A122KM BUSINESS SKILL

INDIVIDUAL ASSIGNMENT

Lecturer: Submit by:

Miss Aneetha Nguyen Thi Thanh Huyen Vu Xuan Bao

Student number: Date:

08027023

30-09-2009

Table of contents:
I) Executive Summary.. 3
1.1) MISSION. 1.2) KEY TO SUCCSSEFUL.. 6 II. Company overview 2.1) Company overview. 8 2.2) Company ownership.. 8 2.3) Start up summary/ budget . 9 III) Products 3.1) Product description 12 3.2) Product Features 13 IV) Market analysis summar y 4.1 Market Segmentation .. 14 4.2 Target Market Segment Strategy . 14 4.3 Industry Analysis. 14 4.4 Competition and Buying Patterns. 15 4

V) Competitor

Analysis..
VI) Personal

17

Plan.

18

VII) Marketing strategy .

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7.1) Price Strategy..

VIII) Sale Strategy 8.1) Sale Forecast. IX) Barrier of Entry X) Future Plan XI) Conclusion . 22 23

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Executive Summary:

Non Cigar World, Inc. is a quit cigarette medical company that intends to design, patent, and market quit cigarette medical . The trade name "C-Quit" will serve as brand name and identity name for the product. . The product is intended to help people easier to quit cigarette. The C-Quit is an innovative stop smoking patch
designed to help you give up smoking safely and natura lly. A United States patent on the device is in the application process and is pending. Our company is competing in the quit cigarette segment of the quit cigarette industry. We focus on meeting the demand of customers who consider quitting cigarette from all over the world. Non Cigar World Company focuses on the middle and upper income markets. Our company is focusing on the people who are addicted to cigarette and trying to quit. This is comprised of males between the ages of 25 -65 mainly professionals with a medium to high income. These groups of people qualify for my product because they want to quit cigarette. They are those that understand cigarette causes poor health and leads to death. This segment of the population is the most profitable one due t o a large disposable income. On the large scale, our customers are wholesalers, retailers, and companies.

C-Quit is a medical help a smoker quit cigarette. Because of this, C -Quit got a lot of support from the government and social organization. Because of this, we expect that our product will be easy to accept by the customers. According to our analysis, we are assured that after two years we start getting profit. Total amount we need to run the company nearly $80,500. But we just need $26,000 to start-up. However, we can make profit in the second year.

1.1 MISSION: According to the World Health Organization (WHO), every 6.5 seconds each active or former smoker dies. In fact, quit smoking is very difficult, people must set his/her mind set to realize that how cigarette affect to their health and determine to quit smoke. People probably know that smoking cigarette is harmful to their health, increasing their risk for heart disease, bad skin, bad breath, smelly clothes, hair and many types of cancer including lung, throat, stomach, and bladder cancer.

Our company NON CIGAR WOLD exists to help people who are willing to quit smoking by providing:

- Higher quality product. - Maintains the highest standard of service such as customer counseling. - Responsibility to make sure that our product really works to customers.

Hence, we proudly release latest product C -QUIT will help smoker reduce smoking habit after 90 days only .

1.1 OBJECTIVE:
y

We will achieve through the following ways:

Required market share to break even to make sure customers will buy our product. Develop a competitive, control pricing and increasing profit. Brand loyalty and attainable market share give promotional budget and competitors The cigarette market shows huge number in China about 390 million smokers, which takes up 30% of global smokers. As China market shown prospect opportunity, we will promote our product in China and improve the companys branding and reputation as well. Develop our product globally, an d each market in each country will help our product grows and effects the market share in the world. Based on the economic conditions , we can produce products that satisfy consumer financially as long we still maintain competitive advantage. We maintain an d constantly develop our research section (Invention, maintain, testing ) for any smoker, and provide reliable warranty of defect product that will increase more trust in prospect consumer.

expenditures.

1.2 KEY TO SUCCSSEFUL: Evaluate each and every product that we sell a nd determine if we are selling them profitably. If not we need to identify how to make its current sales profitable, whether can reducing the costs for our product or increasing its price. We also can cuts costs by evaluating our insurance needs, reducing our reliance on outside consultants and service providers, or cutting down unnecessary supplies and equipment. Develop new products while maintaining the high quality of existing products and ensure that our products are created or chosen in response to th e needs of our customers. Ask for customer feedback through surveys to understand what are a customer needs. Create and maintain the highest level of customer satisfactions and provide the best service to customers is very important success factor needed to sustain business. Hence, the most important thing to makes a business successful is satisfied customers and gives them more than they expect. Increases sales and gain high profit. Minimizes outsourcing and utilizes insurance benefit.

Adjusts new products to consumer needs. Analysis feedback. Provide excellent customer service Gives extra benefits for customer.

II. Company overview Start up summary/ budget Products/ services Market analysis 2.1 Company Overview A quit cigarette product of the highest quality at a low and affordable price. Our product will be launched all over the world and it will be delivered in patch form with the best customers service in the industry. We will serve customer the best products with production flexibility and the best quality control in the industry. This will help our company launch and enable to compete with other companies in the market. NON CIGAR WORLD has established a strong business to business telemarketing effort that is working very well to create new business for us. Members of our management team have four partners. They will provide capital from their own savings for the first year and the rest will borrow from the banks. What more, the company has gained a vehicle to be used by our sales representatives. This will allow us to better serve customers in the market. We have acquired all the necessary permits at the state, and county levels. As with any company, Non Cigar World recognizes its risks. The company is working to determine trends in the industry, the needs of the customer, and how best to address the needs of the customer. We aim to provide customers with good service and products to keep them coming back for more. 2.2 Company ownership Non Cigar World is an incorporation company, it is o wned by its four partners
y y y y

Bao, President. Thao, Vice President. Huyen, Production Manager JingJing, Sale Management

2.3 Start up summary/ budget Our company start-up costs come to nearly $26,000 which is mostly renovation of the occupied store space, p rofessional fees, and expenses associated with opening our first location. The start-up costs are to be financed by direct owner investment, financial institutions, and private investors. The assumptions are shown in the following table and illustration.

Start-up

Requirements

Start-up Expenses Professional Fees (Legal, Accounting, Consulting) Placemats, Stationery, Business Cards Renovation Marketing Rent Expensed Equipment Insurance Website Development Misc Expense Total Start-up Expenses $1,800 $1,100 $8,300 $2,500 $2,000 $5,000 $350 $1,000 $3,800 $25,850

Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets $23,100 $6,000 $5,250 $20,300

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Total Assets

$54,650

Total Requirements Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required

$80,500

$25,850 $54,650 $80,500

Assets Non-cash Assets from Start-up Cash Requirements from Start -up Additional Cash Raised Cash Balance on Starting Date Total Assets $31,550 $23,100 $0 $23,100 $54,650

Liabilities and Capital

Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities $0 $25,000 $9,500 $0 $34,500

Capital

Planned Investment Investor 1 Owners Additional Investment Requirement $15,000 $30,000 $1,000

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Total Planned Investment

$46,000

Loss at Start-up (Start-up Expenses) Total Capital

($25,850) $20,150

Total Capital and Liabilities

$54,650

Total Funding

$80,500

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III. P

3.1 P

duct d

C-Quit i turall . abit. C-Quit i

ti

it it uni ue lend f ingredient , C -Quit ill elp

afe and easy t use. Each patch contains a dose of the ost effecti e ithdrawal while

herbal ingredients, formulated to alleviate the symptoms of nicotine

cleansing the system of all smoking-related toxins. o uit smoking, you need to break free from nicotine. nlike other stop smoking patches, C-Quits all-natural formula eliminates, rather than replenishes, the level of nicotine in your body, helping you break the habit. It is a well -known fact that withdrawal from nicotine is very unpleasant. In fact, it is the single thing that causes even the most committed uitters to go back to smoking. hat makes the C-Quit patch so amazing is that it combines the all-natural healing

ly properties of a uni ue variety of traditional herbal formulas to complete and naturally eliminate your bodys need for nicotine.

c i ti

u i

up

i i

f l t e

u t finall

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y y y y y

Give up smoking safely and naturally Alleviates symptoms of nicotine withdrawal wit carefully chosen herbs All natural formula eliminates nicotine from your body Perfect for people serious about giving up 100% Money Back Guarantee
 

Ingre ien s: Alfalfa, Echinacea, Licorice Root, Gotu Kola, Hops, Skullcap, Oat, Peppermint, Ginger Root, Gentain, Myrhh, Safflower, Passion Flower, Bayberry, Eucalyptus, Sasparilla, Sli ppery

Dire ions: Place one patch in a different place on the skin every three days. It is recommended that the patch be placed on a hair -free area, if at all possible to avoid irritation when removing the patch. Do not place the patch on the genitals or the face. IV. Market analysis summary Our company is competing in the quit cigarette segment of the quit cigarette industry. We focus on meeting the demand of customers who consider quitting cigarette from all over the world. We know that 90% of all our c ustomers will be men. We have divided up our clients into the following market segments, the specialty smoker, the recreational smoker, average smokers, and occasional smokers. The specialty and recreational smokers will be the most frequent customers of o ur company and have the highest average profit; we will be focusing on marketing and servicing these customers the most. Currently we have a lot of competitors within the country. Most of these competitors are single store firms, and many of them have mor e unlimited stock In recent years, the number of local participants in the quit cigarette industry has increased. As more participants enter the market, the more competitions increase in the market share. At the moment, management is exploring the possibil ity of being a leader in market consolidation. This would create a buffer to declining profits by increasing the aforementioned market share and volume.


3.2 Pro

Fea res

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4.1 Market Segmentation Non Cigar World Company focuses on the middle and upper income markets. Our company is focusing on the people who are addicted to cigarette and trying to quit. This is comprised of males between the ages of 25 -65 mainly professionals with a medium to high income. These groups of people qualify for my product because they want to quit cigarette. They are those that understand cigarette causes poor health and leads to death. This segment of the population is the most profitable one due to a large disposable i ncome. On the large scale, our customers are wholesalers, retailers, and companies . At the moment our potential list of customer include all the smoking population in the city, with an adult population of 4.6 million people (over the age of 21) we estimate this to be 450,000 people. However, only a small fraction of these potential customers are willing to quit cigarette and most of consumers will purchase our product from non -specialty stores such as grocery markets and convenience stores. While we acknowledge that there will be some female customers, we anticipate that 90% of all our customers will be men. We also will launch our Internet site with online ordering, we will be able to sell to all the potential clients in the world. Therefore we will see th e number of potential customers will be increased. Once we become established as an online retailer of specialty and nationwide brand quit cigarette we expect to have an estimated potential customer base of 150 million customers 4.2 Target Market Segment S trategy Our target market segment strategy is providing to customer the best product and the best price. Since the Specialty and Recreational Smokers will be the most frequent customers of our company and the highest average profit margin, we will be focusing on marketing and servicing these customers the most. Usually these are clients who have an upper level of income as well, which improves volume. We are seeking to create a larger dedicated client than what we possess through the creation of our we bsite, to be launched in the future. 4.3 Industry Analysis Now a days, Quit smoking cigarette products are produced by a lot of companies in the world. The United States is the world's leading quit cigarette product producer, behind only China. Their produ cts are exported and sold in many places; especially they sell their products online and shifting. What more, both quitting cigarette product consumption and quitting cigarette products exports have increased, and they are getting a lot of profits.

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All of this makes for a current market situation that is a little bit difficult to our company. Since a lot of new entrances are come into the quit cigarette industry so they has been forced to reduce prices to competitive with other competitors. Quit Cigarette companies have reduced prices as a result of competition. Lower prices have increased consumption. The long-term increase in quit cigarette consumption due to economic factors continues as well as health care organizations continue to push for the eliminat ion of all smoking throughout the nation. 4.4 Competition and Buying Patterns We have developed a masterpiece when it comes to quality, presentation and, most importantly, price, but the competition is strong and in order for us to succeed we need to market this quit cigar aggressively. Company staffs have been interviewing customers in all our country in order to get feedback from the customer. From these interviews we have determined that the market is ready for a new quit cigarette brand, one that is a u nique. Also, the price was determined by taking into consideration how much the customers are willing to pay for a new product. Currently we have a lot of competitors within the country. There has been a boom in growth for products designed to help you sto p smoking from patches to prescriptions, nicotine delivery systems, herbal treatments, supplements, chewing gum, and lozenges, the options seem endless. Most of these competitors are single store firms, and many of them have more unlimited stock. In recent years, the number of local participants in the quit cigarette industry has increased. As more participants enter the market, it increases competitions in the market share. At the moment, management is exploring the possibility of being a leader in market consolidation. This would create a buffer to declining profits by increasing the aforementioned market share and volume. Because of pressure competition, a lot of firms have left the market. As more participants leave the market, our company will consolida te and gain market share. At the same time, there is a serious risk from marginal competitors who sell quit cigarette products as a small percentage of their total sales. These include grocery and convenience stores. At the present time these competitors only offer a limited number of nationwide brands and do not appeal to our target market segments.

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However, they do seriously affect on our business because of the large volume of customers who shop in these stores. We feel that despite any attempts to change shopping habits the quit cigarette shops across the country do not possess the power to change the overall market share that these indirect competitors have. Our company will be launching its nationwide website with online ordering. This will open up new potentials for the firm and help to turn the company's declining profits around. However, we will also be running into new competitors who are already established online. These include E Cigarette, Zero Smoke, E Z Quit...It is Non Cigar World's intention to create a good position in this market through an easy -to-use and attractive website, a lot of shipping options, low cost, and comprehensive marketing.

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Non cigar world

V. Competitor Analysis

Zero nicotine patch competitor is the name of smoke deter brand. Its also made in USA. We will use SWOT analysis the brand in
Strength

bellows:

The companies is a proud member of the Natural Association and are dedicated to providing safe and products that help people supplement their lives.

Products effective

The Smoke Deter is difference with other market products. The main sales market is in European and Australia. The advantage is smoke deter is absorbed quickly into the blood vessels under the tongue. Their sublingual application is the preferred method to deliver homeopathic ingredients to combat your symptoms so you can feel better quickly. The important thing is SMOKE DETER is designed to relieve multiple symptoms, and can be safely used with no drowsiness or adverse side effects. Theyve adopted the mission: To deliver the highest quality health and beauty products with the best value to their customers. What customers are saying about Smoke Deter System?
Lisette, USA She said: he has tried several stop smoking products without any success. After trying smoke deter product, his over all health is so much better and his urges has gone away. Randy, Canada Ever since she started taking smoke deter product her feels so much better and she doesnt has those urges. thanks for changing her life. health She

Weakness

The SMOKE DETER hasnt directly sales in

Asia

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market. If you want to buy, you have to order for USA and then they are shipped via FedEx with tracking or a local international carrier with track ing. It affects the speed of sales.
Opportunity

The SMOKE DETER sales better in USA, UK CANADA and AUSTRALIA. It got testimonials in this city. And they will enlarge the market in the Asia area. Because of Asia have a big market for people who want to ki ck the habit of smoke. Now Asia people can order and pay for online, very convenient.
Threats

In the same line SMOKE DETER also have several competitors in the market. So if the brand wants to enter Asia market they have to think about the package and fit the Asia people tasty. The other one is about the government policy. They always want to protect local product and prevent the overseas product insert.

VI. Personal plan

As we know our products all come from USA, when we need we have to ship from USA. Its not only waste of money also waste of time. So we want to establish ourselves company in Singapore. We produce in Singapore and then sale for the local retailer .you know if we take over Singapore market we will take over Asia market. Nowadays, we hav e more and more similar competitor in a same sale line. So we have to think about how to lower the expenses and improve our product quality of sales. We want to do a unique company in Singapore. First, we hire the person who has higher technology knowledg e as our manager .we needs him to lead us how to do the product. And we hire local staff as our worker in order to bring down the cost of salaries. Secondly, In order to manage Our Company we create four departments: marketing, finance, business departmen t and product department. The original material comes from USA. We just ship the original material from USA. 19

Year 1 Managers Original material ship fee Boxing fee Other Total people Staff fee Total payroll
4. Financial plan

Year 2 $120,000

Year 3 $130,000 $60,000

$100,000 $40,000 $10,000 $0 20 $360,000 $510,000

$50,000 $15,000 $0 20 $400,000 $585,000

$20,000 $0 20 $420,000 $630,000

Startup capital Projected start-up capital for 1 st month ( start up expense 3 months ) Project set-up costs ( only- once expense) Total start-up capital We need a capital of at least $80,500 $36,000 $10,000 $26,000

Borrow $ 44,500 guaranteed by the SBA as a ten -year loan.

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VII) Marketing strategy:

One of important factor make a company success in market is marketing strategies. The company have good strategies will be got an advantages. C -Quit is a medical help a smoker quit cigarette. Because of this, C -Quit got a lot of support from the government and social organization. We plan to advertise in publication such as MRT stations, Bus stations and shopping center. Additional, we also advertise our product in the magazine. We are also in the process of creating partnerships with other Internet firms to create Internet links to our existing informational website. When we launch our online ordering features we will intensify these efforts. Finally, we will be seeking to introduce our new products to the community through newspaper articles and banner advertisements.
7.1) Price strategy:

The customers have to pay $35 for o ne box with 7 patches. But if the customers buy more than 10 boxes, they just have to pay $31.5 for one box. It is 10% discount for each box. If the customer buys a large of goods, we will give more service such as delivery free, free gift and others. In o rder to satisfy a long term customers, we also make a membership when they pay more than 200$ when they buy our product and they will have a members benefic such as get more discount, free gift for birth day and get more promotion.
VIII) Sale strategy:

We are looking for clients who want a long -term relationship. A company they can trust and depend on. We target in average -income and high-income people so we have to create long-term salesperson to customer relationship. Promotions, specialty items and other such standard sales strategies will be used when possible.

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8.

S l

Sales forecasts are based on conservative estimates. he uit cigarette medical products industry is fortunate in that sales are not seasonal and remain steady throughout the year. e estimate that sales will go up in Year 1 due to our Internet distribution outlet and this will continue to moderately grow for the foreseeable future. e do not anticipate any sales growth from our shop until the last uarter of Year 4 and man agement has decided not to include those revenues in this plan.

Sale By Year
$1,400,000 $1,200,000 $1,000,000
$800,000 $600,000 $400,000 $200,000 Year 1 Year 2 Year 3 Year 4


Roll-own-business Single nit

Package


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IX) Barrier of entry:

Difficult acquire legal procedures is very common problem for the new company want to entry the market. Because of this, we have to spend more time and more money than we expect. Heavy spending on research and development can act as a strong deterrent to potential entrants to an industry. Clearly much R&D spending goes on developing new products (see patents above) but there are also important spill-over effects which allow firms to improve their production processes and reduce unit costs. This makes the existing firms more competitive in the market and gives them a structural advantage over potential rival firms. We also will get intensity of rivalry from exit firm. They will spend heavily on advertising that we would find more difficult to afford. I just mention some of major factors which are barrier our company entry the market. We dont expect that happen with our company but we have to prepare as well as possible .
X) Future plan for expansion:

In order to make our branch more popular, we will open more firms in the other countries, spend heavily of money for advertising and promotion such as advertise on local magazine. Moreover, we will spend more money for rese arch and development to develop new products. We try to get more innovation technology. However, we will open classes to train our staff more profession. To get more advantages, we try to hire an expert staff form competitors with a better offer. We also look for global market. We try to achieve some legal procedures. After get the standard we can start do business with more power in the market .
XI) Conclusion:

In the beginning, Non Cigar World just is the idea of four students. Now, it becomes true. The Non Cigar World Company has been operated in couple years and it really run well until now. Four students be come the leader of company. We try their best to make the company more power and stron ger. We have finished a first step that establishes our own company. Now we move to a second step that makes their company become public in our country and after that in the world. In order to do the second step, we need more budget. This plan show how we will do for the company. If we follow this plan correctly, we will achieve a purpose of second step. We hope this plan will be satisfy you and you can make a right decision when you put your investment in our company.

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