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Authors: Misbah Nasir Saima Yasmin Aeatasama Khan

ARMY PUBLIC COLLEGE OF MANAGEMENT & SCIENCES

Executive Summary
The Company
The door step milk and bread service Hi Milk n Slice will provide the citizens of Rawalpindi and Islamabad with fresh, healthy and hygienic milk free of any contamination, in a container that will protect the milk from getting in contact with any germs in the atmosphere; promising pure and best quality of milk. Also it will provide bread fresh from the oven as a supplementary product. The name of the product will be Hi Milk n Slice and the logo will be Now Health is Safe and Rich

Vision
The company plans to position the brand Hi Milk n Slice for customer value and satisfaction.

Mission
The companys mission is to become a recognized fresh milk provider through out Pakistan. It also aims to introduce the unique concept of providing bread as an additional product with milk. The company guarantees 100 percent customer satisfaction and values friendly service.

Marketing Strategy
This service will serve the community living in major colonies and sectors of Rawalpindi and Islamabad. The target customers will be those people who are health conscious and realize the importance of milk purity. In regard to this, the service will be a convenient service to the customers as companys vans will deliver the best quality pure milk and fresh bread at the doorsteps of the customers early every morning. The business will be promoted through majorly word of mouth. Other advertising will be achieved by distributing the pamphlets to people, through newspaper and as the business will breed then the electronic media will also be used for the purpose.

Operations
The company will have its office in the main commercial area of Saddar, Rawalpindi. The company will outsource the procurement of milk while bread will be baked in the kitchen of outlet. The employees will be full time on the site during working hours to deal with the existing customers and register any new customer keen to use the service.

Management Team
There will be three business partners. A qualified manager will be hired, who will be responsible for the overall operations. An assistant will also be there to assist the office operations. There will be a quality manager who will visit once a week to check the quality of milk provided by the farm and bread baked by the chef. The milk and bread delivery service will be having five vans; each having a driver and a delivery man.

Table of Contents
I. II. III. Background of the Business Description of the Business Objectives and Goals A. Profit plan B. Marketing plan
C. Procurement & production plan

D. Quality control plan E. Financial plan IV. Definition of the Market A. Target Market B. Market Analysis C. Competitor Analysis D. Industry Analysis
E. SWOT Analysis

V.

Description of the Product A. Product B. Packaging C. Delivery D. Research and Development Status

VI.

Management Structure A. Who will enact the plan B. Communication C. Employee Policies

VII.

Financial statements A. Income Statement

B. Cash flows Statement C. Balance Sheet VIII. Social and economic benefits

I. Background of the Business


LIVESTOCK is an important sector of agriculture in Pakistan. Pakistan is the 5th largest milk producing country in the world. The annual milk production is 33 billion litres. 97%milk is produced in the informal sector. Only 3% of the total production of milk is processed and marketed through proper channel. The concept of opening a business center came from the need for fresh, quality and pure milk. People dont trust milk men because the containers in which they deliver milk are very often in wretched and pathetic condition. Tetra pack milk is good in quality but it is not fresh. Keeping in mind all these factors we came up with the resolution of delivering fresh and pure milk. Secondly the business has come up with the unique idea of delivering freshly baked bread along with milk. Bread is the daily consumed item of breakfast and normally it becomes difficult to go to the market and get fresh bread daily. The area of concentration for these services is Rawalpindi and Islamabad. Hi milk n slice will supply fresh, hygienic and quality milk in transparent bottles along with freshly baked bread to the general public.

18% Manufac turing

16% Others

23%
Agricultur e

24% Services

19% Retail/
wholesale

Fig 1: Agriculture in economy of Pakistan

According to year 2009-10 livestock production of milk is as follows; Livestock Production of Milk Species Cow Buffalo Year 2009-10 42,199 14,437

Table: 1 Annual Milk production of Livestock

II. Description of the Business


Everyday, people are reinventing the way they do business. Business partners will support this revolution by providing innovative ways to get the job done in a convenient and timely manner.

The companys aim is to provide high quality, fresh & healthy milk and bread to all customers. The company will be consisting of 3 business partners .There will be 1 line manager and 1 assistant, 1 quality manager, 1 chef, a helper, 5 drivers & 5 delivery persons. The business outlet will be located in Sadar, Rawalpindi. Companys goal is to ensure the quality and freshness so that people can enjoy healthy life. Company will have 4 vans, three motorbikes with 5 drivers & 5 delivery persons who will collect fresh bottles of milk from the companys farm & then those bottles will be delivered to the customers in the morning between 7:00-9:00 am. Our delivery persons will collect the empty bottles from the customers (after using) & then those bottles will be properly washed & used again for refilling purpose. Supply of milk and bread will also be there in evening time in case customer wants it. Payment from customers will be taken in advance on monthly basis. Company will also have a contract with the local glass bottle manufacturing company for the supply of bottles. The quantity of milk and bread to be delivered depends on the customers need & then our delivery persons will adjust according to the demand of the customers. The telephone number of the office will be given to all the customers for any enquiry or complaint.

III. Objectives and Goals


The company will be committed to doing whatever is needed to guarantee customer satisfaction with the companys products and customer services.

A. Profit plan

First of all we will build profitable relationships and create customer delight, by observing the following;

Good quality Healthy and safety Reasonable price scale / cost Delivery Speed Moral values 8

WHAT CUSTOMERS BUY?

Customers do not buy products and services; they want solutions of problems, and fulfillments of their needs and wants. Milk and bread is the essential need and want of every home. And in every home it is used for different purposes. Currently, customers main focus is quality. The quality of milk provided by the milk man is not satisfactory whereas the other source of getting milk is Tetra pack milk which has good quality but is not fresh and is expensive and everyone cannot afford to buy it. So, quality is no longer a desirable option. Other factors are also involved.

Productivity Quality Competitive price

ITS A KEY TO SURVIVAL So, we are offering good quality fresh milk in clean transparent glass bottles on time in a good and presentable manner not like casual milk man along with bread. Through this we will build profitable relationships with customers and get more / high sales then start getting profit. If we start earning good profit at a large scale we will expand the business and will offer butter, cheese, cream as well. PRICE IN GENERAL MARKET

Fig: 2: Traditional principle of cost OUR PRINCIPAL OF COST REDUCTION

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Fig: 3: Our companys principle of cost reduction

B. Market plan

Market is a place having Actual and Potential buyers of a product and service. But the Marketing concept means achieving organizational goals depends on knowing the needs and wants of target market and delivering the desired satisfaction better than the competitors do.

Our company will make suitable market decisions by considering consumers wants, the company requirements, consumer long run interests and society long run interests. Customer satisfaction depends upon the products perceived performance relative to a buyer expectations. Our business is not only for selective market but for all type of market as it is the need of every home. It is related for long term (find, retaining, growing profitable customers) that is customer life time value with Quality, Cost and Affordability. We will do marketing of our product by using following communication networks;

Newspapers Pamphlets Media Internet

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Effective advertisement of the business will be carried out for the purpose. The promotional slogan for Hi Milk n Slice will be; Lets start getting healthy If customer needs more milk than daily usage for some special events, for example Eid days, birthday, weddings, Ramadan, etc, OR If customer needs less or no milk like incase of emergency, for example going on holidays, transfer / shifting any other place etc, the customer will have to inform the delivery man or call our office one day earlier.
C.

Production and Procurement Plan

For procurement of milk, contract will be made with dairy farms in the outskirts of the twin cities. Similarly glass bottles will be purchased from local glass factory. For the production of bread, the outlet will have a kitchen with ovens installed. A professional chef will be hired for baking the bread.

D. Quality control plan


Cleanliness and hygiene will be fully ensured. There will be a strict check on quality control. The company will strongly focus upon the principles of Total Quality Management (TQM). The quality manager will check the proper washing of bottles, freshness of milk, cleanliness of big containers, hygiene of kitchen and quality of production of bread. Other than this they will have a proper check on record keeping, documentation, daily and monthly transactions etc. TOTAL QUALITY MANAGEMANT PRINCIPLES Delight the customers Management by fact People based management Continuous improvement

Following tools of TQM will be followed; International 5s ---- 5 steps of Improvement SEIRI ---------------organizing

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SEITON SEISO SEIKETSU SEITSUKE

-------------------------------------------------------------

neatness cleanliness maintain training people to follow good habits

Kaizen

E. Financial Plan:
Initial investment required: Rs. 2,500,000 Initial Costs: Rs.2,295,000 Profit per month: 312750 20% of the profit will be kept separately in reserve for uncertainty or any unavoidable situation that the business might face. Rest of the profit will be equally divided among the business partners.

Financial Information:
Initial Costs Delivery Vans Motorbikes Equipment Bottles Office furnishing Total requirement 4 3 5000 Price (Rs) 500000/ each 25,000/ each 150000 4/ each 50000 Total Cost (Rs) 2,000,000 75000 150000 20000 50000 Rs. 2,295,000

Table 2: Estimation of Initial Costs

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Salary Expense

Number people
Quality Management Quality manager Labor force Driver (full time) Driver (part time) Delivery boy (full time) Delivery boy (part time) Labor Chef Helper Office staff Manager Assistant 1

of Salary per Aggregate head (Rs) Salary (Rs)


10000 10000

Total (Rs)

10000 2 3 2 3 6000 3000 4000 2500 12000 9000 8000 7500

2 1 1
1 1

3000 15000 8000


20000 8000

6000 15000 8000


65500 20000 8000 28000 103500

Sub total Table 3: Estimated Salary Expense of employees & labor force

IV. Definition of the Market


A. Target Market:
The target market of our product is the people living in Rawalpindi and Islamabad. We are targeting the middle and the upper middle and higher classes. Our product especially targets those people who are not satisfied with both the quality and hygienic conditions of the milk provided by the milk man, or they are not satisfied by the taste or freshness of the tetra pack milk. Secondly it also targets the people who are fed up of going to the market and getting bread.

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The milk and bread supplied by the company would be fresh, economical and of best quality. We would ensure the quality and freshness of our product to meet customer expectations. Market segmentation: After the identification of target market we would determine whether any of those areas are large enough and has sufficient buying power to generate profits or to cover the cost.

B. Market Analysis
We analyzed the market by carrying out market research by distributing questionnaires and conducted interviews which showed the exact percentage of the customers in different areas. Our research showed that in the initial stages of the business we will have more than 200-300 potential customers both in Rawalpindi and Islamabad.

C.

Competitors Analysis

Companys competitors are the local milk men and the tetra pack milk e.g. Olpers, Halla, Nestle, Haleeb, Prema, Everyday, Nido, Prime dairies and Dairy farm milk. Many of the consumers are unsatisfied with the quality and hygienic conditions of the milk distributed by the milk man and the milk of tetra pack is not fresh. We would supply milk fresh from the dairy farm in the glass bottles and each of our van would deliver the milk to the targeted areas from which we would take orders before the delivery and advance payments for the whole month. We would ensure that quality of the milk is the best and it is delivered in a proper hygienic condition. Our vans would deliver fresh milk in the morning from the farm to the customers. This will keep the quality and freshness of the milk and could give us competitive advantage.

In terms of providing bread at the doorsteps, the business has no such competitor however the regular bread is available at every store and bakery but no one is providing the facility at doorstep. The milk man sells the milk at an average rate of 65 rupees per litre where as tetra pack charge 75 rupees per litre. The price of our milk also gives us competitive advantage as we would be selling our milk for 75 rupees per litre and 40 rupees half litre with free home delivery service. The price of bread will be Rs 50.

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D. Industry analysis:
While doing the business we have to be aware of what other companies are doing. When our company conducted industry analysis we analyzed the prices the competitors were offering. The second thing analyzed was, that they introduce different packages like Haleeb offered the whole family package. The farm milk suppliers offer other dairy products like yogurt, butter, cheese, cream, ghee etc We also analyzed the processor capacity of various milk processing companies.
Processors Nestle HFL Millac Vita Halla Capacity (Million liters) 1.3 0.9 0.3 0.05 0.15

Table 4: Milk processing capacity of companies

E. SWOT analysis
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.

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Strengths: Dairy industry is the major source of food i.e. milk, meat, butter, cream, cheese, ghee. There is an extensive scope of milk production as Pakistan is the 5th largest milk producing country in the world. The business will provide High Quality, pure, fresh and hygienic milk to its customers Delivering fresh bread with milk is a new concept Free delivery at the doorstep of the customers. Business will use the valuable concept of Total Quality Management

Weaknesses: Maintenance and sustainability of quality of the two products (milk & bread) is a challenging and demanding task. The business is a new entrant in the market. Business lacks the brand power.

Opportunities: Government of Pakistan and institutions like, SMEDA are taking immense interest in developing the dairy sector. Dairy products needs are much higher than the supply. Supplying fresh milk in glass bottles is a new and unique idea in Pakistan. It has not been used by any company in the country.

Threats: Monopoly of multinational firms. General public is usually resistant to change and hesitate to adapt quickly to new products. Competition in the market. Bargaining power of suppliers Risk of rejection of the idea by the masses.

V. Description of the Product


A. Product
Product that is to be offered to the public is Fresh milk. Pure, hygienic and quality milk is an essential requirement for people of all ages. Both cow and buffalo milk contains essential nutrients. It contains calcium, vitamin B complex, butterfat vitamin C, lactose and other nutrients. Our companys aim is to provide the customers with

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quality fresh milk containing all the natural nutrients. Company will be supplying fresh milk and milk will not be pasteurized or treated in any manner. The name Hi Milk stands for; Hygienic, healthy and high quality. The other product offered by the business is bread. Bread is an essential item of breakfast in every home. Bread provides essential nutrients and must be included in the daily diet plan. B. Packaging Packaging has three main purposes: 1. Protection. 2. Preservation. 3. Making the product look more attractive to potential buyers. Use of non-biodegradable plastics in chemical drums Non-biodegradable plastics are used for the manufacturing of chemical drums to store chemical. Some chemicals are very injurious to human health and they may be highly acidic and basic in nature. The milk men and some small hotel owners used these drums to store milk and water. The chemical effect in the drum cannot be removed whether we wash it many times. These drums are also used to store pesticides. These chemicals react with water and milk and are causing serious health damage to human beings. Therefore, our company will use transparent glass bottles. The bottles used for the purpose will be plain and simple. Glass is a heat insulator and will help in preventing the milk from getting spoilt in summers. Secondly, glass bottles will be reused after proper washing. Milk will be available in bottles in two sizes i.e. 1 litre or 1000 ml & litres or 500 ml. Bread will be packed in polythene bag with the companys logo on it. C. Delivery Four air-conditioned vans will be used for delivery purpose. These vans will have proper containers for keeping the bottles. In addition there will be three motorbikes for the transportation in nearby areas. D. Research and Development Status Research regarding obtaining milk and maintaining its quality has been completed. First, questionnaires were distributed and interviews were conducted to get peoples response about the product and then areas having potential customers were identified. Milk procurement will be outsourced. Contract will be made with a local farmer and fresh milk will be obtained on daily basis. Milk will be directly filled in the glass bottles and will be delivered at the doorstep of the customers.

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VI. Management Structure


A. Who will enact the Plan The owners of the organization will enact the overall plan. Major responsibility will be delegated to the manager who will formalize the implementation and execution of the plan. B. Communication There would be an informal type of communication where employees would be free to express their views with the manager. C. Employee Policies There would be clear policies and guidelines regarding employees work.

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VII. Financial Statements


A. Income Statement

Hi Milk Income Statement For the month ending June 30, 2011
Sales - Cost of goods sold Gross Profit - Expenses Salary expense Rent expense Utility bills expense Fuel expense (103500) (50000) (50,000) (75,000) Rs. 1,462,500 Rs. (776,250) Rs. 686250

Office supplies expense (5000) Maintenance expense (20,000) (vehicles & equipment) installments Advertising expense Profit (60000) (10,000) Rs. (373,500) Rs. 312,750

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B. Cash Flows Statement

Hi Milk Cash Flows Statement For the month ending June 30, 2011
Cash flows from Operating Activities Revenues Rs. 686250 - Expenses Rs. (373500) Cash provided by Operating activities Rs. 312750 Cash flows from Investing Activities Sales of fixed assets Purchases Cash used by Investing activities Cash flows from Financing Activities Long term loan (1250000) Owners investment Rs. 1250000 Cash provided by Financing activities Rs. 2500000 Rs(2,295,000) Rs. (2,295,000)

Net increase in cash

Rs. 1,854,000

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A. Balance Sheet

Hi Milk Balance Sheet For the month ending June 30, 2011
ASSETS Cash Equipment Furniture Vehicles 50000 Rs. 2075,000 Rs. 205,000 170000 Rs. 25,00,000 LIABILITIES & OWNERS EQUITY Long term debts 1250000 Owners equity Rs. 1250000

Rs. 25,00000

VII. Social and Economic Benefit


The company will have the following social benefits; This business is environmental friendly as it will be using glass bottles instead of plastic which is non degradable. The product is more close to nature. There are no added preservatives i.e. the business is using direct from the farm approach. The company is a socially responsible company as it will ensure the provision of clean and hygienic milk and fresh, best quality bread to its customers thus minimizing the risk of various diseases. The company will be providing fresh milk and bread at customers doorstep, guaranteeing convenience to them.

The business will also give economic benefits. It will provide employment opportunities.

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As business will provide hygienic milk and bread so it will help in lessening diseases that will indirectly help in improving economic conditions. With the introduction of our brand name in the market, competition will increase. This will have a positive impact on the market.

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