INVIGO JUICES BUSINESS PLAN

  • Category:
    Business
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    4
  • Words:
    2633

Student:

Table of Contents

3Part One

3Introduction

3Executive summary

4Objectives

4Mission

4Product

5Self analysis

5Part two

5Marketing Research

5Geographic

6Demographic

6Primary research

6Competition

7Market segment analysis

8Analysis of potential location

8Part three

8Organisation and Personnel plan

8Ownership Choice

9Personnel needs

9Organisational structure

10Hiring Strategy

10Part Four

10Marketing Plan

10Product

10Pricing policy

11Promotional plan

11Distribution

12Part five

12Financial Plan

12Invigo Juice Income statement for the first three years

13References

16Appendix A

Part One

Introduction

Executive summary

After extensive market research, the owner discovered there is a need for a 100% natural, organic, non-GMO juices and smoothies for the Australian market. Currently, there are a few players such as boost juice offering smoothies and juice extracted from fruits and vegetables. Currently, Boost juices dominates the Australian market with a product line that is almost similar to what Invigo intends to offer[ CITATION Boo16 l 1033 ]. The owner believes Invigo is a great name for a nutritious juice as it is derived from the English word “invigorate”, which means energize, refresh, rejuvenate or revive[ CITATION Col161 l 1033 ]. Invigo line of juices and Smoothies will be 100% natural, organic, non-GMO cold-pressed juices. The raw materials will be fresh fruits, vegetables and other ingredients sourced from Australian farmers.

Invigo juices will initially be introduced in the Canberra area, whose population has a higher disposable income than the rest of Australia. Invigo juices and smoothies targets to gain a 30% market share of the fresh juice market in Canberra in three years. Invigo will rely on the founding owner’s management expertise, passion and commitment. In addition, the start-up company also intends to aggressively promote its organic, non-GMO fruit juices and smoothies through trade fairs, social media, digital platform and retail stores. Invigo success will largely be guaranteed by the company’s focus on quality, natural ingredients and creative packaging and branding. Invigo expects to be profitable in the second year of operations. In the third year, Invigo juices is projected to generate a net profit of $309,595

Objectives

Invigo juice expects to gain 30% share of the fresh juice and smoothies market in Canberra within three years of introduction by offering 100% natural, organic, non-GMO juices and smoothies for the Australian market.

Vision

To be the leading natural juice brand in Australia

Mission

Invigo’s mission is to offer its customers value for money by producing high-quality, fresh, tasty and nutritious juices and smoothies that are 100% natural, organic, and non-GMO.

Product

Invigo line of juices and Smoothies will be 100% natural, organic, non-GMO cold-pressed juices. The raw materials will be fresh fruits, vegetables and other ingredients sourced from Australian farmers.

Invigo juices will offer the target consumers an alternative product that is more nutritious, healthy and tasty. Health-conscious consumers can be assured that Invigo will not only quench their thirst, but also rejuvenate them and boost their immunity.

Invigo juices will be priced between $5 and $7 depending on the cost of production. Organic, non-GMO raw materials may be more expensive to use.

Invigo expects to sell at least 5000 bottles per month for the first 6 months. This volume is expected to increase to 10,000 to 15,000 in the second year of operations.

Self analysis

I believe I have the skills and the passion to start producing and marketing Invigo juices for the Australian market. I have a background training in business management and marketing. I am passionate about pursuing my entrepreneurial dream by offering creative products that meet the needs of consumers.

I consider myself a transformative team leader as I prefer motivating people towards adopting my vision for a greater goal. I have achieved this in my school projects and small income generating projects in my neighbourhood. I believe I am a reliable team player who can motivate my team towards making Invigo a leading natural juice brand.

Part two

Marketing Research

Invigo juices will focus on the following market segmentation to increase its chances of success in the Australian market.

Geographic

The Company will first introduce its juices and smoothies in Canberra and expand into other parts of Australia after one year depending on the strategic factors that will be considered by the, management from time to time. Canberra has the lowest level of unemployment in Australia at 3.4%. Canberra’s population stands a little over 350, 000 that has the highest level of disposable income at average weekly wage of $1702 compared to the national average of $1485[ CITATION Aus15 l 1033 ]. These factors make Canberra an ideal geographic segment to introduce Invigo juices and smoothies in Australia.

Demographic

Demographic data for selected Australian region (Canberra)

Population

Number of families

Average Children per family

Median weekly household income

Median weekly rent

People below 65 years

Unemployed

Households with rent as less than 30% of income

Source: Australian Bureau of Statistics

Primary research

Invigo juices will conduct a series of focus group interviews that includes several prospective consumers picked from different parts of Australia Capital Territory. The use of focus groups is a relatively affordable research method that will enable the company understand consumer perceptions and improve on practical suggestions[ CITATION Gai12 l 1033 ]. See Appendix A for a sample of the guiding questions.

Competition

There are a few players in the Australian market offering a product similar to what Invigo Juices intends to introduce into the market. Boost juice is the dominant player in the Australian fresh juice industry. Boost juice operates a chain of retail outlets in Australia and internationally. Boost juices has been operational since 2000[ CITATION IBI16 l 1033 ]. The company has the technical capability, production excellence and financial backing to offer stiff competition to Invigo juices. However, Invigo juices can rely on its flexibility, product differentiation and branding to compete with Boost juice.

Apart from Boost juice, other indirect competitors such as Pepsi and Coca-Cola that mainly sell carbonated drinks have a huge share of the Australian beverage market[ CITATION Aus151 l 1033 ]. Carbonated drinks are still very popular in Australia despite the fact that several studies have linked them to lifestyle diseases such as obesity. For example, it is estimated that Australians currently consume more than 1.28 billion litres of carbonated drinks per year[ CITATION Ret15 l 1033 ]. Invigo juice and smoothies will offer a healthy and equally refreshing and tasty alternative to carbonated drinks. Carbonated drinks have 16 teaspoons of sugar per 600 ml bottle[ CITATION Dun16 l 1033 ]. This is dangerous to the health of consumers as it leads to lifestyle diseases. Invigo will get free promotion from government agencies and nonprofits that promote healthy living.

Market segment analysis

Invigo juices target market comprises young Canberrans between the ages of 5 and 65 years. The age group between 18 and 65 is very much concerned with the health benefits of fruit juices and is likely to recommend it for the group between 5 and 18 years[ CITATION Aus151 l 1033 ]. Canberra households have an average of 1.8 children per house and a median weekly household income of $1920. 92% of the households spend less than 30% of income on rent, meaning they have high levels of disposable incomes that can be used to buy premium fruit juices like Invigo. There are also low levels of unemployment meaning the company can expect consistent growth and sustenance of product sales[ CITATION Aus15 l 1033 ].

Analysis of potential location

Invigo juices will be located close to Canberra central business district. The business is specifically interested in leasing space in the Hume area. Old stores or an abandoned but functional business premises may be ideal for conversion into a processing centre. Invigo juices will also operate retail outlets in nearby areas such as Kingston, Manuka and Civic to promote the brand. Hume area is located close to the market and is well served by rail, road, and rail transport[ CITATION Aus161 l 1033 ].

Part three

Organisation and Personnel plan

Ownership Choice

The owners of Invigo juice intend to operate the business as a limited liability proprietary company under the Corporations Act 2001. Even though this is a complex structure for a start-up, it will allow the business to attract a strategic investor that will require such a structure[ CITATION Hei10 l 1033 ]. The founding manager will own 80% of the business while a strategic investor will own the remaining 20%.

The company owner intends to invest personal savings of $12,000 as the seed capital for the idea and expects to raise the rest $4, 000 through sale of 20% at $3000 equity to a strategic partner. The company will maintain a profit re-investment policy for the first five years to enhance its competitiveness through expansion and technology integration.

Personnel needs

Currently, the business owner is the sole employee in the business. However, the owner intends to hire two production staff members who will be supplemented by three part-time employees. The business will also have a full-time loader and a truck driver. The owner will also hire a marketing and sales executive to assist with marketing the products and handling client relations. The business will also require the services of an accountant who will also handle the human resource function. The owner is the managing director in charge of administration and all other operations in the business.

Organisational structure

Invigo juices organisational structure is a flat structure with the managing director at the core of the business management. This structure is appropriate at this stage to overcome unique start-up challenges such as changes in operational objectives and strategy confusion[ CITATION Rob11 l 1033 m Spi12].

Student:

Hiring Strategy

Invigo intends to offer competitive salary packages to motivate employees. The company will also strive to improve employee performance by implementing a performance management and reward system that accommodates all positions in the business. Employees will also be offered bonuses when sales targets are met or exceeded. As the company expands, employees will be offered 10% shareholding, a quarter of which shall be free while the rest shall be paid in easy instalments.

Part Four

Marketing Plan

Product

Invigo line of juices and Smoothies will be 100% natural, organic, non-GMO cold-pressed juices. The raw materials will be fresh fruits, vegetables and other ingredients sourced from Australian farmers.

Invigo juices and smoothies will initially be available in two flavours, Banana-passion and Raspberry squeeze. The juices and smoothies will be packaged in 350 ml branded special, clear plastic bottles. The predominant colours will be green, brown, orange, purple, red and yellow. These colours occur naturally in several fruits and will thus enhance Invigo’s natural juice and smoothies claim.

Pricing policy

Invigo will initially rely on a skimming pricing strategy that will involve setting a higher price to communicate the health benefits and premium qualities of the brand. A higher price also allows a company to recoup the initial investment cost before the market is flooded with stronger competitors [ CITATION Oli12 l 1033 m Rob111]. However, Invigo may consider lowering its prices by introducing low-priced juices and smoothies in its product line. Invigo juices will be priced between $5 and $7 depending on the cost of production. The average price of Boost juices in Australia is $4 to $5[ CITATION Boo16 l 1033 ]. Invigo will consider discounting by up to 20% in the first five three introductory months. Invigo aims to generate profitability from high profit margins that should be 50% of the wholesale prices.

Promotional plan

Invigo will promote the new brand in retail stores by paying for display space. Personal promoters including the founder will occasionally popularise the new brand in stores and malls to create awareness.

Invigo will initially rely on less-costly advertising options such as social media promotions through sites such as Instagram, Twitter and Facebook. The company will pay for targeted advertising campaigns in these sites and conduct regular promotions and offer information relating to the product. Invigo will also market via Google ads and YouTube videos, trade shows and festivals including the Canberra Food and Wine festival.

Distribution

Invigo will reach its target market through various distribution channels. Invigo will operate retail outlets where its range of juices and smoothies will be served. Invigo will also negotiate with several retailers and grocery stores to have its juices and smoothies on display. Invigo will further sell its juices and smoothies online through its website and social media accounts. Online sales will basically be a weekly delivery plan where customers buy at least twelve 350 ml bottles per week to cover the delivery costs.

Part five

Financial Plan

Invigo Juice Income statement for the first three years

$800,000

$1,200,000

$1,500,000

Direct Cost of goods sold

$120,000

$150,000

$160,000

Sales returns

Gross Profit Margin

$670,000

$1,042,000

$1,334,000

Operating Expenses

Salaries and Wages

$ 380,000

$400,000

$400,000

$150,000

$200,000

$240,000

Water & Electricity

Internet and Telephone

Insurance

Marketing and Promotions

$100,000

$120,000

$120,000

Depreciation

Payroll taxes

Total expenses

$757,000

$853,000

$901,000

Net profit before tax

($87,000)

$189,000

$433,000

Corporation Tax

$123,405

Net Profit

($87,000)

$135,135

$309, 595

References

Australian Bureau of Statistics . (2015). State and Territory Earnings . Retrieved May 11, 2016, from http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/6302.0Main%20Features5Nov%202015?opendocument&tabname=Summary&prodno=6302.0&issue=Nov%202015&num=&view=

Australian Capital Territory Government. (2016). Doing business in Canberra — Working — Canberra — Create your future. Retrieved May 11, 2016, from Canberra Create Your Future: http://www.canberrayourfuture.com.au/portal/working/article/doing-business-in-canberra/

Australian Food News. (2015, June 15). Thinking beverage? Here are the 5 top trends | Australian Food News. Retrieved May 11, 2016, from Australian Food News: http://ausfoodnews.com.au/2015/06/15/two-facts-remain-constant-in-australias-beverage-market-its-constantly-changing-and-its-only-increasing-in-competitiveness-2.html

Boost Juice. (2016). Products-Boost Australia. Retrieved May 11, 2016, from Boost Australia: http://www.boostjuice.com.au/products

Churchill, N., & Lewis, V. (1983, May). The Five Stages of Small Business Growth. Retrieved April 20, 2016, from Harvard Business Review: https://hbr.org/1983/05/the-five-stages-of-small-business-growth#

Collins English Dictionary. (n.d.). Definition of “invigorate” | Collins English Dictionary. Retrieved May 11, 2016, from Collins English Dictionary: http://www.collinsdictionary.com/dictionary/english/invigorate

Dunlevy, S. (2016, April 28). Teenage boys consuming 38 teaspoons of sugar a day. Retrieved May 11, 2016, from News: http://www.news.com.au/lifestyle/health/diet/teenage-boys-consuming-38-teaspoons-of-sugar-a-day/news-story/74f8332fe23694e480fd213f49f0d371

Goodman, G. (2012). Engagement Marketing: How Small Business Wins in a Socially Connected World. John Wiley & Sons.

Hastings, R. (2011). Small Business Marketing: Marketing for Small Business Owners. Businessman 101.

Heintz, J., & Parry, R. (2010). College Accounting (20 ed.). Cengage.

IBIS World. (2016, March). Juice and Smoothie Bars in Australia: Market Research Report. Retrieved May 11, 2016, from IBIS World: http://www.ibisworld.com.au/industry/juice-and-smoothie-bars.html

Oliver, L., & English, J. (2012). The Small Business Book: A New Zealand Guide for the 21st Century. Allen & Unwin.

Rethink Sugary Drinks. (2015). Facts about sugary drinks. Retrieved May 11, 2016, from http://www.rethinksugarydrink.org.au/facts: http://www.rethinksugarydrink.org.au/facts

Schindler, R. (2011). Pricing Strategies: A Marketing Approach. SAGE Publications.

Spinelli, S., & Adams, R. (2012). New Venture Creation: Entrepreneurship for the 21st Century (9 ed.). McGraw-Hill/Irwin.

Appendix A

Focus Group Guide

Everybody to introduce themselves (demographic details such as age, location and occupation should be included)

  • What do you think about Invigo brand name?

  • After drinking Invigo Juice and smoothie, what do you think about the products?

  • Have you had any other natural juice or smoothie before? How would you compare it to Invigo?

  • How important is to you that a product is organic, non-GMO and chemical-free?

  • Do you believe Invigo is actually 100% natural, organic, non-GMO and chemical-free?

  • Would you pay more for a natural juice that what is currently charged for carbonated and concentrate-based drinks?

  • Is it important to you that Invigo raw materials will be sourced in Australia?

  • What ingredients would you like to be included in the Invigo product line?

  • Are there ingredients you think we should remove from Invigo? Exemplify

  • What quantity of packaging best suits you needs?

  • Do you like Invigo branding and packaging? What would you suggest to improve?

  • Would you buy Invigo juices and Smoothies online?

  • How often would you be drinking Invigo juices and Smoothies?

  • Do you have any comments for Invigo management?

Moderator to thank everybody