You are on page 1of 25

Marketing Plan of Knorr Pasta

Marketing Management Course

April 08, 2010

Prepared By,
Muhammad Tahir khan (2908)
Syed Hassan Raza Taqvi
Syed Mukarram Hussian
Badar Jiwani

Submitted to,
Sir Sanatullah
Marketing Management Report on Knorr Pasta

Table of Contents
..........................................................................................................................................1
Introducing Knorr Pasta.................................................................................1
Term Paper on the Launch Strategy of Knorr Pasta............................................1
Table of Contents............................................................................................2
Background....................................................................................................4
About Knorr..................................................................................................4
Passion for Flavor ................................................................................................................4
Key Facts .............................................................................................................................4
Product Concept & Proposition.......................................................................6
About Pasta..................................................................................................6
The Instant Pasta Concept..............................................................................6
Target Market Analysis...................................................................................7
Target Segment Identification (Ideal Consumer Profiling)...................................7
Demographics ......................................................................................................................7
Psychographics ....................................................................................................................7
Consumer/Buyer Behavior ...................................................................................................7
Market Potential............................................................................................8
Symbols ...............................................................................................................................8
Calculating N ................................................................................................................................8
Determining Q ....................................................................................................9
Determining P ......................................................................................................................9
Competitive Positioning................................................................................10
Brand Values...............................................................................................10
Positioning Statement...................................................................................10
SWOT Analysis..............................................................................................11
BCG Matrix....................................................................................................12
Financial Forecasts.......................................................................................13
During Test Marketing Period.........................................................................13
Test Market Details ............................................................................................................13
Socio Economic Classification ............................................................................................13
Test Market Potential .........................................................................................................13
Assumpt i ons ......................................................................................................................13
Pr i ce ..................................................................................................................................13
Post Test Marketing ....................................................................................14
Revenue and Operating Profit Projections............................................................15
Basic Parameters ........................................................................................................................15
Forecasted Sales (Units) .....................................................................................15
Forecasted Sales (Rs.) .......................................................................................................15
Forecasted Operating Profit ...............................................................................................15
Pricing Strategy............................................................................................16
Distribution & Sales Strategy........................................................................16
Background: Knorr’s Brand Strategy Today..................................................18
Communication Campaign............................................................................19
Campaign Objectives........................................................................................19
Communication Message .............................................................................19
Advertising Strategy.....................................................................................20
Electronic Media .........................................................................................20
Press Media.................................................................................................20
Out of Home (OOH) Media............................................................................20

Page 2 of 27
Marketing Plan on Knorr Pasta

Activation Strategy.......................................................................................21
Out of Home (OOH) Activation .....................................................................21
School / College / University Activation..................................................................21
Mall Activation....................................................................................................22
“Planet Knorr” - Point of Purchase (POP) Activation..................................................22
Leisure Activation........................................................................................23
Surprise Pasta @ Cineplex....................................................................................23
Canteen/Cafeteria Branding..................................................................................23
Branded Mobile Vans...........................................................................................23
Sales Promotions..........................................................................................24
Consumer Promotion....................................................................................24
Instant Pasta Recipe Contest................................................................................24
Trade Promotion..........................................................................................24
Marketing (Communication) Budget.............................................................25
Marketing Plan on Knorr Pasta

Background
This report forms the launch plan for Knorr Instant Pasta in the Pakistani urban market.
The launch plan has been constructed as an academic project for the course titled
“Principles of Marketing.” The plan contains our views on the overall product concept
and proposition, the product’s target market, positioning, communication, distribution,
pricing, and a broad based business model that outlines projected financials
subsequent to the launch of the said product.

About Knorr
Knorr believes in the power of the cooking woman. Cooking is more than just
transforming raw ingredients into a dish. It is the creation of flavor into food, which
sparks delight into everyday meals. With the power of cooking in their hands, women
create relationships and strengthen bonds. This conviction lies at the heart of Knorr's
success - it is Unilever's no. 1 brand.

Passion for Flavor


A passion for good food goes right back to Knorr's earliest days. The business was
formed in 1838, when founder Carl Heinrich Knorr pioneered experiments in drying
seasonings and vegetables to preserve their flavour and nutritional value. Since then
Knorr has become an international brand offering a wide range of bouillons, soups,
seasonings, and other cooking aids that is every cooking woman’s kitchen partner.
Soup is at the heart of good food and good nutrition - and the heart of Knorr. Soup
naturally enjoys a healthy nutritional profile, can help consumers increase their daily
consumption of vegetables and will help them look good, feel good and keep fit.
It is well known, for instance, that people who eat more soup tend to have:
• A lower Body Mass Index

• Lower fat intake


• Lower energy intake per day
• Better cholesterol values
• Better nutritionally balanced breakfasts, lunches and dinners
Soup is a nourishing dish offering an almost primitive comfort. That is why Knorr will
continue to create delicious soups, based on its long experience of producing soups of
all kinds and flavors.

Key Facts
Knorr is a trusted and popular brand, recognized and appreciated all around the world:
• It's Unilever's no. 1 brand, with annual sales of more than €3 billion.
• Knorr products are currently sold in more than 80 countries and it is growing fast
beyond its European heartland, particularly in Latin America, Africa, the Middle East
and Asia.
Marketing Plan on Knorr Pasta.
Product Concept & Proposition
About Pasta
A 1/2 cup serving of cooked pasta (spaghetti) contains a mere 99 calories, less than
half a gram of fat, and less than 5 milligrams of sodium.1
Pasta is high in complex carbohydrates, which helps give us energy. Instead of a quick
burst of energy, complex carbohydrates provide a "time release" of energy. Athletes
who take advantage of "carbo-loading" eat complex carbohydrates to save up the
energy in their body. The carbohydrates become glucose stored in the muscles. The
glucose energy is then released when needed during long, tiring exercise, like long-
distance running or biking.
Pasta comes in many different shapes and sizes. There are simple string-shaped pasta
like spaghetti and vermicelli, ribbon-shaped ones like fettuccine and linguine, short
tubes like elbow macaroni and penne, decorative fancy shapes like farfalle and rotelle,
large sheets like lasagna, and hollow pasta stuffed with filling, like ravioli, manicotti,
and tortellini.

The Instant Pasta Concept


Today's consumer has redefined traditional eating. This "on-the-go" generation has
created a demand for nutritional pasta that is quick to prepare and portable.
In recent years, research indicates that young urban Pakistanis have continued to find
lesser and lesser time to actually “cook” the food they eat, while its demand for tasty
and healthy food that can be conveniently prepared at home continues to grow.
Therefore, we would like to introduce the concept of “Instant Pasta” in order to
capitalize on this market dynamic. The concept can be described as follows:
[Knorr] Instant Pasta is an alternative and faster way to make great tasting
pasta in half the time taken to make it using traditional recipes.
[Knorr] Instant Pasta comes in a variety of flavors, shapes and packaging. It
is very simple to make and the preparation time is very low.
Marketing Plan on Knorr Pasta

Target Market Analysis


Target Segment Identification (Ideal Consumer Profiling)
After careful analysis of the market as well as consultation with the Knorr brand
team, we have identified the following market segment to be targeted as ideal
consumers for Knorr Pasta:

Demographics
Buyer Consumer
Density Urban [Same]
Age 30 – 35 8 – 15
Gender Female Male/Female
Family Size 4+
Lifecycle Stage Married with children Kids/Early Teens
Minimum Household Rs.25,000/- N/A
Income
Graduate Primary/Secondary School
Occupation Housewife/Working Students
Woman

Psychographics
Buyer Consumer
Social Class SEC A1, A2 or B [Same]
(Middle, Upper Middle,
Lower Upper and Upper
Upper Classes)

Lifestyle Believers Achievers


Personality Ambitious, trendy Extrovert, confident

Consumer/Buyer Behavior
Buyer Consumer
Occasion Mostly commonly bought School lunch break,
during daily/weekly evening/general snacks,
groceries by the house wife school night dinner
or the chief wage earner. (especially when the main
course is not liked),
alternative to lunch.

Marketing Plan on Knorr Pasta


Benefits Sought Good health and great taste Great tasting alternative to
in the food that can be already available/unavailable
prepared quickly and Food in the house.
conveniently which her
children would readily eat and
thus facilitate her in raising
them to the best of her
abilities.
Status Regular Instant Noodles Regular Instant Noodles
Buyer Consumer
Average Usage 6 packs a week 3 packs a week
Rate(s)
Loyalty Medium Strong
Attitude Low Involvement, Positive, Habitual, Enthusiastic
Habitual

Market Potential
Symbols
1. TMSD: Total Market Segment Demand.
2. N: Number of Buyers in the Market Segment.
3. Q: Quantity purchased by an Average Buyer per Week.
4. P: Price of an Average Unit.
Where,
TMSD = N X Q X P

Calculating N
� The total population of Pakistan is 160 million, according to unofficial estimates. 3

� The average household size is 5 in the target market segment identified above.2

� Hence, there are a maximum of 32 million households in Pakistan, (assuming


that the average household size stays constant across various geographies in the
country.)
� According to human development index (HDI) statistics provided by UN, 15% of
Pakistani population is below the poverty line i.e. in absolute poverty.
� Hence, (100% - 15%) x 32 million yields 27.2 million households across Pakistan

� The urban and rural split in the country’s population is 35%:65%3

3 Source: Economic Survey of Pakistan, Chapter on


Population

Marketing Plan on Knorr Pasta

~ Hence, 35% x 27.2 million yields 9.52 million urban households or 9.52 million
urban housewives

Determining Q
Based upon the buyer and consumer behavior mentioned above, the average units
bought per week per buyer is 6.

Determining P
Knorr Pasta would be sold at the price at Rs.15/- per unit.

The total market segment demand per week i.e. market potential per week is
as follows:

TSMD = NxQxP
= 9.52 x 6 x 15
= Rs.856.8 million

Note: According to estimates received from Unilever, Knorr Noodles currently


has 30% share of this potential market.
Marketing Plan on Knorr Pasta

Competitive Positioning
At Knorr, we want people to enjoy good food, any day, any time. This is why we would
like to functionally describe Knorr Instant Pasta as follows:
“Knorr Instant Pasta is a ready to make, healthy and tasty meal specifically
developed for children and teenagers. It is quick and convenient to prepare
and comes in a variety of flavors.”

Brand Values
We intend to communicate what Knorr Instant Pasta should mean to our profiled ideal
buyers (i.e. housewives within the targeted market segment) and consumers. It is
much more than merely an instant meal. It is a passport to world cuisine, adding new
ideas and new twists to old favorites. The challenge is to make our products the
healthy choice for consumers without compromising taste, convenience and
affordability.
Knorr’s value statement is as follows:
“Great food is exhilarating. It elevates us out of the everyday. No matter
what your background or cooking skills, we believe that everyone should be
able to create an incredible meal without having to spend hours in the
kitchen. That's why we've taken some of the world's greatest pastas and put
them right in your home - inspired by different recipes that stimulate the
senses.”
Knorr believes that good food matters. It adds untold pleasure to our lives. And
everyday meals can be just as magical as special occasions.
Food is not just fuel, it really is the glue of life.

Positioning Statement
Based upon the above, Knorr Instant Pasta will be positioned in our target market as
follows:
“A food solution that elevates you out of everyday life and provides you the
exciting ability to create an incredibly tasty meal without any hassles and
thus ensure your family’s good health while remaining within your budget.”
Marketing Plan on Knorr Pasta

SWOT Analysis
Strengths Weaknesses
~ High Brand Awareness Levels (Recall) ~ Low Brand Salience Levels
(Consumers are not really aware of
~ Association with quality, taste, the brand’s benefits, despite
innovation reasonably high recall)
~ Strong brand heritage. ~ Limited Distribution
~ Expanding distribution network. ~ Offering suitable for urban markets
~
Wider variety of taste offered to the only
consumers.
~ Health consciousness on the rise in
consumers.

Opportunities Threats
~ (Net) disposable income has ~ Influx of other foreign brands in the
increased over the past few years, same category can give rise to
thus increasing the consumers’ sterner competition
purchasing power. ~ Frozen foods can curtail the sales.
~
Awareness of healthy, hygienic and
conveniently packaged food is on the
rise.
~ Consumer exposure to foreign
Products has also increased.
Marketing Plan on Knorr Pasta

Financial Forecasts
Detailed financial forecasts are enclosed in the attached annexure. These forecast
have been made based upon the information provided below

During Test Marketing Period

Test Market Details


Test Market Karachi
Activity Duration 6 Months
Total Test Market Population 16,000,000
Average House Hold Size 5
Total House Holds 3,200,000

Socio Economic Classification


SEC %age of Population
A1 2%
A2 3%
B 15%
C 20%
D 35%
E 25%

Test Market Potential


~ Potential (Targeted) House Holds: 640,000

Assumptions
Trial Purchase Rate 20%
Repeat Purchase Rate 50%
Repeat Purchase Frequency Weekly

Price
Price per Package (PKR) 15.00
Marketing Plan on Knorr Pasta

Post Test Marketing


Once the test marketing stage is over, the average monthly volume for Karachi will
be taken as benchmark and the following volume split is expected across the
country.

City Volume %age

Karachi 50%

Lahore
30%
Islamabad

Fa isa la bad
20%
Others
Marketing Plan on Knorr Pasta

Revenue and Operating Profit Projections

Basic Parameters

Avg. Monthly Vol. (Units) 981,333


Annual Sales Increase 10%
Operating Profit 40%

Forecasted Sales (Units)


Lahore & Faisalabad &
Period Karachi Islamabad Others Total
Test Marketing 5,888,000 - -
2,355,2
Year 1 Post Test Marketing 5,888,000 3,532,800 00 17,664,000
2,590,7
Year 2 Post Test Marketing 12,953,600 3,886,080 20 19,430,400
2,849,7
Year 3 Post Test Marketing 14,248,960 4,274,688 92 21,373,440

Forecasted Sales (Rs.)


Lahore & Faisalabad &
Period Karachi Islamabad Others Total

Test Marketing 70,656,000 - -


Year 1 Post Test Marketing 70,656,000 42,393,600 28,262,400 211,968,001
155,443,20
Year 2 Post Test Marketing 0 46,632,960 31,088,640 233,164,801
170,987,52
Year 3 Post Test Marketing 0 51,296,256 34,197,504 256,481,281

Forecasted Operating Profit


Period Operating Profit (Rs.)
Year 1 84,787,200/-
Year 2 93,265,920/-
Year 3 102,592,512/-
Marketing Plan on Knorr Pasta

Pricing Strategy
Knorr Instant Pasta will be priced along the corporate policy of having sustainable and
premium profit margins. The average operating margin for all Knorr products sold in
Pakistan is 40%.
Knorr Instant Pasta will be sold in a single serving pack. Assuming that the Overall
Cost of 1 Pack Sold is Rs.10/- we would price Knorr Instant Pasta at Rs.15/- + GST
per pack.
Customers usually have a reference price in their mind for a particular product and
therefore they might compare the price of knorr instant pasta with the price of knorr
noodles. Therefore we have priced it for Rs.15 as in knorr instant pasta we have kept a
pasta sauce rather than a powder which makes it different from the knorr noodles and
also the cost production increases.

Distribution & Sales Strategy


Knorr Instant Pasta will be distributed in the market using standard distribution
mechanics for all existing Knorr products.
Distribution is carried out as follows:
1. The exclusive distributor for Knorr buys from Unilever and sells it to various whole
sellers in the target market cities. Since these are high volume sales, per unit margins
are relatively low.
2. These whole sellers then sell to retailers at a higher margin but lower volumes.
3. Retailers then sell to consumers.
Along with the abovementioned, the Sales Force for Knorr is structured to facilitate
the entire process. The structure is as follows:
Position Role

Territory Sales Officer ~ Revenue Target Driven


~ Responsible for a location/area within the targeted
city
~ Liaison with retailers
~ Ensuring product placement, availability and
merchandizing at POP/POS
~ Liaison between the retailer and whole
seller/distributor

Area Sale Manager ~ Responsible for a cluster of territories


~ Managing various territories
~ Personnel Management
~ Conflict Management & Problem Resolution
Marketing Plan on Knorr Pasta

Regional Sales Manager ~ Responsible for a collection of areas usually


comprising of more than one city.
National Sales Manager ~ Responsible for the sales within the entire country
for the brand.
Marketing Plan on Knorr Pasta

Background: Knorr’s Brand Strategy Today


• Relatively efficient Use of ATL Media:
• Electronic (min 45 sec TVC to break into the clutter)
• Radio
• Ads in selected magazines and
• Occasionally in Newspaper
• Merchandizing activities through:
• Product placement at Eye Level
• Strategically designed POS material with particular emphasis on in store
branding material particularly buntings
• Store Converter Activity:
• Trial are generated by placing branded Kiosk at outside the selected
superstores and shopping malls
• Trade Activities:
• Ensure that Competitive margins are offered to trade in order to retain their
interest in the brand
• Also to maintain maximum trade barriers for new rivals
Marketing Plan on knorr Pasta

Communication Campaign
Campaign Objectives
• Create a strong brand association by means of an emotional theme in
communication highlighting the important role the brand plays in terms of care and
health of the family.
• Own a unique position in consumers’ mind through elaborating the functionality of
the product and try establishing the position as in the positioning statement.
• Leverage on the brand’s heritage (“Its from Knorr – it’s healthy and gives you
happiness because its Premium and unique”)
• Use best practices and techniques for developing greater brand awareness,
interest, and trial generation.
• Maintain consistency in visual presentation to establish strong brand recognition.

Communication Message
See: Positioning Statement
Marketing Plan on Knorr Pasta

Advertising Strategy
At the launch phase, emphasis should be placed on BTL marketing activities that will
be supported by ATL at the follow-up stage.

Electronic Media
� A slice of life TVC for 45 seconds will be developed to thematically portray the
positioning statement in a creative and engaging manner.
� Subsequently, shorter adaptations of the TVC will be developed.
� The TVC will also be adapted into a radio commercial.

� Radio will also be used to deliver branded content via content sponsorships

Press Media
� The electronic media will be adapted visually
� The headline will come from the creative idea used for the TVC
� The body copy will be formed using the positioning statement and adapting it to
the creative idea
� The Knorr tagline will be retained as is.

Out of Home (OOH) Media


� Billboards
� POP/POS Material
Marketing Plan on Knorr Pasta

Activation Strategy
Out of Home (OOH) Activation
School / College / University Activation
Various leading educational institutions i.e. schools, colleges and universities in major
cities will be activated for infusing product awareness as well as generating trial.
Product awareness will be given via a branded kiosk/stall placed inside the
cafeteria/near the tuck shop. The kiosk attendant will be responsible to educate
potential customers as well as generating interest and desire while inducing trial.
A non exhaustive list of educational institutions where the activation will be conducted
is as follows:
Karachi ~ Karachi Grammar School
~ Beacon House School System
~ The City School
~ Foundation Public School
~ Aga Khan Higher Secondary School
~ DA Degree College
~ Baharia College
~ Institute of Business Management
~ Institute of Business Administration
~
FAST NU
~ Baharia University
~ SZABIST
~ Iqra University

Lahore ~ Top 3 Secondary Schools


~ Aitchison College
~ Lahore University of Management Science (LUMS)
~ Lahore School of Economics (LSE)
~ National College of Arts (NCA)

Islamabad ~ Top 3 Secondary Schools


~ Top 3 Colleges
~ Top 3 Universities
Marketing Plan on Knorr Pasta

Mall Activation
The activation of educational institutions will be replicated at various shopping malls
across the city. Along with awareness and trial objectives, interest in the product’s
offering will be enhanced through various competitions, games and prizes.
This activity will be conducted at the following venues:

Karachi ~ Park Towers


~ Forum
~ Millennium Mall
~ Dolmen Mall
~
Lahore Pace
~ HKB
~
Fortress Stadium
~ M. M. Alam Road

Islamabad ~ Jinnah Market

“Planet Knorr” - Point of Purchase (POP) Activation


POPs of super stores and super markets will be activated using an idea called “Planet
Knorr.” The details are as follows:
A particular segment of the Super Store will be dedicated as Planet Knorr, which
would have:
� A branded wall to give it a creatively distinct look from its surroundings
� A store converter – an educated and pleasant female promoter that will pitch to
every (potential) consumer that ventures to that particular area. She will inform them
about the product, induce tasting, and persuade for trial purchase by attractive
introductory/ discount/special price offering.
� Electronic Screens in Super stores that run the TVC for Knorr Instant Pasta.
� Floor graphics/Direction stickers at super stores / supermarkets directing to
planet Knorr for an attractive offerings.

� Attractive POP to be placed at strategic locations of all the major outlets. These
would include lamas, shelf talkers and wobblers.

Page 20 of 27
Marketing Plan on Knorr Pasta

Leisure Activation

Surprise Pasta @ Cineplex

Potential consumers visiting Universe Cineplex, Karachi will be tapped using the
branded kiosk approach. However, the difference here is that there will be no
sampling. However, Knorr Instant Pasta will be served in a pre-cooked form on a per
serving basis.
Furthermore, an unannounced lucky draw will be conducted at every show’s interval
and the winners will receive a free serving of Knorr Instant Pasta.
Canteen/Cafeteria Branding
Cafeterias/canteens and tuck shops of selected schools/colleges/universities will be
activated via branding using the communication campaign’s visual adaptations.
Furthermore, since Knorr Instant Pasta will be served at these venues at subsidized
prices, it is likely to generate greater trial and repeat purchase.

Branded Mobile Vans


During the test market stage, branded Vans will be deployed in targeted areas near
offices (e.g. II Chundrigar Road, Shahrah-e-Faisal, etc) during lunch hours, near parks
(e.g. Nisar Shaheed Park, Hill Park, Sea view, Race Course Park etc) during peak
hours, to serve Knorr Pasta at introductory prices.

*
Marketing Plan on Knorr Pasta

Sales Promotions
Consumer Promotion
Instant Pasta Recipe Contest
Post launch, a press and radio driven consumer promotion will be designed to invite
consumers to share their own innovations and customizations to Knorr Instant Pasta
Recipes.
Consumers will be asked to share their recipe for a variation of Knorr Instant Pasta.
The recipe will be sent along with 2 used packages of Knorr Instant Pasta and a copy of
the consumer’s CNIC.
The first prize would be Rs.100,000/- along with recognition in the form of the recipe
being printed on the packaging along with the customer’s photo (if they so desire).

Trade Promotion
Retailers will be provided a lot of branding and merchandizing material including
customized dispensers.
Also, tiered trade discounts will be given to retailers to increase their off take vis-à-vis
Knorr Instant Pasta.
The trade terms will not simply be 2 N net 30. However, a special trade discount
structure during the launch period will comprise of:
X N net Y

Where,
X Y
2% 30 days
3% 25 days
4% 20 days
Price ceiling:
Marketing Plan on Knorr Pasta

Marketing (Communication) Budget


The launch year marketing budget is as follows:

Knorr Instant Pasta


Launch Budget - Marketin g Communications

105,984,0
Ceiling 00

Advertising
Television
10,000,00
Production Cost 0
40,000,00
Media 0
50,000,00
Subtotal 0
Radio
200,00
Production Cost 0
2,000,00
Media 0
2,200,00
Subtotal 0
Newspaper
s 15,00
0
Production Cost 350,00
0
Average Tariff 7,000,00
Media 0
7,365,00
Subtotal 0
Magazines
15,00
0
Production Cost 75,00
0
Average Tariff 750,00
0
Media
840,00
Subtotal 0
Out of Home
20,000,00
Billboards 0
10,000,00
Merchandizing 0
30,000,00
Subtotal 0
Marketing Plan on Knorr Pasta

sales
Retailers
disc of
cost 2%cupspromotion
trade and spoons
Subtotalgiven to each institution
amount 14719995
If
stall 255146.58
Subtotal
disc 4% 14464848.2
Subtotal
sales 588799.8
cost of cups and spoons 14131195.2
cost of putting up a stall
Activation
Subtotal
school/college/university
47250
28350
for putting up a
14175
61425
mall activation
303750
182250
50000
536000
Marketing Plan on Knorr Pasta

Conclusion

This report outlines the marketing plan for Knorr. With existing demand for
Knorr products presently met by minor competition in the form of independent
Pasta, this report puts forward the viability of launching the Knorr range of
products in various flavors. Taking into account the absence of any existing
brands in the market this report presents growth potential and profitably in
serving this untapped market.

You might also like