Marketing Plan for Compost in Nepal

INTERNATIONAL AMERICAN UNIVERSITY PRESIDENTIAL BUSINESS SCHOOL Buddhanagar, Kathmandu A Report on Marketing Plan of Nepal Recycling Company Ltd. In partial fulfillment of the MBA IInd semester project submission requirement Submitted to : Submitted by : Mr. Sujan Raja ShresthaAshim Shrestha Lecturer, Marketing Management Gyanman Bade Niranjan P. Bajracharya Sangeeta Ghale Shreya Joshi As on 21 March 20, 2013 Table of Contents I.

Executive Summary A. Summary of situation analysis B. Summary of marketing objectives C.

Summary of marketing strategies D. Budget summary II.

Situation Analysis A. The Industry 1. History of the industry III. Executive Summary Summary of Situational Analysis In developed countries, the main motivations for waste reduction are frequently related to legislation, environmental protection, the scarcity of sites for landfills, and the risks associated with toxic materials. The same considerations apply in developing countries to large metropolitan areas that are subject to many economic and environmental pressures.

Urban centres which do not have effective collection and disposal systems should not devote resources to developing waste reduction measures until adequate waste management systems are in place.

For this, or other reasons, solid waste managers in developing countries tend to pay little attention to the issue of reducing organic wastes which make up from 50 per cent to 90 per cent of the total waste generated. Management of solid waste is a growing concern in Nepal as urban population densities increase and flat usable land is in short supply.

Although small urban centres were declared to be municipalities2, they suffer from a lack of infrastructural and technical resources to tackle the problem of waste management. With increasing public awareness about good health and a clean environment, solid waste management has now come to the top of the priorities of the municipalities in Nepal. When the environmental impacts of proposed landfills are being investigated, it is often found that residents refuse to accept landfill sites near their homes and local leaders from various political parties are often involved in protests against proposed landfill locations.

Though the Local Self Governance Act of 1999 has empowered municipalities to take every necessary action at the local level, the absence of elected representatives3 since 1998 has been causing difficulties in its implementation. Even though collection systems are still not in place, most of the municipalities are expressing their desire to develop final disposal systems. They are also promoting waste reduction, reuse and recycling among local communities.

Some of the 58 municipalities in various parts of the country are providing effective house-to-house waste collection services and some are making good progress towards final disposal. For this review, communities and private sector service providers have been selected according to their present performance in waste reduction.

Priority is given to those community-based organizations (CBOs) and non-governmental organisations (NGOs) that are playing effective roles in waste reduction at source, collection, processing and recycling.

Table 1 provides details of the regions and municipalities in Nepal. Where do we stand ? Nepal Recycling Company’s area of business will be to collect, recycle/compost, and market waste from municipality waste processing plants for use use as a consumer good. This recycled product will meet two critical needs: 1. It will help people to better manage their organic wastes.

2. It will give municipalities a feasible and cost effective alternative to landfilling the waste, and 3. It will help meet the growing demand for organic soil enhancers and fertilizers.

The material that will be recycled is human waste sludge. Our recycled waste will be targeted toward fertilizer manufacturers, nurseries, landscapers, farmers, government agencies, golf courses, and others.

All of these potential customers will benefit from the compost’s numerous soil enhancing characteristics. Landfills are filling up and costs of disposal are rising. Also there are a lot of problem in managing human sludge. This is a unique and viable concept that addresses the needs of various customers and reaches an untapped market with tremendous growth potential.

One of the most attractive aspects is that the business is projected to attain a strong cash position and achieve profitability in the third year of operation. Due to a large need for these products and services, and a lack of direct competition, our projection of quick profitability is attainable.

Research will be an ongoing process for the company; one particular area of interest is the possibility of qualifying the product as a fertilizer. In this case, the profitability of the product would nearly double A. Summary of marketing objectives Specific:

Our goal of the company is to initially promote recycled product as for now “compost ” to the customers bringing about awareness about the use of recycled product in focus the compost against the use of chemical fertilizers. We are to capture the market of the compost industry within the next two years by providing high quality organic composts at the rate lower or equal to the local rate but cheaper than the chemical fertilizers. We aim to sell our products to large segments : local farmers, industrial farmers, golf course and ultimately export the products.

We aim at slow ascend in the profit curve rather than a rapid one.

Measurable: We aim to take 20% of the market share within the first year and slowly increase to 30%. With the availability of input using human sludge and other organic waste, we are less in operating cost that merits us to sell our product at low cost. We are in collaboration with the government so we don’t have to incur any of the business taxes as the industry is currently targeted to social welfare with a little amount of profit. Achievable:

We ensure to possess the latest recycling plant and quality assurance team in the industry. We also have the best marketing professionals to increase our sale. We currently are running our industry with the support of government assistance as well as different NGO working for the environment welfare, so we have sufficient funds as well are free from different taxes helping us to operate at optimal level bringing about profit which is to be reinvested in the same.

Also our customers, as Nepal being an agricultural country , we have easy customers.

The only thing our marketing team has to do is to aware the customers about the use of compost and its advantages against the other chemical fertilizers. We are also in collaboration with government and other NGOs that are working for the environement and the development of the agriculture segment in the country. Summary of marketing strategies. Nepal Recycling company aims to provide composts to customers at a price far way cheaper than the chemical fertilizers being sold in the local market.

Mission Nepal Recycling company’s mission is to provide the highest quality composts .

WE exist to attract and maintain local farmers and agro-industrialist. When we attain the most of the market share, we tend to move towards profit maximization and go towards globalization of our product through brand. Marketing Objectives * Improve the local farmers perception on compost uses and its advantages * Increase the amount of compost market share in the country * Maintain a slow ascend profit margin * To educate the country about waste management and the advantages of organic wastes Target Markets * Local farmers * fertilizer manufacturers * nurseries * landscapers * government agencies * golf courses

Marketing Mix Nepal Recycling Company is comprised of the following approaches to pricing. ,distribution, advertising and promotion and customer services. * Pricing : The cheapest high quality compost in comparison to other chemical fertilizers * Distribution: The products will be manufactured in the recycling plant while the selling will be done with the help of agriculture retailers and government aids.

* Advertising and promotion: We will require advertisements , sales promotions and government references to local farmers through different agricultural banks and NGOS working for the welfare of the agriculture. Customer Service: The customer service in the context of our product will be to educate people different information regarding the use of composts against the chemical fertilizers . And also educate about different agriculture information II Situational Analysis The Recycling Industry 1. History Recycling has been a common practice for most of human history, with recorded advocates as far back as Plato in 400 BC. During periods when resources were scarce, archaeological studies of ancient waste dumps show less household waste (such as ash, broken tools and pottery)—implying more waste was being recycled in the absence of new material.

In pre-industrial times, there is evidence of scrap bronze and other metals being collected in Europe and melted down for perpetual reuse.

[4] In Britain dust and ash from wood and coal fires was collected by ‘dustmen’ and downcycled as a base material used in brick making. The main driver for these types of recycling was the economic advantage of obtaining recycled feedstock instead of acquiring virgin material, as well as a lack of public waste removal in ever more densely populated areas. In 1813, Benjamin Law developed the process of turning rags into ‘shoddy’ and ‘mungo’ wool in Batley, Yorkshire.

This material combined recycled fibres with virgin wool. The West Yorkshire shoddy industry in towns such as Batley and Dewsbury, lasted from the early 19th century to at least 1914. Industrialization spurred demand for affordable materials; aside from rags, ferrous scrap metals were coveted as they were cheaper to acquire than was virgin ore.

Railroads both purchased and sold scrap metal in the 19th century, and the growing steel and automobile industries purchased scrap in the early 20th century.

Many secondary goods were collected, processed, and sold by peddlers who combed dumps, city streets, and went door to door looking for discarded machinery, pots, pans, and other sources of metal. By World War I, thousands of such peddlers roamed the streets of American cities, taking advantage of market forces to recycle post-consumer materials back into industrial production. [5] Beverage bottles were recycled with a refundable deposit at some drink manufacturers in Great Britain and Ireland around 1800, notably Schweppes.

An official recycling system with refundable deposits was established in Sweden for bottles in 1884 and aluminium beverage cans in 1982, by law, leading to a recycling rate for beverage containers of 84–99 percent depending on type, and average use of a glass bottle is over 20 refills. (The above mentioned details are abstract from wikipedia.

com ) Current Scenario Some people dump their organic wastes into farm so that they get some fertilizers for their agriculture. While the papers, plastics are burnt and metal scraps are stored.

But people have started selling the papers ,glass , plastics and metal scraps to the people coming to house doors collecting for it. The so called “khaali sisi bottle wallas” pay a small amount for the wastes they take in. They collect wastes in huge quantity and are exported to India where they get recycled and new products are produced in turn and sold to Nepal again in expensive prices.

As population is soring up in the urban areas with the amount of human sludge and other wastes such as papers, glass, plastics and metal scraps.

As the area for land fills are being filled up and there are no more places . The human sludge is directly dumped into rivers and ponds. The organic wastes from homes are also located into nearby open places. The country has not moved towards the concept of recycling and very few companies are into the “Go Green ” concept and use recycled products from other sources. Also there are small companies who collect waste materials such as paper, glass, plastics and metals , but are taken to India for recycling.

The products are then distributed from India only. Growth Potential

The potential for the growth of the recycling industry is very high and flexible. With the availability of waste materials as input, the industry can grow soon and the products as well can be sold easily as the nation is also moving towards “Go Green ” concept. As products such as fertilizers are becoming very very expensive, the compost produced from the industry can be of a great use viz price and quality. As chemical fertilizers are also continuous depleting the soil quality, the organic fertilizer or compost can help the farmers into their productivity. So there is a great potential for growth.

Also with the growing number of other industry such as plastic, glass(esp. bottlers companies, brewery and distillery ), metal industries, the availability of raw materials can reduce their operation cost and provide the people of Nepal with cheaper products and also help the economy of the country by exporting recycled products because the whole world is using recycled products. Nepal Recycling Company History Nepal Recycling Company was established in 2012 AD . Its aim is to help the country in rising the economy as well as the management of waste materials.

It recycles waste materials and helps manage the wastes and puts the country to a cleaner environment. While producing recycled products, it can help boom country’s manufacturing industries roviding products in the form of raw matireials or finished goods.

Scope of business There is a big scope of this business to bloom. The products for the company for now compost and recycled papers have a easily reachable market. It would take some years to capture the market for both the compost and the paper industry.

Compost can be packed as a branded fertilizer and papers can be manufactured as high quality materials and sold in the same brand. The compost is readily required for every farmers so there is a huge probability for it to flourish in the market. While paper products markets can be made to the same organization from where the waste papers were brought from.

Current state and growth The company so far is in its growth stage. It is trying to capture the market share providing the highest quality compost in the country.

There is a scope for the company to grow to earn huge amount of profits and also establish itself as a brand product and also mark up as an international quality product. |Due to the growing concept of organic products, there is a huge amount of market sustainability . Profitability The company currently is operating at low profitability rate . Its capital has been gained from government funds and other donors.

So, the main scope right now of the company is social awareness and to capture the market. However the company will focus on increasing the profitability within the next 4 years.

Competenece in various areas Strengths Starting a business in the recycling industry proves to be a profitable business because the potentials still remain untapped and it is an evergreen niche. recycling itself is a broad niche and making substantial profits from a recycling business in a country like Nepal where waste management is a impossible thing. We have plenty of waste materials that can be used as input for our plants.

The human sludge which at present is dumped directly into the rivers can be directed directly to our recycling plants.

We can also charge money from the home consumers for taking in their organic wastes. The recycling business will prove profitable because there is a high demand for recycled products from manufacturing companies; who are looking to drive down production costs, since using recycled packaging materials is cheaper than acquiring new ones. Challenges * It is capital intensive – but can be started on a small scale. * High cost of recycling equipments and machines. * It takes massive amount of effort to gather waste local sites and other places.

However, you can choose to outsource this process while concentrating on your core competence; which is recycling. SWOT Analysis Strengths| Weakness| 1. Low price2. Environment Friendly3. Low resource consumption4.

Less garbage in the society| 1. Unavailability of Machinery2. Lack of Human expertise in recycling 3. People may not accept this product if we do not rightly market it. 4.

lack of markets for collected materials5. lack of funding for recycling6. poor participation by residents in material collection. Opportunities| Threats| 1. Employment Opportunities2.

Demand Supply Gap, creates a room for our business3. Purchasing power of the people will be increased so they will favour our products. | 1. Firms may react on this establishmentand may negatively affect ourprofitability and sustainability| Potential Marketing Problems The country has 90% of the population making up a living on agriculture. With increased demand and competition, people have started using their productivity using chemical fertilizers.

Educating people on the use of organic fertilizers such as compost on the current scenario can be difficult. With people wanting more productivity, it can be a hefty task to make the people swift over to composts. With people into traditional farming, they have their own methods of organic composts and which is free of costs to them. Making them buy the same feature products with a price will take a heavy amount of risks. As well, the government is providing chemical fertilizers at very subsidized rate .

The government itself can resist the sale of our product .