DIRECT MARKETING OF

AGRICULTURAL PRODUCTS
Business Plan

Submitted to:

Barota Chokraborty

Assistant professor
Department of Marketing
Jahangirnagar University
Submitted by:

Tarikul Islam

ID: 2624
3rd Batch
Accounting & Information Systems
Jahangirnagar University
Submission Date: 18-05-2016
Contents
Executive Summary....................................................................................................................................... 2
Company Description .................................................................................................................................... 3
Vision............................................................................................................................................................. 4
Mission .......................................................................................................................................................... 4
Products & Services ...................................................................................................................................... 4
Legal Status and Ownership.......................................................................................................................... 5
Industry Analysis ........................................................................................................................................... 5
Sales Projection ............................................................................................................................................. 6
Growth Rate .................................................................................................................................................. 6
Key Success Factors....................................................................................................................................... 6
Long Term Goals ........................................................................................................................................... 6
Market Analysis............................................................................................................................................. 6
Marketing Plan .............................................................................................................................................. 7
Pricing............................................................................................................................................................ 7
Promotion ..................................................................................................................................................... 8
Placement ..................................................................................................................................................... 8
Financial Data................................................................................................................................................ 8
Projected financial forecast for 5 years .................................................................................................... 8
Break Even point: ...................................................................................................................................... 9
Pay Back Period: ........................................................................................................................................ 9
Investment size ............................................................................................................................................. 9
Project Investment Cost:........................................................................................................................... 9
Source of Funds: ..................................................................................................................................... 10
Average Monthly Costs ........................................................................................................................... 10
Social Impact ............................................................................................................................................... 10
Conclusion ................................................................................................................................................... 11
Appendix ..................................................................................................................................................... 11
 Executive Summary

In current marketing system Farmers dont get proper price and consumers have to buy these products
at a high rate. As a result, farmer becomes uninterested in farming and they are getting poorer day by
day. On the other hand, customers have to pay high amount to buy these products. Middle class and
lower middle class people often cant fit this high price in their budget.

Here the main problems are intermediaries who do nothing but delivering the goods, which increases
the price 3 to 4 times often more.

Our plan is to replace these 7 (approx.) with just ours. The extra profit taken by these intermediaries will
be saved.

There are several companies serving almost like this, but not good enough.

Our society desperately need these sort of organizations. To save farmers to save middle class. A
country like Bangladesh where Agriculture consists of a large portion of GDP these anomalies arent
acceptable.

We are not saying this organization will make only positive outcomes. There are negative sides too.
Many people who work as intermediaries will be jobless.

Overall this organization alone cant change the entire agricultural marketing system, rather it can make
a change in the current market situation, how people thinks, how they market goods.

Also farmers, who are the backbone of our country will find new inspiration to go farming again instead
joining garments factories. Ultimately their living standard will increase.

We hope there will be many more companies in future like us which will grow competition among them
to give farmers better facilities and customers good products.

As a new entrant we will enjoy several advantage for some years. To compete with evolving market
constant upgradation is necessary.

This is a gateway to a better future for all of us.

 Company Description

Our companies goal is to eliminate as much intermediaries as possible, which will eventually decrease
the total price.

We will collect products from our listed farmers through our employees, transport those goods to our
storage facility via our own transportation and finally sale those goods via retail outlets and website.

Although its not that much simple but the main concept is this.

Below is an example of current market condition:

From the diagram we can see there are almost 6 intermediaries in agricultural marketing chain. We
cant entirely eliminate them, but if we can do these things internally we can save the amount they take
as profit.
 Vision

Our vision is to create balance in agricultural marketing chain, so that both farmers and customers can
be benefited.

Mission

1. Provide customers goods at reasonable price.

2. Ensure that farmer gets proper price.
3. Serve consumers with harmful chemical free products.
4. Ensure profitability without harming society.

Products & Services

Agricultural products such as

1. Rice
2. Pulse
3. Potato
4. Mango
5. Vegetables
6. Other agro based products.
Services like

1. Home delivery
2. Online marketing
3. Mobile marketing

Legal Status and Ownership

The company would be a private limited company, which will be operated under Companies Act 1994.
Later it can be converted into public limited company.

Ownership would be divided by the number of shares they hold. Mostly Financing will be done by loans
and outside investors.

Industry Analysis

Industry analysis has been done using Porters Five Forces Model.

a. Threat of substitutes: There are plenty of substitutes in the market, which is a potential threat.
Quality and price are the main option to overcome the threat.
b. Threat of New Entrants: The threat of new entrants is very high. Anyone can enter at any time
in the market as competitor.
c. Rivalry among existing firms: There are several well established firms in the industry like, Agora,
Shawpno, Shobzibazar.com etc. which is very risky. Yet their weakness in minimizing the price is
our strength.
d. Bargaining power of suppliers: As farmers are our only suppliers their bargaining paower is also
high. By following specific strategies, we can minimize it.
e. Bargaining power of buyers: As we are providing products at lower rate barraging power of
buyers are low.

Competitive Force Threat to Industry Profitability

Low Medium High
Threat of substitutes
Threat of New Entrants
Rivalry among existing firms
Bargaining power of suppliers
Bargaining power of buyers
 Sales Projection

In the beginning it would be 10000 tk/day upto 40000 tk/day (based on market research assumptions).

Growth Rate

Based on customer response for first 2 years it can be upto 30%.

Key Success Factors

Attracting middle and lower middle class customers is our basic key to success.

Long Term Goals

1. Increase the number of sales center.

2. Expand the business in seven divisions.
3. Increase the number of website and mobile sales with home delivery
4. Create a good brand value.
5. Have our own transport facility.
6. Have our own storage facility.
7. Have vacuum packaging facility to save products.

Market Analysis

SWOT analysis is given below:

Strength:
1. Our unique business idea
2. Fully energetic 6 entrepreneur
3. Our marketing strategy
4. High quality & quick service
5. Availability of hygienic vegetables at cheap
price
6. Probable consumer satisfaction
7. Positive response from questioners
Weakness:
1. Insufficient practical knowledge about business
and market
2. Available complementary products in market
3. Financial constrains as new entrepreneur
4. Creating huge unemployment problem
 Opportunity: Threats:
1. An unlimited number of potential consumers 1. Direct attempt from intermediaries
2. Easy financing from Banks and personal 2. Various government and legal barriers
investment 3. Possibility of any strong future competitor
3. Easy access to market 4. Political and local problems with
4. First-mover advantage intermediaries.
5. Availability of raw materials

Marketing Plan

Our strategy is very simple. We will collect products from our listed farmers. Our three regional officers
(Rajshahi, Khulna and Barisal) will collect these products and send the products to our hired Cold Storage
in Dhaka. We will sell our products via our Sales Center, Website and mobile.

Pricing

We will divide our every product into 3 categories for pricing.

1. Platinum (Upper Class): We will give them best sorted attractive products and the
price of the goods will be a little bit high.
2. Gold (Middle Class): We will provide them with average looking products at a
reasonable price.
3. Silver (lower class): We will provide them unsorted product at a low rate.
 Title Taka
Purchase 4

Transport 1

Storage 1

Wage & Salary 1

Rent 1

Others .5

Total Cost 8.5

Profit 33.33% OVER cost price (12 tk) 2.8

Selling Price 11.3

Promotion

Online will be the main medium of promotion. Also special campaign at places will be conducted.

Placement

Areas where most of the residents are middle and lower middle class like, Mirpur, Savar etc.

Financial Data
Projected financial forecast for 5 years
If our average daily sell will be 40000 tk then our yearly revenue will be 1, 46, 00,000 tk. After
1 year we expect 20% increase in sell. On 2nd year average daily sell will be 48000 and yearly revenue
st

will be 17520000 tk. On third year our daily sell will be 57600 tk and yearly revenue will be 21024000 tk.
On fourth year our daily sell will be 69120 tk and yearly revenue will be 25228800 tk. On fifth year our
daily sell will be 82944 tk and yearly revenue will be 3027560 tk.
Break Even point:
When our average monthly sale will be 314000 tk from that month we will enter break ever point.
We expect that our first month daily sale will be around 10000 tk. From this we can say breakeven point
will come on the 2nd month.

Pay Back Period:

We need at least 6 years to pay back the investment.

Investment size
Project Investment Cost:
`The project will require starting capital of 300000.

COSTS Estimated Actual

Fixed Costs
Advertising for Opening 10,000
Basic Website 10,000
Building Down Payment
1,450,000
Business Cards/Stationery 7,000
Business Entity 20,000
Business Licenses/Permits 30,000
Computer Hardware/Software 50,000
Decorating 150,000
Internet Setup Deposit 3,000
Lease Security Deposit
Legal/Professional Fees 10,000
Machines & Equipment 50,000
Operating Cash (Working Capital) 150,000
Security System Installation 10,000
Setup, installation and consulting fees 30,000
Signage 10,000
Starting Inventory
1,000,000
Telephone 10,000

3,000,000
Total Fixed Costs -
Source of Funds:
As both of are student we dont have ability to invest money. We have to depend on Investors.

Average Monthly Costs

Advertising (print, broadcast and Internet) 15,000
Business Insurance
Business Vehicle Insurance
Employee Salaries and Commissions 85,000
Equipment Lease Payments
Inventory, raw materials, parts
Franchise Fee
Health Insurance
Internet Connection 400
Principal repay 50,000
Legal/Accounting Fees
Merchant Account Fees 1,000
Miscellaneous Expenses
Mortgage Payments
Lease Payment
Owner Salary 40,000
Payroll taxes or Self-employment tax
Transportation charge 40,000
Security System Monthly Payment
Supplies
Telephone 400
Travel 10,000
Public Utilities
Website Hosting/Maintenance 3,000
Rent 70,000
Other 2 (specify)
Total Average Monthly Costs 314,800 -

Social Impact
The social impact of our business is given below:
Farmers will get proper price of their products. So Farmers will be
interested in farming. This can reduce their poverty.
Consumer can buy their necessary agro products at a reasonable price.
They will get chemical free fresh healthy product.

We think our business can make a positive competition with intermediaries and they will try to reduce
their price also. As a result our countrys economic condition will be stable.
 Conclusion
The profitability of this industry is high. If it is possible to grab the market, it will start a new era.
Advancement in agriculture, funding for farmers to avail better equipment, chemical free packaging
system like Nitrogen vacuum packaging will be available. Someone has to be the pioneer. We decided
We CAN.

Appendix
Questioners