Marketing and sales strategy of Juicy Fruit Smoothies

Marketing and sales strategy of Juicy Fruit Smoothies This opportunity analysis document identifies and summarises the background, status and future plans for the creation for Juicy Fruit Smoothies Ltd. This idea is Juice and Smoothy Bar which is seen in most shopping centres, cinemas and department stores. This new type of business will offer the consumer a wide range of beverages ranging from soft drinks to fruit flavoured beverages with nutritious ingredients. In addition, this new business will sell a variety of ice creams and chocolate. Beverages are among the most sellable items that people can offer. Selling beverages like concentrate juice, vitamin c juice and nectar juice is most profitable during the summer where a frozen juice or smoothie drinks can be refreshing relief from the heat of the sun. This is the reason why it will be a good idea to start a business selling juice fruit and smoothie drink if seeking a good and profitable starting start up business. The Juice and Smoothie brand has been has been a  successful product brand all over the world. Juicy Fruit Smoothies Ltd will use 100% nutritious fruits to promote a healthy advertisement campaign and attract conscious health goers. This business will open one juice and smoothie bar and will continue to expand in shopping centres, entertainment spots, transport companies and gyms.   Juicy Fruit Ltds start up cost is à ¢Ã¢â‚¬Å¡Ã‚ ¬71000. The main source of the cost is from the general operating expenses such as payroll, suppliers, insurance, advertising and other overheads. The remaining costs are the overheads that are normally associated with opening up a premise. We need an investment of about à ¢Ã¢â‚¬Å¡Ã‚ ¬100,000 to get the business started. The start up assumptions is illustrated below: Start-up Funding Start-up funding for expenses à ¢Ã¢â‚¬Å¡Ã‚ ¬54000 Start-up assets funding à ¢Ã¢â‚¬Å¡Ã‚ ¬17000 Total Funding Required à ¢Ã¢â‚¬Å¡Ã‚ ¬71000 Assets Non cash assets from start-up à ¢Ã¢â‚¬Å¡Ã‚ ¬5000 Inventory à ¢Ã¢â‚¬Å¡Ã‚ ¬2000 Long Term Assets à ¢Ã¢â‚¬Å¡Ã‚ ¬10000 Total Assets à ¢Ã¢â‚¬Å¡Ã‚ ¬17000 Liabilities Long Term Liabilities à ¢Ã¢â‚¬Å¡Ã‚ ¬100000 Total Liabilities à ¢Ã¢â‚¬Å¡Ã‚ ¬100000 Start-up Requirements Advertising à ¢Ã¢â‚¬Å¡Ã‚ ¬5000 Insurance à ¢Ã¢â‚¬Å¡Ã‚ ¬2000 Marketing Promotion à ¢Ã¢â‚¬Å¡Ã‚ ¬5000 Payroll à ¢Ã¢â‚¬Å¡Ã‚ ¬40000 Repairs Maintenance à ¢Ã¢â‚¬Å¡Ã‚ ¬1000 Shipping Delivery à ¢Ã¢â‚¬Å¡Ã‚ ¬1000 Internet à ¢Ã¢â‚¬Å¡Ã‚ ¬1000 Total Start-Up Expenses à ¢Ã¢â‚¬Å¡Ã‚ ¬54000 Start-up Assets Start-up Inventory à ¢Ã¢â‚¬Å¡Ã‚ ¬2000 Other Current Assets à ¢Ã¢â‚¬Å¡Ã‚ ¬5000 Long Term Assets à ¢Ã¢â‚¬Å¡Ã‚ ¬10000 Total Assets à ¢Ã¢â‚¬Å¡Ã‚ ¬17000 Total Funding Required à ¢Ã¢â‚¬Å¡Ã‚ ¬71000 Objectives The objectives of Juicy Fruit Smoothies Ltd  are the following: Create a state-wide sales staff. Establish strong sales revenue by 2013. Maintain tight control of cost and operation during expansion. To successfully expand our products Mission Statement Juicy Fruit Smoothies Ltds mission is as follows: Quality: Our fruit juices are the highest quality, most nutritious food productsbecause we will accept nothing less. Innovative: Our products have always been in the forefront of the health and nutrition wave. Innovative products, state of the art manufacturing, quality assurance and industry expertise are the bases for our past and future successes. Integrity: Our customers depend on the quality of our juice products. Our commitment to the highest standard is the foundation of our customers trust in Oasis Juice.  Delivering freshly made juice to consumers depends on extensive cooperation and mutual reliance between supplier and retailer. We stand behind our product, our service and our word. Company Description Business Definition Juicy Fruit Smoothies Ltd will offer a range of smoothies, juices and energy drinks. Juicy Fruit Smoothies Ltd will have over 50 different flavours that can only be bought in this store, while still selling the already popular ones, such as Power Punch. These refreshment drinks are healthier than soft drinks as they are made from real fruit and blended together to make the smoothie. In order to make these smoothies we will use frozen fruit. Put it in the blender along with some frozen yogurt for thirty seconds and the smoothie is ready to serve. It is really simple and speedy method but it creates a great tasting product. Long Term Aim of the Business Juicy Fruit Smoothies Ltd will be a great opportunity to enter the food and beverage industry providing the consumer with another business to choose from when they decide on their commodities. The main long term aim of the business is to provide excellent customer satisfaction, be miles ahead of the leading competitors and to be profitable. Many people like smoothies and other sweet like products but Juicy Fruit Smoothies Ltd will provide much healthier options that will assist in the competitive advantage. New smoothie recipes will be implemented as time goes on and more promotions will be on offer. Key Features and Benefits Key Features of Juicy Fruit Smoothies Ltd will include: Skilled staff who are aware of the need for high quality in every smoothie Online service where customers will be made available of the ingredients in each smoothie and also the weekly special offers, without having to go into the store. Key Benefits to customers will include: Great tasting drinks made in front of your eyes Quick service Ability to sit down in store and enjoy your smoothie Small Large Size (low prices) Huge selection of flavours Juicy Fruit Smoothies Ltd plans to be as customer friendly as possible and therefore will offer lower prices than the competition. We will welcome criticism from customers on how we can improve our products and of possible different flavours of smoothies. We believe that this will be a great success as we will be giving the customers exactly what they want. The customer will also be able to decide in the store what fruits they want in their smoothie, without the need for the recipe being in use. However, we will have to charge a slightly higher price in order to provide this service. We will be the only company to provide this service and we think that it will be extremely popular. As people are increasingly trying to eat healthy we feel that now is the perfect time to get into the smoothie market. We have a wide range of target outlets such as coffee shops, sandwich bars, gyms, sports clubs, health clubs and hotels, as well as having stores of our own in shopping centres throughout the country. Most people know that fruit loses its nutritional content over time however what most people dont know is that this loss occurs within minutes. Therefore, it is crucial that the ingredients be as fresh as possible in order for the customer to receive maximum benefits. Juicy Fruit Smoothies Ltd has taken this under consideration and has a system that is focused on maximising freshness. Value Proposition At the minute there is no company providing the customers with high quality fresh smoothies at a low price. The recipes are very limited and the prices are high. Juicy Fruit Smoothies Ltd will be the first smoothie bar that offers a wide range of smoothies at affordable prices. Products Juices/Smoothies Energy Drinks Ice Cream Sweets/Chocolates Analytical Spending and Outsourcing Juicy Fruit Smoothies Ltd has a need for analytical spending in order to find out what kinds of fruits and smoothie flavours people are looking for. The major areas that would need to be analyzed would have to be: types of fruits, recipes, ice cream flavours, and potentially meals in the future. At this point in time Juicy Fruit Smoothies Ltd should be focusing on spending for research into what kinds of fruits people in the area would desire. Juicy Fruit Smoothies Ltd should also focus on trying to analyze how they can transport fruits from areas at a low cost. This would entail finding good transportation routes, good areas to find quality fruits, and also how to go about getting them for a decent price. Through these tests Juicy Fruit Smoothies Ltd should be able to figure out a way to get a good quality product thus giving them an advantage on the competition. It would be good for them to try to outsource the testing for recipes to outside service providers. This would allow them to get a more wholesome perspective on what kinds of blends to use in the smoothies and also would allow Juicy Fruit Smoothies Ltd to be more forward looking and potentially expand into the global market at some point in the future. This way they do not have to focus completely on just the local area for business and will be able to become more profitable through expansion. Barriers to Entry Products The Smoothie and Juice Bar industry is a successful industry will many businesses doing quite well despite the economic downturn. The main competitors such as Zumo already are a global brand and would have more stakes in the market and experience. That alone may cause concern for the success of Juicy Fruits. Loyalty to Customers In any market or sector it is known that customer satisfaction gives a better competitive edge for businesses already in the market. Since firms that have a high reputation and have built up their clientele over the years, the customers will remain loyal to that business which gives that business a competitive advantage. Economies of Scale Large and more experienced businesses may be able to operate more efficiently due to minimal costs. These businesses are also more experienced because of the length of time spent in the sector thus giving them more of a competitive advantage. SWOT Analysis Strengths: The Smoothie Juice market is a widely known and successful industry Juicy Fruit Smoothies Ltd will provide quality products than the leading competitor including fresh fruits Chocolate: Cadburys and Nestle will be our suppliers Drinks: Red Bull Coca Cola Smoothies: Fresh Fruits with nutrients Professional products that will be sold to colleges, schools, restaurants and gyms Successful due to the unquestionable ability to provide top of the range products including healthy options. Weaknesses: Our rival companies like Zumo and Innocent may have a better stake in the market and more experience along with knowledge. The competitors may formulate new tactics for the new entrant Juicy Fruit Smoothies Ltd Opportunities Future developments in the smoothie recipes and further business expansion Provide allergy free products such as peanut free drinks and chocolates Threats The major competitors such as Zumo Innocent Any contamination to the food supply and shortages Possible increase in supplier costs# Strategy Implementation Summary Juicy Fruit Smoothies Ltd will penetrate the smoothie and juice beverage industry by creating and deploying new smoothie and juice products and brands. The business will also locate in a logical and more accessible area. Shopping Centres Gyms are the busiest places that a lot of consumers go to for recreation. Since that Juicy Fruit Smoothies Ltd is promoting healthy beverages it is a right step in locating in a gym. We want to let the customer experience a fast and friendly service without the inconvenience of waiting too long for their purchase. The business is for a customer that wants a quick drink on the go and who wants to get in and out fast. Juicy Fruit Smoothies Ltd has identified that the market is busy and the potential target customers will range from school and college goers to business people who will be passing by the juice bar at regular intervals and that is why location is a number one success pattern. In addition to providing a quality product and an extensive menu of delicious items, to ensure customer awareness and loyalty, as well as positive public and media support, Juicy Fruit Smoothies Ltd can continue to offer more promotions if it deems to be a successful juice and smoothie bar. Strategy Pyramid Juicy Fruit Smoothies Ltd strategy is to show people that JF has an excellent product, convenient accessibility, and with a community benefit. To execute on this strategy, Juicy Fruits will be locating its bars at easily accessible with the Dublin area. Juicy Fruits will be pricing its products competitively and training the staff to the highest standards in the country In doing so, Juicy Fruit Smoothies Ltd has to: Provide a customer with a quality product at a competitive price Provide the customer with a more convenient method for obtaining their desired product Demonstrate how Juicy Fruits appreciates customer loyalty buy offering promotions, coupons, loyalty cards, etc. Continue to implement future marking strategies and to ensure that Juicy Fruits will be ahead of the leading competitors Identify future developments and possible merging with other retail companies such as Spar or Centra Continue will some market research in the area of customer satisfaction. Are the customers satisfied with the level of service? Are they happy with the products? Any feedback? This could be done through feedback cards. Strategy Pyramid.jpg Market Analysis Target Market The target market is vast, covering almost all demographics, with an emphasis on the age group of 15-35 i.e. older school goers, students and young professionals. Thus locating the franchises near colleges, shopping centres and in town is important. Perhaps it might also be beneficial to cooperate with a current institution in Ireland for the start up of the company, i.e. cooperate with a shop, such as Centra or Spar, using their well known brand name to help solidify the name of this new franchise. This again would result in an addition to the already high start up costs, but it may well be the smartest and most effective route forward. An in depth researching of the market prices would also be needed and Juicy Fruits would most certainly have to charge less than its competitors in order to gain a foot hold in the market. This might have to be continued for several months/years in order to persuade people away from companies like Zumo. This would result in low income for the first few accounting periods and with the high start up costs the margin for a healthy profit in the first two years is very low. However, all of this being said, the fact that there is only one other Smoothie and Juice Bar company out there in the market in Ireland at the moment means the potential for a new company is excellent, as long as an efficient strategy is put in place to effectively corner a section of the health food market. Market Segmentation The effects of the industry affect how we will have to market, as well as what services/products we will have to offer in Juicy Fruit Smoothies Ltd. For example, we will have to separate our juice and smoothie products from others as well as focus on their weaknesses and exploit them. The major competitors we have in the beverage industry are cafes and corporations such as Starbucks. Juicy Fruits will have to be sure to specify how much healthier their product is in comparison to coffee and why it is a better choice. This will hopefully allow for them to attract customers away from the competition as well as allow them to gain a solid foothold in the market. Geography segmentation is not a very large part of Juicy Fruit Smoothies Ltd concerns. The target market/customers for the company are a very large range that doesnt target anyone in particular. Just your average people, the only part of the geography that would be major is being sure to be in a densely populated location such as in downtown Dublin or directly on/near the campus. Now we will look at the different tiers that Juicy Fruit Smoothies Ltd would be concerned with. Tier 1 (Industries Juicy Fruit Smoothies Ltd can leverage on their own) Fruit and Smoothies Ice Cream Tier 2 (Industries that can be leveraged with help from a partner) Recipes Organics Tier 3 (Future industries to get involved in) Food (full meals) Vegetables Fitness Competition The two main competitors in this industry are Zumo and Innocent. Zumo has been in Ireland since 2001 and are the largest juice and smoothie bar chain in Europe, with over 100 bars in 13 countries. Their company is extremely similar to ours as they make up their smoothies in store also. We will have an advantage over Zumo as we will have a greater selection of smoothies and also the customers will have the option of choosing the fruits that go into their smoothies. We expect to steal a lot of their customers due to this. Zumo is already a well established company and have had the luxury of charging high prices for their product and having a huge mark-up. In order to break into their market we intend to have cheaper prices and also have special offers weekly. E.g. For one week have the Power Punch smoothie at à ¢Ã¢â‚¬Å¡Ã‚ ¬1.50. This is extremely good value and although we will not be making that much profit off this deal, we expect that it will attract customers into the store and also that we will sell quite a large amount of the products on special offer. Innocent is a UK based company which was founded in 1999. They provide smoothies and juices also, however the key difference between our company and theirs is that we intend to make ours fresh in store whereas their product comes readymade in cartons and plastic bottles. Their product is sold at a cheaper price than ours however a lot of the goodness is lost in the smoothie and also the majority of people find that it doesnt taste as nice as the freshly made smoothies. Competitive Advantage Juicy Fruit Smoothies Ltd will be successful if it is able to satisfy the key customer criteria. This includes: high quality product, affordable prices, speedy and friendly service. It will have advantages over other smoothie providers for the following reasons: Juicy Fruit Smoothies Ltd has a keen interest in satisfying the customer, and therefore spends time perfecting their recipes. The wide range of flavours that Juicy Fruit Smoothies Ltd will provide should satisfy all tastes. The customer will have the ability of choosing what goes into the smoothie on off chance that there isnt a recipe that suits the customers taste. We will provide high quality smoothies in less than a minute. This speed is vital in order to compete with the competitors as customers will not be willing to wait for over 5 minutes for their smoothies. This time will be increased drastically if there is a queue. Therefore it is vital to us that the smoothie is made and in the customers hand in two minutes. This speed is also good for the quality of the product. As outlined earlier, the nutrients leave the fruit within minutes, therefore this process keeps our product as healthy as possible also adding to its appeal. Marketing/Sales Strategy Marketing Strategy The Fruit Juice and Smoothie bar market is currently occupied, in Ireland, by one major company, Zumo. The Zumo chain of bars is, at present the only realistic competition to the introduction of a new franchise of smoothie bars. The creation of the new chain Juicy Fruits would most certainly result in direct retaliation from this major competitor and plans must be put in place to differentiate the products that Juicy Fruits intend to sell from those of Zumo. Similarly, other areas of competition, such as coffee houses like Starbucks and Insomnia must be planned for. An emphasis on the healthier aspects of a smoothie over things like coffee must be stressed in an early advertisement campaign. As there is only one major competitor in this area there is obvious room for growth in the market. An informative and cost effective advertisement campaign would be essential and would have to be run early in the life of the company, perhaps even before the first Smoothie and Juice bars opened. This obviously will result in a high start up cost; however the lack of any effective advert campaigns currently from Zumo would result in excellent market coverage for said ad campaign. Market Share Due to well established companies already in this market, we expect to initially have a small market share. However, once we have an advertising campaign in place we expect this to rise to approx 5% within one year. Advertising and Promotion As already stated, it would be essential to run an informative advertisement campaign early in the companys development. This would be necessary in order to corner the market early on in the business development. It would be my recommendation to run this advert campaign before the first store opened its doors in order to generate some anticipation and create a slogan about the new franchise. It would also be wise to run discounts and offers for the first few weeks of existence, in order to draw in more potential customers. Deals would have to be good enough to pull current Zumo customers away from their usual purchases. As Ive said in the above section, forming a partnership with a well established company would be very beneficial to the future development of the franchise. This would convey some trust towards the company and perhaps add loyalty to the brand name from those already loyal to the shop that Juicy Fruits will now operate out of, (Centra, Spar etc.) Getting the correct theme for the Smoothie and Juice Bars will also be essential. The current competition, Zumo, uses green and yellow as their main colours and is very easily distinguishable. Juicy Fruits would have to also use colours that suggested healthiness and fruitiness, without using the same colours as Zumo. It is essential that Juicy Fruits remains differentiable from Zumo. I would suggest the use of blues and reds on all things Juicy Fruit; this would strongly differentiate the franchise from the competition, and suggests a cool, healthy atmosphere. An advert campaign would get people buying smoothies instead of other commodities such as coffee should also be run, targeting young professionals. It should be noted that, in the morning, a full smoothie has just as much energy providing substances as coffee, and is substantially healthier. This campaign should be run later in the companys development, as the already high start up costs do not need to be added to from the get go. It should also be made clear that our smoothies and juices are significantly cheaper than the competition (and we will have to make this the case, at least in the first one to two years of the companys life) in order to draw potential clients out from Zumo and bring them in to us. High quality produce would be required, with an emphasis on fair trade fruits in order to increase popularity with the public. Perhaps a companywide statement saying Juicy Fruits will only buy fair trade produce would be in order. This would also be an excellent selling point for the new business and would hopefully draw in new customers. Sales Strategy The promotional and marketing side of the business will be about à ¢Ã¢â‚¬Å¡Ã‚ ¬1000. When the company is set up the business will then open up with promotions such as a buy 1 get the 2nd at half price offer. This type of strategy has been very successful with food and beverage industries and I have no doubt that this type of strategy will give Juicy Fruit Smoothies Ltd the start-up success it needs Pricing I have analysed the pricing scheme for Juicy Fruits competitors along with our prices which are as follows: Juicy Fruits Zumo Smoothies à ¢Ã¢â‚¬Å¡Ã‚ ¬3 large, à ¢Ã¢â‚¬Å¡Ã‚ ¬2 small Smoothies à ¢Ã¢â‚¬Å¡Ã‚ ¬4 Energy Drinks à ¢Ã¢â‚¬Å¡Ã‚ ¬1.50 Energy Drinks à ¢Ã¢â‚¬Å¡Ã‚ ¬3 Soft Drinks à ¢Ã¢â‚¬Å¡Ã‚ ¬1.50 bottle, à ¢Ã¢â‚¬Å¡Ã‚ ¬1 can Soft Drinks à ¢Ã¢â‚¬Å¡Ã‚ ¬1.70 Ice Cream à ¢Ã¢â‚¬Å¡Ã‚ ¬1.20 Ice Cream à ¢Ã¢â‚¬Å¡Ã‚ ¬1.50 Fruit Juices à ¢Ã¢â‚¬Å¡Ã‚ ¬1.00 Fruit Juices à ¢Ã¢â‚¬Å¡Ã‚ ¬1.50 Chocolate à ¢Ã¢â‚¬Å¡Ã‚ ¬1.00 Chocolate à ¢Ã¢â‚¬Å¡Ã‚ ¬1.30 From the table above, Juicy Fruits pricing scheme is quite better and attractive than Zumos pricing scheme. Zumos products are much more expensive than Juicy Fruits which would help the consumer on choosing a product for less. It would be a decision of supply and demand. Research Development In the food and beverage industry, the requirement for RD is a crucial element as it involves checking your competitive advantage and also keeps tabs on your competition. Juicy Fruit Smoothies Ltd will be providing new smoothie recipes and will require more market research to ensure that these recipes have not been already invented. If and when a new recipe is invented patents, copyrights and branding legal requirements will need to put in place. If the new inventions and products are not legalised then anybody could take the products and use them for their own. With legalisation, this helps to eliminate this with the legal system. Staffing Operations Management (including Board) Organisational Chart Staffing Training Plans With Juicy Fruits the recruitment and employment procedures will be like the same as many other businesses. The main procedures that this business will take will be an interview, performance appraisal and there will be a trial period. The main key areas that Juicy Fruit Smoothies Ltds employment procedures will undergo will be: Conduct a job analysis and determine what the responsibilities of the job will be Determine what skills are needed to carry out these responsibilities Draft an advert Candidates to be chosen based on interview performance, availability and references At the end of about six months there will be a performance appraisal which will evaluate the job performance of each staff member in order to extend his/her employment The performance appraisal will help to: Inform employees on the status of their performance Check to see if the employee might require more training Identify personnel decisions; to analysis salary increases or bonuses Assess and provide communication between the employee and administration The trail period will be for one month and upon completion of that period there will be a small performance appraisal as mentioned above. Since the Juicy Fruit Smoothies Ltd is just starting up, there will be minimal amount of staff that will be required until the business expands which will then be a requirement to hire addition staff. Personnel Management Juicy Fruit Smoothies Ltds management team will consist of a Director, an Operational Director, a Managing Director, and Accountant, General Manager a Supervisor. In order to deliver efficiency to the consumer it is critical that the products and machinery is up and running and that everything is fully operational. The Board of Directors will be as follows: Director (Stiophà ¡n Mac Suibhne) Operational Director (Padraig Sheehan) Managing Director ( Barry Cunneen) Accountant ( Jesse Dunham) Operations The main operational requirements for Juicy Fruit Smoothies Ltd will include: Location for the business Staffing Inventory Functional Website (for promotional purposes) It is imperative that staff be fully trained on the equipment to include manual handling training and healthy and safety before the initial opening of the business. All legal requirements will need to complete before opening. Factors Determining Success The main factors that will determine the success and future success of Juicy Fruit Smoothies Ltd are: Competition it will be important for me and my colleagues to keep an ongoing track of the businesss competitors in order to reach full market potential. Since that Juicy Fruit Smoothies Ltd already has competition with some main companies offering the same type of products, it will be our job to continue to expand the business and continue to offer bigger and better offers and products. Reducing Overheads ensuring that the overheads will remain low will be our top priority and will continue to be a business objective. The main methods of reducing costs will be both change insurance requirements and cutting supplier costs as the business continues on. Development for Juicy Fruit Smoothies Ltd as already mentioned, Juicy Fruit Smoothies Ltd will expand from one premises to many others pending the success within the first year of business. Market research such as surveys or questionnaires may provide feedback on our products and help to assess customer satisfaction High Customer Satisfaction customer satisfaction is the top success factor for this business and it will operate a boomerang approach to returning customers if they are kept happy with the products and service. Other Operational Factors The main operational factors that need to be addressed are: Quality Assurance: Keeping the products and customer service up to date will be a main priority. Location: Juicy Fruit Smoothies Ltd will need a location in either a shopping centre or a gym to start up. Many of these jui