cone pizza

Cone Pizza

EXECUTIVE SUMMARY

The objective of this report was to present a detailed analysis of the marketing aspects of Fraam Company’s product cone pizza which would be offered in outlets named Cone Pizza. This report discusses in detail the functions of marketing department of Cone Pizza under its business mission. The report starts with the general introduction of cone pizza.

It then states the process of launch of our new product and talks about micro and macro environmental effects on the working of that product in Pakistan. This report clearly defines the buyer’s characteristics and buyer’s decision behavior.

We have emphasized on the company’s marketing mix and have discussed in detail various aspects of product, brand development. We have stated the packaging of our new product in detail. Price has been stated in detail showing, ending with a detail analysis of place and promotion.

We have emphasized on the company’s marketing mix and have discussed in detail various aspects of product, brand development. We have stated the packaging of our new product in detail. Price has been stated in detail showing, ending with a detail analysis of place and promotion.

Cone Pizza

We have highlighted the SWOT analysis of the product in detail followed by the marketing research, which is the main emphasis of this report. Thus focusing on market segmentation, market positioning and target market. It is followed by the budget analysis, action plans It then leads to future trend and conclusions.

TABLE OF CONTENTS

S.no TOPICS Page #

1 Current market situation 5

2 Competitive review 6

3 Target audience analysis 8

4 Product Life Cycle 9-10

5 New Product Development 10-12

6 Marketing Research 12- 14

7 Market Segmentation, Targeting & Positioning 15-16

8 Consumer Buying Behavior 17-18

9 Effects On Environment 18-21

10 SWOT 21-23

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11 Brand Development 24-25

12 Action Plan 25

13 Future Trend 25-26

14 Direct Survey 27-28

15 Objectives & Issues 28-29

16 Marketing department structure 29-30

17 Product strategies 30-31

18 Pricing strategies 31-32

19 Placement strategies 32-33

20 Placement strategies 34

21 Budget analysis 35-36

22 Conclusion 37

Cone Pizza

CURRENT MARKET SITUATION

Pizza Hut is the world’s largest and most well renowned international chain of pizza restaurants. It is operated as a franchise, with branches all over the world. The legacy of Pizza Hut® began in 1958, when two college students from Wichita, Kansas, Frank and Dan Carney, were approached by a family friend with the idea of opening a pizza parlor.. After borrowing $600 from their mother, they purchased some second-hand equipment and rented a small building on a busy intersection in their hometown. The result of their entrepreneurial efforts was the first Pizza Hut restaurant, and the foundation for what would become the largest and most successful Pizza Restaurant Company in the world.

Domino's Pizza, Inc. Founded in 1960, Domino's is the second-largest pizza chain in the United States. Domino's currently

Cone Pizza

has nearly 9,000 corporate and franchised stores in 60 international markets. Domino's menu features pizza, pasta, oven-baked sandwiches, wings, boneless chicken, salads, breadsticks, cheese sticks , and a variety of dessert items.

Domino's Pizza, the pioneer in "Pizza Delivery System" started out small with just one store in 1960 in US. Now, Domino's Pizza is celebrating over 50 years of delivering food, fun and innovation to its valued customers in 140 countries with its 8000 plus outlets.

In Pakistan, Domino's Pizza started with one outlet in Karachi in 2004 and now they have 7 outlets in Karachi & Lahore and are planning to launch 1 more outlet in the Capital city Islamabad.

Competition is therefore more intense but the “FRAAM” company with our new product “Cone Pizza” can compete in a way that will carefully target the specific segment, Aware the people about its features that deliver the desired benefits valued by each customer group in a valuable and affordable price.

The product that our company has come out with is something different which is an additional benefit for us because no other company has come out with an idea like this.

COMPETITIVE REVIEW

Cone Pizza

Pizza’s are something which are very popular and the liked by majority.It is something new with great tastes. In Pakistan, Pizza Hut, Pizza Experts, Dominos and some other local outlets are doing very well and have captured the market but our product is different with a different taste,flavor,look and affordable price will make its place in the market.

Competitors look for new methods of increasing their customer base. Many pizza chains decided to diversify and offer new non- pizza items such as Buffalo wings, and Italian cheese bread. The current trend in pizza chains today is the same. They all try to come up with some newer, bigger, better, pizza for a low price. Offering special promotions and new pizza variations are popular today as well. For example, chicken is now a common topping found on pizzas.

By launching Cone Pizza we have taken out something which these companies have not come out. Therefore we can capture the market by penetrating the market and attracting all the pizza lovers towards our new product.

TARGET AUDIENCE ANALYSIS

Cone Pizza is a family product. Low and middle class family background people are the target market of Cone Pizza. But we also focus on a broad variety of customers. We are also targeting the generation X e.g. students who more active in spending money on non

Cone Pizza

essential things like eating products. We provide them quality product at a reasonable price which they can even consume “On the Go” as most of the students have a very hectic schedule. The potential Market Cone Pizza is huge because Pakistan has one of the highest number of youth populations in the world an estimated 103 million Pakistanis, or 63% of the population, fall under the age of 25 years. Apart from this there is a huge population who wants to eat out but due to their limited income they cant afford it so Cone Pizza caters such demands. The basic objective is to provide people with low and middle income an alternative against the expensive normal pizza. Cone Pizza is also very good place for the students of colleges and universities to arrange the treat parties at an affordable price.

PRODUCT LIFE CYCLE

We expect our product to carry a ‘STYLE’ as it is a basic distinctive mode of expression which might bring a change for a longer time.

Cone Pizza

During the introduction period we expect the sales to be low with a high cost per customer, but we expect it to grow soon as people are already familiar with pizza and they already have a developed taste for that, the thing which has changed is the shape which will not take much time to become common among people. In addition there is a possibility of zero or negative profits as the cost is expected to be very high in the beginning due to imports of new machines and heavy advertisement and sales promotion cost, as the basic aim is to create product awareness. But in near future when the product will reach the growth stage it will manage to achieve rapid sales which will leave to lower average cost per unit and higher profit rates. We have to emphasize a

PIZZA CONE IS AT INTRODUCTION STAGE

INTRODUCTION GROWTH MATURITY DECLINE

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lot on sampling and free product samples in selective super stores and popular malls. Advertising must be done in an efficient way but personal selling approach must not be applied in communication mix.

NEW PRODUCT DEVELOPMENT

Idea generation

The core concept of this product was derived from a variety of aspects observed in our surroundings. Various customers leaving the thick crust of pizza aside, some working customers not liking the idea of heavy cheese threads slipping off their mouth which might fall on their dress, above all, the pizza was not mobile as like other fast food items. This idea was to promote the mobility of pizza so that it can be consumed anytime, anywhere and not necessarily at the restaurant.

Idea screening

Many ideas pertaining cone pizza came forward but based on the questionnaires disseminated in the public, only the ones which management perceived from the requirements of the customer were added to our product.

Concept development and Testing

Our product idea was to make pizza mobile and to further enhance this innovation we delimitated key points by keeping consumers in mind. The intention was to formulate a shape that is easy to handle, nutrient ingredients, convenience, equally good taste, comparative price, covering diversified taste buds, covering the whole family therefore coming with

Cone Pizza

respective sizes and above all some thing which anyone can use while doing anything and cone pizza was the prime choice. In order to seek reaction of our consumers we disseminated sheets of papers to every age brackets scripted on which were some questions and followed by the shape of our cone.

Marketing strategy development

The target market is anyone who is on the move covering business men, labor, and public shopping in malls. We forecast that in a few years anyone who is on the move and is hungry will only urge for cone Pizza! The cone will be offered in three flavors chicken, meat and sea food to wrap a large population under one cone pizza umbrella. The outlets would be situated in every busy areas across the country be it malls, parks or offices. Initially management intends to keep the prices quite comparative but in the 2nd or 3rd year the prices will be increased alongside the advertising budget will shoot up in the 3rd year to make sure the positioning of our product is affirmed for longest possible duration.

Business Analysis:

After the idea of the cone pizza has been finalized an informative survey has to be made regarding all the sales and check whether the budget is in favor of developing this product or not. If the sales and profit are positive then the product is ready to be developed.

Product development

After mustering together all the ideas the product takes its physical shape and is sent to health laboratories for testing of the nutrients. Verification is done to check all the ideas being delimitate are been taking cared of. Exclusive people are given the cone for test of taste and attractiveness and comments are filed for the management.

Cone Pizza

Test Marketing

Using standard test market, cones are exposed to the market at selective locations. These locations would include super stores, near offices and, a busy mall to discover the response of the market. This will cost a lot but for long-term the profits would out class the investment. The result to this approach might be unmanageable since various fast food chains might cut down their prices to fail the product launch in market. But being such an innovative product there is likely of some thing of this sort to occur.

Commercialization

The product will be launched on all country bases. Alongside, there will be TV Commercials, advertising on radio, magazines, and campaigns emphasizing the point of pizza being now mobile. The ads would be visible on the billboards everywhere. It would be a mega launch with stalls every where.

MARKETING RESEARCH

Types of People Surveyed

STUDENT 60

WORKING 30

OTHERS 10

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Gender

MALE 67

FEMALE 33

010203040506070

GENDER

MALE FEMALE

0

10

20

30

40

50

60

GRAPHICAL REPRESENTATION OF TARGET CUSTOMERS

STUDENT

WORKING

OTHERS

Type

No. of People

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Targeted segment Customer need Features and benefit

Low & Middle class Group Affordability It provides them something which is good in taste & not heavy on pocket.

Students Affordability and healthy Food “ON the GO”

We provide them with healthy food at affordable rates and which does to not take much time to serve.

RESEARCH TYPE

The type of research that we used is survey research which involves the gathering of primary data by asking people questions about their knowledge, attitudes, preferences and buying behavior. This research brought us one step closer in our production of cone pizza.

RESEARCH INSTRUMENTS

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Among the two basic research instruments (questionnaire and mechanical device), the one used in our research was the questionnaire. The questionnaire contained open end questions where people could freely respond to any question in anyway they like and also give their true comments and criticism.

VALUE PROPOSITIONS

1. Everything is mobile…why cant pizza be?

2. Comfortable dinning of pizza.

3. Pizza with pure relaxation.

4. Pizza in an innovative and brilliant way.

Cone Pizza

MARKET SEGMENTATION The market consists of many types of customers, products and needs. A market segment consist of consumers who respond in a similar way to a given set of marketing efforts, for example customers who want a good environment, taste and quality food regardless of price and operating economy make up one segment. Customers who care mainly about price and operating economy make up another segment; it would be very difficult to make a model that was the first choice of consumers in both the segments. Pizza cone is a product which is low in price and good in quality.

MARKET TARGETING

Pizza cone is one of the most innovative products. This product is basically created for office workers, university students, kids and generally for those people who don’t have dine in time so they can carry it easily on their way.

Cone Pizza

MARKET POSITIONING

Market positioning is arranging for a product to occupy a clear and distinctive position relative to competing products in the mind of target customers. Thus marketers plan positions that distinguish their products from the competing brands and give them the greatest strategic advantage in their target markets.

CONSUMER BUYING BEHAVIOR

HIGH INVOLVEMENT LOW INVOLVEMENT

Significant differences b/w brands

Few differences b/w brands

Basically there are 4 types of buying behaviors and they are as follows;

Complex buying behavior Variety seeking buying behavior Dissonance reducing buying behavior Habitual buying behavior

Complex buying behavior

Variety seeking buying behavior

Dissonance reducing buying behavior

Habitual buying behavior

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Our product lies in variety seeking buying behavior which involves low consumer involvement but significant perceived brand differences.

EFFECT OF ENVIRONMENT

Micro Environment

1.The company:

The company plays a very vital role, as it will be the one to decide that how much should be spending on for the R&D (research and development) what budget should be allocated for promotion and advertisement. How dedicated we are towards our new product, pizza cone.

2.Suppliers:

P’conzo will have its own suppliers. All ingredients will be the same, which are used in pizzas ,except the cone which will be made fresh within the premises.

Cone Pizza

3.Marketing intermediaries.

P’conzo can use marketing and advertising agencies, for the promotion of the product. More over try to create hostile relations with places like shopping malls, office buildings, universities and cinemas, in order to put stall and promote the product and to enhance sales.

4.Customers:

Customer who will be focused, are the pizza lover and people who prefer fast food, on the go. Moreover, they will be attracted with new promotional deals, and reasonable prices. Pizza cone have four sizes suiting the customer appetite and budgets.

5.Competitors:

In the beginning we do not expect to have competitor threats, as the product itself is an innovation and introduced in Pakistan for the first time. But in near future other fast food restaurants might end up introducing there own pizza cones.

6.Public:

Media public can be of great help, as we expect the product will create hype in Pakistan, same way it did in other countries. This will increase the sales by attracting masses to try this new creative product.

General public will also have a positive attitude towards our product and activities. As public image of the company effects it’s buying.

Cone Pizza

MACRO ENVIRONMENT

Demographic Forces:

As far as demographic forces are concerned, age is the main cause which can affect the sales of this product. The main focus is on children and youth which form the majority population of Pakistan. This will attract most of the children aged 12 or under and is handy for teens and early 20’s as these are mainly students who prefer less time consumption in dining-out and easy eating. Secondly, occupation is also one of the source which can drive the sales of this product. It will focus on those individuals who stay out of the office for site work, sales, marketing or any other job which have much to do with travelling and staying out of the office.

Natural and economic Forces:If there is a shortage in any raw materials due to any natural or economic crisis, it

will effect the cost of our product which in turn will effect the economic environment as, if the spending power of the individual remains the same and the

prices go up, our sales will decrease. To counter this problem we have decided not to increase the prices too much that it gets unaffordable for our majority

consumers instead we will cut down our cost.

Cone Pizza

SWOT ANALYSIS

STRENGTHS

1. In Pakistan we have a huge number of pizza lovers

2. Easy and attractive

3. Unmatched Look and Taste

4. It can be consumed anytime, anywhere, and not necessarily at the restaurant

WEAKNESSES

1. Low Advertising : As compared to its competitors Pizza Hut lacks majorly in appropriate amount advertising.

2. Risk: The product has large risks as it targets office workers and students mostly. and it also has the risk of not being appreciated by other people who are very found of going out and eating particularly at various restaurants.

3. Health Concious People :Many people are health conscious and hence they would not go for such a product which has excessive use of cheese and other cholesterol oriented products.

Cone Pizza

OPPORTUNITIES

1. Quality Food Not Available at Office & Various Institutions

Cafeterias of offices and educational institutions are not offering quality food products and this provides an opportunity for restaurants to enter this segment.

2. Changing Customer Preferences

Customers are moving from traditional dishes to fast food and there fore want more variety in menu.

3 . Low Labor Cost

In Pakistan as the unemployment rate is very high, so the cheap labor is easily available. This gives us a plus points to hire more employees for making new products.

4. Ramadan: During the month of Ramadan, cone pizza would be very convenient for the people who would not be able to reach their homes before iftaar or who would be on their way.

Cone Pizza

THREATS

1. Pizza Hut

Our biggest threat is Pizza Hut as most of the people prefer going to Pizza Hut rather than other Pizza outlet but if we keep our prices low maintaining the good quality and taste, we can surely attract more people.

2. Recession in Economy

Currently the country is experiencing an economic recession, which can reduce the food expenditure of people, which in turn would have an adverse effect on the sales of food industry.

Cone Pizza

BRAND DEVELOPMENT

There are two types of brand development which are line extension and brand extension.

BRAND EXTENSION:

Brand extension means that a new product has been launched in a new category using a successful brand name.

LINE EXTENSION:

Using a successful brand name to introduce additional items in a given product category under the same brand name, such as new flavors, forms , colors, added ingredients or package sizes.

Our product lies in the category of line extension as it is under the same brand name of pizza hut in the same category but in a different and unique form.

Cone Pizza

ACTION PLAN

Existing products New Products

Existing markets

New markets

Our new product lies in the category of product development as we have created an item in the existing markets of pizza’s but it is a new product in Pakistan.

FUTURE TREND

The market of Pakistan had been growing in term of size and in the implementation of modern international marketing tools. People of Pakistan will love the new concept of pizza cones, as the same product have show great success in rest of the world. Implementation of this marketing plan will lead P’conzo to the heights, for developing an innovation of new fast food concept. Being clear financially and promoting this new product will gain popularity and will make pizza cone a revolutionary product.

MARKET

PENETRATION

PRODUCT

DEVELOPMENT

MARKET

DEVELOPMENT

DIVERSIFICATION

Cone Pizza

“I AM TOO GOOD FOR YOU”

Seven mouth watering flavors Prices will suit you

Unique Crispy,

Tasty Dough

Fully Nutrient cone

Offered in 4 sizes Environmentally smart shape

Easy to handle e

Always available near you

P’CONZO

Cone Pizza

DIRECT SURVEY

OFFICE PEOPLE AND UNIVERSITY STUDENTS

- That looks cool, never heard of it before sounds yummy too

- Am sure it's heading our way soon!

- wow, this sounds so special!!

- "wow…O..O ... Now I am hungry it’s really yummy

- "Sounds good"

- "That’s something new"

- "I like the concept"

- "I have never seen cone pizza before, it looks delicious.

- "I love food and I really like finding new things/ideas or new ways of doing old things."

- It definitely sounds great!

- I tried it in Italy; I want to eat in again in Karachi

- This sounds very good!

- Wow I gotta try that

- wow... never heard this. Even though I'm not too fond of pizza, I'd try this just because of how it's prepared!

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- Oh i can eat it when I don’t have time to dine it

- "Its something unique and plus we can have it while doing anything, even at my office when I am piled up with loads of work."

OBJECTIVES

We have set aggressive but achievable for the first and second years of market entry

First-year objectives:

To create awareness and interest among the youngster especially. To make “CONE PIZZA” stable in the market. To boost our sales by setting the reasonable prices of our product. We are aiming for 6-10 market share of Karachi

Second-year objectives:

to achieve the market share of about 10-15

To achieve Break-Even (Target Profit) in the second year

Major Objective :

Attract customers with low pricing strategy Selecting out profit maximization in the opening stage Achievement of high profit through effective marketing and sales distribution Fullfiling product contingency plans by analyzing ethical conduct To properly sequentalize the distribution process through SWOT analysis. Effecive brand development Assurance of personal selling After getting maximum sales in Karachi, we would like to cater the other cities of the

country like Lahore; Islamabad; Peshawar.

ISSUES

In a relation to the product launch, our major issue is to develop a well well-regarded brand name linked to meaningful positioning. We also invest heavily on marketing to create a

Cone Pizza

memorable and different brand image in the market because of this we have to face the issue of financing the expenditure required in this product

Marketing Organization:

We have a hierarchy of eight persons which are included in the marketing structure of Cone Pizza. We have hired marketing firm to handle national sales campaigns, trade and consumer sales promotion, public relations effort.

Regional Sales 1

Advertising Analyst

Promotion Analyst

Regional Sales 2

C.M.O

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Organizational Structure :

The Fraam & Co. adopted traditional structure for their outlets that otherfood chains are following. The outlet is leaded by the Manager, assisted by two assistant managers, and one shift in-charge for each shift, that supervises theperformance of counter workers and kitchen workers.

PRODUCT STRATEGIES

PRODUCT OVERVIEW:

1. A Pizza Launched In A Different Style Which Offers Great Convenience.2. Easy Dining And Serving For Our Customers.3. Suitable Pricing And Hetrogeneous Aspects Make It A Perfect Pizza U Want.

Cone Pizza is produced for people who engage in various roles of life. It offers to the best; the simplicity and a lush way to wind up your hunger through its easy-to-handle shaped fully nutrient cone. It’s the easiest meal you will enjoy while you are working or might sometimes will make your boring work quite arousing. Whether you are late for your class, having a pretty time strolling in a mall, taking the air along the foot path listening to your favorite song , drifting in a car , talking on your cell phone ,this Cone always gives a green signal to you to enjoy its yummy, hassle-free flavors while you are on the move. The exterior dough does not get any hotter than a freshly baked pizza crust, and is served in a heat-proof sleeve similar to ones used to hold your coffee cup. Each filling is carefully chosen, and baked with specific instructions in order to control the crispness.

Cone Pizza

Design & Flavour

This pizza is in the cone shape. It will be sold in three different flavours Chicken Cheese Lover, Beef Cheese Lover & Vegetable Cheese Lover. Cone Pizza is also available in 4 different sizes Small, Medium , Larger & Larger than Life. The Cone Pizza will be served as the shape of cone inside it will be filled with cheese and the choice of flavoured such as Chicken, Beef & Vegetable. The crust of the cone will be crispy as compared to the normal pizza’s crust.

Packaging

The Cone Pizza is perished inside a cardboard box with a small circular hole at the top. A bunched-up napkin underneath the cone completes the tissue-box effect.

The cones are pulled from a warming box, where they sit in neat rows.it clearly fulfills the general requirement of eatinf pizza without having a headache of droping any thing from the cone.this clearly will lead you to enjoy your pizza with a remarkable taste.

Production Process:

Its production process generally involves a traditional dough receipe to deliver an authentic pizza for you.the cone itself offers you the following features with a unique retailing carton devolped for the good baking and a self serving tray.

PRICING STRATEGIES

Pricing is critical and complex variable in marketing strategies. The pricing decision ultimately affects an organization’s ability to stay in the market.so we will apply the “Market penetration pricing” for our new product we would start off with promotional prices such as rs.120 so that it is easily affordable by students and office workers whose income is not at a high level.. This pricing strategy will allow us to attract a large number of customers and large market shares. Moreover, the blend of our informative and persuasive advertising campaign will support our prices and help us in achieving, our objectives i.e. getting a large market share.After the introduction stage the prices would eventually increase with the growth stage and passage of time.

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Small Medium Large Larger Than Life

Rs.120 RS.220 Rs.300 Rs.350

Placing strategy:

Cone Pizza is a concept encouraging something as pizza on the go. Thus with such positioning that goes directly in the mind of consumers as they hear the name we have to provide them with excellent coverage as this will enhance our consumer satisfaction. Due to all these reasons Cone Pizza has to be distributed ion such a way that we target and cover audience leaving no complains simultaneously increasing demand. First of all we have to provide thorough and good supply and availability of Cone Pizza in the main malls of Karachi. This will allow our product to be introduced to new people and especially the youth which consists of 40% and more than of the population thus we can generate sufficient revenues from such locations.

The malls in which the concept of Cone Pizza would be introduced shortly are:-

PARK TOWERSShahrah-e-Firdousi, CliftonKarachi, Pakistan.

Cone Pizza

DOLMEN MALL HYDERIBlock C, North NazimabadKarachi, Pakistan.

DOLMEN MALLTariq RoadKarachi, Pakistan.

MILLENNIUM MALLRashid Minhas Road, Gulshan-e-IqbalKarachi, Pakistan.

CITY CENTREPlot No. ST-1-A/2, Main Shahrah-e-FaisalKarachi, Pakistan

The placing of Cone Pizza in such areas will also allow simultaneous promotion of the product.

Not only this but Cone Pizza will also be kept at business hubs and there will be outlets providing Cone Pizza to the population working in the business sector thus our aim is to target these people and to make Cone Pizza in the reach in every such individual.

Our placing strategy is not limited or niche rather it is following a mass marketing approach everyone who wants to eat it, will get it.

In the placing strategy that we are following for Cone Pizza is based on direct selling and interaction to provide him with not only the best product but an excellent service. The direct selling and reaching to the costumer may prove to be a bit costly but the costumer experience created with this approach would lead us to cover the costs and lead to profits moreover such an innovative product which is an eatable product needs quality to be assured at its maximum thus the company cannot take risks by let going the product distribution responsibility to some other distributor, at least not in the beginning.

Cone Pizza

Promotion strategy:

The promotional area is one on which we would want to concentrate the most as this would play a vital role in the success of the product. Heavy promotional effort is needed both informative and persuasive. We need to make people familiar to the product and then we want them to be attracted to it. Thus informative advertisement needs heavy budgeting as the target market should be aware of the launch of the innovation of pizza being served as a cone.

Informative advertisement can be best done through television, billboards and magazines. Magazines and billboards would be preferred more because the add would stay for a longer time in front of the consumer and that we can in written provide him with the best info even to persuade him for the product. The only thing it lacks is a motion picture thus television is very necessary to provide with a persuasive and attractive advertisement that would also target the audience who have less exposure to magazines. So the firm has to keep most of the budget to promotional efforts. The TV commercials must be of enthusiastic type to mostly attract the youth audience on the other hand we can make use of newspaper and business magazines to attract the employed busy life workers. This will prove most beneficial to the concept of Cone Pizza. Due to all these reasons we are using heavy and extensive promotional effort for the awareness of Cone Pizza. Our selling preposition would be food on the go and that will make sure through advertisements that this pizza concept is perceive by the consumer as a tasteful, fun filled and a food item which takes care of their appetite as well as time.

The marketing department will work collaboratively with the sales department to ensure that the placing of Cone Pizza is embedded with promotional activities, so there will be banners and broachers especially available at all outlets providing all the information about the flavors and different prices of Cone Pizza which will be provided to each or every customer or family which visits the outlet. This way the company will also be able to retain the customers and promote Cone Pizza to existing as well as potential customers.

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Budget Analysis

Year 1 (Rs) Year2(Rs.)

Sales 20000000 30000000

Cost of sales 8000000 12000000

GROSS PROFIT 12000000 18000000

Distribution costs 6,000,000 8,000,000

Administration expenses 200,000 140,000

Other operating expenses 50,000 50,000

Other operating income 3,000,00 2,000,000

PROFIT FROM OPERATIONS 5450000 7810,000

Finance cost 505,000 400,000

Profit before taxation 4945000 7410000

Taxation 600,000 650,000

PROFIT/LOSS AFTER TAXATION 4345000 6760000

Number of units sold: 330000 380000

At a sales price of: 120 135

Break even achieved in year: yes yes

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Analysis:

We can clearly see that the financing cost is way too much which is causing a detoriating effect on our income which can be decreased if the company uses efficient and effective means of financing its fixed as well as current assets. On the other hand the distribution cost would increase due to an extension plan which will follow the increase in demand as planned(backed with promotional expenses).

The income which is generated would be split in 2:3 ratio and the larger proportion will be spent on promotional activities as other pizza providers will definitely enter into this innovative segment of pizza on the go. Thus to avoid any kind of drawback we can consider these promotional expenditure to be a buffer expense as it will pay us of. Budgeting is a mixture of finance, marketing and sales department effort as all the needs must be specifies with the cost and benefit analysis done so that we can clearly allocate the costs to develop the most efficient budget. We can also not ignore the 150000 invested in the training of the workforce of cooking and providing the consumers with this new product. Thus this cost will be deducted from the 1st years net profit, we consider this as an investment as this would in turn reduce our costs in the 2nd year and so on because of the skill development of our labor force.

Cone Pizza

ConclusionThus we can conclude Cone Pizza in Pakistan will enjoy the first mover advantage and will be the costumers’ first choice, as it sells not only food but experience too. It is bringing a new easier way of eating pizza via cone This product is basically to attract the youngers because now the generation is going too fast, everyone wants everything to be portable and this Cone Pizza is very feasible to handle.You can now have taste of pizza on the go, while shopping, in universities, office breaks time, parks, concerts, cinemas, traveling and much more and this the usp of our product. We expect the products to rise on the wave of success, created by its strong foundation of Fraam & Co. excellent food and showing creativity at its best. Thus the future is brighter for Cone Pizza.

cone pizza

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