Profitable marketing of

1. Profitable marketing of • Agro products • Cutting tools (wood working sector) • Special snacks…

2. Project report -2013

3. Table of contents • executive summary ………… 3 • business description ………… 4 • operational plan ………… 6 • Project cost and funding ………. 8 • Sales and profitability ………….. 9 • Investors’ benefits …………… 10

4. Executive summary • A group of Bangalore based investors are interested in promoting a marketing company with total project cost of Rs110 lakhs and with their equity investment of 20lakhs.the balance fund Rs90lakhs is to be availed as returnable preference shares after seven years with premium The project will be located with offices in Chennai and karur districts of tamilnadu • The company initially proposes to market organic fertiliser (neem based)-farm equipments like weeder-tiller- etc and cutting tools of wood working industries application and also special quality eatables/snacks etc

5. All these products are niche market supply-technology upgraded segment- and educative concept selling techniques to be adapted for sales target.They are having very big potential I n indian and export market and good margin is available for the marketing company from manufacturer • A team of application engineers and a sales team will handle the entire show.Through backward integration strong quality control cum R&D departments will be established over years which will help marketing department to develop strong own brands . • By developing unique brands a sizeable market share can be captured and nurtured (including exports segments) after some period .A seasoned marketing professional with more than 25 years of experience and close associate of investors will head the company. • Given the minimum margin of about 30% for the marketing agency a sale of about 3-5cr per annum will ensure enough surplus profit to reward the investors attractively and return their capital by seventh year

6. Business description • A professional marketing activity always links need and supply with value added services Interestingly need is not always visible to the customer and through effective communication by marketing the need has to be created & the hidden potential is unleashed.. • We have carefully chosen a set of products (like organic fertiser- farm equipment-wood- cutting tools-special snacks etc )which have not been marketed in a professional manner. By suitably positioning these products in the value chain we are confident of gaining a market share .The unorganised market –the uneducated farmers-their eternal cash crunch …all hurdles will be converted as opportunities through conceptualised marketing • Special snacks will be marketed after thorough research on customer preference/ need on ground nut burphy(chikki)-numkeen (thattai murukku) etc. The untapped potential is very big for such items through out india and selective export potential in certain countries.there are quite number of quality manufacturers who do not have proper marketing net work.By successfully linking the manufacturer and customers through the snacks this marketing company will earn name profit and repeat orders • Nearly 2lakh villages in south india alone has got organic fertilisers’ need for min 10lakhs acres of agricultural application In south india alone approximate sales potential of Rs100cr is there and garnering 2% of this potential per annum should not pose big challenges for this marketing company

7. Any manufacturing business can be divided in to four areas of activities namely technology-production-finance-marketing and all these areas are to be constantly monitored for overall profitability .Necessary systems- controls –and directions are to be in place for consistent performance • This marketing company will take complete charge of marketing and leaves technology and production to the product manufacturer initially. Customers’ preference/taste/expectations will be thoroughly studied for matching need and supply very effectively for each and every product marketed • All these exercises improve relationship and increases the pricing power for the product and the profit margin also improves. High sales low margin concept will be employed where competition is to be managed • Application engineering and technology departments will be established with in 3 years period to bring out our own brand .Under this scenario manufacturers will become sub contractors and price comes under our control.After domestic market export market will be explored.Innovative customer relationship techniques will be applied constantly to gain more market share • Tamilnadu-andhra Karnataka kerala will be our initial focus for the chosen products which will be expanded to pan india .. export to foreign countries etc at later years • List of products to be marketed has been identified.Oncekarur and Chennai offices are established customers and marketing net working will be established with in six months and we expect first year sale to cross fifty lakhs and we are confident from second year the sales will cross two crores with 30 % annual growth.we have taken project year expenses(pre operative expenses) with in the project cost

8. Product strength is very good in all the chosen products .with professional marketing we take the product to needy customers with integrated pricing power and margin. • Standard trade practices will be put in place .As all the products are consumable in nature product quality-customer relationship etc will be given special priority for gaining repeat orders

9. Operational plan • The organic fertiliser & farm equipment are classified as agro products • Wood processing cutting tools are semi- consumables of industrial application • Special snacks are known as fast moving consumer goods FMCG • Agro products will be stocked in karur office and marketed from there • Cutting tools and snacks will be sold from Chennai office • Farmers need to be educated for selling agro products and close relationship in essential for sales and collection of payments etc sales professionals will be specially trained for our agro products to roam in nearly two lakh villages in south india and perform customer service .Indian farmers are struggling to make good profits and government subsidies and bank credit facilities where ever available are to be passed on in a very effective manner to win the goodwill of farmers. Productivity will be the focus area and how they get back their money and also improved crop yield will be explained to farmers while selling these agro products.This style of sales and marketing will lure all farmers gradually and we are confident of meeting our sales targets • Wood working cutting tools are to be sold through carpenters and data base of carpenters need to be created district/statewise. Fast moving /slowmoving tool designs depend upon furniture design and we have to bridge all to arrive at tools demand data. Furniture market is growing at more than 15% per annum and cutting tools being derived market will follow the same trend.It is estimated untapped market for tools in india alone is 12 crores per annum and exports offer very strong promise with more attractive profit margin

10. Special snacks will be marketed from Chennai.good quality tasty and affordably priced snacks are very limited in indian market. our small research revealed only by brand power the existing players manage their show and shop people are telling very less customers ask for specific brand of specific food item. This is the hidden opportunity.Extreme care will be exercised in fixing the taste and hygiene and chikkies-thattai-rava laddu and other forgotten indian traditional snacks will be brought to market with uncompromising taste and consistency.The huge city based population which is caught in pizza-mcdonald-coke western food culture will be systematically lured. Manufacturing skill plays very high role and grading will be done to manage quality fluctuations in manufacturing.Bangalore based MTR brand success in auxiliary food products and the huge gap between MTR and no 2 will be taken as market lesson for positioning our snacks in the brand ladder • Our market survey with small players reveal Chennai alone has got the hidden untapped potential of good quality snacks of min Rs.3crores per annum if manufacturing and marketing are properly fine-tuned. With this encouraging data our activities will be geared up for the target

11. Project cost and funding (fig in lakhs) • Project cost Land and building …. 25.00 Office equipment….. 10.00 Marketing and branding exp …. 20.00 Company formn&alliedexp … 05.00 Working capital fund……. 50.00 Total project cost 110.00 • Means of funding Equity share from promoters 20.00 Preference shares from investors 90.00 Total funding 110.00 Note • Private ltd company will be formed and equity & pref.shares issued • Product strengthening and brand building is given special priority with budget • Pref. shares are paid dividend of 10% p.a. and redeemed in 8th year with 50% premium • in fourth year 25% of preference shares are offered for conversion to equity shares • working capital estimated for3 months business cycle of 2 crores annual sales plan • equity shares are paid dividend from net profit quantum only.

12. Sales and profitability projections (fig.in lakhs)

13. Operating expense includes staff salary-trade discounts-travel -admnetc • Cumulative provisions of net profit Rs177lakhs for investors help reward them liberally • Pref.shares repaid with 50% premium (90+45 =135lakhs) • Equity share holders dividend 200% in 7 years for 20 lakhs (20x2=40lakhs) • Incometax is taken as 35% and depreciation for assets as per IT norms • PBDT means profit before depreciation and tax • Dealer/distributor discount of 30-35% is deducted from sales to arrive at cost of material

14. Investor’s benefits • Professionally seasoned people will be managing the business • A list of high growth products with technical strength are chosen for marketing • Preference shareholders are paid 10% dividend every year irrespective of profit or loss. • While repaying/redeeming additional 50% is paid in eighth year totally they get 120% return • Equity share holders are paid in a flexible manner every year depending upon the net profit • However they get 200% return in 7 years period • Option is offered in fourth year for 25% conversion of preference shares in to equity • The company will plan for listing its equity in Mumbai stock exchange at min 200% premium • When sales crosses 10cr in 8th year. This will help investors to completely exit at a huge gain

15. Contact details Tsk venkatasubbarrao BE.,MBA Plot no 21, second cross street Venkateswara nagar Thiru mulai voyal Chennai-6000632 Mobile 9884240600 Email-tsk500@gmail.com