Business Plan for Honey and Honey Products - Report Example

Business Plan of the of the Contents Outline 3 Company Mission ment 3 Introduction of the Product/Service 3 Target Market 4 Competition (Direct and Indirect) 5 Pricing Structure 5 Distribution 5 Sales Forecasting 6 Action Plan 7 Production 8 Summary 9 References 10 Outline The objective of the current report is to prepare a business plan for a company, Honey and Honey Products, selling the same. The report will include description of the company, its products and services offered. It will provide a detailed analysis of the target market, demographics and reason behind choosing them. Direct and indirect competitor analysis will help in determining present risks and future opportunities in the target market. A comprehensive marketing plan, including budgeting and sales forecasting, will facilitate analysing the strengths of the business plan in short-term as well as long-term objectives and goal fulfilments. Distribution strategy for market penetration will be established and the production process of Honey and Honey Products will be discussed in detail. Company Mission Statement The mission statement for the company will be: “To source, distribute as well as sell the best quality honey and honey substitutes with continuous commitment of incorporating an ethical and sustainable growth and development, increasing stakeholder’s value and promoting best corporate practices that respects the environment and Earth.” Introduction of the Product/Service Natural honey is a very popular and liked sweetener with several benefits. It also possesses many health benefits. As a result, honey and honey products are preferred by millions of customers across the globe (Murphy, et al., 2000). The company deals with the sourcing, production, distribution and selling of honey and its associated products. The various honey variants of the brand are as follows; Clover Honey Creamed Honey Buckwheat Honey Blueberry honey Golden Honey Orange Honey Pulp fruity Honey Organic Honey Apart from being packaged in Fibre and Glass bottles, honey is also encased in various other forms, making it more attractive and lucrative. Honey is available in the form of straw bundles, sticks and smaller sachets, for immediate and smaller usages and even in cup cakes. Besides eateries, the company also manufactures and distributes honey products such as, honey candles, colourful honey sticks, bee pollen, honey baskets and beeswax. In order to increase its customer base, the company also sells gift packages of honey and associated products at attractive prices (Pettigrew, Whittington & Thomas, 2006). Target Market Honey And Honey Products will be targeted as a natural and daily choice among its customers. As a result, the target customer base will include all population and demographics within the age group of 10-70 years. However, different strategies will be applied to target different customer segments. For instance, mothers and housewives will be the prime target in the mass population as they are the major decision makers, in terms of groceries and daily eateries (CBI, 2011). The premium honey products such as, Organic Honey, will be targeted at high-end families and working professionals. Other niche target groups will be senior citizens of the age group 50-70 years and children of the age group 10-15 years. Honey products such as, candles, sticks and gift packs, will be targeted at families and young customers on different festive occasions as well as general options for gifting. Overall, the target market will be set to make Honey and Honey Products a daily food item. Competition (Direct and Indirect) Sourcing of honey is an easy task. There is a traditional procedure for souring honey from the beehive and is cheaply available in various regions. As a result, barriers to entry are low and a lot of companies are into manufacturing and selling honey (Williams & Cutis, 2012). The direct competitors of Honey and Honey Products are Honey Company, Local Harvest and Dutch gold honey. The company is in stiff competition with the above three competitors, in terms of revenue, market share as well as customer base. Both Honey Company as well as Dutch gold company has an established base of suppliers as well as customers. Apart from direct competitors, the company also faces indirect competition from various honey substitutes. The various honey substitutes include maple syrup, rice syrup, corn syrup, molasses and agave nectar. All these products are naturally sourced and act as an effective and nutritional sweetener. Many individuals are allergic to honey and associated products and prefer safer honey substitutes. Nevertheless, most of the honey substitutes are not available in regular grocery stores and even these substitutes might have allergic properties. As a result, the market share of substitute products of honey is very little (Scarborough & Kydd, 1992). Pricing Structure Marketing organisations in the honey market usually fix the pricing unilaterally, setting their own pricing and selling volumes according to their abilities and interest. Pricing structure of the company will depend on various factors such as, sourcing costs, purchasing costs, marketing, competition as well as profit margins (Haberberg & Rieple, 2008). Since the major competitor for Honey and Honey Products is Honey Company, pricing strategy is made with the objective of levelling with the competitor. The pricing structure will also include transportation costs as well as cost of raw materials. The growth in pricing has remained almost constant and has slowed down over the years. Honey is a cheaply available product and mostly consumed in raw form. Therefore, the price growth is constant. Distribution At present, Honey and Honey Products offers its products and services in UK. The firm has more than 1000 distributors spread over United Kingdom. The company also distributes to bigger corporate accounts such as, retail chains, hyper markets and bigger grocery stores. The target distribution demography will include both sub-urban and urban regions across UK. Customers to be targeted will be of upper and middle class background. The campaigning of the brand will be at a national level. To ensure wide distribution and maximum availability of Honey and Honey Products, the products will be placed in major consumer food outlets such as, supermarkets, hypermarkets and grocery stores (Batt & Liu, 2012). Regular inspection and monitoring from firm employees will ensure maximum availability. The company will also drive incentivised distribution, so that maximum placement of product is achieved. Sales Forecasting The sales forecasting has been presented for one year. Sales Forecasts (2014 Q4 - 2015 Q3) Service Unit Cost (£) Units Sold Yearly Gross Sales (£) Creamed Honey 25.00 120 3000.00 Buckwheat Honey 35.00 120 4200.00 Blueberry honey 30.00 60 1800.00 Golden Honey 45.00 60 2700.00 Orange Honey 50.00 70 3500.00 Pulp fruity Honey 55.00 100 5500.00 Organic Honey 60.00 45.00 2700.00 Clover Honey 35.00 100.00 3500.00 Honey gift packs 150.00 75.00 11250.00 Total Sales 750 38150.00 Action Plan The action plan will include marketing and communication activities followed by Honey and Honey Products for a certain time period. Activities Time Frame (months) Jan Feb March April May June July Aug Sep Oct Outdoor advertising Television ads Tie-up with branded retail chains Radio advertising Print advertising and free sampling Pilot survey and in- store sampling Survey of distribution The action plan will also include appropriate budget, in order to determine the cost and expected returns from the overall business plan. Budgeting Media/Activity Length Cost(£) Outdoor advertising January - September 4,000 Print and magazine and advertising February- April 3,000 Tie-up with branded retail chains February – June 4,000 digital and online advertising March-June 3,000 Television and radio Advertising March- June 3,000 In-store sampling January -June 3,000 Events February - April 3, 000 Pilot survey August- September 2,000 Proposed Budget 22,000 Production Raw honey is extracted from honey combs found in the tropical forests. There are various procedures for extracting honey from the comb. It can either be done traditionally or through mechanical equipments. Honey and Honey Products use advanced techniques for honey production. The various steps can be divided as follows; Site selection as well as obtaining bees- Honey and Honey Products chooses the best and most hygienic sites for selecting and obtaining bees. Special treatment is given to the bee hives in order to protect them from winter winds and pollution and only those hives are selected which follow the right criteria. Honey sourcing- In this step the flavour and colour influences the type of honey to be sources. Processing and harvesting honey- Once the bees cap honey, it is considered as ripe and the honey is then harvested and processed. After processing, it is kept is dry sealed containers in warm environment or inside freezers, till it is marketed. Management- Once the honey is sourced through various equipments such as, extractor, rotator and extracting pump, proper management is required for healthy production environment. The company also involves regular inspection to keep track of the facilities. Pest management- The production process also involves pest management such as, taking care of other pests (like, mice and skunks), which are common in these production places. Summary The current report had aimed at establishing a business plan for Honey and Honey Products. The business plan will help in changing consumer perception towards Honey and Honey Products. The action plan will include strategic advertising and communication activities in order to promote the brand and establish sustainable competitive advantage for the firm. References Batt, P. J. & Liu, A. (2012). Consumer behaviour towards honey products in Western Australia. British Food Journal, 114(2), 285 - 297 CBI, 2011. Trade structure and channels for honey. Retrieved from http://www.cbi.eu/system/files/marketintel/2011_Trade_structure_and_channels_for_honey.pdf Haberberg, A. & Rieple, A. (2008). Strategic Management. Oxford University Press: New York. Murphy, M., Cowan, C., Henchion, M. & Reilly, S. O. (2000). Irish consumer preferences for honey: a conjoint approach. British Food Journal, 102(8), 585 – 598 Pettigrew, A. M., Whittington, R. & Thomas, H. (2006). Handbook of strategy and management. California: SAGE. Scarborough, V. & Kydd, J. (1992). Economic Analysis of Agricultural Markets: A Manual. Chatham, U.K: Natural Resources Institute. Williams, J. & Cutis, T. (2012). Marketing management in practice. London: Routledge. Read More