Executive Summary

Nestle is planning to launch ‘Nestea’ into the Bangladeshi market. This is a type of cold
drink that the consumers can have anytime, and anywhere. We initially want to release a
pet bottle and a mini sachet into the market to see how consumers react to this new
product. It will be aimed mainly at busy students and jobholders who need both energy
and refreshment during their daily life.

We will initially dominate the market, as we are the first company that brought this
product into this market. With a daily sale of 70,000 pet bottles and 100,000 mini sachets,
we expect to initially achieve a 20% market share which will consist of mostly upper and
middle class individuals.

We are segmenting the market according to demographics (age wise) as different age
groups need tea, at different levels, during the day. If market still seems promising after
the first couple of years in business, we want to bring in other varieties of Nestea that
Nestle are already providing in other countries (markets)
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Currant Market Situation

Richard Blechynden, an American tea plantation owner, invented Iced Tea at the 1904
World’s Fair in St. Louis. Because of a heat wave no one wanted to sample his hot tea, so
he dumped a load of ice into it and served the first Iced Tea. Ironically enough, it was a
major hit. It should have a similar effect in Bangladesh. There is no reason to think that
there will be a different impact in our country. There is no such competitor who sells ice
tea to their consumers. The only unlikely competitor would be cold coffee, which in turn
is only sold in restaurants, and at high prices.

Market Description

We are currently targeting the market demographics wise. More specifically, we are
targeting the working and studying segments of our country. The summer is coming and
people will want to have cold drinks. This gives us an opportunity to expand the ice drink
to working individuals and students. Tea is a normal drink for the South Asian
community and hence it’s going to be hard to replace. What we can try and implement is
making the public aware of ice tea as a side drinks to tea, which they can have on a hot
day when they must have tea but the weather seems to dictate otherwise. We can also
promote ice tea in a pet bottle and illustrate it as mobile tea.

Product Review

The product will have 2 distinct types:

 250 ml Pet bottle

 2-taka Mini Ice Tea Powder packet.

We will increase the quantity of ice tea provided in pet bottles in later years but only if
we find that it would be profitable to do so. We can also have a large powder ice tea
bottle but this will again depend on future sales of such a product.

Competition Review

Again, there is no direct competition for ice tea since no other company has come up with
this product. And again, we are not going directly against the normal “hot” tea, as that
would be suicidal. The only competition that can be seen is cold coffee, which is only
served in restaurants. They highly vary in quality from store to store and, most of the time
is highly priced.
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Table: A
Targeted
Segmentation Segment Customer Need Corresponding Feature/Benefit
Students Cold and quick Its cold tea, and is available on
(Age: 12-25) refreshing drink the spot and can be consumed
immediately
Can enjoy a cold Iced tea will have a certain
drink which helps amount of caffeine that will
them work provide students, who are
working late, with enough energy
to run the day
Need cold drink in the Is always cold!! Its ICED tea!
summer
Job holders Need quick refresher Can provide a cold energy up on
(25-40) at the office a hot summer day.

Distribution Review

1. Supermarkets – all major supermarkets like Nandan, Agora will be provided with
the product
2. Local stores – local community stores located in residential areas will be provided
with the product
3. Cafeterias – school, university, and office cafeterias will be also provided with ice
tea refreshing drink
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Strengths, Weaknesses, Opportunities, and Threat Analysis:

As Nestea has a strong brand impact, it has several powerful strengths, and opportunities.
Besides these, there are some weaknesses and threats as well, which are initially
predictable. The following description both encourages us, and cautions us to launch the
product in this country.

Strengths

Nestea can be produced and marketed on six strengths:

1) First in this country: As there is such no brand to produce and launch this
readymade ice tea in this country yet, Nestea is the first company to introduce the
product in the market hence the competition would be less.
2) Comes up with new taste: Nestea is a new taste of tea, which people can always
enjoy as a soft drink, especially in the hot summer.
3) Low RM cost: In Bangladesh, there are many tea gardens and we have many
resources to collect tealeaves at a low price. As the raw material cost will be low,
the price of our product would be low and therefore people can effort it.
4) Very big market for this sub-continent: There is a huge number of populations in
this sub-continent, and the increasing growth rate of population will also increase
our market because everybody has at least a cup of tea in a day. As the new
generation is growing they are always interested to taste a new flavor.
5) Mobile tea: Nestea is offering pet bottles of ice tea of different sizes which will
solve the problems of those people who do not want to carry a flask of tea with
them.
6) Environment conscious: Nestea is producing pet bottles which are easy to recycle
and hence it is environment friendly. Nestea will also encourage the recycling
firms by rewarding them for recycling the bottles most.

Weaknesses

As Nestea is a new brand of product coming up with new taste in this sub-continent there
will be few weaknesses besides the strengths like:

1) Change of taste: People in this sub-continent are not familiar to the taste of ice tea
so there might be a risk in launching the product.
2) Heavy marketing cost: As ice tea is completely a new taste of drink so Nestea has
to follow a strong marketing strategy, so it will require a large amount of
marketing cost.
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Opportunities

Nestea can exploit its external elements to take the advantages from these four major
marketing opportunities:

1) Expansion: Firstly Nestea is planning to launch this product in Bangladesh and

then gradually planning to expand the market of this product in the whole sub-
continent.
2) Good brand name: Nestea belongs to a very good brand name (Nestle). So the
image of the product will be good from the start, hence people will be interested
to taste the product.
3) Good Packaging opportunities: Nestea is providing good packaging strategies
which include different sizes of pet bottles, mini packs, powder for house use.
These will increase the mobility of the product and the price will also be within
the reach of people.
4) Advantage of the season: Nestea is planning to launch this product in summer
which will increase the choice of the people besides the other soft drinks and due
to its taste it will be easier to catch the market for this product. People take tea for
refreshment which they avoid during summer season because it generates heat in
our body, but as our product is cold they will be also able to get the same
refreshment in the summer.

Threats

We may face three possible challenges at the introduction of Nestea:

1) New competitors: Nestea is launching a new product in the market and once it
gets the market other companies will also plan to launch same kind of product in
the market hence we might get a competition.
2) Rejection from certain segments: Older generation use to have tea in a warm state
so this taste of tea may not be acceptable to them.
3) Limited product lifecycle: Every product has a limited lifecycle and the same may
go with our product. The product might not have the same market as the
beginning for life time.
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Objectives and Issues

We plan to have a certain amount of sales and profits from our first couple years of sales.
Here are our expected values.

First year:
We expect to take 15-20% of market share
We expect an average of 70,000 pet bottles to be sold daily
We expect an average of 100,000 mini packs to be sold daily.
We will have a late breakeven since consumers will have to get use to the idea of
ice tea.

Market Share for first year

20%

80%

Second Year:
Market share will increase to around 35%
This year we expect an early breakeven
We expect increased sales from last year.

Market Share for 2nd Year

35%

65%
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Marketing Strategy

We are initially targeting the upper and middle class of Bangladesh. We want to
give away free minis to university students at particular times of the summer when they
really need a cool drink. If possible we would want to give them free cold ice tea as well.
This will make them, in a way, habituated to ice tea. This has a side agenda as well,
which is, we can gather survey information from these students after they have been
exposed to ice tea. Future modifications, improvements and even variety of products
could be found.
As stated before, we are only releasing a pet bottle and a mini sachet in our first
year of business. This is because we still are unclear as to how the consumer will react to
ice tea. Again we are promoting this ice tea not as a competitor for regular tea but as
something consumers can have when they are in a hurry or in a hot summer day. The
portability of the bottle will also help in its appeal.
There are of course other plans from the 2nd year onwards. We plan to increase the
size of the pet bottle in the long run and release a bigger powdered bottle having ice tea,
which can be made at the convenience of people houses.

Positioning

Since we are the first company releasing this product in Bangladesh, we will position for
number one in consumers mind. When competition does appear, we will appeal to the
customers with our quality and already know brand name.

Product Strategy

We have already detailed out our plan for the first year. There are of course other plans
from the 2nd year onwards. We plan to increase the size of the pet bottle in the long run
and release a bigger powdered bottle having iced tea, which can be made at the
convenience of people houses. From the 3rd year onwards, if markets still seem attractive,
we will increase promotions via packaging. Bangladesh has a huge market for new
graduates who have amazing ideas for packaging products. We would be missing out on
a lot if we didn’t take advantage of this opportunity.

Pricing Strategy

To be competitive, we are planning on releasing our 250 ml bottle at Tk. 8 for wholesale
and Tk. 10 as retail. The mini sachet will cost around Tk. 2 per packet. We are going to
be competing with normal cold soft drinks when it comes to pricing. Even though we are
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not providing a carbonated drink, consumers will be judging the price in terms of other
cold drinks. Hence this pricing will help us keep value in the market. A highly priced
bottle or sachet will not last long in Bangladesh’s bargain market.

Distribution Strategy

Our distributive channels will not change dramatically. The channels described before in
‘Distributive Review’ will be our lasting logistics channels. But we do want to provide
these channels towards the rural areas of our country. Initially, there will be no other way
but to physically go to these areas and advertise our product. Since this will not be
financially feasible, we will attempt to increase share of our product in urban areas and,
as a transition, we hope that the markets in the rural areas pick up on the product. If not
and if still profitable, we will start physical distribution to these particular markets.

Marketing Communications Strategy

Couple of ways to communicate our product to the customer came into view:

We can attach a mini sachet with a popular newspaper and provide it to all newspaper
buyers. A sachet will be taped to, for instance, Daily Star Magazine (Friday edition). This
will promote the product to every newspaper reader.

Stalls will be opened at popular students and jobholder spots. They will be given for few
at particular times of the day, at particular times of the year. Also included here is the free
drinks and sachets provided to university hostels.

Marketing Research

Simply put, we don’t want to do the mistake ‘New Coke’ did when they released the
Coca-Cola company released this product in to the market. As mentioned before, our
awareness programs will provide background information on how people will reach to
our product. The free give away will give early warning signs to defects or faults in any
part of the product).
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Action programs

Nestea will be introduced in the month of April. These are the schedules of the next six
months of the next year to achieve our goal as stated before:

March
We will initially start a Tk.200,000 trade sales campaign to educate the dealers and to
increase the excitement of the product that will be introduced in the month of April. We
will train the retailers so that they can explain the taste, benefits of the product to the
consumers.

April
We will start multimedia advertising campaign through radio, newspaper, television, and
internet. We will also offer our product’s sample attached with one of the well renowned
weekly news paper for free to add sales promotion.

May
As the product is mainly focused on the new generation we will start a free campaign
among the schools, colleges and universities. We will also freely distribute certain
amount of product in different offices to get good response as well from the office stuffs.

June
We plan to open some Nestea booths beside few educational institutions, amusement
parks and cinema halls so that our product becomes more available to people (especially
new generation). We will also open booths in the fair, concerts and some important
occasional events.

July
We will promote our sales by rewarding the dealers for selling the most amount of
product which will highly encourage them.

August
We will offer lottery like sales promotion in which we will offer customers to win some
prizes if they buy our product. If the quality of our product is reliable, this will not
only increase sales but also expose customers to the new taste that they will start to
love.

From September onwards we will focus mainly on customer satisfaction and awareness.
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Budgets:

Nestea is planning to sale 70,000 units of pet bottles and 100,000 units of mini packs in
the very first year, which will totally cost Tk. 945,000. As we have initially priced the pet
bottles at the rate of Tk.8 per unit, and the mini sachets at the rate of Tk.2 per unit we
would expect to get total revenue of Tk.760, 000. So initially we might have a loss of
Tk.185, 000 in the first year. Then if we get a remarkable response from the consumers,
and they get habituated by our product we would increase the wholesale price of the pet
bottles up to Tk.10 per unit. According to break-even calculations, Nestea will become
profitable after selling 175,500 units. The break-even calculation follows as:

Total estimated fixed cost in the first year = Tk.770, 000,

Variable cost per unit = Tk.6,
Firstly assumed wholesale revenue per unit = Tk.8.

350,000
Tk.8 – Tk.6
= 175, 000 units
Table B: Nestea budgets in the first year.
Unit Price Units sold Total Unit variable
revenue cost Unit Fixed cost Units sold Total Cost

Pet Bottle 8 70,000 560,000 6 5 70,000 770,000

Mini
Sachet 2 100,000 200,000 1.5 0.25 100,000 175,000

First Year
Total sales 760,000
Total cost 945,000

profit/(loss) (185,000)