SHAHID ABBAS BC11-252 MUHAMMAD ARSLAN BC11-259 AHMAD SHEHZAD BC11-264 KAMAL SUBHANIBC11-294

MUHAMMAD ATIF RAFIQBC11-296

Group Members

AASKA MINERAL WATER

Healthy water for Healthy Life

Company NameAASKA Mineral Water (Pvt) Limited 8 Km raiwind road near Bakhtawar hospital

Lahore. Phone No.042410007

Executive Summary

Muhammad Arslan Phone # +923037343810 Shahid Abbas

Phone # +923447487764 Ahmad Shehzad

Phone # +923426788877 Kamal Subhani

Phone # +923455827242 Muhammad Atif Rafiq

Phone #+923008679443

Partnership

Our business is partnership. We started business with the capital of Rs

30,000,000 Every partner will contribute 5 lac and

remaining amount we will obtain from bank Our business is to provide healthy water to the

people We will make mineral water in different packing Our product is mineral water and we will deliver

our product to customer ‘s home free We will solve the problem of inconvenience of

customer by delivering products to their homes

Our business

Our target market is Johor town, WAPDA town, Azmeer town, EME, Eden housing society Behria town and the departmental stores which are situated near by the above mentioned areas Demographic

Our customers are upper class families They have their own businesses and they are

health conscious They are quality conscious Behria town’s people are richest families and

they are quality conscious

Target market

Our expansion decision is based on our marketing strategy of increasing our customer base

Other mineral water companies are taking this huge opportunity of targeting the psychographic, demographic and benefits sought segments of Lahore region

As we are in the business of bottled water which is a consumer product no big effort in decision making is required by the customers so push strategy is that we are providing free of cost home delivery of water

While other companies charge for this service. Due to this reason we have competitive advantage on other companies

Strategy

Following fixed and working capital requirements have been known for operations of the future business.

Table 1: Capital Investment for the Project

Project cost

Description Amount

Capital Cost  

Plant and Machinery 1,600,000

Furniture, Fixture and Office Equipment 200,000

Motor Vehicles (2nd hand) 600,000

Pre-operating Cost 100,000

Total Capital Cost 2500,000

Working capital :  

Building Rent 50,000

Cash 800,000

Total project cost

3,000,000

Vision'Each day we struggle to make our goods full of flavor and in good health choices that help clients care for themselves and their families Mission

“Confidently effect the community location in which we work as liable business residents, with due esteem for those ecofriendly ethics and social aims which mend superiority of life”

Vision and Mission Statement

The market of mineral water bottles has risen by at least 15 per cent a year as the quality of tap water depletes persistently in Pakistan

The quantum of the demand is projected to be around 1.1 billion liters as the awareness about the quality of drinking water grows in society

The bottled water has been powered by urban middle class that aspires to switch to bottled water to avoid water-borne diseases

Bottled water has also been treated as status symbol in middle income families that tends to follow the lifestyle of elite in Pakistan

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Business and industry profile

Five years back the market was hardly 25 per cent of the current level of 1.1 billion liters a year

People living in posh areas seemed to be switching over to bottled water

The situation seems to be similar in the mineral water business such like tetra milk

Success factor of this business is that water pollution is increasing day by day and people becoming aware of it and they are becoming conscious about health

Our vision is to provide healthy water to the nation

Business and industry profile cont’d

Company has three types of goals, operational, financial and others Operational goals Enhance our water stewardship practices by partnering

with local communities and stakeholders to support up to two watershed improvement projects per year (2014-2018)

Complete a comprehensive assessment of our materials and packaging footprint by 2013, and use findings to make future waste reductions and promote second-life use

Develop next generation bottles made from 100% recycled or renewable material by 2020

Increase the reach of water education through support and engagement with leading water education entities

Company goals and objectives

Financial According to management of company will

sale 250 bottles per day in start and in only one year it will be 450 bottles per day

It is decided by the management that price of the each bottle will be Rs.80 and the amount of the sale will be Rs.20000 which will be Rs.36000 in only one year

According to above mentioned estimation, Rs600000 is the monthly sale of the company

Company goals and objectives cont’d

OthersIn others, company has the following goals

Continue efforts to educate and encourage citizens to reduce their average annual caloric intake from beverages

Continue to advocate for federal standards on public disclosure of source, quality, and process reporting for bottled water

Now, last but not least important goal is that, to provide healthy water for healthy life because quality has a vital role in the success of every type of product

Company goals and objectives cont’d

Desired image and position in market It’s company strategy to get a powerful image in the market and a leading position among the competitors SWOT analysis Strength Socially responsible company Provide quality products Employ skilled labor and educated staff Have easily available products Have an efficient research and development

department Market a strong brand name, with a wide range of

products

Business strategy

Weaknesses Is a relatively new company in Lahore as compare

to its rivals? Have a limited relations with people Opportunities Consider adopting a credit policy to increase sales Develop some farms own Threats Price fluctuations due to rupee devaluation Market segment growth could attract new entrants.  Economic slowdown can reduce demand Current market situation 

SWOT analysis

Cost leadership We follow cost leadership strategy in our

business We use this strategy for our product, we

offer lower price as compare to our rivals This strategy works well when buyers are

sensitive price changes when competing firms sell the same commodity products, and we can get benefit from economies of scale

Competitive strategy

Differentiation We provide free home delivery to customers at their home

and departmental stores. Focus AASKA wants to win and keep customers: distributors,

departmental stores and retailers and the final consumers They have different requirements Trade customers expect excellent service, correct

information and timely delivery Consumers study taste, appearance and price when they

make their choice. AASKA is offering quality to customers It also means ecofriendly excellence AASKA shares society’s concern for the environment and is

committed to environmentally sound business practices throughout the target Customers are central focus of AASKA and it must always respect their needs and preferences.

Competitive strategy (cont’d)

Product

Company product and services

Product feature Our product is full of minerals and healthy

from all aspects AASKA has very low Sodium content, and

has no calories AASKA has very low Sodium content, and

has no calories AASKA  is bottled at its state-of-the-art and

hygienically protected plant at raiwind road AASKA is not chemically treated and no

minerals are added to it artificially

Company product and services

Customer benefits Its great benefit for the customer to receive the product at

home without cost Customer can get high quality water by purchasing it. It has no side effect on customer’s stomach or any health

disease Uniqueness Customer can get his payment back if they are not

satisfied with the product We will provide dispenser to existing customers if they

motivate other people to buy our 1500 bottles per month We will also provide dispenser to retailer if he purchase

2600 bottles per month

Company product and services

Trademark of the company is below

We protect our formula and process of purification and bottle style

Patent or Trademark Protection

Raw Material Natural water is our raw material Production process The first step for setting up a water purification plant is

the analysis of source of water After the chemical analysis, the terms of the purification

plant are set In the purification plant, source water is stored in the feed

water tank, passes through the sand filter for preliminary water filtration

Water then passes through the dosing pump-I where chlorine is added to kill the germs in the water

After the chlorination, water passes through carbon filter It help in the maintenance of proper odor and taste of the

water It also removes chlorine from water. Water is then passes from

dosing pump-II, where Sodium Meta Bisulphate is added It helps in dechlorination of water.

Description of production process

Water is filtered next and passes through dosing pump-III, where anti scallant is added

It prevents scaling of membrane from calcium, magnesium and biological growth

Water then passes through reverse osmosis module This stage of the process makes water clear from all the

impurities and minute elements Water then passes through dosing pump-IV, where minerals are

added for taste development After this stage, water undergoes Ultra Violet treatment to avoid

any impurity from bacteria and other microorganisms Water then passes through automatic washing, filling and

covering plant. Here water is filled into bottles After filling bottles are taken into the warehouse or shipped to

the retailers. The complete process flow diagram is as under

Description of production process(cont’d)

Production process

Magnesium, Sodium, calcium and anti-scallant are consumable asset of the company

Company will utilize almost Rs 30,000 per month on these things purchase

cost

We will produce our own bottles rather than buying from other company

We will give our customer one month credit facility, (customers can pay bill after one month)

We will install one more new plant of water purification, through which customers can enjoy less per unit cost

We will start one new branch in Faisalabad

Future product or service offerings

Marketing Strategy Our target market is Johar town, WAPDA town, Azmeer

town, EME, Eden housing society Behria town and the departmental stores which are situated near by the above mentioned areas

After the company has segmented a market, management must next select one or more segments as its target markets

The target market consists of upper lower class to upper class due to their purchasing power and company is following multiple targeting strategies which include mainly two focus groups i.e. home & Retailer particularly for bulk water.

Marketing Strategy

Customers know that our product is a quality product and with suitable cost

Customers are very careful about their health, and our product provides them pure water for good health, without any side effect

We will provide dispenser to existing customers if they motivate other people to buy our 1500 bottles per month

We will also provide dispenser to retailer if he purchase 2600 bottles per month

Customer Motivation to Buy

Market of our product is increasing day by day

Customers trends are changing they prefer using purified water to normal water

Our market is not a large but it is growing day by day

Size of marketing is increasing day by day because ever changing fashion and trends are influencing the customer

Market size and trends

Promotion is the very important and crucial element of marketing strategy as through it the company establishes its image in the minds of the customers

AASKA is promoted by using different ways of promotion Advertisement of AASKA is done through TV, radio,

billboards, newspapers and magazines Current advertising slogans are that AASKA is

“HEALTHY WATER FOR HEALTHY LIFE” AASKA also conducts the tradeshows, concerts, events, sponsorships, and discounts for sales promotion

For establishing public relation, AASKA distributes its newsletters, annual reports, calendars and diaries, lobbying, donation for charitable and civic events

Advertising and promotion

Media We use electronic media for advertisement, we have

contract with different websites such as yahoo, send sms.pk, Facebook, news paper and magazine etc.

And we have printed posters and banners for advertisement.

Table 2.Media cost in percentage %

Advertising and promotion (Cont’d)

TV Advertisement 30%

Website 20%

Newspaper 35%

Magazine 7%

Banners and pamphlets 8%

It is decided by the management that price of the each bottle will be Rs.80 for home delivery and Rs70 for retailer and quantity will be 19 Liters

Competitors Sonnevalley, Gourmet, Nestle, Description

mineral water

Pricing

Competitors name Price

Nestle 120

Gourmet 90

Sonnevalley 80

Description mineral water 95

Ahmad Shehzad is a marketing manager who will take over all the following responsibilities

We have two pick up vans for distribution of our product in customers’ homes and departmental stores

Distribution channel Branding and marketing of bottled water is

as essential as water for the survival of the human body

The traditional marketing tools include site advertisement, TV and print media advertising and brochures

Distribution strategy

The study shows that 10% of the revenue is spent for advertising and promotional purposes

The study suggests to focus more on other marketing magnets that include interactive marketing, cooperative marketing may include educating the general public about the importance of water and its daily consumption requirements for human body through the participation in seminars and in general public gatherings

One of the marketing options is to sponsor public events like cricket matches or hospital campaigns, distribution free brochures about water and its daily consumption, water requirements in different age brackets

Distribution strategy

Existing competitors Sonnevalley, Gourmet, Description mineral water ,Nestle, Butt, Atlantic, Kinley, Aqua Fine water Strength Socially responsible company Provide quality products Employ skilled labor and educated staff Have easily available products Have an efficient research and development

department Market a strong brand name, with a wide range of

products

Location and layout

Weaknesses Is a relatively new company in Lahore as compare

to its rivals? Have a limited relations with people Potential Competitors As the trend of market, it is changing and it is a

product which is developing day by day Every 2nd person wants to starts this business.It is

difficult to say something about potential competitors

They can affect our business because people want to taste new thing one time

But our strategy is to improve quality every day to compete such unknown competitors.

Location and layout

 Organizational Structure Organizational structure is the formal

framework by which jobs tasks are divided, grouped, and coordinated

AASKA is a function-based organization The tasks are divided into separate jobs and

then these jobs are grouped together under different departments

Each major area is kept under the manager who is skilled in that apprehensive field and is responsible for all activities, which that department performs

Description of Management Team

Muhammad Arslan (Managing director) Phone # +923037343810 New Campus University of the Punjab, hostel # 17, room #132 Ahmad Shehzad (Marketing Manager)

Phone # +923426788877New Campus University of the Punjab,

hostel # 19, room #35

Description of Management Team

list of employees Accountant Two drivers Three helpers Two plant operator with 2 year experience Chemist

Employees

We have chosen partnership because we individually don’t have large amount to start own business individually

We want to share experiences for a best one business

Decision making authority Managing director is the decision making authority, then this decision flow from top to low level Compensation and benefits packages

Company will provide free product to the managers for their household use

Plan of operation

Following financial statements are included in the financial statements: Income statement Balance sheet Breakeven point Ratio analysis

Financial Forecasting

Current assets: Amount (Rs.)  

Cash in hand 50,000  

Cash at bank 500,000  

Account receivable 405,000  

Stores & spares 200,000  

Advertising expenses 195,000  

Fixed assets:    

Plant & machinery 1,600,000  

Furniture & fixture 200,000  

Equipment 200,000  

Motor vehicle 600,000  

Bottles (700@Rs.500) 350,000  

Total assets   4,300,000Liabilities & Owner’s Equity:    

Current liabilities:    

Account payable 400,000  

Note payable 300,000  

Rent payable 600,000 1,300,000

Fixed liabilities:    

Bank loan@15% p.a   500,000

Owner’s Equity:    

Arslan’s capital 500,000  

Shahid’s capital 500,000  

Ahmad’s capital 500,000  

Kamal’s capital 500,000  

Atif’s capital 500,000  

Total capital   2,500,000

Total liabilities & owner’s equity   4,300,000

Balance sheet

Revenue From Sales: Amount Amount

Sales 6,120,000  

Less: Cost of goods sold 3,672,000  

Gross Profit   2,448,000

OPERATING EXPENSES:    

Advertising expenses 5,000  

Bad debts expense 5000  

Rent expenses 600,000  

Office expenses 30,000  

Salary expenses 300,000  

Factory expenses 100,000  

Utility expenses 420,000  

Total operating expenses   1,460,000

Other expenses:    

Interest expenses   75,000

Net income before taxes   913,000

Income tax on exceeding amount 400,000@10%   51,300

Net Income  

861,700

Income statement

Following are the notes related with Balance Sheet and Income Statement : Balance Sheet Furniture and Fixture include 20 chairs, 5 tables and 2

cupboards and depreciation will be charged @10% with straight line balance method

The cost of the plant and machinery is Rs. 1,600,000 and depreciation will be charged @5% with straight line balance method. It was decided that useful life of the plant and machinery is 30 years and residual value will be Rs. 300,000

Depreciation on equipment and motor vehicle will be charged @10% per annum

It was decided by the management that the depreciation will not be charged 1st year

Bank loan obtained @15% for 5 years and interest will be paid at the end of every six month

Notes to financial statements

Income Statement It was assumed that total sales include 40%

to home based customers and 60% sold to retailers

Cost of goods sold is the 60% of the total sales

Advertising expenses are amortized in 5 years @ 5%

Notes to financial statements(cont’d)

Selling price = Profit+ (Variable cost per unit * Quantity

produced) + Total fixed cost/ Quantity produced To break-even point, the management

assumes that the profit is Rs.0.= Rs.4.5 per unit

Break even

Now it was supposed by the management that company will earn Rs. 50,000 profit

Then the selling price is calculated as follows:

= 50000 + (2.23 * 90,000) + 200,000 / 90,000

= 450700 / 90,000= Rs. 5 per unit

Selling price (cont’d)

In ratios analysis following ratios are calculated

Liquidity ratio Current ratio Quick ratio   Current ratio =current asset / current liability =1,350,000 / 1,300,000 =1.038   Quick ratio =current assets – inventories / current liability =1,350,000 – 200,000 / 1,300,000 =0.885

Ratio Analysis with Comparison to

Industry Standard

Leverage ratio Debt ratio Debt to equity ratio

  Debt ratio

=total debts / total assets=1,800,000 / 4,300,000=0.418

  Debt to equity ratio

=total debts / total equity=1,800,000 / 2,500,000=0.72

Ratio Analysis with Comparison to Industry Standard

Amount Requested Total capital of the partnership is

Rs.3,000,000 Every partner is contributing Rs. 500,000 Remaining amount is covered through bank

loan@15% per annum

Loan or Investment Proposal

Task #/Name Person

Responsible

Month of Action for Task

Assigned

Completion Date

January February February March

Apply for loan Shahid Abbas X     X

Finalize

suppliers

Kamal Subhani X   X  

Seek for

building

Atif Rafique X   X  

Marketing

materials

created and

distributed

Ahmad Shehzad   X   X

Hiring

Employees

Muhammad

Arslan

  X   X

Timetable for Implementing Plan and Launching Business