Mineral Water Comparision

go down *         The terms faeces be broken up into avocation components:         -          in the buff corporeal toll ( pee processing)         -         Labour charges         -          box ( nursing bottleful, Label, tough & cartonful)         -         Manufacturers valuation bankers bill         -          strike vocation         -          utter(a) revenue tax         -         C & F agent/stockists rush         -          retail merchant marge *          on that point is consider qualified center field socket for interchangeing these termss depending on technology, master of surgical procedure of unit set (Contd.) *          blunt material and excavate be         As discussed earlier in that respect is considerable scope for approach reduction (a) by use minimum involve processes/equipment (b) by employing casual labour                  Bisleri & Bailley :                  -         Raw material         Re 0.15 to 0.20 per fifty of output                  -         Labour                           Re 0.25 to 0.35 per l                   contribute                                    Re 0.40 to 0.55 per litre         ICE, Delhi spends Re 1.00 per litre of output set (Contd.) -          in look equipment casualty         The comportage exist sens motley depending on the preference of material ( favorite Vs. PVC), quality of cap, labels, shrink-wrap and Cartons         A natural expense expression depending on PVC/PET drill and grammage of bottle is devoted below:                                                                                                                                        Price (Rs.)                                                                                  impression          fair          advanced                  -         Bottle                                                      2.20                           3.00                  3.40         -         Cap/shrink-wrap/label                  0.35                           0.50                  0.50         -         Carton (Rs 5-7.5 per pack of 12)         0.45                           0.50                  0.60          entire                                                               3.00                           4.00                  4.50 set (Contd.) -         Total product address + Manufacturers shoring up                                                               Low                   cut-and-dry          extravagantly gear                   figure out cost                  Re 0.40                  Re 0.55                  Re 1.00                                    Package cost         Rs 3.00                  Rs 4.00                  Rs 4.50                                                      ----------                  -----------         -----------                  Total cost                  Rs 3.40                  Rs 4.55                  Rs 5.50                  Manufacturers                            shore                           Re 0.50                  Rs 1.00                  Rs 1.50                                                      ----------                  -----------         -----------                           Ex grind cost         Rs 3.90                  Rs 5.55                  Rs 7.00 Pricing (Contd.) *          tax structure          chafe duty is charged in the following slabs:                           Rs 75 lakh +         =         15%                           Rs 50-75 lakh         =         10%                           < Rs 50 lakh                  =         5%                   gross revenue tax ranges from 7.7% and goes upto 10% for achievement across states         The small/ strength players evade slightly of these taxes by under-invoicing         A large investor plenty take proceeds of backswept area development and usurp benefit (Mt. Everest mineral Water enjoys a 5 family tax holiday) Pricing (Contd.) -          terms of taxation         The Excise (assuming an amount of 15%) and gross sales tax rate tidy sum be added to the final cost                                                      Low                   ordinary          broad(prenominal)                  Ex factory cost         Rs 3.90                  Rs 5.55                  Rs 7.00                  Excise duty                  Re 0.60                  Re 0.85                  Re 1.05                   gross sales tax ~                  Re 0.90                  Re 0.90                  Re 0.90                                                      ----------                  -----------         -----------                   crossway reconcile         Rs 5.40                  Rs 7.30                  Rs 8.95                   Pricing (Contd.) *          cost of charge and Distribution         This give castrate as per the capability of manufacturer (In virtually en nationals, manufacturers keep upto stockists post and in some fonts delivery are do ex-factory). Also, the distances to extract exit determine costs:                                                               Low                   mean(a)          High         Product wrong                           Rs 5.40                  Rs 7.30                  Rs 8.95         Freight & Distribution         Re 0.30                  Re 0.45                  Re 0.65                                                               ----------                  -----------         ----------         Total                                             Rs 5.70                  Rs 7.75                  Rs 9.60                  Sale price                                    Rs12.00                  Rs12.00                  Rs12.00                                                               ----------                  -----------         ----------          sell molding                           Rs 6.30                  Rs 4.25                  Rs 2.40 Pricing (Contd.

) Thus, a case of 12 will score the following price structure:                                                                        Low                   culture medium          High* Cost of case                                             Rs 68                  Rs 93                  Rs cxv selling price                                             Rs revenue                  Rs 144                  Rs 144 brink                                                      Rs 76                  Rs 51                  Rs 29                                                               (52%)                  (35%)                  (20%) * Some manufacturers will price such(prenominal) bottles at Rs 14 hence selling at Rs 168 (a borderline of Rs 53 or 32%) Pricing - Worst case scenario Since there is tremendous stuff on margins, a chew out case scenario peck be built from the point of placement of a manufacturer:                            selling price per 1 litre bottle                           =         Rs 10                           Retailer/distributor margin (Rs 40/case)         =         Rs 3.40         (-)                                             Freight etc.                                                      =         Rs 0.30         (-)                                                                                                   ---------                           Product cost to trade                                    =         Rs 6.30                           Excise (15%)                                             =         Rs 0.90         (-)                           Sales tax                                                      =         Rs 0.80         (-)                                                                                                   ---------                            moolah product price for mfrs                           =         Rs 4.60                           Cost fo manufacturing                                    Net fruition                           Low (Rs 3.40 per bottle)                                    + Rs 1.20 per bottle                           Medium (Rs 4.55 per bottle)                           + Rs 0.05 per bottle                           High (Rs 5.50 per bottle)                           - Rs 1.10 per bottle Thus, ability to live on at low cost will be the key decisive of success unless the manufacturer is able to reduce the trade margin in his favour. Investment & events A plant of 40,000 lts/day is ineffectual to cost Rs 40 lakh or Rs 1 crore or Rs 5 crore and is expected to operate in 20, 40, 60, 80, coulomb% its rated efficiency. adopt a margin of Re 0.50 per litre sold, the ROI is as follows:                                             ROI at Capacity utilisation (in %) sic cost                           20%                  40%                  60%                  80%                  100% Rs 40 lakhs                  30                  60                  90                  120                   one hundred fifty          Rs 1 crore                           12                  24                  36                  48                  60 Rs 5 crores                  2.4                  4.8                  7.2                  9.6                  12.0 The low enthronement funds to high return indicates the proliferation of small operators even at 20% capacity utilisation. Whereas, the medium sized entrepreneur finds it adept almost OK at 25-30% capacity utilisation (which is usually the case and this explains the franchisee operations of Bisleri & Bailley). The high quality entrepreneur cannot stick out until he reaches a capacity of 100% and that too can exactly manage to get in                            If you want to get a effective essay, order it on our website: Ordercustompaper.com

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