up to 3000kgs of packets. Thus per kg cost
equals 2.5.
  Distributor margin RS 11 per kg

 Which is 18.3% of the sale price?

 Retailer margin RS 10 per kg

 This is 16.3% of the sale price.

 Marketing cost 2 RS per kg

 In this 2.Rs/kg, Rs.1/kg goes to the salaries of the sale managers of

the twin cities and the other Rs.1 goes to the cost of posters and
banners.

Placement:
As we are producing mash tomatoes in bulk form so we will place our
product in every shop in super stores, general stores, markets and every
where, where our targeted customers have full access to our product. We
will ensure our placement through our hired distributors.
We have planned to cover the market of (Rawalpindi selected areas: satellite town, sadiqabad,
committee choke) and Islamabad for which we have contacted a distributor named Matee-Ur-
Rehman the distributor head of S.S marketing at (peer wadhai) who have agreed to place our
product on 18% commission of total sale price he is still distributing the products of Haleebs and
coca cola in Rawalpindi and Islamabad. He has ensured us that he will make our product
available in all shops. We have also contacted to another distributor who has agreed to place our
product on 20-22 percent margin. we will ensure our placement on 328 shops in Islamabad and
Rawalpindi. Islamabad shops are 204 in number and the remaining shops will be in Rawalpindi.
The placement will be according to the saturation of target markets. For example, our target
markets are mostly located in the sectors like I/10, I/8, I/9, G/6, G/7 etc. Thus we will ensure
our placement in the saturated target market areas and vice versa.

Processing:

Our processing cost will be RS 5 per kg .We will show our processing that
we are making our product from pure and fresh tomatoes in the future in
different commercials.
Market segmentation:
Every house use tomato and tomato is very necessary for 80% of the dishes
we cook in our homes. When tomato become expensive people either starts
using alternatives such as yogurt and other tomato products like paste and
puree or reduce its consumption. Therefore we are offering such a product
which is used as alternative of tomatoes.
We have segmentized our consumers according to the available sizes of our
product.

1) 250 gm RS 18 for 3 members

2) 500 gm RS 35 for 6 members

3) 1000 gm RS 60 for more than six members

Positioning:
We will position our product through our tag line in the minds of our targeted customers. The tag
line represents the true image of our product, which is “taste without waste” or “sahoolat kifayat
aur zaiqa”.
The theme behind sahoolat is that the customer does not need to make selection of
tomatoes and then bring tomatoes to homes and then cut them and use them in cooking which
take about 10 minutes to fully mash. So we are offering our customers “mash tomatoes”
customer does not need to make selection of tomatoes and our product is already mash so there is
no need to mash tomatoes and wait for 10 minutes. Our product can also save the precious time
of our customers who waste that time in selecting tomatoes and cutting and mashing them in the
dish.
The theme behind kifayat is that our product can also save the money of our customers,
as our product is available in that lowest price in which tomatoes are not available in the market.
The theme behind zaiqa is that our product is made from fresh tomatoes so it will give
the taste of fresh tomatoes after being cooked in the dish.
The tag line in English also represents the same meaning as in Urdu. We are giving the
message to our customers that don’t waste your precious time and money while selecting
tomatoes and cutting them and mashing them just use mash tomatoes which have a taste like
fresh tomatoes.

We will position the product on the basis of our product features that are availability in plastic
bags, low price as compared to competitors

We will position the product on the basis of product benefits which are it saves money and time
and provide the customers with the taste of fresh tomatoes at the same time.
We will position our product away from the competitors as they are not using any long lasting
and healthy preservatives in their products. Our product will be available in three different sizes
which our competitors do not have.
We will position our product against the competitors as they are making tomato paste which is
50% condense so we are making mash tomatoes which are only 30 % condense. That is we will
make 700 gm from the tomatoes of 1kgs.

Business analysis:

Total Investment

Land (8 kanal) 1,200,000

Infrastructure (5,000 square feet) 4,500,000
Machinery 3,000,000

Worth of total market

We have targeted the market of Islamabad and Rawalpindi .the total population of Islamabad is
8, 00000 while our target population of Rawalpindi is 400,000.From this total target market our
target market is 504,000(42% of 1,200,000)
According to the result of our questionnaire 61.2% would definitely buy our product, and
average members in a family are 6.and average consumption of tomatoes per home is .25 kg.
So per kg consumption of our target market is as follows.

1200000/6 multiply by .25= 50000 is the worth of total market.

Worth of target market

500,000 multiply by 61.2% (definitely buy) multiply by 14.1% who actually buy (from
61.1%) is equal to 1834 per kg is the demand in the target market.

And our production: (5000×30×4) ÷365 =1643Kg.

Competitor market share

50000 is the capacity of total market and our indirect competitor share is.021% so total share is
(50000* .021)=1050.

Cost and profit ratio

Our cost is 50RS and profit is 60RS.
So ratio is 83% cost and 16.7% profit.
Return on investment
Our total investment is 10 million.
And per day production is 1643
Profit is 10 rupees
So 1643*10*30= 492900 is the return
492900*12/10 million=60%per year.
Conclusion:
So the plan tells us that this product satisfies our customer as well as it’s a profitable business. So
the plan was quite successful to have a business with the product tomato mash. Product success
is based on the quality and customer satisfaction.