The Mission of Energizer-Refreshers - Case Study Example

Соffее саrt business Раrt B Table of Contents 1.0 Introduction 3 1.1 Mission Statement 3 2.0 Business outline 3 2.1 Executive Summary 3 2.2 Background 4 2.2.1 Mission Statement 4 2.2.2 Business Goals 4 3.0 Marketing 4 3.1 Market Research 5 3.1.1 Economic and Social Factors 5 3.1.2 Competitive Environment 5 3.1.3 Geographic Area 6 3.1.4 Market Description 6 3.1.5 Target Customers 6 3.1.6 Market Definition 7 3.2.1 Marketing plan 7 3.2.2 Competitive Advantages 7 3.2.3 Customer Incentives 8 3.2.4 Advertising and Promotion 8 3.3 Operations 9 3.3.1 Pricing decisions 10 3.3.2 Products/Services & Target Market 11 3.3.3 Placement 11 3.3.4 Promotions and Advertising 11 3.3.5 Pricing Policy 11 4.0 Operations 12 4.1 Legal & Licensing Requirements 12 4.2 Management Details 12 4.3 Business Controls 13 4.3.1 Accounting System 13 4.3.2 Quality Control 13 4.3 Organizational structure & Staffing 14 5.0 Financial Projections 14 References 17 Business Plan 1.0 Introduction The name is coined from two words – Energy and Refresh. The rationale is to reflect the two needs that the brand will, primarily, serve. The products will be quick energy recovery solution after long working time; and at the same time will refresh the mind, owing to the stimulant nature of coffee. The business will initially be located at the University’s strategic meeting points namely: the student’s center; main library area; main administration block and at the sports pavilion. 1.1 Mission Statement The mission of Energizer-Refreshers is to become the provider of choice for refreshing drinks and snacks, in this case coffee, to the population at the Melbourne University. The company especially seeks to meet the needs of the huge student population at the institution. The company is dedicated to offer quality services and hence forge an excellent working relationship with its clientele. The company therefore aims to gain recognition as offering the best services within the university premises not only to the student population but also to the members of staff. The goal of the company is expand steadily and start making profit by the third month of being in operation. 2.0 Business outline 2.1 Executive Summary Energizer-Refreshers is a coffee business within the Melbourne University meant to serve the fast needs of the university community. The plan herein is meant to serve the financial institutions that offer credit for business start up. The business intends to create a unique brand that serves the quick refreshment needs of students and people in offices. The idea follows an extensive market research that sought to identify the needs of the target customers and the way they would prefer such needs to be served. The economic status of the largest customer group, the university students, necessitated a penetration pricing model. The promotion strategy is involves adverts in the print media (internal magazines) and audio visual media operated by the university. This choice is guided by the fact that the band targets a locked-in market. The company will be run by a structured management model headed by a director general. The initial budget is estimated as Australian $ 825,000. The revenue projections are made based on anticipated sales volumes. A growing profit margin is anticipated and this will be a compliment to sourcing the credit to finance the business. 2.2 Background 2.2.1 Mission Statement To offer distinguished hospitality services that exceed customer expectations. 2.2.2 Business Goals Make customer loyalty and retention a key driver for all business operations To be the first choice for guests, colleagues, shareholders and business partners To delight our guests every time by creating engaging experiences straight from our heart 3.0 Marketing Due to the large population at the university, Energizer-Refreshers shall capitalize on the large numbers which signify opportunities for business in the hospitality industry. 3.1 Market Research This will entail a survey of the various wants of the customer groups. That will include gathering data on the tastes of various customer groups and their perceptions on coffee and associated beverages. The exercise will be a descriptive research through interviews conducted by direct sales representatives and interviewer guided questionnaires. 3.1.1 Economic and Social Factors The hospitality industry plays a very critical role in any institution and especially in institution of higher learning where the majority of the population is young people who are still active. Therefore, being in the hospitality industry within an academic institution provides a great opportunity owing to the demand from the large population which also has the capacity to consume many units. The economic strength for the population at the University of Melbourne is quite high. A good number of students at the academic institution come from well off backgrounds. The student population that may not be from very well to do families happens to get some form of financial assistance from the government, the university itself or other sponsoring agencies. The institution has a large population of members of staff who could form a sizable portion of the target market. The academic institution is located in an area which is economically productive and this makes it an ideal situation for location of any kind of business. 3.1.2 Competitive Environment The university has other points through which it offers services such as those Energizer-Refreshers shall be offering. Our competitive edge is offering attractive services to the clients. Having competitive services coupled with proximity to the customers shall ensure that the customers shall refer their colleagues and in the end have a very loyal customer base (Gofton 1997). 3.1.3 Geographic Area Energizer-Refreshers is based in the University of Melbourne in Australia. It targets the students, members of staff and other people who could be visiting the institution. The students who study within the institution make use of the library and other amenities and hence having outlets at such strategic points would ensure that services are taken closer to the clients. 3.1.4 Market Description The University of Melbourne has a student population of about 47000 and including other people who access the university and members of staff the target market is about 60000 people. All these people fall within the target market. University of Melbourne is among the well renowned international universities in Australia whose population is very diverse drawing its students from different parts of the world. This translates to the fact that the purchasing power of the population at the university is quite high. The number of visitors who access the institution are quite many. About 5000 of the target population consists of employed people at the institution who have a large disposable income. The large student population has a large financial muscle which makes. 3.1.5 Target Customers The students at the University of Melbourne are quite educated, stable and productive. The University consists of people who have a deep reverence to the institution. The population is deeply attached to the institution and spends most of the time either studying or teaching and researching at the institution. The institution attracts people from diverse backgrounds and nationalities and its ideal environment makes it a very conducive place for people to spend their time. The population of the university offers a potential customer base of at least 4500 people most of whom are aged between 19 and twenty five years and who have some handsome amounts of money to spend as they do not have many things to spend their money on other than academics and their own upkeep. 3.1.6 Market Definition The university population and especially the students spend a substantial amount of money meant for upkeep on food. Even with the student population remaining constant the spending power is still expected to be a little bit constant over time. Though the population might not be projected to increase much over the years the spending power of the current population at the university is sufficient to keep the company in business and still profitable. The number of customers for the company would continue increasing over time as the student and the university population generally gets to know about the services being offered by the company. 3.2 Market Analysis The University fraternity is composed with people who are completely schedule occupied. This means that they have little time if any to prepare hot drinks either for refreshments or for warming their bodies, particularly, during winter seasons. This fact represents a poorly served need and hence Energizer-Refreshers come in as the best solution. 3.2.1 Marketing plan 3.2.2 Competitive Advantages Most of the students at institutions of higher learning tend to follow specific patterns and they hence tend to becoming very loyal. Students also tend to like services to be provided at their convenience which is what the company aims to achieve. By being located at strategic positions where the students can easily access, then the company would be at a very advantageous position as compared to other providers within the university premises. The coffee services shall be available at all times and this would mean that the population shall be served at any hour of the day unlike the other premises which have times for opening and closing and this does not sit very well with students who happen to be active almost twenty four hours in any given day. The other providers of a similar service have been criticized for being too slow in offering services and being unfriendly to their customers. The prices charged by the competitors are also quite high and the average student feels quite a pinch having to part with a substantial amount of money. Having an alternative to the poor services and bringing in prices which are competitive would serve as a competitive edge and ensure that the company is able to attract and retain customers (Gofton 1997). The employees who shall be employed to serve the customers have the experience and are also young enough and thus capable of understanding and being understood by the mostly young population. 3.2.3 Customer Incentives The market research clearly indicates that publicity does impact people's choice to a great extent (Abrams 2003). Recommendation is also important when it comes to choices that people make with respect to any given product. General advertising does not seem to be very effective in attracting customers and thus it is apparent that the word of mouth appears to be the most effective ways of reaching customers. 3.2.4 Advertising and Promotion Our advertising and promotions will hedge around a number of important strategies: the social media, public relations, social events at the institution, our shop front and customer relations. Public relations: The company is going to put in a substantial amount of effort in preparation and distribution of information. These shall be based on the different types of coffee on offer and various offers that may be available. Shop front: The company plans to an a display which is informative, interesting and managed very well. Artistic works and technology shall be used to achieve the desired effect which is informing the clients. Customers will be able to obtain a diverse range of information regarding the different types and flavours of coffee and the benefits of consuming coffee. Customer relations: The company shall try and have contacts and other relevant regarding its customers. This will help to get to know what a client really wants (Baker & Hart 2008). Having enough information about customers would make it possible to have customized services (Finch 2006). Social events: The company shall make use of social events at the institution and appear like a 'sponsor' and set up stands where people are able to sample the products made by the company and this shall further increase the visibility of the company and its products. The Social Media: The social media has become a very powerful tool in web advertising (Aaker 2003). Making use of the social media would ensure that the target population is reached in the most appropriate manner and this increases the reach for the company in terms of gaining further customers (Silk 2006). 3.3 Operations Premises It is very important that coffee carts are placed at very convenient places for customers. The positions chosen have been chosen for the simple reason that there is a huge population of students available at those points at any given moment and this helps in being close to the customers. The goal of the company is to ensure minimal movement for the customers and thus prevent a lot of disruptions to the activities that the customers may be engaged in. The company shall be renting space from the university at estimated cost of $25,500. The company shall require a further $15,400 for refurbishment of the premises. An additional $4,123 shall be needed to purchase the necessary equipment and other necessary material which is necessary to set up such a business. Hours of Operation The premises for the company shall be open 24 hours each day. Members of staff shall be available at every given moment with the number being increased to meet increased demand at peak hours. The company aims at meeting the needs of the customers at all the times and thus guarantees a presence without interruptions. Since the customers are mostly students and teachers who have tight schedules, the company wishes to offer services which recognizes this and hence the company shall ensure minimum waiting time and provide packaging which ensures that the clients are free to move away with their coffee and snacks and are not unduly restrained at the premises. Staffing Every member of staff shall have their job description clearly spelt out and they shall receive some training about their jobs and have their records properly maintained. The members of staff shall be trained on the operations of the various machines and equipment and also on how to be courteous to the customers. The company shall have a dress code and this shall help customers to identify members of staff and having uniforms aids in ensuring that the company appears more professional. 3.3.1 Pricing decisions The decisions on price will be reached by adding a mark up to the operational costs. Gradually at fast totally later Energizer-Refreshers will be a budget brand capable of serving people with low incomes. 3.3.2 Products/Services & Target Market The business will offer hot drinks made of coffee and served with snacks made by the company. All the products will be branded with the company name. The snacks will be served both within the premises and to outside retailers. The products and services of Energizer-Refreshers will majorly target the university community: from students, staff and even visitors. The serves will be extended to the community surrounding the University particularly the business people who serve the University from outside. 3.3.3 Placement The carts will be strategically positioned to reach out to majority of customers. In the light of this, the major outlets shall be at the students center to serve the students who are using the facilities of the complex; the main library area to cater for university library staff as well as library users; then the main administration block to target the staff and visitors and finally the sports pavilion to serve people participating in games and sports. 3.3.4 Promotions and Advertising Due to the specific target of the University population, both print media and audio-visual media (run by the University) will be applied as the group has access to both. Another significant platform will be the social media. The other method will involve direct marketing by the marketing team who will physically meet with potential customers. A special branch within the public Relations section will be established as it is crucial in dealing with customer complaints (Ozer 2005). 3.3.5 Pricing Policy The University market is mostly composed of students with limited access to funds. This market will consequently require friendlier prices for entry purposes, at least to entice consumers to the new idea. In light of this, penetration pricing approach will be applied. This means that entry prices will be kept as low as possible, and the same would be hiked gradually and over time as the product attains consumer acceptance (Gofton 1997). 4.0 Operations 4.1 Legal & Licensing Requirements The legal requirements include registering the business name and paying for the business license for a medium level private company. There will be the certification from the food and beverages regulatory authority and health clearance for the staff members. 4.2 Management Details 7.2 Dashboard for Key organizational Functions Position Roles Director General Representing the company in outside forums Giving direction to Heads of Departments Chairing all meetings Human Resource Manager Managing all employee functions Head of Finance Head of all financial functions Advisor in investment decisions Head of Promotions Department Directing all promotional campaigns Handling all outsourcing all promotional activities Advising top management on promotional best practices Chairing all promotional strategy committees or sub-committees Head of Public Relations Department Giving direction to the public relations team Acting on information given by officers in the department Feeding the top management with information regarding customer feelings and perceptions. Direct Sales Personnel Doing direct marketing duties Collecting information on consumer desires Collecting data on sales volume Executing all other operational duties pertaining to direct marketing function. Public Relations Officers Sorting customer complains Handling customer desk duties Communicating with customers by all channels available Reporting to head of public Relations department on customer concerns Maintaining customer data on past concerns Carrying out all operational duties relating to Public Relations functions Cashiers Collecting cash from customers. Keying in all financial data. Waiters and other junior staff Serving the customers. 4.3 Business Controls 4.3.1 Accounting System The company shall be using a financial management system which is computer based. With this kind of a system enables a better review of sales and marketing activities (McKeever 2008). Having such a system enables an analysis of profitability of the sales and the amount of sales (Kotler 2008). 4.3.2 Quality Control The company shall develop scripts which shall make sure that the members of staff are able to manage the inquiries made regarding the company. This shall ensure that any concerns and needs by the company are met and thus enable the company to attain the highest levels of customer satisfaction (Baker & Hart 2008). 4.3 Organizational structure & Staffing Director General Head of Operations Head of Marketing Head of Finance HRM Head of Promotions Head of Public Relations Accountants Waiters & Direct Public Relations Officers Cashier sales personnel 5.0 Financial Projections Initial Budget for Business Start-up Item Cost in $ ‘000’ Market research 200 Strategy formulation 50 Direct Marketing 150 Adverts on print media 40 Adverts on social media 25 Adverts on audio-visual media 50 Distribution 100 Salaries & wages 100 Marketing Agency Services 80 Licenses and Government Authorization 15 Taxes and Tariffs 10 Miscellaneous Expenses 5 Total 825 Sales Spreadsheet for the first three years Sales in $ ‘000’ Gross Margin ‘000’ Time University Market Outside Community Market University Market Outside Community Market 1st Month 100 50 25 5 2nd 150 75 35 7 3rd 170 85 45 8 4th 190 95 45 9 5th 210 105 55 10 6th 220 110 55 11 7th 310 155 75 15 8th 400 200 100 20 9th 450 225 150 23 10th 500 250 125 30 11th 540 270 150 27 12th 590 295 175 59 Total 4000 2000 1575 226 2nd Year 5000 2500 1000 500 3rd Year 6500 3200 1250 800 4th Year 8400 4200 1520 1050 5th Year 1100 5000 1800 1250 The financial projections for the start-up business deals with the amount of money that shall be needed to ensure that the project gets a successful take off. The estimated total cost for the business is $825. The amount of money required for start up shall be expended so as to ensure that the project is off to a successful start. The amount of money aforementioned shall be utilised in the vital requirements which will ensure that the business does have a strong basis and thus in a better position to pick off easily and attain its projected targets in a shorter duration. Among the items that are required include market research and strategy formulation. These two items combined take up $250,000. The purpose for the above is to ensure that the viability of the business is determined so that the business is not started blindly and hence result in unwarranted losses to the company. The budget therefore tries to cover all the other necessary expenses which are part and parcel of the business. The financial projections might not be accurate to the last coin but are nevertheless a fair representation of the expected expenses for the company. The financial projections also cover the expected sales to the outside community and the university community. The Sales spreadsheet covers the expected sales and gross margin for the first five years of the company being in operation. The bulk of the clientele is expected to come from within the university. The sales are expected to rise steadily every month for the first year. The sales are expected to reach an amount of $110,000 by the fifth year. Judging by the financial projections set out here it is expected that the company should be profitable and hence a viable enterprise which should break even within a short duration and hence turn in profitability. References Aaker, D A 2003, Marketing research. Hoboken: Wiley. Abrams, R M 2003, The successful business plan: secrets & strategies. Palo Alto, Calif, The Planning Shop. Baker, M J., & Hart, S. J.,2008, The marketing book. Oxford, Butterworth-Heinemann. Bangs, D 2002, The business planning guide: creating a winning plan for success. Chicago, IL, Kaplan Pub. Finch, B 2006, How to write a business plan. London, Page. Gofton, L 1997, Business Market Research, Kogan Page, London. Kotler, P. 2008, Principles of marketing, Upper Saddle River, N.J., Pearson Prentice Hall. McKeever, M. P. 2008, How to write a business plan, Berkeley, Calif, Nolo. Ozer, M 2005, ‘Factors Which Influence Decision Marking in New Product Evaluation,’ Emergence as Predictors of New Product Success,’ European Journal of Operational Research 163, 784-801. Silk, A. J 2006, What is marketing? Boston, Mass, Harvard Business School Press. Read More