Business plan for "CCTP Distributorship"

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Faculty of Economics and Administrative Sciences

Department of Management

BUSINESS PLAN

for «CCTP Distributorship»

Prepared by: Dias Sadykov

Maksatzhan Khakim

Nadir Nadirov

Course: Entrepreneurship

Kaskelen, 2014

Executive summary

Let’s start with the fact that in recent years there is a tendency to maintain the beauty and overall appearance. This trend has spread to absolutely any industry sector and up to healthcare. Nowadays for people is not enough to be healthy, people need to be healthy and at the same time seemingly flawless.

Moreover, people do not wish to spend precious time on the recovery and renewal of beauty. We also want to note that not all recently can afford expensive medical services and quality and not many are willing to part with their capital for the benefit of health.

Let’s consider market as dentistry. To date, the number of independent dental clinics in Kazakhstan is slightly higher than the mark «300». And every year this number is decreasing, and there are only those dental clinics that really can provide quality and safe dental treatment. What about prices? The average price of a tooth filling is about 6200 tenge, the average price of all the teeth whitening 35,000 tenge, get medical advice on the average costs 2000 tenge. By the time of filling a tooth takes about half an hour, teeth whitening requires an hour or two. Plus time spent on way to the dentist. And this is not a complete list.

So what can solve all these problems? How to seal up and whiten your teeth in a short period of time and for little money? How not to waste your valuable time searching for a good dentist? And finally, how to get rid of the subsequent numerous trips to the dentist? Our company is ready to answer these questions and solve these problems.

CCTP Distributorship offers Japanese toothpaste «Charcle», which can quickly and painlessly to plug holes and cracks in the teeth and restore tooth enamel without the help of dentists. Its composition is similar to tooth enamel, and can be applied directly to the tooth to crack. Material was obtained from experiments with hydroxyl apatite — the main component of the teeth. First, the substance contained in the slightly acid dissolves the enamel surface cracked. Three minutes later paste crystallizes and artificial material firmly embedded in the structure of natural enamel. Plus it’s a good antibacterial agent. Tests conducted by Japanese dentists suggest that healed by the invention tooth, does not differ from healthy. The difference is not visible even under a microscope.

Price on our market of Kazakhstan will be 30 U.S. dollars, which is in accordance with our 5460 tenge per tube. That is, for this price the consumer receives all the teeth whitening, filling holes in the teeth, if any, recovery of enamel, plaque removal and elimination of bad odor after several usages of that toothpaste.

Business description

The current status of our business is expansion

Our goals:

1. To enable people in our country to forget about expensive trip to the dentist that also requires a lot of time. Moreover, this distribution of the toothpaste «Charcle» will markedly improve the health of people.

2. It will serve the substantial development of national healthcare in the field of dentistry by studying Japanese technology.

3. Distribution of this product in the territory of the Republic of Kazakhstan in 5 months looks very promising and profitable given the fact that our weighty competitors are only dental clinics.

Location

Since we will distribute this toothpaste «Charcle» on the territory of the Republic of Kazakhstan, the main office will be stationed in the center of Almaty city at the intersection of Furmanova — Al-Farabi.

Warehouses with this product will be located in Talgar city in Kazakhstan, center of Talgarsky district of Almaty region located on the northern slopes of Trans-Ili Alatau, 25 km east of Alma-Ata and in 20 kilometers from the capital of Kazakhstan, Astana, in the village Michurino.

The product will be sold in special brand areas of the firm (Charcle) located in major shopping malls in Almaty and Astana.

Benefits of location and challenges

The fact that these cities inhabited by people who can afford an expensive visit to the dentist, so for the first time, we have chosen these two locations in order to have the opportunity to expand the boundaries of the distribution of toothpaste in the near future.

Business ownership

The fact is that we need cooperation with the inventor of this toothpaste, Kazuyo Yamagashi. We will need to know the specifics of the production of toothpaste «Charcle», even if we only deal with a distributor, and not industrial. This will significantly facilitate and accelerate the sale of toothpaste. Also important will be highly skilled staff dentists along with experienced promoters who will share their views ideas about promoting this product.

We consider our company as Limited Partnership, where owners are Dias Sadykov, Nadir Nadirov and Maksatzhan Khakim.

Products and services

Toothpaste «Charcle», that can quick and painless plug holes and cracks in the teeth and restore tooth enamel without the help of dentists. Its composition is similar to that of tooth enamel, and can be applied directly to the tooth’s crack. Material was obtained from experiments with hydroxyl apatite — the main component of the teeth.

First, the substance contained in the slightly acid dissolves the enamel surface cracked. Three minutes later paste crystallizes and artificial material firmly embedded in the structure of natural enamel. Plus it’s a good antibacterial agent.

Key Production Factors

On the territory of the Republic of Kazakhstan has no analogues of this toothpaste, and the only serious competitors in the market healthcare, namely dentistry are dental clinics and centers.

Industry Overview

Introduction

Our company will not operate in the medical and pharmaceutical industry, as it may seem at first glance. Would be to note that we do not produce toothpaste «Charcle», and we will only be engaged in distribution of the product. That’s why we want to note that our work is related to the dental industry in Kazakhstan.

Industry structure

Table 1. Number of patients who received dental services in 2013

Number of sanitized, total

including independent dental clinics

Number of persons who received prostheses, total

including independent dental clinics

Kazakhstan, total

1 919 848

917 152

170 582

143 678

Clinics in state ownership

Almaty

111 315

49 772

3 606

729

Astana

50 314

21 115

2 889

2 417

Clinics in private ownership

Almaty

158 578

132 178

19 610

17 575

Astana

40 520

30 366

11 451

11 079

Revenues from health organizations of dental services in 2011 by regions, thousands tenge

Kazakhstan, total

11 912 691,4

Almaty

2 723 028,7

Astana

1 329 547,2

Kostanay

1 115 137,8

East Kazakhstan Region

1 108 383,8

Major players

Our clients will be absolutely everyone who has dental problems at an early stage. Therefore, we haven’t no age limit, no other criterion for the distribution of this toothpaste for our customers.

Our direct suppliers will be manufacturers of toothpaste «Charcle», namely the Japanese company NEW JAPAN FUNCTIONAL FOODS CO. LTD.

We consider ourselves as a company which operates in the dental field, as we believe that consumers will choose between trip to the dentist for fillings problem areas or purchase toothpaste for this issue. That is why our direct competitors are dental clinics, but not toothpaste from other manufacturers.

To date, the major players in the dental market (Almaty city) can be the following clinics:

· Daris TTE

· Dent-Lux

· «DIVA»

The fact that the average cost of tooth fillings 6 226 tg, while one tube of toothpaste «Charcle» will be near 2 500 tg, which is twice cheaper. Especially, the effect of this toothpaste much more, as this toothpaste has impeccable property to whiten your teeth in just a few applications. Also, this toothpaste is sold without a prescription, and uncomplicated to use. As a result, we have toothpaste «Charcle» that:

1. fills all teeth (average price for one tooth in dental clinics is 6 226 tg)

2. whiten their (average price for all teeth in dental clinic is 35 450 tg)

3. the client does not need to be consulted by a doctor (average price of dentist’s consultation is 2134 tg)

Industry trends

Most consumers are sensitive to price and services, and materials, which are constantly growing. This category of patients is approximately 90% of the total, which is served by the dental clinics and offices at average level. Among the most frequently visited dental clinics leads small private dental clinic, this is drawn about 48% of population, almost half the percentage of large specialized clinic visits (20%).

Especially rapidly increased consumption of products and services of aesthetic dentistry from whitening procedures elementary volume to work to change the occlusion. What caused the growth? First of all, awareness of the importance of oral health as a factor in the health of the body (digestion, kidneys, nervous system, etc.). Growing prosperity and satisfaction of basic needs of the population, according to pyramid requests entails attention to health, in this case — the comfort and quality of food consumption, as well as comfort in communication. That part of the population that moved in the chain needs further perceives oral aesthetics as an important component of lifestyle. Segment is growing, like beauty, fitness, etc.

Impact from industry changes

Every year the number of dental clinics in Kazakhstan is significantly reduced, and the requirements for them (clinics) are tightened. In this regard, on the part of dentistry chances of weighty new competitors in Kazakhstan are minimal.

And if you take into account similar toothpastes that are made not only in Japan but also in China, Thailand, Korea, the 50% of them do not have enough certificates confirms the quality and the fact that data toothpastes were tested for harmlessness. Approximately 30% are made in secret. As a result, we have 80% similar toothpastes, which do not meet the standards. That is why the import of these toothpastes will be problematic for those who dare to do it after us, as we have already concluded an agreement with still the only manufacturer of rightly certified toothpaste «Charcle» — NEW JAPAN FUNCTIONAL FOODS CO. LTD.

Market Analysis

Market description and characteristics

Table 2. Identifying target market

Population (01/02/2014, thousands)

17 186

Potential customers (age 12−60, thousands)

13 036

Average salary in tg

104 654

Level of Labor Force in Almaty and Astana (thous)

8 564

Level of unemployment in %

5,2

According to this data we can say that our potential customers are 12−60 years old, despite the fact that number of labor force is approximately 8 564 000 with 5,2% of unemployment, therefore in a result we have 8 118 672 potential customers with average salary 104 654 tg and almost 2 056 346 children 12−18 years old, who can afford our product with the financial help of parents.

Target market

Our target market are individuals, and it is based on our community.

Nowadays customers search effective service for their teeth diseases for affordable price. Nevertheless we have uncovered that average price which is appointed by dental clinics for filling one tooth (6 226 tg), and which is not suitable for them, for prospects. So they will try to find more convenient and less expensive solution for their teeth problems, which could be found in our toothpaste «Charcle».

Market trends

The product will be sold in special brand areas of the toothpaste (Charcle) located in major shopping malls in Almaty and Astana, with promoter with dental education, who can provide free and professional information and consultation about this toothpaste.

Dental market absolutely is not seasonal, because problem with teeth may appear at any time.

Competitive Analysis

Competitor’s profile

Our the most serious and strong competitor is dental clinic «Daris TTE» located in Almaty.

Their mission: «Provide dental services to our customers the highest quality and customer value to meet their requirements, the expected timing, anticipating and surpassing their needs. Create conditions for the development of their staff professionalism, attracting the best team and decent people, creating conditions that motivate for inspired work. Ensure the leading position on the market of dental services in Kazakhstan… «

They are operating in dental industry in Kazakhstan for 20 years and they first introduced the term «cosmetic dentistry.» Purchase only the digital electronic equipment — electronic apex locators, an operating microscope, dental unit with electronic appliances (digital camera connected to the computer with the software), which were very expensive.

They are considered as a innovative dental clinic, they implement innovation in dental technologies This year «DARIS-TTE» celebrates its 20th anniversary. And can that in all these years «DARIS-TTE» is synonymous with high quality services, the most advanced dental technologies. Today «DARIS-TTE» — is a professional makeup high-level specialists who constantly improve their skills.

Dent-Lux dental clinic founded in 2012 — a serious age to be legitimately talked about well-deserved success and high progress in the Kazakhstan dental market. However prices of their services are almost high rather than other dental companies.

Certainly, our indirect competitors are manufacturers and representatives of other toothpastes and powders. But the fact remains that they do not have those qualities, which have our toothpaste.

Competitive edge

If we consider the dental clinics, our similarities with them that we offer the same treatment, such as fillings and teeth whitening, removal of plaque and odor and prevention of dental caries at an early stage.

business service market industry

Market niche and share

The fact that our target market is the customers (patients), who are disturbed by the problems mentioned above, while dental clinics offer wide range of services for the high prices. We also offer treatment mainly for the important problems for little money, moreover it takes less time.

Our advantages (benefits of our toothpaste):

1. Relatively lower price than competitor’s prices for certain dental services:

* fills all teeth (average price for one tooth in dental clinics is 6 226 tg)

* whiten their (average price for all teeth in dental clinic is 35 450 tg)

* the client does not need to be consulted by a doctor (average price of dentist’s consultation is 2134 tg)

2. Save customer’s time:

* The customer can make an order, or customer can purchase the toothpaste in major malls in the Astana and Almaty cities.

* Do not need to be written to the queue and wait for the order.

* The curing process takes place during and after each brushing.

In principle, our company can operate in parallel with dental clinics in the market of dentistry and even cooperate with them in the near future, delivering this toothpaste to them. It is also one of the assumptions and the secondary objective of our company. We will try to create and show our competitiveness in order to generate interest among customers as well as competitors.

SWOT analysis

Competitor’s:

Strengths

· Loyal customers

· Organized

· Communication with patients and each other

· Customer service

· Personalities allow for great atmosphere

· Competent staff

· They are detail oriented

Weaknesses

· Time management

· Assistant duties (i.e., taking x-rays and soft touch.)

· Waiting area too small for large groups

· No rotation of duties (leaves staff without opportunity for lunch/break)

· Patient recognition (i.e., place routing slip in door handle for ID)

Opportunities

· Use routing slips for ID of patient at door handle

· Taking x-ray properly (Nalleli — training)

· Pow wow with assistants (Nalleli)

· Dentists — utilizing dental assistants equally

· Dental perio charting

Threats

· Front desk reception

· X-ray's

· Personal touching of privates

Our SWOT:

Strengths

· Loyal customers

· Communication with customers and each other

· Customer service

· Personalities allow for great atmosphere

· Competent staff

· Providing quick treatment

· Painless treatment

· Low costs and price

· There are no any analogs in this market

· Time management

Weaknesses

· Insufficiently known and unrecognizable product

· Not yet won the confidence of consumers

· Patient recognition (i.e., place routing slip in door handle for ID)

· For the first time is not enough organized activities

Opportunities

· Promotion of a product throughout Kazakhstan

· Rotation schedule to allow for lunch

· Individual assistant per patient

· Presentation of the product directly on brand areas.

· Ensure the advancement of the working staff

Threats

· Hypersensitivity of one or more of the ingredients of the toothpaste. (Before use, check the composition)

Marketing Strategy

This product will use every consumer, and in every house will be this product. Because in future customers will stay at home and clean their tooth by our product and their tooth will be fixed.

Our selling point is to help society be health and also to do easy their life with using this product.

Our product is different because we use just tube of paste seal tooth and we won’t use bormachines.

We will attract our customers by advertisement on TV, radio, SMI. And provide experimental advertising.

They will spend a few time to fix their tooth, and they will spend a few money. They will buy 1 time a tube and will use 10 times this tube.

We are focusing on B2C (Business to Costumer) we will build relationship with our customers and we will sell our product to customers directly without mediators

Our prospective customers will think about our product with good side, that our product will help them in the future. With our product they will feel them better, because toothpaste will seal cracks, fill gaps and safe tooth.

Our product will transported from Japan with own package in Almaty and Astana and we will write composition applications in Russian and Kazakh languages. It will help to our customers use effectively and understand how to use it.

Promotion, advertising, and public relations

We will use two marketing methods to sell our product first one is Conventional promotion (radio, newspaper, magazines, internet) and second one is Direct presentations to potential clients.

Table 3. We will spend on our advertising about 8 500 $.

TV Advertising

5 000 $

Radio Advertising

1 000 $

Newspaper, Magazines, Internet Advertising

2 000 $

Direct presentations to potential clients

500 $

We will not give discounts to our bulk buyers because we are distribute this product from Japan and we will minimize the cost of our product and sell. And we won’t have a bulk buyers. Customer can purchase only from our company.

Service and warranty policies

We will give 1 year guarantee for our product. If our product will help or our customers will satisfied with our product.

Ownership, Staffing, and Management Plan

Ownership

Our business will be Limited Partnership.

Dias Sadykov- CEO, Head of Finance Department

Maksatzhan Khakim-head of HR and Sale Department

Nadir Nadirov- COO, Head of Marketing Department

Our business will be partnership because our business will open by 3 person.

And we will invest this business equally. And will discuss about future of company and solve problems equally.

Our Business Manager is Dias. He has high education on business and International Relationship. He is responsible, communicated, organized person.

Management plan

We planning start our business by own money. And as I said before we will invest our business equally and will be partners.

We will have Service managerial position, because we need to contact and communicate with customers. And take care of customer requests and complaints. We’re also responsible for hiring staff and keeping a good working atmosphere, organize events, such as hiring a band or some other public event.

Staffing and training plan

At first we will start from small. At first time we will hire about 30 persons.

Table 4. Amount of employees and their expected salary

~# Members Wage in tenge

2

Accountants

100 000

3

Supervisors

120 000

14

Sales persons

70 000

4

Cleaners

50 000

3

Drivers

75 000

4

Warehouse security

50 000

Our company will work all seasons. And we will keep our workers in their position. If we will growth we will promote our staff.

Managers and staff must be more creative, flexible and effective in work

We will provide every year different trainings to increase their qualification

Financial Plan

There’s no hard and fast answer, because every specialty business is different. Your costs will depend upon the price of renting warehouse, and the price of customs duties will also affect on how much money we will need.

We don’t have already own a suitable building or a complementary place such as an offices, to decrease our costs. In addition to start-up costs we should have cash on hand to cover all of your operating expenses for the first two months.

We might need approximately 250 000 $ to realize all plans that we set. We estimate that to start our business namely this amount of money is required.

We are planning to borrow this many from our relatives. Our parents give us a chance to test ourselves in a real life

In Kazakhstan government is implementing the State program «Business Road Map-2020», designed to support entrepreneurs. Its implementation provides an opportunity to expand your business, for those who want to start their business from the scratch. They provide some financial support for entrepreneur but we don’t need this.

The fact that we will get funding from our relatives, and in principle, the sum of $ 250,000 is enough for the realization of our distributorship.

We think that after the first year of operation, all costs will be justified< so after the first year we will payback loan.

Quarterly we predict to sell approximately 10 000 units of toothpaste, early it will be 40 000 units.

Table 5. Costs, revenues, price, income, profit

Advertising costs (yearly based) in US Dollars

TV adv.

5000 $

Radio adv.

1000 $

Newspaper, Magazines, Internet

2000 $

Direct presentations

500 $

TOTAL

8500 $

Tables 6, 7, 8. Operating costs

Salary (monthly and yearly based)

Staff

Quantity

Monthly

Yearly

Accountants

2

200 000tg

2 400 000tg

Supervisors

3

360 000tg

4 320 000tg

Sales assistants

14

980 000tg

11 760 000tg

Cleaners

4

200 000tg

2 400 000tg

Drivers

3

225 000tg

2 700 000tg

Warehouse security

4

200 000tg

2 400 000tg

TOTAL

30

2 165 000tg

25 980 000tg

In US Dollars

11 895 $

142 750 $

Rent of place (monthly and yearly based)

PLACE

QUANTITY

MONTHLY

YEARLY

Warehouse

2

500 $

6 000 $

Office

1

500 $

6 000 $

Brand zones in trade centers

3 in Astana

4 in Almaty

700 $

8 400 $

TOTAL

10

1 700 $

20 400 $

Technology and Equipment

EQUIPMENT

PLACE

QUANTITY

COST

Truck (GAZel)

Warehouses

2

20 000 $

PC

Office

2

2 000 $

Printer (with scanner)

Office

2

600 $

Sofa

Office

1

300 $

Chairs

Office — 3

Brand zones — 7

10

500 $

Locker

Office

1

80 $

Uniform

22

1 200 $

Store

Brand zones

7

3 500 $

TOTAL

47

28 180 $

Table 9. Income and profit

Budget (borrowed money) = 250 000 $

Expenses for the first time

Advertising

8500 $

Salary

11 895 $

Rent

1 700 $

Equipment

28 180 $

Ordering and Delivering of toothpaste

160 000 $ for 10 000 units

Licensing

1 000 $

TOTAL

211 275

250 000 $ - 211 275 $ = 28 725 $ for unexpected situations

Income statement (At the end of first Year)

Product Sold

10 000 units x 4 quarters (30 $ per unit)

1 200 000 $

Ordering and Delivering of product

160 000 $ x 4 quarters (16 $ per unit)

640 000 $

Salary

142 750 $

Rent

20 400 $

Advertising

8 500 $

Equipment

28 180 $

Maintenance of Equip.

10 000 $

Licensing

1 000 $

Tax 12%

144 000 $

PROFIT

205 170 $

Income statement (at the end of subsequent years)

Product Sold

10 000 units x 4 quarters (30 $ per unit)

1 200 000 $

Ordering and Delivering of product

160 000 $ x 4 quarters (16 $ per unit)

640 000 $

Salary

142 750 $

Rent

20 400 $

Advertising

8 500 $

Software updating

800 $

Maintenance of Equip.

10 000 $

Tax 12%

144 000 $

PROFIT

233 550 $

Implementation Summary

Table 10. Required activities for implementing

TASK

Estimated Time

Determine if the type of business suits for us

01. 01. 2014−19. 01. 2014

Find sources of start-up financing.

19. 01. 2014−23. 01. 2014

Write a business plan, including a profit/loss forecast and a cash flow analysis.

01. 01. 2014−15. 02. 2014

Set up a basic marketing plan.

15. 03. 2014−01. 04. 2014

Find our supplies

15. 03. 2014−01. 04. 2014

License our product

01. 04. 2014−07. 04. 2014

Find warehouse

01. 04. 2014−07. 04. 2014

Buy the equipment

Find the staff

01. 04. 2014−07. 04. 2014

Take agreement with malls about trend zones

Find offices

01. 04. 2014−07. 04. 2014

Sign a contract with Media

Table 11. Sharing operations

Milestone

Start Date

End Date

Budget

Manager

Business Plan

31?dec?14

15?Feb?13

$ 1 000

Dias

Financial backing

1?Jan?14

31?May?14

$ 15 000

Nadir

Make signs

15?Mar?14

31?May?13

$ 2 000

Maksatzhan

Mail (1st) advertisements

1?April?14

30?Apr?14

$ 1000

Nadir

Open store

30?Apr?14

31?May?14

$ 15 000

Dias

Mail (Ongoing) advertisements

1?May?14

31?May?14

$ 4 000

Nadir

Our business will be Limited Partnership. Dias Sadykov will be our CEO and Head of Financial Department, also we choose him as head Manager. Maksatzhan Khakim will be head of HR and Sale Department and Nadir Nadirov will be COO and Head of Marketing Department.

We will have Service managerial position, because we need to contact and communicate with customers. And take care of customer requests and complaints. We’re also responsible for hiring staff and keeping a good working atmosphere, organize events, such as hiring a band or some other public event.

Conclusion

Our company is focused on distributing the toothpaste «Charcle» and our work is related to the dental industry in Kazakhstan, and also we want to say that we are not operating in the medical and pharmaceutical industry, as it may seem at first glance. Every year the number of dental clinics in Kazakhstan is significantly reduced, and the requirements for them (clinics) are tightened. In this regard, on the part of dentistry chances of weighty new competitors in Kazakhstan are minimal. And if you take into account similar toothpastes that are made not only in Japan but also in China, Thailand, Korea, the 50% of them do not have enough certificates confirms the quality and the fact that data toothpastes were tested for harmlessness. Approximately 30% are made in secret. As a result, we have 80% similar toothpastes, which do not meet the standards. That is why the import of these toothpastes will be problematic for those who dare to do it after us. Our product will be sold in special brand areas of the toothpaste (Charcle) located in major shopping malls in Almaty and Astana, with promoter with dental education, who can provide free and professional information and consultation about this toothpaste.

Referrences

Information about «Charcle charcoal toothpaste»:

1. http: //www. yaplakal. com/forum1/topic754972. html

2. http: //www. ebay. com/bhp/charcoal-toothpaste

3. http: //www. amazon. com/Sumigaki-SUMIGAKI-JAPANESE-CHARCOAL-TOOTHPASTE/dp/B000LP5C6G

Information about competitors

4. http: //www. dent-lux. kz/index. php? newsid=30

5. http: //daris-tte. kz//index. php? id=12

6. https: //uk. answers. yahoo. com/question/index?qid=2 014 011 012 3531AAvQ41C

7. http: //diva-stom. com/company

Information about dentistry and dental market

8. http: //yvision. kz/post/293 043

9. http: //vlast. kz/article/obzor_rynka_platnyh_stomatologicheskih_uslug_v_almaty_infografika-2595. html

10. www. stat. gov. kz/э

Preparing financial statement

11. http: //www. sba. gov/ombudsman/7046

12. http: //www. quickmba. com/accounting/fin/statements/

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