Market ResearchPrimary ResearchAfter looking at some research we were able to find that Birmingham, MI was a great location for asmoothie shop. Out of 140 surrounding businesses in the area there are no direct smoothie shops. Thearea is filled with boutiques and women’s fashion stores that are considered to be high-class stores.Birmingham is also one of the richest counties in the country as well as being considered one of the top20 best walking towns in the United States. The wealthy side of this county shows through the averagecost of homes being set at $172,000. Other very wealthy towns and suburbs thus stimulating theeconomy of the area as well also surround the area. Groovy Smoothie would fit right into the boutiqueand dining services, sticking out as one of the innovators in health and quality taste.Secondary Research Population for Birmingham, MI is upward from 20,000 residents. One of the best walking towns in the countryBirmingham Zip Code MapEstimated median household income in 2009: $93,992 (it was $80,861 in 2000)Birmingham:$93,992Michigan: $45,255Estimated per capita income in 2009: $64,461Birmingham city income, earnings, and wages dataEstimated median house or condo value in 2009: $338,434 (it was $300,700 in 2000)Birmingham:$338,434Michigan: $132,200 Mean prices in 2009:All housing units: $512,264; Detached houses: $543,358; Townhouses or other attached units: $349,576; In 2-unit structures: $303,054; In 3-to-4-unit structures: $346,818; In 5-or-more-unit structures: $178,277; Mobile homes: $404,619; Occupied boats, RVs, vans, etc.: $238,515 Median gross rent in 2009: $1,145. Read more: http://www.city-data.com/city/Birmingham- Michigan.html#ixzz2Ne1wuPjDNicheOur niche is our dedication to health and wellness. It is a well-known fact that in order to lead ahealthier life people need to eat better. Our company would be dedicated to serving the healthiest, buttastiest smoothies as possible. We would use local farmers crops as our product supply that way we are
also supporting our community as well. We would also pride ourselves on serving people that are inneed of nutrition and diet advice. Our staff would be trained in the nutrition department that way weprovide the best advice available to hopefully help lead others to a healthier lifestyle. As for our actualphysical product we would try to have locally grown supplies along with some of the freshest fruits andvegetables possible for quality taste. Our product coupled with our dedication to health and superiorservice would be the way to describe our niche as best as possible.StrategyOur strategy at the start would be to try and gain the most market share in our own backyard. We wouldtry to first get our residence of Birmingham, MI as the most market. To do this we would focus on thelocal aspect of our company. We would try to use local TV ads, local radio, billboards, and other types ofmarketing such as booths at fairs. Our main message would be to get the word spread that we arededicated to quality taste, health and wellness, and supporting our local community. With GroovySmoothie being a local brand we want to generate good local buzz. Some of our other strategy would beour competitive pricing. With Groovy Smoothie getting our raw materials from local farmers it wouldkeep costs at a minimum. We would then also gain our products such as cups, straws, and etc. fromlocal businesses as well. Our prices at $6 per smoothie we are able to make a significant profit persmoothie at a relatively low cost.PromotionHow will you get word out to customers?Groovy Smoothie would use many things to get the word out to customers about our emergence intothe local environment. Through the use of local TV ads, local radio broadcasts, and also throughbillboards in our surrounding areas. This would give us a good start on getting the word out about ouropening and what we offer.Advertising: We would use local TV ads much like the ones you see for local car dealerships. Thesecommercials are easy to generate and would not cost too much. These commercials would just letpeople know our location, what we sell, and also some of the other features that we offer as well suchas the nutrition classes we would offer. Our choice would be to run these ads initially during the localnews broadcasts. These could be run during the afternoon news broadcasts and the evening newsbroadcast as well. Since many local people watch the local news this would be a good way to get theword our about our business and also generate a buzz among the local community. Groovy Smoothiewould also use radio broadcasts to get even more local buzz. We would make it a point to find the mostpopular radio shows in the Birmingham area and choose to bring in some samples for the radiobroadcast crews and on air talent to try. We would just request a small segment to talk live on air aboutsome of the things we offer and see some of the reaction from the on air talent as well. This would bedone during the most popular shows at the most popular local stations and odds are these would beduring the morning shows while everyone is on their commute into work. This would be done a shortwhile before our grand opening and every time possibly when we have a new product line coming out aswell, but that could be decided at a later time depending on budget plans. We would also use billboards
to get our message out as well. Initially we would have a Groovy Smoothie billboard on the highwaynearest to us coming in and out of the town. If we started out with just 4 billboards I think that would beenough for us to get the idea across. We could have the billboards coming in to Birmingham and out ofthem surrounding the area in almost a box shape.Other Advertising: As stated above we are a proud local brand that supports its local farmers andbusinesses in order to keep our business afloat. With that said not only would we buy locally, but wewould also have a presence at the farmer markets we purchase food from as well. We would have abooth at the local farmer markets telling about our products and how we buy and sell locally. We wouldalso have signs up telling how much we bought locally and how grateful we are for our local supportersand local businesses. Social media is also something Groovy Smoothie must use in order to properlymarket. Groovy Smoothie will have a Facebook, Twitter, and Instagram. These are free tools that wecould use in order to spread the word about our business and reach across not only the local area, buteven the entire state.Our ImageAs stated above we want to be known as a local brand first and foremost. We buy and sell locally andthat is a great way to draw initial interest from those customers that live in the area. We also want theimage that we are promoting health and wellness into the community. By providing nutrition and dietclasses as well as the healthiest smoothies around, those that are interested in high quality taste andhealth benefit would think of our business first.Repeat Customers and ContactAfter each purchase we could ask if the customer is interested in becoming a premium member and/orif they want to leave their cell phone number in order for us to text updates to their phone aboutcontests, nutrition classes, and other promotions that occur. Premium members would get discountsand also access to our nutritionists and other benefits as well. This would all come to a cost of $50 permonth and would have no contracts that way it is strictly a monthly issue.Promotional BudgetAccording to tvads.shoppingrocks.com we should expect to pay about $2000 per month for our TV adsduring local broadcasting. Also according to localmarketingideas.com/how-much-does-radio-advertising-cost/ our radio spots for our region would cost on average about $800 per month. Withthese figures we could run two our promotions for two months, one month before our opening and themonth of our opening. This would give us good exposure to our local community. For those two monthsfor radio and TV advertising it would cost a total of $5,600 for both months. For a small billboard itwould cost $500 per month and we plan on having 4 billboards. For two months we could have the 4billboards in the surrounding area it would cost $2,000. After the first month we would drop it down toonly 2 billboards for 6 months that would leave us at a cost of an additional $5,000. Our grand totalwould be $7000 for billboards and our local advertising for TV, radio, and billboards would be $12,600for the first 6 months. For our booths at markets and any other marketing booths we have materials will
probably cost around $400 and that would bring our total promotional budget to $13,000 dollars for thefirst year.PricingAll of our smoothies are priced at $6 at the most. We have this price because it is competitive with mostother chains of smoothies. For example, Tropical Smoothie drinks are typically anywhere from $5-$10for each drink. Our prices are competitive, but due to the relative low costs of production for oursmoothies we have a 72% profit per smoothie. We do not intend for our prices to be the main reason forcustomer attraction. We have set low prices, but intend on those to come in based on their preferredtaste and need for healthy drinks. Our service will be extremely well trained as well, that way if anycustomer has any sort of health questions or questions in general we are able to answer them to thebest of our ability. As far as customer service goes we will make sure to be as speedy as possible, butwith high quality. If customers have special requests we will do our best to ensure them that theproduct matches the request. We will offer payment for customers through cash, credit, or debit card.That way we do not miss any sort of business due to lack of payment options.LocationOur location is extremely important for our success. It is a place where customers come to receive ourproduct and nutrition classes. Being located in Birmingham is a huge advantage to our company. GroovySmoothie would be located in an area that is one of the top 20 walkable towns in the country along withone of the wealthiest counties in the country as well. We would offer our customers parking despite thisbeing a walking town. The parking would be limited, but would still be available to our customers. As faras our competition is concerned after looking at the markets in downtown Birmingham, GroovySmoothie would be one of a kind in the area. After looking at yelp.com we were able to find 140businesses in the Birmingham area and surrounding the area and outside of any grocery stores ordrugstores we are the only business to offer drinks. Smoothies and specialty drinks are not offeredanywhere in the immediate area. Being near our competitors would not be an issue due to the fact thatour product and service is very specialized and hard to imitate. We offer just more than healthysmoothies, we also offer nutrition services which is also not found anywhere in immediate Birminghamarea.Distribution ChannelsGroovy Smoothie would sell directly to its customers right out of our shop. A delivery service seems tobe a little bit of a reach due to the relatively cheap costs to our drinks and with our business not offeringfood at this time delivery would wind up costing us more money. We would also sell drinks at some ofthe marketing functions we would attend like when we show our presence at the local farmers markets.As far as our nutrition services we would offer online help as far as using simple items such as Facebook,Twitter, or email for our premium customers. Once it has been identified that a customers dues are upto date we would then do our best to answer any questions they may have in order to provide quick andimmediate results without having to come directly into the store location in order to get a simplequestion answered.
Sales Forecast Year 1 Sales Forecast Best Worst Year 1 Total Sales Budget $13,000.00 $13,000.00 Sales Year 1 Smoothies $158,045.00 $79,022.50 Nutrition Meetings $18,250.00 $9,125.00 Membership Sales $5,400.00 $2,700.00 Total Sales $181,695.00 $90,847.50 Production Expenses Fruits and Vegetables $54,750.00 $27,375.00 Paper Products $6,205.00 $3,102.50 Nutritionist Classes(1 person certification) $2,881.90 $2,881.90 Sales Budget $13,000.00 $13,000.00 Total Expense $76,836.90 $46,359.40 Total Revenue $104,858.10 $44,488.10 Monthly Projections Sales Smoothies $18,600.00 $9,300.00 Nutrition Meetings $1,550.00 $775.00 Membership Sales $4,050.00 $2,025.00 Total Sales $24,200.00 $12,100.00 Production Expenses Fruits and Vegetables $5,177.00 $2,588.50 Paper Products $527.00 $263.50 Sales Budget per month $1,083.33 $1,083.33 Nutritionist Classes (monthly Payment) $240.16 $240.16 Total Expenses $7,027.49 $4,175.49 Total Monthly Revenue $17,172.51 $7,924.51