LoCarb Central Marketing Strategy - Case Study Example

Business Plan for LoCarb Central Marketing LoCarb Central will offer their s with organic and locally grown groceries, preservatives and chemical free produce and eco-friendly products. The store is a Community Benefit Society, CBS, which aims to encourage innovation and development of local food in Toronto and its surrounding. This will enable the local people have better access to healthier locally grown food products benefiting the entire society. Position Statement To establish a community-owned organic store that provides high quality, natural and fresh products that are easily accessible to downtown Toronto. Product presentation PRODUCTS Low glycemic foods geared towards: 1. Diabetics both type1 and Type 2 2. Epilepsy patients 3. Low carb dieters Diabetics both Type 1 and Type 2 Diabetes patients suffer insufficient or lack of insulin in their bodies that causes their sugar levels in their blood to rise quickly when they take GI foods. Our products aim at balancing consumers blood sugar levels by controlling their sugar intake at our Locarb foods. Their bodies take longer to break down these foods controlling their blood sugars than when they consume GI foods. Epilepsy patients Low levels of GI foods control seizers in epileptic patients. Our products aim at delivering the food that is of high quality to control the rates of epilepsy in our customers. Our store will also avail portion sizes, which they require in their meals because it is the main component in reducing seizures. Low carb dieters Our products aim at assisting our customers who are obese. Our products take time before being digested taking a longer time in the stomach than GI foods. Our customers will feel full for longer reducing their food intake and helping them monitor their diet. Diets that are low carbohydrates help control appetite, increasing the rate fat is lost due to the body entering ketosis making the body rely on fat as fuel. Price strategy Locarb foods do not have competition; therefore we are flexible in setting our price range that will enable us maximize on profits. For example the low glycemic snack bar is found only in our store. The normal snack bar is found in many outlets such as Wal-Mart, Shopper drug mart, and Loblaw’s. A customer who needs low glycemic snack bar will only come to our stores. Marketing Strategy Face to face relationship between our customers and us is crucial in the success of our business. Our marketing strategy will focus on improving our social networks with our customers and suppliers. Our market is quite informed on environmental issues and different food issues. Many of our targeted market are already into our information, social and professional networks and this will improve on efficient communication. Our main strategy is to supply our customers with healthy food products and be seen as community initiative. Our secondary strategy will include branding activities where we will improve on our branding, packaging, publication and improving on our adverts, publications and staff uniform. The Store will be more than just a food store. It will have a social enterprise that has educational facilities that hosts various programs and events. The store will be a destination of its own kind. The food store will communicate through adverts and newsletters, diary, and websites. This will attract activities such as football to the main outlets at affordable rates. Networking will be our key marketing activity. We aim at providing easy access to our services. Therefore, our store is located at LoCarb central will be located in the core of downtown making our customers access our product and services. The large parking space within our premises will provide our customers with ample parking space. Our support activity will include hosting various activities and events. The store will be newsworthy and this will attract media coverage that will promote the store. The aim will be to network and advertise our store. Strategic Competitive Advantage LoCarb Central Store has an ideal strategic competitive advantage over other organic food stores. First, LoCarb central will be located in the core of downtown.. This strategic advantage provides the store with ample customers because most of the targeted customers are in this location. LoCarb central is the only organic food store within downtown Toronto. Marketing objectives 1. To provide our esteemed customers with the freshest, pure, and organically grown vegetables and fruits. 2. To offer foods without flavors, artificial colors, or additives. 3. To provide endless support to organic farms, which strive to keep our water and earth pure. 4. To sell earth-friendly cleansers, cruelty-free care products, and natural or pure supplements. Customers Our target customers are approximately 169,000 people who are living in Toronto. Our store will target the intended market using different market segmentation. 1. Demographic We are going to target the 20-40 years age groups, since Locarb aims at providing current health of our population. The aim is providing services to all gender, ages, and race. LoCarb has the best location. This provides the store with the perfect location in regard to its potential competition and customers. The location is ideal for young adults who are looking for food products that will make them look good and provide products for dieters. 2. Behavioral LoCarb central provides quality products that satisfy its customers. All food products in the store are natural and pure suitable for customers that have health issues. This trend will attract more loyal customers because we are aiming to provide the entire population with quality and pure products. 3. Psychographic The store will be located in the center of downtown, it will target the entire population. Most people living at this location tend to live a physically fit lifestyle. Our company is matched to the task because it will provide them with healthy food products and any customers that have health issues will benefit greatly from our products and services. 4. Benefit LoCarb central aims at improving the health of its customers. We are striving to assist our clients achieve a healthier life by supplying them with pure and natural products. Cost Profitability Analysis Market Potential Downtown Toronto = Population Per capita sales = 127,000$59.47 = $7,552,690 Outlying area = Population Per capita sales = (170,000- 127,000) $59.47 =$2,557,210 Since only 30 percent of people in the outlying area made their purchases in Downtown Toronto, $2,557210 Total Market potential = $7,552,590 + $767,163 = $8,319,753 (rounded to $8,320,000) Market Share There are a total of 2 organic stores in Toronto, with a total estimated size of 1200 square meters. (Primary research collected by observation). The size of the proposed organic store is 300 square meters. The percentage share of the market = The percentage of market share would probably have to be decreased slightly, because the proposed organic store is new and would not have built up clientele and the reputation of an existing store. Based on the above factors, market share has been adjusted to 1.8 percent. 1.8% $8,320,000 = $1,497,600 Therefore, market share is approximately $1,497,600. Rounded to $1,500,000 Net Income Organic food Projected Income Statement For the period ended Year One Percent of Sales Sales $1,500,000 100 Cost of goods sold 1,200,000 80.0 Gross margin 300,000 20.0 Expenses: Manager’s salary 60,000 6.0 Employee wages 120,000 12.0 Rent 15,000 1.5 (Rent Deposit $3,000 include) Utilities and telephone 10,500 1.05 Accounting, legal Taxes and license 7,000 0.7 Repairs and maintenance 6,500 0.65 Advertising 7,500 0.75 Bad debts 1,500 0.15 Office and store Supplies 7,000 0.7 Contingency 6,000 0.6 Total Expenses 241,000 24.1 Net Income before Tax 59,000 Employee wages 1 Full-time cashier @$25,000 $25,000 2 Part-time cashier @$15,000 $30,000 3 Part-time tally clerk @$10,000 $30,000 1 Bookkeeper $20,000 1 Marker/receiver/delivery person $15,000 Total $120,000 Cash Flow Calculation of Cash Flow Organic Food Projected Cash Flow Statement For Period Ended Year One Cash inflow Beginning cash $35,000 Cash sales 1,500,000 Total cash inflow $1,535,000 Cash outflow Start-up costs 100,000 Merchandise purchases 1,235,000 (0.80 of sales plus $35,000 inventory on hand and paid for) Manager’s salary 60,000 Employee wages 120,000 Rent 15,000 Utilities and phone 10,500 Accounting, legal, etc. 7,000 Repairs and maintenance 6,500 Advertising 7,500 Office Supplies 7,000 Other Expenses 6,000 Total Cash Outflow $1,574,500 Net Cash Flow $39,500 Projected Startup cost Business Startup year 2012 Assets Inventory $20,000 Cash $35,000 Leasehold Improvements $25,000 Subtotal $80,000 Expenses Permits & Licenses $7,000 Lease Deposits $3,000 Advertising $7,500 Miscellaneous $2,500 Subtotal $20,000 Total Startup Costs $100,000 Annual Sales Categories $ per month(2012) Total Certified Organics 100,000 Prepared Foods 5,000 Refrigerated (Food and Beverages) 21,000 Packaged Foods (Non-Refrigerated) 20,800 Beverages (Non-Refrigerated) 13,900 Snacks 19,000 Bakery 15,400 Deli (Luncheon Meat) 4,900 Works Cited Levinson, Mark. The Economist Guide To Financial Markets. New York: Economist Books, 2009. Print. Mollyneux, P and P Valdex. An Introduction to Global Financial Market. New Jersey: Wiley, 2010. Print. Rickberry, Stephen. Travel and Tourism Case Studies. New York: Travel and Tourism Publishing Limited, 2012. Print. Read More