Feasibility Study of Mike and Jones Fruit Shake - Research Paper Example

Market Research & Feasibility Study We conducted the feasibility study to determine whether to proceed with our project and if so to decide the best approach to adopt. Our business Mike and Jones Fruit Shake (MiJo Fruit) Limited has the vision of providing tasty appetizing and uniquely enchanting beverage and food products of high quality at economic costs. The purpose is to cater to society’s wants and needs instead of just trying to convince our customers to buy whatever products we come up with (Nisa & Bin Junaid, 2014). Our entrepreneurial activity MiJo fruit has a mild delightful taste, not too sweet but perfect for different tastes of our consumers. Its ingredients include fresh dragon fruits, green stevia and non-fattening milk. Market research revealed the need for customers of healthy cheap alternative set of food and beverages. The entrepreneurial activity is about meeting and satisfying these needs while getting substantial income from the same (Nisa & Bin Junaid, 2014). SMART OBJECTIVES 1. To provide a healthy beverage that will meet and satisfy the changing customer preferences and tastes for a shake drink. 2. To earn a substantial profit to support the business as well as to save extra. 3. To be able to establish strong roots in business to gain significant market share and a loyal customer base which we can exploit in the event that we want to establish another line of business. PRODUCT Dragon fruit is an example of fruits that are said to offer multiple health benefits and incorporate a whole list of nutrients, fibre, vitamins and antioxidants. It is suitable for any diet because it has little calories and is fibre rich. It helps in preventing constipation, improving digestive health as well as helping people reduce weight naturally without health risk. Essentially, and it is wonder fruit with healing qualities. Green stevia is one of the ingredients used to make the fruit shake. It provides multiple supplements, and experts confirm that it has moderate amounts of fats, sodium, cholesterol and calories. MARKET RESEARCH 1. EXAMINATION OF THE CUSTOMER ENVIRONMENT There is a variety of the types or groups of customers for our MiJo Fruit Shake, and their needs and preferences vary from segment to segment. The various segments include Adults, Health Conscious (i.e. mainly ill), Kids and the Youth segments of the market. The following table shows the different segments and their statistical analysis. TARGET MARKET ADULTS: Between 25 to 50 years old age Professionals and parents This category is more conscious about their health and prefers food and beverages that offer larger amount of health benefits rather than better taste They are also concerned with the price and quality of the product. THE HEALTH CONSCIOUS: These are aged above 18 years old. They are health professionals and are health-conscious or just want to improve their health due to their physiological conditions e.g. obesity, diabetes, etc. They might also want to prevent sickness that they have a genetic predisposition to, or they want to live longer. YOUTH (aged between the ages of 14 and 25) It is an age where the youth wants to drink cool, trendy stuff and for style and are also easily influenced. They also prefer cheap drinks. A summary of the product’s target market is found in appendix 1. PRICING We intend to use the cost-plus pricing strategy for the calculation of the MiJo fruit shake. The price of the drink will be based on the cost of production at our projected volume of sales and our standard mark-up. The commodity is competitively priced and affordable for many consumers. Considering that, our products have numerous health benefits, we are sure that our customers will find it worthy to spend their money on them. The projected market price for MiJo fruit shake will begin at: $8 for large $6 Medium $4 Small THE PROMOTION STRATEGY For sales promotion we will use: I) Trade fairs and exhibitions ii) Social Media e.g. Facebook, Twitter and other fan websites. iii) Direct marketing for example advertising in television shows, newspapers, magazines We will choose the pricing and promotion strategies basing on the different segments of the markets we are targeting as well as the costs of the advertising tool (Allanson & Lalor, 2007). OPERATIONS PLAN Appendix 2 summarizes the company’s operations plan. Operation manager will design and oversee the whole process of production. The bookkeeper will keep a record of all the financial transactions and ensure the books are updated. The cahier is the bank officer that is in charge of receiving and paying money and handles cash transactions with the customers. The sales personnel will be responsible for selling our product to other businesses or consumers (Wenzel, 2012). The business will be operated from a central location with plans of forming branches in future. We will be getting our raw materials by buying tenders from the local neighbourhood fruit vendors in the beginning before we establish our fruit farm. We intend to build our main facility at a populous centre where all the segments of the population converge to avoid the costs that come with a mobile business. For this, we will require an affordable rental facility in the city centre. In addition, we will need a grinder, a fruit mixer and a packaging material. FINANCIAL SOURCES AND SUPPORT We intend to get the initial capital from loan from a local commercial bank. Four individuals will operate the MiJo fruit shake business as partners. We require $50000 as the initial capital. In order to get a loan of this amount, we will present our business plan to the credit department t of the local bank and each of us will show up with his or her personal financial statement of account. In order to manage our business, we will be drafting a monthly profit and loss account table in the ledger to determine how the business is performing. This will be showing us if we are making profits and if not what we have to correct (Mooi & Sarstedt, 2011). JUSTIFICATION We chose this business because we noticed an opportunity of which no one else was making use. Furthermore, the business is relatively easy to establish and manage. We also intend to venture out more into the business of food products, and we saw this as a good stepping-stone to start us off. Appendix 1 SEGMENTS BENEFITS DEMOGRAPHICS CHARACTER PSYCHO-SOCIAL GRAPHICS Health Conscious Healthy. Nutrient rich. Low calories. Manages cholesterol levels. Ant cancerous agents. Manages cholesterol levels Above 18 Health and Diet conscious. Long-life oriented. Are Dieters Are Professionals Youth Nutritious. Trendy taste for the youth 13-18 year-olds. Taste Drinkers. Tasty Drinkers. Not children and not yet adults. Curiosity drives them to want to drink what adults drink though without the adult taste Adults Nutrient-Rich. Healthy. Cost friendly alternative 22-50 Alternative Drinkers. Taste drinkers. Are professional. Are parents. Always on the move. . Appendix 2 References Allanson, B., & Lalor, B. (2007). Fruit and veg: The winning edge. Aust Instit Sport, 29, 1-5. Beall, A. E. (2010). Strategic market research: A guide to conducting research that drives businesses. New York: iUniverse. Mooi, E., & Sarstedt, M. (2011). A concise guide to market research: The process, data, and methods using IBM SPSS statistics. Berlin: Springer. Nisa, S., & Bin Junaid, A. (2014). EHBH Pvt. Ltd–a step towards creation of a unique business model. Emerald Emerging Markets Case Studies, 3(6), 1-14. Wenzel, A. M. (2012). The entrepreneur's guide to market research. Santa Barbara, Calif: Praeger. Read More