INTRODUCTION TO SAUCES

In cooking, a sauce is liquid, cream or semi-solid food served on or used in preparing

other foods. Sauces are not normally consumed by themselves; they add flavor, moisture,
and visual appeal to another dish. Sauce is a French word taken from the Latin salsa,
meaning salted. Sauce is a French word that means a relish to make our food more
appetizing. Sauces are an essential element in cuisines all over the world. Sauces are
foods devised to make other foods look, smell, and taste better, and hence be more easily
digested and more beneficial. Sauces may be used for savory dishes or for desserts.

WHY DID I CHOOSE SAUCE?

In the face of the economic crisis, consumers are being forced to re-assess their
expenditure and are cutting back on the number of times they are dining out. However, this
does not necessarily mean that they have the time or desire to cook meals from scratch.
Cooking sauces and food manufacturers have seized the occasion and have been
introducing products that allow consumers to re-create the restaurant experience from the
comfort of their home.

Cooking sauces’ generally inexpensive price has contributed to the market’s growth. On its
own, this fact might not be sufficient to drive sales. But coupled with the rising cost of dining
out, consumers are looking to expand their options for at-home cooking. These products
allow those with limited cooking skills to prepare more diverse meals without new
equipment or a large time investment. Also boosting the popularity of these products is their
availability through a wide array of channels, ranging from the inexpensive (club stores and
mass merchandisers) to the more sophisticated (specialty stores and restaurants).

Competition from food service outlets, both in-restaurant and takeout, has taken a hit, as
the economy worsens and consumers cut back on dining out. Cooking sauces, which
combine the participation of consumers with the benefit of pre-made convenience, are
positioned for success. These products allow consumers to replicate recipes from higher-
end gourmet magazines (which depend upon the use exotic ingredients that are not
available in traditional grocery stores and must be preordered) without higher-end items and
fare well.

Cooking sauces market responds to consumers’ needs. With today's hectic lifestyle, there is
an increasing demand for convenient and easy meal-time solutions. Most cooking sauces
only require heating and manufacturers have begun introducing pre-blended spice and
seasonings mixes to facilitate consumers' cooking experiences. The simplicity of these
products and the fact that different proteins and carbohydrates can be added to them, in
addition to the vast diversity in the types of cooking sauces and food seasonings available,
mean that consumers can create a different meal every night of the week. Not only is there
much variety in the ethnic roots of cooking sauces and food seasonings, but also in their
flavor intensity.

One of the strongest attributes of cooking sauces is their convenience. Providing ready-to-
use products that help consumers spend less time in the kitchen and more time enjoying
the meal is necessary. Being both convenient and relatively inexpensive, they are
positioned for continued growth in the market. Price and variety have contributed to
increased sales of these products over the past years and will continue to support growth.
While competition heats up, products that deliver the flavor profile consumers want, at a
reasonable price, will find the most success.

COMPETITIVE SAUCE BRANDS

AMERICAN GARDEN

American Garden knows that every meal is different and that tomorrow’s family dinner calls
for a different touch to last weekend’s picnic with friends. That’s why it makes sure that its
wide range of products is made using age-old recipes and the finest ingredients. This
makes it easier for consumers to choose from and to make sure they always have the
perfect product on every occasion.

Range of Sauces:

1. Barbeque Sauces

(i) Original
 (ii) Honey
(iii) Hickory

2. Horseradish Sauce
3. Hot Sauce
4. Pizza Sauce
5. Pasta Sauce

(i) Traditional
(ii) Mushroom

HEINZ

Heinz’s mission is providing great value, through great tasting food, to everyone, everyday,
everywhere. Its iconic brands have made it the household name it is today. While these
much loved brands have been the bedrock of its success over the years, it has never
stopped innovating and bringing new and exciting products to its consumers.

Range of Sauces:

1. Barbeque Sauces

(i) Classic (Rich & Smokey)

(ii) Sticky (Smooth & Sweet)
(iii) Chilli (Hot & Tangy)

2. Chilli Sauces

(i) Smokey Chipotle (Warm & Spicy)

(ii) Tangy Jalapeno (Hot & Zesty)
(iii) Peppery Habanero (Fiery & Sweet)
(iv) Jerk BBQ (Peppery & Punchy)
(v) Peri Peri (Hot & Zingy)

KNORR

Knorr products owe their tastes and flavors to the culinary skills of its chefs. It embodies a
truly global cuisine and a passion for good food goes right back to its earliest days. Its drive
for innovation centers around its original factory in Heilbronn where international teams of
chefs contribute to product innovation.

Range of Sauces:

1. Classic Sauces

(i) Béarnaise
(ii) Béchamel
(iii) Hollandaise
(iv) Green Peppercorn
(v) Five Pepper

2. Pasta Sauces

(i) Alfredo
(ii) Carbonara
(iii) Parma Rosa
(iv) Sundried Tomato Parmesan
(v) Roasted Garlic & Herbs

CHING’S SECRET

Ching’s Secret strongly believes that food is a representative of a country’s culture. It is

committed to bringing the world together through good taste. It takes its consumers on
culinary journeys by providing them with an extensive choice of foods from The Orient.

Range of Sauces:

1. Schezwan Sauce
2. Manchurian Sauce
3. Soy Sauce
4. Stir-Fry Sauce
5. Black Pepper Sauce
6. Red Chilli Sauce
7. Green Chilli Sauce
8. Sweet Chilli Sauce
9. Fish Sauce
10. Seafood Sauce
MAGGI

Maggi quickly became known as a pioneer in food innovation. Its distinctive red and yellow
logo is well known as a guarantee of quality, consistency and reliability. With a range of
exciting new products and an ever growing fan base, it is transforming culinary culture, meal
by meal.

Range of Sauces:

1. Original Chilli Sauce

2. Sweet Chilli Sauce
3. Hot Chilli Sauce
4. Chilli Garlic Sauce
5. Premium Oyster Sauce

REQUIREMENT OF PERMISSIONS AND LICENSES

Business licenses are required to start any type of new business in India as government
agencies can fine or close a business operating without the required licenses. Before
according necessary approval for any assistance, the authority concerned demands that the
entrepreneur should obtain the necessary clearances and/or licenses, as may be required
as per statues from the relevant authorities relating to various Acts and rules framed there
under. An illustrative list of such licenses/clearances is given below:

S. No. Type of Licenses or Clearances

1 Trade license or Trade Certificate of Enlistments

2 Health license or Food license

3 VAT registration

4 Central Excise registration and clearance

 5 Licenses or registration under the Factories Act, 1948

6 Employees State Insurance and Provident Fund clearances

7 Professional Tax

The Food Safety and Standards (Licensing and Registration of Food Business)
Regulations, 2011 (hereinafter referred to as "License and Registration Regulations")
govern the aspect of license and registration of a food business operator. Under Regulation
2.1 of the License and Registration Regulations, all food business operators in the country
are required to be registered or licensed in accordance with the License and Registration
Regulations. Hence, no person shall commence any food business unless a valid license is
possessed by the food business operator, and the conditions with regard to safety, sanitary
and hygienic requirements have to be complied with at all times by them.

One of the prime purposes of these conditions is to ensure that the food business operator
maintains sanitary and hygienic standards as specified in each food category. It is hereby
recognized and declared as a matter of legislative determination that in the field of human
nutrition, safe, clean, wholesome food is indispensable to the health and welfare of the
consumer of the country. It shall be the deemed the responsibility of the food business to
comply with the labeling, safety and health and sanitary requirements laid down in the
License and Registration Regulations. The labeling requirements are specified under the
regulations and they need to be complied with at all times especially with regard to pre-
packaged goods.

The FSSA being a central act has to be complied with by all the food business operators in
the country. However, India being a big market, each state may have their local laws which
may also need to be complied with. Some of the other approvals and licenses that a food
operator may be required to obtain from various authorities under other laws include: health
and trade licenses from the municipal corporation of the relevant area, environmental
clearance, no-objection certificate for fire prevention and safety, registration under the
police act of the respective city/state, verification certificate under the Standards of Weights
and Measures Act, 1976 for each of the outlets issued by the Department of Legal
Metrology of the respective areas, registration under the shops and establishments act of
the respective state, eating house license and liquor license.
It is mandatory for a food business to obtain insurance from any insurance company with
regard to public policy, product liability, fire policy, building and assets. Other insurances,
though are not mandatory, may be useful if taken. Registration is required under the
Employees' Provident Funds and Miscellaneous Provisions Act, 1952 if it is engaging more
than 20 employees. Registration is also required under the Central Excise Act, 1944 as in
respect of goods specified in Third Schedule of the said act, repacking, re-labeling, putting
or altering retail sale price etc. will fall into the category of manufacture. Subject to
applicability, other statutory and regulatory compliances may also include registrations
under Income Tax Act, 1861, Customs Act, 1962, sales tax, service tax and other labor
laws.

UNIQUE SELLING PROPOSITION OF COMPETITORS

AMERICAN GARDEN

1. It has created a low salt and gluten free range with some particular preferences in
mind for consumers who want to eat healthy but don’t want to compromise on flavor.

2. It has launched a new range of products that brings together a rich selection of the
world’s favorite flavors so that consumers can explore the exotic tastes of faraway
places, re-create the dishes they discovered on their travels, or simply conjure up the
unique tastes of home.

HEINZ

1. It is committed to being the world’s trusted source for good tasting, nutritious foods
every day by delivering products with both superior taste and enhanced health &
wellness benefits, providing nutritionally balanced food choices for adults and
children, and advocating health & wellness through consumer education, community
support and messaging.
2. It is committed to sustainable business practices and this commitment guides its
plans for sustainable growth by extending to every facet of business. It works to
improve the quality and safety of food while reducing its environmental footprint.
KNORR
1. It is Unilever’s biggest food brand with a strong presence in more than 80 countries
and with a wide variety of products.
 2. It has automated its labeling operation, which meshes well with the One Unilever
initiative as well as other Unilever business strategies. It provides a way to help meet
changing customer requirements and also provides more accurate and timely
replenishment of products in its warehouses.
CHING’S SECRET
1. It uses colorful packaging and effective taglines to attract the attention of consumers
belonging to different age groups and various sections of society.
2. It uses good promotional strategies which plays a crucial role in positioning a symbol
of taste and purity in the minds of consumers.
MAGGI
1. It makes use of the most efficient channels of distribution, as a result of which, its
products are easily available at each and every store.
2. It makes people aware about the brand through its ‘Me and Meri Maggi’ interactive
campaign and enlightens consumers about the products available through the
medium of television advertisements, featuring brand ambassadors like Amitabh
Bachchan, to draw the attention of the entire family.

RANGE OR VARIETY OF SAUCES

Product range is a set of variations of the same product platform that appeal to different
market segments. Product variety is a complete portfolio of products that a company
manufactures and markets. Advantages of a product range include:
1. Risk is spread as a decline in the sales of a product may be offset by the sales of
other products.
2. Enough returns may be generated through sales of multiple products.
3. Products can be sold to different market segments according to their tastes,
preferences and needs.
The range or the variety of sauces that I intend to produce and sell incorporates 8 types of
sauces. It covers many categories and can be supplied to order in customer specific
packaging and dimensions subject to availability. It is a tasty selection of readymade
products that will enable the consumers to cook their favorite everyday meals. With this
assortment of products, cooking doesn’t have to be complicated as there is something for
everyone to enjoy. To meet the increasingly diverse and high quality needs of today’s
consumer, the range of sauces includes:
1. HOT SAUCE
It is a spicy sauce condiment made from chilli peppers and other ingredients. Its
ingredients include Tabasco or Serrano chillies, garlic, onions, white vinegar,
vegetable oil, salt and water. It provides low-cal flavor and can be used as a dipping
sauce for just about anything.
2. BARBEQUE SAUCE
 It is a ubiquitous condiment and is used on many foods as a flavoring sauce. Its
ingredients include Worcestershire sauce, lemon juice, ground mustard, onion
powder, black pepper, brown sugar, apple cider vinegar and water. It provides tangy
sweetness and can be used in a number of ways to perk up meals.
3. TAHINI SAUCE
It is a savory paste made from ground sesame seeds and is served as a dip on its
own. Its ingredients include sesame seed paste, garlic, kosher salt, olive oil and
lemon juice. It is a thin sauce and is a major component of hummus, baba ghanoush,
halva, pita sandwiches and marinades.
4. SOY SAUCE
It is a salty sauce having a distinct yet basic taste and is used in Southeast Asian
cuisines with the intention of seasoning food. It ingredients include soy beans, all
purpose flour and water. It is used as a marinade, an ingredient in cooked dishes
and a table condiment.
5. PESTO SAUCE
It is a flavorful relish, dressing and topping served as an accompaniment to food. Its
ingredients include basil leaves, walnuts, garlic, parmesan cheese and olive oil. It is
commonly used on pasta, minestrone and boiled potatoes.
6. SATAY SAUCE
It is a nutty sauce widely used in the cuisines of Indonesia, Malaysia, Thailand,
Vietnam and China. Its ingredients include coconut milk, peanut butter, soy sauce,
brown sugar, chilli, onion and garlic. It is used on grilled meat, rice vermicelli and
croquettes.
7. SALSA SAUCE
It is a tomato-based sauce typical of Mexican cuisine and is piquant ranging from
extremely hot to not hot at all. Its ingredients include tomatoes, chilli, onion,
capsicum, oil, sugar and salt. It is a versatile and delicious relish used on bruschetta,
salads and soups.
8. MUSTARD SAUCE
It is a popular, widely used condiment. Its ingredients include mustard seeds,
cinnamon, vinegar, honey and salt. It is commonly paired with meats and cheeses
and is a popular addition to sandwiches, salads, hot dogs, glazes and marinades.

STANDARDISATION OF SAUCES
Standardization is the process of fixing certain norms established by customs or tradition or
by certain authority for the product. It involves determination of basic characteristic of a
product on the basis of which the product can be divided into various groups. It also means
determining the standard of product to be produced with regard to size, color, form, weight,
shape and quality. Standards are model products which form the basis of comparison.
Without standardization the rule of caveat (law) prevails and there may be confusion and
unfairness. Thus, standardization means making the quality specification of the grade
uniform among buyers and sellers over space and time. Advantages of the standardization
process include:
 1. With standardized goods, there is homogeneity and consistency in quality and thus a
consumer can buy a product without much hesitation and risk as the quality of
product will not change over a period of time, thus leading to better goodwill.
2. When goods are standardized and classified into various types, one can used
differential pricing for different grades of the product thereby assuring better return to
both buyer as well as seller.
3. As there is uniformity in size, form, quality and utility of all products of an enterprise,
the customers rely on these products and thus sale of standardized goods increases.
The standards of the range of sauces that I intend to produce and sell include:
1. Various sauces of predetermined specifications will be produced. This will help in
achieving uniformity and consistency in the output.
2. This will also reduce the need for inspection, testing and evaluation of the products
as they conform to the predetermined standards of quality, price and packaging.
3. Sauces will be sold in standardized bottles, jars and packets having uniform weights
and measures.
4. Sauces will carry the FPO standardization mark. FPO stands for Food Products
Order and sets standards for protection of quality of products from fruits and
vegetables.
5. Sauces will carry the barcode. Barcode indicates the type and the price of the
product which serves the purpose of preparing a list of products in store through a
computerized system.

BRAND-NAME OF SAUCES
A good brand name not only lets consumers know what the product does, but is also
distinctive, memorable and easily recognizable. The process of creating a brand name can
be very complex and involve significant amounts of research, time and money. Advantages
of good brand names include:

1. Brands provide multiple sensory stimuli to enhance customer recognition.

2. Customers who are frequent and enthusiastic purchasers of a particular brand are
likely to become brand loyal.
3. Well-developed and promoted brands make product positioning efforts more
effective.
4. Firms that establish a successful brand can extend the brand by adding new
products under the same family brand.
5. Strong brands can lead to financial advantages through the concept of brand
equity in which the brand itself becomes valuable.

The brand name of sauces that I intend to produce and sell is “Mapa Del Mundo” (MDM). It
is a Spanish phrase which means ‘the map of the world’. It is logical and innovative as it
appropriately describes my product range which incorporates diverse types of sauces from
various regions of the world. It is memorable as it can be easily recognized and recalled. It
is transferable as it is something that works within and across product categories,
geographic boundaries and/or cultures. It is protectable as it is legally secure and
competitively well guarded. It is meaningful, credible and rich in interesting verbal imagery.

FEATURES OF SAUCES
Product features are physical characteristics of a product sold and marketed by the
company. They include qualities or variables such as shapes, size, color, weight, speed,
durability, and maintainability. They exist in the product and remain the same irrespective of
how or by whom the product is used. Features can communicate the capability of a product.
Firms make products or services with features which customers perceive as valuable
benefits. Customers buy products and services because they want to solve a problem or
meet a need. Product offerings have to deliver solutions and satisfy needs, or they won’t be
successful. Features always matter because they provide customers with hints about how
well a product will deliver its benefits.
The features or the characteristics of the range of sauces that I intend to produce and sell
include:
1. Proper consistency through blending of herbs and spices.
2. Distinctive flavor to enhance the natural flavors of the dish.
3. Concentrated flavor to compliment the dish on which it to be used.
4. Degrees of transparency and opacity ranging including transparent, translucent and
opaque.
5. Variety of colors ranging from light sauces to dark sauces to create interest and
stimulate appetite.
6. Variety of textures through the use of thickening agents to add on to the richness of
the dish.
7. Utilization of natural organic ingredients, lesser additives and lesser preservatives to
meet the requirements of health conscious consumers.

LABEL OF SAUCES

A label is a piece of paper, polymer, cloth, metal, or other material affixed to a container or a
product, on which is printed information about the product. Labels provide information on a
product, some or all of which may be governed by legislation. The package and the label
designs must be integrated as it is important that they both send the same message to the
consumer. The ultimate goal is to produce a label that is educational and user-friendly,
adequately markets the product within legal specifications and is an integrated part of a
strategic marketing approach. Advantages of labels are as follows:

1. They are the primary communication media for a product.

2. They specify quantity, shelf life, warnings, etc.
3. They convey the message of a product. They convey the message of a company.
Between these two vital pieces of information, they become the “face” of a company
as well as its products.

The labels of the sauces that I intend to produce and sell will provide permanent product
identification by remaining secure throughout the life of the product, i.e., until the sauce has
been used. They will be attached to the sauce bottles and jars. They will carry pricing,
barcodes, nutritional information, instructions for use, declaration regarding vegetarian or
non vegetarian, declaration regarding food additives, name and complete address of
manufacturer, net quantity, ingredients and recipes. They will include serial numbers, lot
numbers, code numbers, batch numbers and an expiry or best before date in shorthand
form. They will communicate how to recycle or dispose of the package of the product.

LOGO OF SAUCES
A logo is a graphic mark, emblem, or symbol commonly used by commercial firms,
enterprises and organizations to aid and promote instant public recognition. Logos are
either purely graphic (symbols/icons) or are composed of the name of the organization (a
logotype or word mark). At the level of mass communication and in common usage a
company's logo is today often synonymous with its trademark or brand. Logos’ job is to
define the brand in a way that satisfies everyone: the designer, the company, and the
customer. Advantages of logos include:
1. They are effective and efficient branding and marketing tools.
2. They represent what a business stands for, its nature, its goals and its objectives.
3. They set a business apart from various competitors.
The logo of the sauces that I intend to produce and sell consists of a globe encasing three
individual bottles of sauce with the alphabets M, D and M on the first, the second and the
third bottle, respectively. It is unique and eye catchy. It will give a visual representation of
my company brand. It will give high impact and leave an unforgettable impression on the
consumers. It will serve as the primary means by which the consumers form an image of my
products.
TAG-LINE OF SAUCES

A tagline is a small amount of text which serves to clarify a thought for, or designed with a
form of, dramatic effect. As a variant of a branding slogan, taglines can be used
in marketing materials and advertising. The idea behind the concept is to create a
memorable dramatic phrase that will sum up the tone and premise a visual product. Some
taglines are successful enough to warrant inclusion in popular culture. Advantages of good
tag lines include:
1. They express the meaning of a business’s mission or vision.
2. They emphasize a key differentiator or a competitive advantage.
3. They align messages to a specific audience or a target market.
The tag line of sauces that I intend to produce and sell is “Around the World in 8 Sauces”. It
indicates that food, like language, is an expression of place. It highlights the fact that this
diverse range of sauces would take consumers back to their favorite country via their taste
buds or inspire them to pack their bags to try the real deal abroad. It vividly illustrates the
point that utilizing this manifold range of sauces would take consumers on an adventurous
culinary rollercoaster, thereby encouraging them to try various new cuisines. It provides
consumers with a ticket to intriguing and sometimes unfamiliar territory by offering a taste of
exotic places. It gives consumers an opportunity to expand their culinary horizons without
having to travel the world.

SELLING PRICES AND PROFIT MARGINS OF COMPETITORS

Selling Prices of 500 gram bottles of competitive sauce brands are as follows:
AMERICAN GARDEN
Selling Price to customers: र 250
Selling Price to retailers: र 230
Selling Price to wholesalers: र 205
HEINZ
Selling Price to customers: र 220
Selling Price to retailers: र 205
Selling Price to wholesalers: र 185
KNORR
Selling Price to customers: र 235
Selling Price to retailers: र 215
Selling Price to wholesalers: र 190
CHING’S SECRET
Selling Price to customers: र 150
Selling Price to retailers: र 140
Selling Price to wholesalers: र 125
MAGGI
Selling Price to customers: र 100
Selling Price to retailers: र 95
Selling Price to wholesalers: र 85
300

250

200

SP to customers
150
SP to retailers
SP to wholesalers
100

50

0
American Garden Heinz Knorr Ching's Secret Maggi

Profit Margins of 500 gram bottles of competitive sauce brands are as follows:
AMERICAN GARDEN
Profit Margin of manufacturers: 12.19%
Profit Margin of wholesalers: 10.86%
Profit Margin of retailers: 8%
HEINZ
Profit Margin of manufacturers: 10.81%
Profit Margin of wholesalers: 9.75%
Profit Margin of retailers: 6.81%
KNORR
Profit Margin of manufacturers: 13.15%
Profit Margin of wholesalers: 11.62%
Profit Margin of retailers: 8.51%
CHING’S SECRET
Profit Margin of manufacturers: 12%
Profit Margin of wholesalers: 10.71%
Profit Margin of retailers: 6.66%
MAGGI
Profit Margin of manufacturers: 11.76%
Profit Margin of wholesalers: 10.52%
Profit Margin of retailers: 5%

14

12

10

8
PM of manufacturers
PM of wholesalers
6 PM of retailers

0
American Garden Heinz Knorr Ching's Secret Maggi
PACKAGING OF SAUCES

The packaging of the sauces that I intend to produce and sell will consist of three types, i.e.,
primary, secondary and transportation. Primary packaging is the main package that holds
the food that is being processed. Secondary packaging combines the primary packages into
one box being made. Transportation packaging combines all of the secondary packages
into one pallet. Sauces will be packaged in the proper containers such as bottles, jars and
packets, and labeled accordingly with ingredients and nutritional information. These labeled
packages will need to be placed in boxes or coolers for shipment to their final destination.
Sauces will need to be refrigerated immediately after opening. Packing materials will be
used to cushion and protect sauces that are inside the boxes. Packing tape will be used to
around the edges of the boxes to seal them shut at some point. Good business
relationships with manufacturers who specialize in the packaging materials required will be
established in order to purchase these products in bulk and maintain steady flow of supply.

CHANNELS OF DISTRIBUTION OF SAUCES

Distribution is the process of making a product or service available for use or consumption
by a consumer or business user, using direct means, or using indirect means
with intermediaries. Distribution of products takes place by means of channels. Channels
are sets of interdependent organizations (called intermediaries) involved in making the
product available for consumption to end-user. Merchants are intermediaries that buy and
resell products whereas agents and brokers are intermediaries that act on behalf of the
producer but do not take title to the products. Advantages of channels of distribution
include:
 1. They make it possible to deal with customers that a business could not economically
reach with its own sales force or store, by providing ready-made coverage of other
regions or the whole country without investing in its own resources.
2. They take responsibility for local marketing taking orders, holding stock, arranging
delivery, invoicing customers and provide customer service and support, thereby
reducing a business’s customer administration costs and enabling it to deal
efficiently with larger numbers of customers.
3. They provide a business with local market knowledge, enabling it to enter new
markets quickly and effectively without the cost of market research or marketing
programs to establish itself.

The various channels of distribution of the sauces that I intend to produce and sell will
consist of two types, i.e., direct and indirect. A direct or zero level channel has
no intermediaries. Sauces will be sold through one on one demonstrations, personal contact
arrangements and internet sales. An indirect or two level channel has two intermediaries,
wherein the flow is typically from manufacturer to wholesaler to retailer to consumer.
Sauces will be sold through supermarkets, department stores and consumer cooperatives.
These two channels are the most suitable channels for sauces. Appropriate channel
members or intermediaries will be selected, trained and motivated to sell the sauces.
Channels’ performance will be monitored overtime and modified to enhance their
performance.

WAREHOUSING OF SAUCES

Warehousing is the performance of administrative and physical functions which include

receipt, identification, inspection, verification and retrieval for issue associated with storage
of goods and materials. Warehouses are large plain commercial buildings in industrial areas
of cities and towns for storage of goods. They usually have loading docks to load and
unload goods from trucks. Sometimes they are designed for the loading and unloading of
goods directly from railways, airports, or seaports. Advantages of warehousing include:
 1. It generates jobs, which of course depend upon the skills of labor, as it involves a
wide variety of work requiring workforce ranging from unskilled to semiskilled to
highly skilled laborers.
2. It uses mechanical appliances which can easily handle heavy and bulky goods
without any breakage, thereby reducing handling costs and wastage of labor.
3. It ensures continuity of the supply of goods by supplying consumer durables as per
demand, thereby avoiding scarcity.

The warehouses of the sauces that I intend to produce and sell will consist of three types,
i.e., private, public and government. Warehouses which are owned and managed by the
manufacturers to store, exclusively, their own stock of goods are known as private
warehouses. Advantages include better use of human resources, degree of control and
flexibility. It will be constructed near the sauce factory. Its design and facilities provided by it
therein will be according to the nature of the sauce. Warehouses which are run to store
goods of the general public are known as public warehouses. Advantages include zero
capital investment, low opportunity cost and capability to expand. Their functions and
operations will be regulated by the government. They will store the sauces on the payment
of rent to an individual, a partnership firm or a company that owns them. Warehouses which
are owned, managed and controlled by central or state governments or public corporations
or local authorities are known as government warehouses.

SELLING-PRICE OF SAUCES

Price sometimes refers to the quantity of payment requested by a seller of goods or

services, rather than the eventual payment amount. Average selling price
of goods or commodities is the average price at which a particular product or commodity is
sold across channels or markets. Advantages of a selling price include:

1. It is an important tool used to gauge the health of businesses.

2. It provides business owners with a rough measurement of their gross profit margin.
3. It usually bears a close relationship to sales as it has an effect on the sales volume
of products.
Selling Prices of 500 gram bottles of the sauces that I intend to produce and sell are as
follows:

1. Selling Price to customers: र 200

2. Selling Price to retailers: र 180
3. Selling Price to wholesalers: र 160

Selling Price
250

200

150
Selling Price

100

50

0
SP to customers SP to retailers SP to wholesalers

Profit Margins of 500 gram bottles of the sauces that I intend to produce and sell are as
follows:

Profit Margin = Selling Price – Cost Price X 100

Cost Price
1. Profit Margin of manufacturer:

Cost of producing MDM Sauces: र 140

Selling Price (Revenue): र 160

Net Profit: र 20

Profit Margin: 12.5%

2. Profit Margin of wholesaler:

Cost of procuring MDM Sauces: र 160

Selling Price (Revenue): र 180

Net Profit: र 20

Profit Margin: 11.11%

3. Profit Margin of retailer:

Cost of procuring MDM Sauces: र 180

Selling Price (Revenue): र 200

Net Profit: र 20

Profit Margin: 10%

Profit margin
14

12

10

8 Profit margin

0
PM of manufacturer PM of wholesalers PM of retailers

PROMOTION OF SAUCES

The promotion of the sauces that I intend to produce and sell will consist of five types, i.e.,
advertising, personal selling, sales promotion, public relations and direct marketing.
Advertising is presentation and promotion of ideas, goods, or services by an identified
sponsor. Sauces will be promoted through the use of print ads, brochures and catalogs, in
store displays, radio, television, billboards and web pages. Personal selling is a process of
helping and persuading one or more prospects to purchase a good or service or to act on
any idea through the use of an oral presentation. Sauces will be promoted through sales
presentations, samples and telemarketing. Sales promotion is employment of media and
non-media marketing communication for a pre-determined, limited time to increase
consumer demand, stimulate market demand or improve product availability. Sauces will be
promoted through the use of coupons, contests, product samples, rebates, tie-ins, trade
shows and exhibitions. Public relations is paid intimate stimulation of supply for a product,
service, or business unit by planting significant news about it or a favorable presentation of
it in the media. Sauces will be promoted through newspaper and magazine articles/reports,
television and radio presentations, charitable contributions, speeches and seminars. Direct
marketing is a channel-agnostic form of promotion that allows businesses to communicate
straight to the customer with various techniques. Sauces will be promoted through mobile
phone apps, interactive consumer websites and online display ads.

SALES PROMOTION SCHEMES OF SAUCES

Sales promotions are the set of marketing activities undertaken to boost sales of the
product or service. Sales promotions can be directed at the customer, sales staff,
or distribution channel members. Advantages of sales promotion schemes include:

1. They result in good relations between manufacturers and key customers.

2. They convince retailers and wholesalers to stoke the manufacturer’s value added
products in their stores.
3. They induce impulse buying and encourage consumers to switch brands.

The sales promotion schemes of the sauces that I intend to produce and sell include:

1. Schemes for wholesalers

i. CASH REBATE
This is a form of delayed value promotion for the wholesaler. Only after the
proof of performance is furnished, the wholesaler is given a cheque for the
 amount of discount. Once a wholesaler has met the laid down conditions,
the rebate is given to the wholesaler.
ii. FREE GOODS
This is a deviation from straight price cut. The promotion offer to trade is in
the form of extra quantity of purchased product “free”. Free goods deal often
encourages wholesalers to stock more during the promotion period.
iii. INCENTIVES
Incentives to the members of the trade include a variety of tactics like awards
in the form of travel, gifts, or cash bonuses for reaching targeted sales levels
that induce wholesalers to give a firms’ brand added attention. The incentive
does not have to be large or expensive to be effective. Another form
of trade incentive is referred to as ‘push money’ i.e. SPIFFS.
2. Schemes for retailers
i. POINT OF PURCHASE DISPLAYS
Product displays and information sheets are useful in reaching the consumer
at the point of purchase and often encourage retailers to support ones brand.
POP promotions can help win precious shelf space and exposure in a retail
setting. From a retailer’s perspective, a POP display should be designed to
draw attention to a brand, increase turnover, and possibly distribute coupons
and sweepstake entry forms.
ii. SALES TRAINING PROGRAMMES
An increasingly popular trade promotion is to provide training for retail store
personnel. It has become important for manufacturers to ensure that proper
factual information and persuasive themes are reaching consumers at the
point of purchase. For personnel at large retail stores, manufacturers can
hold special classes that feature product information, demonstrations,
and training about sales techniques through the use of videotapes and
brochures.
iii. TRADE COUPONS
Trade coupons are manufacturer-initiated sales promotion; however, the
coupon distribution is undertaken by retailers, either through local print
medium or in some other manner. There is an agreement between the retailer
and the manufacturer that some agreed allowance will be paid to the retailer.
The distributing retailer gets the double benefit due to the increase in store
traffic and the incentive of reimbursement from the manufacturer, thereby
providing a string incentive to the retailer to arrange displays and promote the
coupon offer.
 3. Schemes for consumers
i. DISCOUNT
Under this method, the customers are offered products on less than the listed
price. For example: Giving a discount of 25% on the sale of MDM Sauces.
ii. REFUND
Under this method, some part of the price of an article is refunded to the
customer on showing proof of purchase. For example: Refunding an amount
of 5/- on showing empty bottles, jars and packets of MDM Sauces.
iii. SAMPLING
Under this method, the producer distributes free samples of his product
among the consumers. Sales representatives distribute these samples from
door-to-door. Thus, the consumers willy-nilly make use of free samples and if
it satisfies them, they buy it due to which way sales are increased.
iv. QUANTITY GIFT
Under this method, some extra quantity of the main product is passed on as a
gift to the customers. For example: 25% extra sauce in bottles, jars and
packets of 200 gm MDM Sauces.
v. USABLE BENEFIT
Under this method, coupons are distributed among the consumers on behalf
of the producer. Coupon is a kind of certificate telling that the product
mentioned therein can be obtained at special discount. Possession of a
coupon motivates the consumer to buy the product, even when he has no
need of it. For example: Coupons for a discount of 10% on the purchase of
MDM sauces published in newspapers and magazines.

UNIQUE SELLING PROPOSITION OF SAUCES

A USP helps determine if the product is different from what is already available and, if not,
whether there is any reason for a buyer to purchase it over established competitors. If there
is a strong differentiator, there is a good possibility the venture has the chance to be
profitable and successful. It isn't just good enough for a business owner to know what sets
them and their products apart from competitors. They must convey those reasons on to the
consumers so they fully understand why they should be spending their money with them,
over someone else. Advantages of USPs include:
 1. A unique USP will differentiate a business from its competitors.
2. A strong USP will drive sales and make communications with potential customers
more effective.
3. A good USP will help employees and friends of the company understand the value of
your products or services.

The USP of the sauces that I intend to produce and sell is that the product range
incorporates a broader selection of comprehensive sauces from various regions than that
offered by competitors. This is the major benefit which makes it unique, valuable and
interesting. This is likely to make it stand out from the crowd in the eyes of the target
market. This will help to beat the competition and to make it the first choice of the
consumers. This has the potential to make MDM Sauces the best provider in the market
with the help of the brand name, the logo and the tag line which play a significant role in
effective marketing.

TRANSPORTATION OF SAUCES

Transportation is the movement of people and goods from one location to

The means of transportation of the sauces that I intend to produce and sell will consist of
two types, i.e., road and rail. Advantages of road transport include very product options,
moderate speed and moderate cost. It is accessible and will be ideally suited for
transporting the sauces over short distances. It will enable local shipments of the sauces to
wholesalers, retailers and consumers. Advantages of rail transport include low cost,
moderate accessibility and moderate capacity. It will be ideally suited for shipping the
sauces in bulk and will be adapted to meet specific product needs through the use of
specialized cars. It will enable long distance shipments of the sauces.

SOCIETAL MARKETING MESSAGE OF SAUCES

The social message of the sauces that I intend to produce and sell is that consumers can
contribute their bit towards the empowerment of the girl child in India by purchasing any
MDM sauce as 5% of the annual turnover will be charitably donated to Nanhi Kali, Mumbai,
a prominent NGO allowing citizens to sponsor the education of female children through their
network. It was initiated in 1996 by the K. C. Mahindra Education Trust (KCMET) with the
aim of providing primary education to underprivileged girl children in India. It is driven with a
strong belief that educated women would not only contribute to the economy but also issues
of population and social evils like the dowry system and child marriage would reduce as
more women are educated. Consumers are encouraged to ’give back’ in a focused manner
by emphasizing on the fact that there is no other investment more effective for achieving the
millennium development goals than educating girls. Successful education of the girl
child has been repeatedly acknowledged as an effective mechanism to break the inter-
generational cycle of poverty, social norms, myths and social evils. Research conducted in
developing countries has shown that a literate female population is linked to reduction in
population growth rates. On the other hand, illiteracy breeds ignorance and fear that only
increases her vulnerability to be exposed to lifelong abuse, suppression and exploitation.

COST EFFECTIVE TECHNIQUES OF PRODUCTION OF SAUCES

Manufacturing costs can be divided into materials, labor, and overhead, each of which
offers opportunities for cost control. Paperwork and records will offer insight into potential
ways to cut manufacturing costs by providing data which can be used to track costs and
improvements. Advantages of cost effective techniques of production include:

1. They reduce wastage of resources.

2. They maintain quality of products.
3. They accelerate the production process.

Cost effective techniques of production of the sauces that I intend to produce and sell
include:

1. MATERIALS COST CONTROL

i. Ensure about getting the best possible prices.

ii. Be conscientious about reducing and eliminating waste.
iii. Check with a variety of suppliers to find the best prices for manufacturing materials.
iv. Buy in volume when possible, as long as there is space to store the inventory, and
as long as there is enough capital that some can be tied up in extra stock.
v. Control waste by tracking mistakes and developing strategies to avoid similar errors
in the future, and also by developing processes that use materials in the most
efficient ways.

2. LABOUR COST CONTROL

 i. Look for ways to improve worker efficiency.
ii. Keep track of how much product the operation produces per person per hour, and
look for variables that correlate with increased productivity, such as the number of
workers on the floor at once, or the particular workers participating in a
manufacturing process.
iii. Learn the workers' strengths and skills, and schedule them for positions that make
the optimum use of their abilities.
iv. Look for bottlenecks in the manufacturing processes, or steps that take longer than
others, causing backlogs of work.
v. Rethink staffing arrangements to alleviate bottlenecks by moving workers to the
areas where they are needed most, or scheduling worker breaks during periods
when work is backed up elsewhere in the production process.

3. OVERHEAD COST CONTROL

i. Cut overhead costs by using facilities as fully as possible, and looking for ways to
save energy.
ii. Schedule a night shift if there are enough orders, rather than taking additional days
or weeks to fill them.
iii. See if energy-guzzling equipment can be affordably replaced with energy-efficient
alternatives.
iv. Turn off machines and lights when they are not in use.
v. Audit the use of energy.

COST EFFECTIVE TECHNIQUES OF PROMOTION OF SAUCES

Promotion can be a heavy expense, especially for a new business that wants to make itself
known in a community. The business owner needs to make the public aware of his or her
products at the lowest possible cost. Promotion often makes the difference between
business success and failure. Customers must know about a business or product line
before they’ll buy and they must have a reason to buy. It is advisable to mount a low cost
promotion effort, using a potpourri of attention getting gimmicks to bring the message to the
buying public.
Cost effective techniques of promotion of the sauces that I intend to produce and sell
include:
1. GOOGLE ADS
 Google ads, particularly for small business owners, can result in
significant targeted traffic. There is no minimum amount that they
need to spend except for a setup fee and they are charged on a per
click or per impression basis. They can set a daily budget, allowing
to cap how much they spend.
2. FACEBOOK PAGE
For certain types of small business, a Facebook page can be an
invaluable and free source of advertising. Similar to a Twitter
account, owners should use the many resources available to share
information about their business, industry and niche, link to blog
posts and stimulate discussion. They will want to encourage
friends and customers to “like” their page to extend their reach.
3. LINKEDIN
As a networking platform, LinkedIn allows small business owners to
build a networking group, advertise their expertise and their
business and get new business through online recommendations.
4. BUSINESS WEBSITE
Having a website is pretty much essential for almost any business
these days. It doesn’t have to be fancy or expensive. It should
provide details about the business and specific services and have
an about page as people like to know the people behind the
business.
5. BUSINESS BLOG
Having a blog that is regularly updated is one of the most powerful
ways to improve the ranking of a website. Blogging can be a great
way to present expertise on a subject. By helping potential
customers, they are encouraged to connect with the business.
6. NETWORKING GROUPS
Most cities have networking groups for small businesses. Joining
one of these, passing out business cards and getting to know other
small business owners can be quite valuable in getting referrals. Of
course, one must give to receive.
 7. CUSTOMER SERVICE
The importance of excellent customer service in a small business
cannot be emphasized enough. People, in the long run, tend to
favor businesses that provide outstanding customer service even if
they have to pay a little more. The word of mouth promotion that
accompanies great customer service is also invaluable.

CONCLUSION

The marketing mix is a business tool used in marketing and by marketers. The marketing
mix is often crucial when determining a product or brand's offer, and is often associated with
the four P's: price, product, promotion, and place. E. Jerome McCarthy proposed a four Ps
classification in 1960, which has since been used by marketers throughout the world.

1. PRODUCT

Product is seen as an item that satisfies what a consumer demands. Tangible

products are those mass produced goods that have an independent physical
existence. Marketers must do careful research on how long the life cycle of the
product they are marketing is likely to be and focus their attention on different
challenges that arise as the product moves. Marketers can expand the current
product mix by increasing a certain product line's depth or by increasing the number
of product lines. Marketers should consider how to position the product, how to
exploit the brand, how to exploit the company's resources and how to configure the
product mix so that each product complements the other.

2. PRICE

Price is an amount a customer pays for the product. The price is very important as it
determines the company's profit and hence, survival. Adjusting the price has a
profound impact on the marketing strategy, and depending on the price elasticity of
the product, often it will affect the demand and sales as well. The marketer should
set a price that complements the other elements of the marketing mix. When setting
a price, the marketer must be aware of the customer perceived value for the product.
3. PROMOTION
 Promotion includes all of the methods of communication that a marketer may use to
provide information to different parties about the product. Promotion comprises
elements such as: advertising, public relations and sales promotion. Advertising
covers any communication that is paid for, from cinema commercials, radio and
Internet advertisements through print media and billboards. Public relations is where
the communication is not directly paid for and includes press releases, sponsorship
deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-
mouth is any apparently informal communication about the product by ordinary
individuals, satisfied customers or people specifically engaged to create word of
mouth momentum.
4. PLACE
Place refers to providing the product at a place which is convenient for consumers to
access. A firm can design any number of channels they require, which are classified
by the number of intermediaries between producer and consumer. In practice, many
organizations may complement a direct sales-force who typically call on larger
customers with agents who cover the smaller customers and prospects.