Products/ Services of Pipan Foods Pty Ltd
1.1. Existing Products/ Seduces
Pipan Foods Pty Ltd is an Australia owned company that offers supplementary foods for making children’s diet simpler through developing fortified snacks which are delicious as well as healthy. The existing products of the company include Mo Milk supplements that include probiotics and are flavored and designed in a manner that it appeals children. This product comes in different flavors including bliss mix, original, utopia mix and paradise mix. The product ranges of the company include probiotics, Omega 3 (DHA) and calcium + vitamin D (BerwickPharmacy knowledge & expertise 2019). Another product that is introduced and offered by the company includes Skweezi which comes in three different flavors introducing Apple, Rockmelon and Grapes. This product comes in a convenient sqeezy pouch that is developed to address health problems commonly faced by children such as irregular bowel movements and constipation. These products offered by the company are of exceptional flavors containing high fiber and vitamin C (Global Table. 2019).
1.2. Potential Product Development as per Trends in Consumer Segments
The identified consumer segments of Pipan Foods Pty Ltd include young and modern parents more specifically mothers belonging to the age group of 25 to 40 years. From analyzing the current trends of this consumer segment it has been gathered that the type of products that are preferred by consumers includes milk or dietary supplements offering nutritionally balanced and fortified food for children that tastes great and is healthy (Baxter 2018). The target consumers are highly health conscious, active n social media, influenced by ambassadors and are less sensitive about price bit highly cautious about safety and quality of food offerings (Dodgson 2018). As consumers are shifting towards the trends of preferring healthier products that includes low sugar content and high protein content. Consumers expectations for quality has increased along with that the social norms for food have also changed. Focused on such demands of the target consumer segment, the company has considered introducing its existing product Shmoodi with more added dietary nutrients along with additional flavors for appealing the children.
1.3. Description of Proposed Product
The new product that is considered to be developed is Shmoodi that will be a beverage which will be an exceptional dietary supplement for children. The company will consider introducing four new flavors in this product that will include, mango, vanilla, mixed and original (Pipan 2019). For introducing these flavor variants of the product successfully the company will consider deciding other aspects such as size, packaging, delivery along with appeal factor for the product. The appeal that will be used for successfully marketing this product among consumers will be its colorful cartoon theme based packaging along with positioning the product to be plant based and a source of great dietary supplement for children (Johnson 2016). Moreover, such product features will also be marketed through in store sampling product sampling in the play centers and childcare centers as well as in exhibitions. The product will be launched in 200 ml recyclable tetra pack container and gradually it will also be introduced on sizes of 500 ml and 750 ml. The packaging of this product will be done in a way that appeals the children as well as their parents. Recyclable containers will be used for packaging and the designs will be based on cartoon characters along with using coloured packs for various flavors (Chang 2016). It is considered that such products have very limited shelf life and it is necessary for such offerings to reach consumers in a better condition. Considering same, this product offering with new flavor variants will be distributed through selected retail channels so that their visibility and accessibility among the target consumers are enhanced. This product is intended to be delivered through various effective retail channels including Priceline, Parma Save, Clinicare Pharmacy, Health Food Shops and Daigou Shops (Stark 2015).
2. Financial Plan
The financial plan of Pipan Foods Pty Ltd will be developed taking into consideration certain assumption the company’s existing manpower, capacity along with its market prices based on which it will attain its business goals of increasing brand equity, local expansion in Australia and attaining brand extensions.
2.1. Required Investment
| Particulars | Amount (in $) |
| Initial Investment: | |
| Legal | 1,100 |
| Stationery | 450 |
| Brochures | 3,300 |
| Consultants | 3,200 |
| Insurance | 2,550 |
| Rent | 3,000 |
| Remodelling | 12,000 |
| Total start-up expenses | 25,600 |
| Start-Up Assets: | |
| Cash required | 70,000 |
| Start-up inventory | 15,000 |
| Long-term assets | 63,000 |
| Total assets | 148,000 |
| Total requirements | 173,600 |
| Start-Up Funding: | |
| Start-up expenses to fund | 25,600 |
| Start-up assets to fund | 173,600 |
| Total funding required | 199,200 |
2.2. Revenue and Sales Forecast
| Sales Forecasting for 1st Year:- | ||||||||
| Products | Price per unit | 1st month – 4th month | 5th month – 8th month | 9th month – 12th month | Total Annual Revenue | |||
| Average number of customers | Revenue | Average number of customers | Revenue | Average number of customers | Revenue | |||
| Shmoodi (Mango) | $ 5.00 | 300 | $ 1,500.00 | 450 | $ 2,250.00 | 800 | $ 4,000.00 | $ 7,750.00 |
| Shmoodi (Vanilla) | $ 4.50 | 600 | $ 2,700.00 | 800 | $ 3,600.00 | 1,200 | $ 5,400.00 | $ 11,700.00 |
| Shmoodi (Mixed) | $ 6.00 | 1,500 | $ 9,000.00 | 1,900 | $11,400.00 | 2,800 | $16,800.00 | $ 37,200.00 |
| Shmoodi (Original) | $ 5.50 | 800 | $ 4,400.00 | 1,000 | $ 5,500.00 | 1,900 | $10,450.00 | $ 20,350.00 |
| Shmoodi | $ 4.75 | 550 | $ 2,612.50 | 700 | $ 3,325.00 | 900 | $ 4,275.00 | $ 10,212.50 |
| Total | 3,750 | $20,212.50 | 4,850 | $26,075.00 | $40,925.00 | $ 87,212.50 |
2.3. Projected Cash Flow
| Particulars | Year 1 | Year 2 | Year 3 |
| Cash flows from operating activities: | |||
| Cash receipts from customers | $ 26,163.75 | $ 34,020.00 | $ 31,329.00 |
| Cash paid to suppliers and employees | $ (20,000.00) | $ (22,000.00) | $(26,500.00) |
| Net cash flows from operating activities | $ 6,163.75 | $ 12,020.00 | $ 4,829.00 |
| Cash flows from investing activities: | |||
| Additions to equipment | $ – | $ (2,800.00) | $ (1,200.00) |
| Additions to furniture and fixture | $ – | $ (2,400.00) | $ (1,250.00) |
| Net cash flows from investing activities | $ – | $ (5,200.00) | $ (2,450.00) |
| Cash flows from financing activities: | |||
| Capital contribution from owners | $ – | $ – | $ – |
| Long-term bank loans | $ – | $ 3,000.00 | $ 13,000.00 |
| Interest expense | $ (8,820.00) | $ (8,610.00) | $ (7,700.00) |
| Net cash flows from financing activities | $ (8,820.00) | $ (5,610.00) | $ 5,300.00 |
| Net cash increase/decrease | $ (2,656.25) | $ 1,210.00 | $ 7,679.00 |
| Opening cash balance | $ 90,000.00 | $ 87,343.75 | $ 88,553.75 |
| Closing cash balance | $ 87,343.75 | $ 88,553.75 | $ 96,232.75 |
2.4. Projected Profit and Loss
| Particulars | Year 1 | Year 2 | Year 3 |
| Sales revenue | $ 87,212.50 | $113,400.00 | $104,430.00 |
| Cost of Sales | $ (15,698.25) | $ (20,412.00) | $ (18,797.40) |
| Gross Profit | $ 71,514.25 | $ 92,988.00 | $ 85,632.60 |
| Operating expenses: | |||
| Eletricity | $ (5,000.00) | $ (7,500.00) | $ (8,600.00) |
| Telephone and internet | $ (1,000.00) | $ (1,200.00) | $ (1,500.00) |
| Salary to support staffs | $ (25,000.00) | $ (25,000.00) | $ (25,000.00) |
| Rent | $ (3,000.00) | $ (3,000.00) | $ (3,000.00) |
| Depreciation on equipment | $ (3,500.00) | $ (4,200.00) | $ (4,800.00) |
| Depreciation on furniture and fixture | $ (1,400.00) | $ (1,600.00) | $ (1,750.00) |
| Total operating expenses | $ (37,500.00) | $ (40,900.00) | $ (42,900.00) |
| Operating profit | $ 34,014.25 | $ 52,088.00 | $ 42,732.60 |
| Interest expense (7% on bank loan) | $ (8,820.00) | $ (8,610.00) | $ (7,700.00) |
| Profit before tax | $ 25,194.25 | $ 43,478.00 | $ 35,032.60 |
| Tax expense @30% | $ (7,558.28) | $ (13,043.40) | $ (10,509.78) |
| Net profit | $ 17,635.98 | $ 30,434.60 | $ 24,522.82 |
References
Baxter, M., 2018. Product design. CRC Press.
BerwickPharmacy knowledge & expertise., 2019. Would your kids benefit from Mo Milk? | BerwickPharmacy knowledge & expertise. [online] Available at: https://berwickpharmacy.com.au/would-your-kids-benefit-from-mo-milk/ [Accessed 22 Oct. 2019].
Chang, J.F., 2016. Business process management systems: strategy and implementation. Auerbach Publications.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and internationalization in innovation. Routledge.
Global Table., 2019. Pipan Foods Pty Ltd | Global Table. [online] Available at: https://globaltable.com.au/exhibitors/pipan-foods-pty-ltd/ [Accessed 22 Oct. 2019].
Johnson, G., 2016. Exploring strategy: text and cases. Pearson education.
Pipan., 2019. Mo Milk by Pipan Foods – Health Supplement Milk Drinks for Kids!. [online] Available at: https://pipan.com.au/ [Accessed 22 Oct. 2019].
Stark, J., 2015. Product lifecycle management. In Product lifecycle management (Volume 1) (pp. 1-29). Springer, Cham.
