Global Expansion Strategy April 29, 2010 Napo Delinia Hsin-Ying Hu Philip Jang Ann Lu Kristen Parnell U.K. Thailand Swirly Goodness!
Agenda Company Overview Current Strategy and Positioning Global Expansion Opportunities Thailand United Kingdom Communication Strategy Distribution Strategy Localized Strategy Differences Projected Performance and Metrics for Success
“The taste that launched 1,000 parking tickets.” Privately-held frozen yogurt restaurant Founded in 2005 in West Hollywood, CA Founder: Shelly Hwang and Young Lee Funded by venture capital firm, Maveron Business Type: Franchise Company Headquarters: Los Angeles, CA Company Size: 30 employees Number of Restaurants: 73 Current International Presence Bahrain, Dubai, Kuwait Tagline: “Pinkberry is Swirly Goodness.” Company Profile
Current Strategy: U.S. Creating emotional connection with customers Investing in a highly differentiated product by offering: Proprietary, premium products Creative-designed, tailored environments Superior customer service Forming an enduring brand Partnering with mall/restaurant operators and developers e.g. M.H. Alshaya Co., Autogrill
Consumer Insights: U.S. Orientation towards younger customers Perception of the category overall as youthful and trendy The Pinkberry “experience” drives the brand Seen as a healthier dessert option Importance of fruit toppings In comparison to other frozen dessert categories (e.g. ice cream) Celebrity and cult following Pinkberry “groupies” Lady Gaga Beckham
Positioning Statement For trendsetters who embrace fun, sophistication and creativity, Pinkberry is a one-of-a-kind experience that satisfies like no other because of its healthy, fresh treats, distinctive selection, and hip atmosphere.
Global Expansion Opportunities Thailand United Kingdom Population 61,113,205 (July 2009) Urban Population 90% of total population (2008) GDP per capita $35,200 Developing market No global frozen yogurt competitors Population 65,998,436 (July 2009) Urban Population 33% of total population (2008) GDP per capita $8,100 Growing market
Opportunity Analysis: Thailand The Thailand Yogurt Market is estimated to grow up to $1.8 million for frozen yogurt retail business. Total yogurt market size: $224.5M (2010) 10.6% growth from $183.5 m (2008) Set yogurt segment is 8.1%, $18.8M Frozen Yogurt is just emerging in the industry Accounts for 10% of set yogurt business ($1.8M) Competitors: Red Mango Buddhi Belly YogenFruz iBerry Ice Monster Independent Yogurt Restaurants
Consumer Insights: Thailand Based on ZMET research, consumers associated their experiences with frozen yogurt to the following images and adjectives: MODERN and CHIC stores – great for girls to spend time with friends. The taste of frozen yogurt is LIGHT and FLUFFY. A type of sweet treat that is HEALTHY and good for you. REFRESHING and ENERGIZING from the hot weather. COOLING and a quick GETAWAY from the heat. Variety of COLORS and options of FRUIT toppings.
Target Customers: Skewed Female (Age 16-34) Habit and Behavior Enjoy dining out with friends Look for unique and different products Perception and Preference Perceive “foreign brands” as higher quality Prefer natural ingredients and origin of frozen yogurt Prefer variety of topping choices – value add Consider convenience and store locations important Target Customer: Thailand
Opportunity Analysis: U.K. Population and General Demographics UK Population: 61,113,205 Yogurt Market $2.6B in UK Current Market Size and Growth Introduced in 2007 Frozen yogurt retail market size $260 M Only located in London (search on Yelp UK) Competitors: Snog Yuforia Coolicious Independent yogurt restaurants
Consumer Insights: U.K. The rise of “aspirational” foods –including better quality, healthier foods, organic foods, locally-produced foods, etc. “Aspirational” foods create distinct brand and tend to be premium priced. UK consumers are becoming more price sensitive - except for aspirational foods. Young consumers are becoming more receptive to food home delivery due to convenience.
Consumer Insights: U.K. Relief from stress Place to hang out Celebrity & Fashion Less Fat Alternative to ice-cream Healthy Treat Nature
Target Customer: U.K. Target Demographics: Ages 16-34 Target Population : 15,120,500 25% of total population Test Market: London Target Demographics: 1,873,941 (3% of UK Total) London‘s Population: 7,556,900 (12% of UK Total) Segment: health-conscious consumers. Consumers are trending toward eating healthy foods due to health concerns. UK consumers are eating less ice cream because of health issues. Life Style: Eating out with friends, try new things, spend £ on fashion
Communication Strategy Strategy is based on developing relationships with: Consumers Brand image Advertising and promotions Web Strategy Partners and Potential Franchisees CRM management and information gathering Franchisee information sessions
Communication Strategy Continue current Pinkberry brand strategy Store design Keep color, layout, and music consistent Customer Service Friendly, enthusiastic team members to maintain customer experience Quality “All of our fresh fruit toppings are cut daily in each and every store to guarantee both quality and freshness. Our fruit is never canned, frozen or sitting in water.” Pursue credentials to certify product health and quality Current US: National Yogurt Association Live and Active Cultures Thailand: Ministry of Public Health UK: Food Standards Agency
Communication Strategy Franchisees are responsible for the implementation of grassroots marketing strategies Corporate provides guidance as to the types of tactics necessary Solicit feedback as to which strategies work Example Promotions Tactics Sampling Promotional Events: college events, food fairs Utilize local and global market celebrities Thailand: Tata Young UK: Robert Pattinson Traditional Advertising Not currently implemented in the US: based on WOM Howard Schultz (Board of Directors) influence Base communication on experience
Communication Strategy Web Strategy Develop localized corporate Pinkberry websites Social Media Pinkberry Groupies (proprietary) and Pinkberry blog Facebook, Twitter Thailand: Facebook’s second highest global growth market (1,632,880 registered accounts as of January 2010) UK: Facebook 23,860,000 registered accounts
Communication Strategy Develop Partner Relationships Seek out Local Retail Associations/Organizations to share CRM information gathering UK: Information Sessions Host joint events with Local Retail Associations / Organizations
Distribution Strategy: General Rules Supply Chain Development Local Suppliers Partners for interior (HQ supports architect) Opening locations and selecting criteria Headquarter supports/ Building local office for communication Initializing suppliers: Yogurt, toppings, packages, napkins, uniforms
Distribution: Criteria and Risks Franchising fee structures and supporting scopes Risk Assessment Cultural differences: not first mover (Red Mango in TH) ↘ No brand equity: Opening ceremonies, seminar for potential investors No experience: Testing market with a few stores (5 TH/ 7 UK) Time line: Control the speed of expansion Learning curve: Stabilize first stores then replicate Fee Structure Store Location Equipment Training Except U.K. Research/Analysis Yogurt Machine Furniture Franchise Training Initial $45K? Royalty 6% Marketing 4% Designing
Initial Investment Thailand Up-front fee: $15K -> positioning on premium imported brand Opening five stores (Bangkok) Supporting yogurt equipments with deposit, local suppliers Initial Investment & profit: Based Competitor’s performance Daily $1,500 x 5 stores = $2.7 M/y Pinkberry (6%) $162K/year Marketing (4%) 108K/ year Max investment $405 K for 18m U.K. No Up-front fee except equipment deposits: No premium for imported Open seven stores (London) Same strategy for the equipments and designing stores Initial Investment & profit: based 5% share in frozen yogurt Daily Sales $2,500 x 7 stores = $6.5 M/y Pinkberry (6%) $390K/year Marketing (4%) 260K/ year Max investment $975 K for 18m Total Investment: $1.4M for 15 months payback for building Biz
Country Comparison Thailand Image: “American” trendy Price: premium pricing Product: size offerings (smaller sizes for Thailand) Promotion: Localized events, localized celebrities Distribution: partnerships Location: near shopping centers/shopping occasions UK Image: “healthy” Price: premium pricing Product: texture (creamier texture for UK) Promotion: Localized events (example, rowing on college campuses) Distribution: partnerships Location: near college campuses, SoHo/Covent Garden
Dashboard Food and Service Quality QC specifications Customer satisfaction Quality Expansion #shops # customers Growth Financial Performance Payback in 15 mo. 10% Revenue from overseas Finance Community Engagement Local Events Charity 0.2% Groupies Community