Pro forma financial statements and budgets

Marketing budget:
Overall marketing budget will include the following:

Selling expenses:

Selling expenses includes any cost incurred by the sales department. Mostly these costs include:

Type of expenses Particular Cost(monthly)

Sales person salaries or wages Monthly salary 25000
Commissions For achieving target 5000-7000
Benefits Sim/call and net package/insurance 2000-3000
Travel and entertainment Petrol and food 9000-10000
Utilities bills Electricity/gas/water 1000000
Other departmental expenses Depreciation or thing else 5000-10000

Advertising/promotional expense:

Types of expense Particular cost

TV ads Ad will be played on HUM or DUNYA news 25-30 million

Boards 8 to 10 bill boards in main cities 4.5-5 million

Print Pamphlets, magazine, and newspaper 0.1 million

Social media ads Facebook, YouTube, and Instagram etc. 0.5-1 million
Designer For designing posts or videos 50000

Distribution expenses:

Types of expense Particular cost

22-wheeler truck From Karachi to other cities (5) 2000000
Pick-up wagon From model-hub to wholesaler (15-20) 250000-300000
Pick-up bikes From wholesaler to shop (30-40) 225000-275000
Product cost:

Types of expense Particular cost

Direct labor If labor is between 80-100 1200000
Direct material Tea bags/tea mixture/stickers/thread 50-70 million
Factory overheads Depreciation/rent/building insurance 3000000
Mode selection: Advantages/disadvantages of each mode
Railroads:
Advantages:

1. Durable:
The greatest advantage of the railway transport is that it is the most durable mode of transport as it
is the least affected by weather conditions such as rains, fog etc. compared to other modes of
transport.
2. Better Organized:
The rail transport is better organized than any other form of transport as it has fixed routes and
schedules. Its service is more certain, uniform and regular as compared to other modes of transport.
3. High Speed over Long Distances:
Its speed over long distances is more than any other mode of transport, except airways. Thus, it is
the best choice for long distance traffic.
4. Suitable for Bulky and Heavy Goods:
Railway transport is economical, quicker and best suited for carrying heavy and bulky goods over
long distances.
5. Larger Capacity:
The carrying capacity of the railways is extremely large. Moreover, its capacity is elastic which can
easily be increased by adding more wagons or boxes.

Although railway transport has many advantages, it suffers from certain serious limitations.

Disadvantages:

1. Huge Capital Outlay:

The railway requires is large investment of capital. The cost of construction, maintenance and
overhead expenses are very high as compared to other modes of transport.
2. Lack of Flexibility:
Another disadvantage of railway transport is its inflexibility. Its routes and timings cannot be
adjusted to individual requirements.
3. Lack of Door-to-Door Service:
Rail transport cannot provide door to door service as it is tied to a particular track. Intermediate
loading or unloading involves greater cost, more wear and tear and wastage of time.
4. Unsuitable for Short Distance and Small Loads:
Railway transport is unsuitable and uneconomical for short distance and small traffic of goods.
5. Booking Formalities:
It involves much time and labor in booking and taking delivery of goods through railways as
compared to motor transport.
6. No Rural Service:
Because of huge capital requirements and traffic, railways cannot be operated economically in rural
areas. Thus, large rural areas have no railway service even today. This causes much inconvenience to
the people living in rural areas.
 Air Carrier:
Advantages of air transport

1. High Speed:
It is the fastest mode of transport and therefore suitable for carriage of goods over a long distance.
It requires less time.
2. Quick Service:
Air transport provides comfortable, efficient and quick transport services. It is regarded as best
mode of transport for transporting perishable goods.
3. No Infrastructure Investment:
Air transport does not give emphasis on construction of tracks like railways. As no capital investment
in surface track is needed.
4. No Physical Barrier:
Air transport is free from physical barriers because it follows the shortest and direct routes where
seas, mountains and forests do not obstruct.
5. Natural Route:
Aircrafts travels to any place without any natural obstacles or barriers because the custom
formalities are compiled very quickly. It avoids delay in obtaining clearance.

Inspite of many advantages, air transport has some disadvantage also.

Disadvantage of air transport

1. Risky:
Air transport is the riskiest form of transport because a minor accident may put a substantial loss to
the goods. The chances of accidents are greater to other modes of transport.
2. Very Costly:
Air transport is considered costly as compare to other mode of transport.
3. Small Carrying Capacity:
The aircrafts have small carrying capacity and therefore these are not suitable for carrying bulky and
cheaper goods.
4. Unreliable:
Air transport is unreliable as it depends of the weather forecast. Normally if the weather is not
certain the flight may get delayed.
5. Huge Investment:
Air transport requires huge investment for construction and maintenance of aerodromes. It also
requires trained, experienced and skilled personnel which involves a substantial investment.
 Ocean carrier
Advantages:

1. Less Maintenance Cost:

Maintenance cost in rail and road transport is quite high but maintenance cost of ocean carrier is
quite less.
2. Cheap:
The transport channel is quite cheap as compared rail and road Transport.
3. Useful for Bulky Goods:
Heavy and bulky goods can be transported easily at little cost through ocean carriers.
4. Useful During Natural Calamities:
During natural calamities like flood and rains, when rail and road transport is disrupted, relief
operations can be operated through ocean carriers.
5. Important for Foreign Trade:
Ocean carrier plays important role in foreign trade. Pakistan’s foreign trade is mainly dependent on
ocean carriers.

Ocean Carrier also got some disadvantages which are.

Disadvantages:

1. Slow Speed:
It is a slow means of transport. as it has to come from a longer route.
2. More Risky:
Ocean carrier is riskier as compared to other means because there is always danger of sinking ships
or boats.
3. Lack of Infrastructure:
Certain parts of the world might not have the facilities of ports and terminals and can therefore not
receive large ships carrying containers. Usually, a significant amount of capital expenditure is
essential to handle container-based networks.
 Motor Carrier:
Advantages:

1. Less Capital Outlay:

Road transport required much less capital Investment as compared to other modes of transport
such as railways and air transport.
2. Door to Door Service:
The outstanding advantage of road transport is that it provides door to door or warehouse to
warehouse service. This reduces cartage, loading and unloading expenses.
3. Service in Rural Areas:
Road transport is most suited for carrying goods and people to and from rural areas which are not
served by rail, water or air transport.
4. Flexible Service:
Road transport has a great advantage over other modes of transport for its flexible service, its
routes and timings can be adjusted and changed to individual requirements without much
inconvenience.
5. Suitable for Short Distance:
It is more economic and quicker for carrying goods and people over short distances.
6. Lesser Risk of Damage in Transit:
As the intermediate loading and handling is avoided, there is lesser risk of damage, breakage etc. of
the goods in transit.
7. Saving in Packing Cost:
As compared to other modes of transport, the process of packing in motor transport is less
complicated.
8. Rapid Speed:
If the goods are to be sent immediately or quickly, motor transport is more suited than the railways
or water transport.
9. Less Cost:
Road transport not only requires less initial capital investment, the cost of operation and
maintenance is also comparatively less.
10. Private Owned Vehicles:
Another advantage of road transport is that big businessmen can afford to have their own motor
vehicles and initiate their own road services to market their products without causing any delay.

In spite of various merits, road/motor has some serious limitations

Disadvantages:

1. Seasonal Nature:
Motor transport is not as reliable as rail transport. During rainy or flood season, roads become unfit
and unsafe for use.
2. Accidents and Breakdowns:
 There are more chances of accidents and breakdowns in case of motor transport. Thus, motor
transport is not as safe as rail transport.
3. Slow Speed:
The speed of motor transport is comparatively slow and limited.
4. Less organized system:
The road transport is comparatively less organized. More often, it is irregular and undependable.

We selected motor carrier mode for our transportation as we just have to transport our goods or raw
material or products within the country so air carrier cant work and also ocean carrier cant be used so
the best option, we have is the motor carrier.

Also, we don’t need any kind of marking and labeling regulations or any type of containerization as we
are not importing anything from outside of the country. So, it will not give us any cost like importing cost
or custom/duty etc.

. Channels of distribution
So we will use the already established distribution channel of Lipton which is

ManufacturerModel HubWholesalerRetailerConsumer

So first of all the chocolate dip will be manufactured in Karachi raw material of which will be taken from
magnum and Lipton. So the whole manufacturing will be done in Karachi then product will go for
packing and after full packing and branding it will be loaded into containers so that it could be moved to
other major cities like Lahore Islamabad Gujranwala Peshawar etc. then these containers will get
unloaded in model hub of these major cities and then the product is loaded into small pickup van and
then they are moved towards wholesalers and from wholesalers to retailer on bike and then finally from
retailer it will be in our customers hand. Price of the product will also get changed as it been passed to
the next one.

So a small art is been drawn in which the whole process is discussed along with the change of prices
from 150350.

Each of the distribution channel will work on cash as well as on credit. Because for selling this product
company have to invest money in the form of giving their product to retailers, wholesalers, and model
hubs on credit.
 Manufacturer150

Model Hub 250

Wholesaler 275

Retailer 300

Consumer 350

SWOT Analysis
Strengths:

 Unilever is a multinational company

 Lipton has been present in the Pakistani market since 1948
 Strong Image and Customer Base
 Well established supply chain with distributors, wholesalers and retailers
 A new sweet flavor that caters for the taste of the Pakistani Public

Weakness:

 High competition from Tapal, Brooke Bond and Vital Tea

 Low market share in Khyber Pakhtunkhwa (KPK) Province due to cheaper alternatives available.

Opportunities:

 Pakistan has a growing population, therefore the Tea market is increasing

 The chance to promote our product in KPK and other rural areas

Threats

 Rising inflation in the country

 The emergence of new competitors
 Possible increase in the market share of loose tea (unbranded smuggled tea)
 Lipton’s profit margin is exposed to rupee devaluation.
Promotion Mix
The Promotion Mix refers to the blend of several promotional tools used by the businesses to create,
maintain and increase the demand for goods and services.

So it is the integration of advertising, sales promotion, personal selling and direct marketing

Advertising
Sales Promotion
Direct
Personal
Marketing
Selling

Advertising:

Company will do advertisement so that customer come to know about the new product is being
launched so Lipton will make an ad like Lipton will lead ads by expediting board VIPs, for example, Ali
Zafar and Mahira Khan to speak to its childhood and in addition to make a brand an incentive for the
clients. Since Lipton has officially kept up a family like bond with its customers by candidly engaging the
gathering of people through its legacy, along these lines it will currently likewise add the normal
component to induce the individuals who long for improved low-calorie refreshments.so related to this
an ad will be made to run on TV ads. Also we can use bill board advertisement and digital /social media
advertisement.

 Objectives:
To give people a new taste and low calories refreshment.
To inform them about the new product which is being launched in town.
Make it a thing of superiority so that every one wants to consume that.
To take them back into their child hood where they consume chocolates.
To let Urban communities, know about this "SWEET" development in the Pakistani tea industry.
 Media Mix:
Media which we will use could be
Television Ads
 Billboards
Websites
Digital media
Social Media
 Message:
To kept up a family like bond with its customers by candidly engaging the gathering of people
through its legacy.
 Costs:
Advertisement like Tv ads, bill boards and social media will cost around 35-40 million.

Type Cost
Tv ad 25-30 million
Bill boards 4.5-5 million
Social media 0.5-1 million

Sales Promotion:

Sales promotion will be given to the customers to increase sales of the product these sale promotions
could be like Dip & Win campaign in this campaign we can post a code on the product box. On scratching
it you will get a code then message this code to Lipton and get a chance to win something good like a car
or something. Another sales promotion could be 23 march(Pakistan Resolution Day) campaign like we
can give our customer 23% off on buying our product. Also we can attach our tee dips with other Lipton
tea sachet. Or make a pair of it with a well known and highly sold product.

Objective:

 To increase and boost sales of newly launched product.

 So that people at least try the new product.
 People don’t hesitate to buy it as an expensive product.
 At least people come to know about it
 People buy it not for consuming it but for getting a car.

Coupons:

 First 500 customers will get 20% off.

 Buy Lipton chocolate dip and get discount coupon on other Unilever products.

Premium:

 Buy 5 boxes and get 1 box free

 Get our product for your office or home permanently and get extra boxes or gifts or some
discounts or become or exclusive customers.

Cost:

 The amount of percentage we are discounting will depend on our total sales on these
discounted products etc.
Personal Selling:

For personal selling we could do some campaigns in malls or other public gatherings etc. where
our sales person interacts with the customers directly and make them to at least try this
product. And give us instant feedbacks.

Direct marketing:

With the intent of technology, we can reach customers directly without any intermediaries or
any medium. We can place our product on DARAZ like online stores. Or online from website or
you can order from Facebook and likewise things.