COMPLAN MARKET ENTRY
STRATEGY FOR KENYA
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Applied Learning Project
on
COMPLAN MARKET ENTRY STRATEGY FOR KENYA
Submitted in partial fulfilment of the requirement of
Global M asters in Business Administration
Prepared for
S P Jain School of Global Management
Singapore/Dubai
Project Team
Dennis George Sumedha Sharma Varun Mahajan
(GAPR12CMM101) (GAPR12CMM1 30 ) (GAPR12CMM 131 )
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DECLARATION
We hereby declare that this report titled Complan market entry strategy for Kenya is the
result of study and interviews carried out by us. We further declare that this is our original
work and has not been published anywhere before. We have read and understood the IIP
Guidelines and we solemnly promise to abide by all regulations. Non -Compliance to the same shall result in disciplinary action.
This Project Work has been carried out for the sole purpose of submission towards partial
fulfilment of Global Masters in Business Administration (GMBA) program at SP Jain Sc hool
of Global Management, Dubai
The above is true to the best of our knowledge and understanding.
We have read, understood, signed and submitted the SP J ain Code of Ethics.
COPYRIGHT ASSIGNMENT
-
under copyright]
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
assigns, in perpetuity, all right (whether now known or hereinafter invented), title, and
interest , throughout the world, including any copyrights and renewals or extensions
thereto, in Complan market entry strategy for Kenya .
IN WITNESS THEREOF, Assignor has duly executed this Agreement.
Date:
Assignor: Project Team:
Dennis George Sumedha Sharma Varun Mahajan
(GAPR12CMM101 ) (GAPR12CMM1 30) (GAPR12CMM131 )
Project Mentor: Project Mentor:
Dr. Bal akrishna Grandhi Mr . Ashish Chakravarti
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ACKNOWLEDGEMENT The project Complan market entry strategy in Kenya gave the team a wonderful
opportunity to work with Heinz HJ, o ne of the most r eputed FMCG brands in the world.
The project proved to be a learning ground for gaining insight into the Africa market and
African consumer consumption patterns . The team also understoo d the various macro and
micro factors that impact the FMCG business. Th is project would not have been possible
without the help and guidance of few people. The team would like to express their heartfelt
thanks to them.
First and foremost , we wou ld like to express our gratitude to our corporate mentor Mr.
Ashish Chakravarti . H e ensured that the team was on right track and was always available
for feedback. In addition , his personal feedback to team members help ed them in improving
themselves.
Our s pecial thanks to Ms. Dorcas Halima, Heinz Africa team. She helped us execute the
survey in Kenya. In addition , she gave insight o n the Kenya market. We really appreciate
her quick response and readiness to help the team.
We would also like to thank Mr. Umesh Kothari and Mr . Nitin Patwa for their help and
feedback during questionnaire d esign stage.
Also, special thanks to Dr. Balakrishna Grandhi for his valuable insights which helped us
challenge our own assumptions and come out with better results.
Last but not the least we would like to thank all the respondents who took out time to f ill
our survey.
Sincerely:
Dennis George (GAPR12CMM 101 )
Sumedha Sharma (GAPR12CMM13 0)
Varun Mahajan ( GAPR12CMM13 1)
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TABLE OF CONTENTS
Executive Summary ................................ ................................ ................................ .... 6
1. Introduction ................................ ................................ ................................ ........... 7
1.1 Kenya -Country snapshot ................................ ................................ ......................... 8
1.2 In troduction to Nutritio nal drinks ................................ ................................ ......... 11
1.3 Kenya Hot Drinks Market ................................ ................................ ...................... 12
2. Research Methodology ................................ ................................ .......................... 14
2.1 Objective & Hypothesis ................................ ................................ .......................... 15
2.2 Importance of the Study ................................ ................................ ........................ 16
2.3 Research Design ................................ ................................ ................................ ... 16
2.4 Literature review ................................ ................................ ................................ ... 18
3. Analysis and Interpretation ................................ ................................ .................. 21
3.1 Market Sizing and potential ................................ ................................ ................... 22
3.2 Customer Behavior Analysis ................................ ................................ .................. 28
5. Marketing entry strategy for Complan in Kenya ................................ ................... 37
6. Future Scope ................................ ................................ ................................ ......... 44
References ................................ ................................ ................................ ................ 46
Appendix ................................ ................................ ................................ ................... 47
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EXECUTIVE SUMMARY
There have been tremendous change s in the eating habits of all age groups in the past few
years. More and more people , especially , children and teenagers are having erratic eating
habits and consuming fast food . Most of the urban families are becoming nuclear and
consuming ready to eat food. As a result parents are becom ing more focussed on their
children. Th ey want overall development of their children and are ensuring that their
children have balanced diet . One of the products which is gaining popularity in the
developing markets is nutritional or fortified drinks. N utritional drinks are adopting
different p ositioning strategies such as ability to help in height gain of children, increase
their immu nity levels or meet their daily nutritional requirement which helps them perform
better a nd become stronger. Apart from children, many youngsters s and s
and middle age d people are also consuming nutritional drink to make up fo r the missing
nutrients in the ir daily diet. Also , there are many specialised nutritional products for older
people aimed at fortifying their daily food and improv ing their immu nity.
The demand for FMCG products in mature economies such as USA and Europe is
stabilising and there is increased competition. M ost of the companies such as Nestle, Kraft,
Heinz ar e now focussing on increasing their sales in developing c ountries such as India ,
Africa and South east Asia .
The primary objective of the study is to estimate the market potential for nutritional drinks
in Kenya and develop a positioning strategy for Complan which is different from the current
competition. The final recommenda tion s of the project are aimed at design ing the Go to
The study is majorly focussed on SEC A and
SEC AB category as Complan is a premier pr oduct. The study was comprised of both
secondary and primary research. The prim ary research primarily consisted of face to face
survey interviews carried out in Nairobi in supermarkets and Malls. The survey carried out
on 130 respondents gave deep insight into consumer perception about various nutritional
and hot drinks which was used to design a positioning platform for Complan in the Kenya
market.
The study is aimed at understanding various m acro economic factors such as retail
landscape , political regime and social behaviour patterns , penetration of media which have
an imp act on business. In addition, the study i s also aimed at understand ing the
consumption and buying habits of consumers.
The project also mentions the future scope of the study which can be covered in future
researches.
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INTRODUCTION
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KENYA -Count ry Snapshot
Kenya is one of the fastest growing country in East of Africa and has the largest GDP in
East and West Africa. Nairobi is the
capital of Kenya which is also a very bi g
commercial hub .
the macroeconomi c factor which can
have an impact on the business. Given
below are certain factors that were
studied to understand the Kenya
market better.
Political :
Although Kenya faced communal riots
post its 2007 election but the economy
has fully recovered now and currently
has the highest GDP and per capita income.
Kenya had it s general election in 2013 and Uhuru Kenyatta won the majority. Although , he
is currently facing an intern ational trial in United Nations but its outcome is not expected
to have a great impa ct on the business conditions of the country. In addition , the country
faces terrorism threat from Sudan and other neighbouring countries which are very
unstable. According to Vision Humanity website , the country ranks 18 th in world ter ror ism.
Moreover, th e country faces rampant corruption and ranks 139 according to
transparency.org. The country also faces high energy cost and poor logistic and transport
system .
Economic:
Kenya has a liberalized economy and is considered as Central and Eastern African
comm ercial hub. The country has positive economic prospect as GDP is growing at 5 -6%.
In addition , many international companies are looking at investing in the country. The
country has large pool of English speaking computer literate professional who can prov ide
the base for growing economy. The country is looking at incorporating reforms to simpl ify
its local and foreign investment. But there are certain downside s to the economy as well .
The country is r anked 121st out of 185 economies in the s Ease of Doing
Business Index , down from 117th (out of 183 economies) in 2012. It is also 8 th highest in
Gini index on income inequality .
Social:
Kenya has one of the youngest population in the world where almost 43% of population is
below 14 years of a ge. This is a great opportunity for brands that are facing tough
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competition and low consumer spend ing in home countries and mature economies. The
country also has young working population which have high spending powers. In addition,
the new age families have high disposable income and spending large amount of money on
their children.
Retail landscape:
It is very important for any company to understand the distribution and retail structure of a
country befor e a product launch. As per AC Nielsen report , Kenya has the highest
penetration of modern retail channels like malls and supermarkets in Africa and has one of
the most developed retail landscape in Sub Saharan Africa . The country has both
traditional and modern channels of trade. Although , modern trade channels make just 10%
of the retail channel volume, they cater to the biggest consumer spending (Kenya retail
landscape, Deloitte 2011 ) .Kenya has many retail cha ins such as Nakumatt, Uchumi,
Tuskys . Nakumatt is the lea ding chain in Kenya and is r anked 29 th in Campden FB Top 50
Global Challengers List.
Media Penetration:
Kenya has very high media penetration and has all medium of mass communication . As per
Vernacular radio report 20 11, r adio has the highest media penetration of 95%.There are
almost 100 ch annels available in Kenya. Some of the popular ones are Homeboyz Radio,
Hope FM, Capital FM, kass FM etc. These channels play both English and Swahili music.
Each city has its own channels as well. Mobile penetration is 71% which is one of th e
highest in t he world. Internet penetration is 28% and Africa has the 2nd h ighest internet
speed in Africa (freedomhouse.org ).Apart from that TV has 71% media penetration and print
media has p enetration of 48% .
Nutritional trends :
Due to high income inequality, the st andard of food intake varies among Kenyan
population. Complan targets high net worth people who can afford balanced diet , therefore ,
i . Ho wever, as per a report from FAO
UN the most common deficiencies found in Kenya are Zinc, Vitamin A, Iron, Folic acid.
Shift to Urban Cities:
More and more people are shifting to cities with Nairobi the capital cit y seeing an increase
of 17.6 % in population with total inhabitants in excess of 3 million. All major cit ies are
seeing rise in population with people migrating from rural to urban areas. The rate of
urbanization is set to grow in coming years with estimation that by 2020 around 26% (13.
Million) Kenyans will be living in cities as compared to present when ar ound 22%
population live in the city.
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This will lead to higher socializing by people and increased disposable income and so the
consumption of branded goods is set to increase in the future.
In troduction to Nutritional drinks
"Nutritional drink" refers t o any drink or additive which contains nutritional ingredients,
such as vitamins , minerals and proteins. Some brands position nutritional drink as a drink
for sportsperson or people focussing on fitness while other brands promise overall
development and serve as a supplementary source of vitamins and mineral s. For example,
vitamin C control s infection, vitamin A helps with cell growth and the production of white
blood cells. Some drinks contain iron, calcium and other minerals important for healthy
circulat ion and bones. Few of the drinks have reliable scientific evidence to support claims
such as improved mental performance.
Given below is general classification of hot beverages. It is divided into Tea and coffee which
are the most popular hot beverages. Apart from that there are other hot drinks in the
market which can be further subdivided into nutritional a nd fortified drinks and other
drinks like cocoa and drinking chocolate.
Complan is a nutritional drink from Heinz which focuses o n providing planned and
balanced nutrition for gro wing children. According to Heinz, Complan stands for complete
planned food & is milk based nutritional health beverage fortified with 23 vital nutrients
in balanced proportion including 100% milk protein to help in better c hild growth. It is a
nutrition expert and its formulation is specially designed to meet the requirements of
growing children.
Nutritional drinks are also know n as fortified drinks in some markets like India. As per the
research ers understanding drinks l ike Milo, Bournvita , Horlicks and Complan fall under
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nutritional/fortified drinks whereas drinks like Cadburys c ocoa, Cadburys drinking
chocolate do not have any nutritional value.
Kenya Hot Drinks Market
Hot drinks in Kenya had CAGR volume growth of 5.6% for the period 2006 -2011 and value
growth of 9.1 %. The major brands being sold are chocolate based drinks with the highest
brand share by Cadbury drinking chocolate followed by Cadbury cocoa, Milo and Raha. The
table below sho ws the v alue wise share of d ifferent drinks. As can be seen, the share of
Chocolate based drinks is exceptionally high as compared to non chocolate based drinks.
Chocolate is the most popular and the primary flavor in a drink for Kenyans. 99.8% of the
total sales of other hot drinks are chocolate based drinks. In 2011 the historical data shows
that 11237 tonnes of chocolate based drinks were sold in comparison to only 15.5 tonnes of
non chocolate based drinks. There has been a compounded annual growth rate of 5.56%
from 2006 to 2011.
Fig : Volume of chocolate and non chocolate based drinks sold in Kenya between 2006 and 2011
Considering the current and future trends and the macroeconomic factors, Euromonitor
has forecasted the CAGR at 6.86% from 2011 to 2016. Euromonitor expects th e growth rate
and the popularity of chocolate based drinks to be maintained even though there are
threats of rising costs of cocoa due to escalation of violence in the cocoa producing regions
To
nn
es
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Fig : Forecast volume of chocolate and non chocolate based drinks to be sold in Kenya between
2011 and 2016
Fig : Value of chocolate and non chocolate based drinks to be sold in US dollars in Kenya between
2006 and 2011
Fig : Forecast Value of chocolate and non chocolate based drinks to be sold in US dollars in Kenya
between 2011 and 201
To
nn
es
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There are three major players in the industry Cadbury, Nestle and Excel. Cadbury is the
market leader with more than 45%
market share and has maintained that
share for over 5 years. The m ajor factor
of its success can be attributed to the
small 15gm packs of drinking chocolate
and high spent on advertisements. Nestle
is a distant second with 22% market
share followed by Excel chemicals with
15% market share. These 3 companies
have more or less maintained their
dominance over the years with static growth and each protecting its market share. Major
factor is a loyal customer base and innovative marketing campaigns which these 3
companies focus on.
Distribution channels:
The primary channel of distribution for Hot drinks is through independent retailers and
supermarkets.
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RESEARCH METHODOLOGY
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2.1 OBJECTIVE OF THE STUDY
Heinz is one of the most well known brands across the world. As the matured economies of
USA and Europe stagn ate, the co mpany is looking at expanding i n developing economies
such as India and Africa. The primary objective of th is study is to make a go to market
in Kenya. The first phase will be targeted at three cities
(Nairobi, Kisum u, Mombasa) followed by additional three cities (Eldoret, Garissa, Nakuru )
by 2015 .
OBJECTIVE :
The three primary objectives of the
project are as follows :
To u nderstand the market size and
opportunity sizing for nutrition
drinks in Kenya.
To u nderstand and evaluate
consumer behavior and
competitors to decide which
s Complan take
in Kenya market
Develop a Go to market strategy for Complan in Kenya.
RESEARCH GAP:
The research aim s to fulfi l the following need gaps in study of hot drinks market in Kenya :
Consumer demographic
Brand awareness and top of mind brand recall for hot drinks.
Consumer purchase behavior : Location /packaging preference/ Frequency
Major motivators to purchase
Behavioral pattern of milk consumption by children
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2. 2 IMPORTANCE OF THE STUDY
It is imperative for Heinz to do market research before launching a product in a new market
as it has to invest a lot of money in market communication and setting up of distribution
channels for Complan. The study is aimed at prov iding market insight to Heinz regarding
the market potential f or nutritional drinks in Kenya which can help company take a
calculated decision. The study will also form a base for further research to be done by AC
Nielsen . Also the African market is unlike any other developing market as its diverse and
culturally different. The project aims at understanding the various consumer segments &
behaviours and developing a launch plan for Complan in Kenya.
2.3 RESEARCH DESIGN
The research design is a
method adop ted in the
research process . The flow of
the research has been given
in exhibit on the side . Out of
the four basic research
methods - surveys,
experiments, secondary data
studies and observation
(Zikmund, 2003), we have
selected surveys, secondary
data stu dies .
Secondary Research
The secondary research was targeted towards getting indepth knowledge of the nutritional
drink market worldwide and specifically in emerging markets. It also include d studying the
current ind ustry scenario and performing competit or analysis. The research aims to find
the market potential and opportunity size for nutritional drink specifically in Kenya. The
secondary research majorly included study of industry report and academic j ournals.
Primary Research
The primary research cons isted of quantitative r esearch.
Research Methodology
Secondary
Industry report
Academic Journals
Primary
Quantitative survey
Consumer analysis
Demand forecasting & market sizing
Go to market strategy
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Quantitative Research :
The quantitative research consisted of face to face survey which was carried out in Nairobi.
The major aim of the quantitative research was:
Quantifying and validating the findings of our qualitati ve research
Understanding consumption nd purchasing patterns.
Making recommendations in terms of brand positioning and advertising of
Complan in Kenya.
SAMPLING
the sa
The questionnaire was administered in supermarkets and mall. The sampling was done
SEC A and AB based on monthly household income
Mothers of children betwee n 4 -18 years.
The kids should have milk and mix additive in their drinks.
Questionnaire Design
The questionnaire was designed for face to face interview. Since the survey was being done
by another team in a Kenya. The questionnaire was limited to a 20 min utes interaction with
the respondent. The questionnaire was primarily focussed on getting information on the
consumption habits of milk by children in the SEC A category and understanding the
purchase behaviour of mothers for nutritional drinks.
Data Ana lysis
The analysis stage involve d the application of relevant statistical tools to find and validate
the desired outcomes. It help ed us segment different buyers on relevant factors according to
their needs and wants in terms of products being used. The ana lysis help ed us find feasible
solutions to cater to the different segments and help decide marketing strategies to launch
Complan in Kenya.
The following tests were used in data analysis.
Factor Analysis
Cluster Analysis
Cross tabs
Perceptual mapping
Micro soft excel and SPSS software for windows was used for data analysis. B
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2.4 LITERATURE REVIEW
Food and Agricultural Organization of the United Nations (FAO) and World Health
Organization (WHO) define fortification as "the practice of deliberately increasin g the
content of an essential micronutr ient, i.e. vitamins and minerals in a food irrespective of
whether the nutrients were originally in the food before processing or not to improve the
nutritional quality of the food supply and to provide a public healt h bene fit with minimal
risk to health. " Milk and milk based products are one of the most common fortified foods.
As per Fortified/functional Beverages in I ndia , Euro monitor International , 2011 , most
people feel the need for nutritional drinks to make up f or the missing nutrients in their diet.
Most of the people have erra tic work schedules so they look for easy to consume fortified
drinks .In addition ; children also consume nutritional drinks for extra nutrition and also
the fact that it makes milk tastier . As growing children have extra need for nutr ition,
Fortified drinks are made part of their daily diet.
As far as brand positioning is concerned, most of the brands have an overall wellness
positioning. However, brands are now focussing on ingredient b randing. The leading
functional ingredients are protein, vitamin, iron, calcium, iron, and omega -3. Most brands
such as B ournvita, Horlicks, Complan are focused on boosting overall growth and health,
improving br ain health, memory, bone health. In addition , most nutritional drinks focus on
boosting strength, stamina or heigh t. Many drinks are now focusing on com plete mental
and physical health encompassing sharpness, alertness, stamina, physical and mental
growth, memory as well as immunity. However, many n utritional drinks are being marketed
only on basis of improving the taste of milk.
As per Euromonitor Other Hot drinks -Kenya the other hot drinks market in
Kenya is increasing YOY as a result of increased consumer awareness, strong marketing
and new brands in the market. Chocolate based flavoured powders such as Cadbury coc oa
and drinking Chocolate recorded the maximum growth in 2011.The category is expected to
grow at a CAGR of 7% over the forecasted period till 2015.
Some of the new trends in the nutritional drink market are introduction of small packages,
increase in prices because of rise in raw material prices. In addition , many companies are
investing in advertising campaigns to build awareness about the category and also their
brand rec all.
As per Food and Agriculture Organization of United nations report Nutrition Snapshot
Kenya , Almost a third of Kenya population is undernourished as the dietary energy supply
is not met. The undernourishment is associated with deficiency of micronutrie nt such as
Zinc, Iodine, Folic Acid, Vitamin A. Other important health indicators like Infant and under
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five mortality rates are stagnating and increasing respectively. Also HIV has compounded
the deteriorating health standards particularly in urban area .As per three national survey
carried out in 1998, 2000 and 2003 which document the nutritional status of preschool
children, almost 20% of children under 5 were underweight. However, this trend was more
prevalent in rural areas as compared to urban area.
As per Euro monitor report on Trends in Hot drinks market, the most preferred channel for
hot drinks distribution is supermarkets/hypermarkets . Consumers like shopping at these
outlets since they offer wide product range and also offer price promotions. Most of the
buyers purchase hot drinks along with their weekly purchase rather than impulse
shopping. In addition, although consumers will keep on seeking out cheaper channels but
they are not ready to compromise on quality in hot drinks. As per Deloitte repo rt The
hidden heroes -the next generation of retail markets the consumer spending has increased
in Kenya due to growing middle class, combined with demand from affluent expatriate
community. 90% of national grocery sal es are generated in traditional and informal sector.
The biggest part of consumer spending is done in big cities like Nairobi and Mombasa which
have supermarkets . imports. Also the
integration of East African community will create new opportunitie s for foreign investors in
Kenya
In a research paper by Dharmesh Motwani and Khushbu Agarwal Customers' Behaviour in
Health Food Drink Product Category that over the last few consumers have become
more health conscious. The paper discusses that bet ter understanding of consumer
perception of healthy foods and its determinants is one of the key factors for harnessing
market opportunities .
As per research paper by titled Consumption of nutritional supplements
among adolescents: usag e and perceived benefits , that many adolescents agreed that they
obtained supplements such as vitamins and minerals from their mother. In addition many
adolescents were actually unaware of the benefits of the supplements supplied by their
mother; They jus t had a vague idea that nutrit ion drinks make them healthier. Most
nutritional drinks are perceived to be beneficial and useful in prevention of illness. Most of
the people associate nutritional drinks with short term benefits like prevention of cold, flu
and cold sores. Similarly, Nowak and Crawford (Nowak and Crawford, 1998) found that
adolescents recognize the importance of food in the long -term prevention of future illness,
but attach more importance on short term issues such as their current looks, en ergy and
fitness.
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TARGET CITIES
Nairobi
With a population of 3.48 million as of 2013, Nairobi is the most populous in East Africa. It
has the 4 th largest population in Africa. It is considered the most urban and modern city in
Kenya. Nairobi is conside red as the political and financial center of Kenya. It has the
highest literacy rate in Kenya. Male and female have a literacy rate of 90.6% and 79.7%
respectively. Nairobi has the largest industrial base. There is an influx of foreign exchange
due to a l arge community of expatriates. Standard of living is the highest in Kenya.
Nairobi constitutes of 8 constituencies
Westlands, Kasarani and Embakasi .
Mombasa
Mombasa has a population of 1.04 million as of 2013 and is the second largest City in
Kenya. This city lies next to the Indian Ocean . It boasts of a major Seaport , Kilindini
Harbour and an International A irport. The City is also the center of the coastal tourism . The
local industries include an oil refinery. Mombasa boasts of a literacy rate of 86.1% as of
2012. The major languages spoken are Swahili and English.
Kisumu
growing cities in Kenya. It is a p opular tourist destination and known for its strategic trade
harbour. Kisumu has a literacy rate of 48%. Kisumu serves as a communication and
trading confluence for the great lakes regions for Uganda, Tanzania, Rwanda and Burundi .
Eldoret
Eldoret is an in dustrial city with a population of 0.70 million. It is the fifth largest city in
Kenya.
Garissa
This is a market center and commercial hub with a population of 0.69million. This is a
market hub and commercial hub of the region.
Nakuru
With a population of 1.78 miliion, Nakuru is the fastest growing city in Africa and the 4th
fastest growing city in the world. Known for agriculture, manufacturing and tourism . The
population growth rate was 13% in 2011.
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ANALYSIS AND
INTERPRETATION
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MARKET SIZING & OPP ORTUNTY SIZING
Target Demographics
According to Euromonitor ,
population is relatively one of the youngest
in the world. This is at the time when the
many nations across the world have started
gaining signs of an aging population. This is
an encou raging sign for a company that is
foraying into a country with a product
targeted specifically at children between the
age of 4 to 14 years. From 2009 to 2015 , the
percentage of children between the age of 4
to 14 years represent 43% of the population.
Period
The period at which the market sizing and
demand forecasting will be calculated will be
for three years from 2013 to 2015. This is a
good enough period to estimate the market.
The addition of cities and the impact on the
overall volume and value sales can be
estimated.
Methods available to calculate demand forecasting and market sizing
According to the book, Case in point by Marc P. Cosentino, there are three ways to segment.
They are
1. Individual segmentation
2. Household segmentation
3. Population segmenta tion
The method considered most suitable for segmentation in this scenario is Household Segmentation.
Facts and considerations taken when the demand forecasting is calculated
1. According to a study of AC Nielsen of
Kenya in 2011, the ta rget income group i s
SEC A and SEC AB. They comprise of 11%
and 9% of the total Kenyan population
respectively. Together with SEC B which
then comprises a total of 33% of the entire
population of Kenya, these respondents
together contributed 77% of the income .
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Eligible population criteria
Children between the age of 4 to 14
years
Belong to the SEC A and SECAB
category
Belong to the six target cities
ELIGIBLE POPULATION ESTIMATE - 2014
CITYTOTAL
POPULATION (million)
ELIGIBLE POPULATION
(million)
% OF TOTAL POPULATION
NAIROBI 3.58 0.16 4.46%MOMBASA 1.07 0.05 4.84%
KISUMU 1.10 0.07 6.24%NAKURU 1.83 0.11 5.92%ELDORET 0.72 0.04 5.98%GARISSA 0.71 0.05 6.78%TOTAL 9.01 0.48 5.32%
ELIGIBLE POPULATION ESTIMATE - 2015
CITYTOTAL
POPULATION (million)
ELIGIBLE POPULATION
(million)
% OF TOTAL POPULATION
NAIROBI 3.67 0.16 4.46%MOMBASA 1.10 0.05 4.84%
KISUMU 1.13 0.07 6.24%NAKURU 1.88 0.11 5.92%ELDORET 0.74 0.04 5.98%GARISSA 0.73 0.05 6.78%TOTAL 9.25 0.49 5.32%
2.
population is 2.67% according to World Bank .
3. Average size of a Kenyan household and population of cities
received from Kenya Open data source. This is a online
government of Kenya initiative wherein the city wise
population estimates are maintained and updated.
4. Complan pack size 400gms
5. Annual consumption of 400gm b ottles is taken in three scenarios. 12 bottles per year, 18
bottles per year and 24 bottles per year.
6. Price of a pack of 400gms Complan 650 Kenyan Shillings
7. Complan market share estimate
2013 5%, 2014 7.5%, 2015 9%
The process of calculating the en tire demand forecasting is as follows :-
1. The average household size of Kenya is taken from Kenya Open Data source.
2. Total households in Kenya are calculated from the total population received from Kenya
Open Data source.
ELIGIBLE POPULATION ESTIMATE - 2013
CITYTOTAL
POPULATION (million)
ELIGIBLE POPULATION
(million)
% OF TOTAL POPULATION
NAIROBI 3.48 0.16 4.46%MOMBASA 1.04 0.05 4.84%
KISUMU 1.08 0.07 6.24%TOTAL 5.60 0.27 4.87%
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3. The no. of households available in the segments that are our target segments i.e. SEC A
and SEC AB will be calculated.
4. Estimated 50% of the target segment consumes other hot drinks.
5. Total volume consumption and value of sales from the consumption of other hot drinks
6. Estimated market s hare of Complan is calculated from the total sale and consumption of
other hot drinks in the marke t.
ANNUAL HOUSEHOLD CONSUMPTION 12
YEAR ANNUAL MONTHLY
SALES BOTTLES
2013 $ 636,980.18 7003
2014 $ 1,351,707.70 14860
2015 $ 1,779,545.39 19564
ANNUAL HOUSEHOLD CONSUMPTION 18
YEAR ANNUAL MONTHLY
SALES BOTTLES
2013 $ 955,470.27 10504
2014 $ 2,027,561.56 22290
2015 $ 2,669,318.09 29345
ANNUAL HOUSEHOLD CONSUMPTION 24
YEAR ANNUAL MONTHLY
SALES BOTTLES
2013 $ 1,273,960.36 14005
2014 $ 2,703,415.41 29720
2015 $ 3,559,090.79 39127
P a g e | 25
COMPETITION ANALYSIS
The major players in h ot drinks market in Kenya are as follows:
Cadbury
Nestle foods
Excel chemicals
Glaxo Smithkline
Figure shows the various company
shares as pe r retail value in 2011.
Source: Euromonitor International
chocolate a nd Milo are the same. Therefore, while studying competition it is important to
study both direct and
indirect competition as
consumers buy both
interchangeably.
As Shown in Exhibit , the
direct competition to
Complan in Kenyan
landscape is Bournvita
and M ilo which are
nutritional drinks. The
rest being the indirect
As mentioned earlier, the indirect
competition cannot be ignored because the differentiation between a hot drink and
nutr itional drink is not very clear. In the initial phase the company can target fighting
against Bournvita and Milo but in the long term the company has to also keep in mind the
activities being done by indirect competition such as Raha and Cadburys drin king
chocolate .
P a g e | 26
The market share of the different brands in the Kenya market for the period of 2008 till
2011 is given in the exhibit on the side. . Cadbury drinking chocolate has been the market
leader since 2008 and the liking of chocolate flavour by t he Kenyan masses helps
2008 till 2011. Every player has been able to hold on to its market share over a 4 year
period.
A closer look at the competition shows us the following picture:
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