Marketing Plan of BoxPlus Company - Assignment Example

Marketing Plan of BoxPlus Company Submitted by Submitted to Marketing April 22, TABLE OF CONTENTS I. Executive Summary 3 II. The businesschallenge 4 III. The Market 4 a. Customers 4 b. Company analysis 4 c. Collaborators 6 d. Competitors 6 e. Business climate 6 f. The strategy 6 g. The product 8 h. Communication plan 8 i. Distribution 9 IV. The Budget 9 V. Conclusion 10 VI. Annexes 11 References 13 The Marketing Plan for Box Plus I. Executive Summary This marketing plan is developed for a new company, the BoxPlus. It is formed by a group of friends who have set their minds in establishing a business after college. They come up with an idea of supplying restaurants, retail outlets and specialty shops with secondary packages to put their products into. The recent awareness of people on environment has changed attitude of people on sustainability and wastes. This idea came as a business opportunity and a need to become a supplier of paper bags and boxes as a replacement for plastics and Styrofoam packaging. The company is proposed to be established in San Francisco, California. The market is promising, as the need for the product arises. Competition comes from the product category itself and not coming from paper manufacturers. Paper manufacturers sell sheets and have to be converted to form it into bags and boxes, and does not go into retailing. Paper manufacturers form part as a supplier. It is expected that sales growth in the first months of operation is slow because company will have to undergo the pains of introduction to companies. It is expected to grow because of its commitment and objectives to keep customers 100% satisfied. Company will use integrated marketing communication which today uses data based marketing, linked with internet. Internet presence strategy is what the company needs and will not use television because does is not require a national exposure. People are now aware of social media and has used this to look for information on things they need to buy. II. The Business challenge Recent awareness of people on environmental issues drives the interest of our company of supplying biodegradable secondary packaging materials for stores and businesses. Doing away with plastics and Styrofoam packaging for food and restaurants will reduce wastes and add to the sustainability of materials. This will be a shift from using the traditional packaging to a new design of paper and boards for packaging foods in restaurants, paper bags for groceries and boxes for specialty stores III. THE MARKET A Customers Target market of the company are general users of boxes and packaging materials in their business. BoxPlus will be going after three distinct segments of users: the restaurant industry, groceries and supermarkets, and specialty stores in San Francisco, California, USA. Customer growth is expected at 15% in the initial year, to grow by 10 to 15 % in succeeding years. One of the Target market of BoxPlus is the restaurants in San FRANCISCO, California. According to Luchesi, P, 2012, San Francisco has the highest density of restaurants in proportion to households. There is an absence of exact data on the number of retailers and groceries in San Francisco, but judging from the number of search engines of grocery stores in the area, it could be presumed that there are a number grocery stores that BoxPlus could serve. Some sites seen are Safeway Grocery stores, California Market,etc. Customers are in want of packaging that would meet environmental sustainability and changes that would suit consumers demand. B.. Company analysis - Boxplus is a start up company that will cater to restaurants and stores that need secondary packaging for its products. It is going to be a retailer that will get its paper supllies from paper manufacturers in California. Boxplus is led by Jason Turner, a seasoned entrepreneur, who started his first business after college. Together with his friends they will set up a business offering packaging. Their experience in pursuing business is an assurance for the success of this new business venture. Company will be located in San Francisco,California, USA. Objectives Become a premier packaging supplier Reach profitability within three years Achieve market penetration by year two Mission BoxPlus mission is to become a premier supplier of secondary packages by offering fast and efficient delivery, maintaining low price and keeping customers 100% satisfied. Key to success Provide convenient service Provide a market needed service Employ strict quality controls Offer customized service not available from other suppliers C. Collaborators. Our source of supply will come from the multiwall bag manufacturer in California and retailers from China. High Beam reports said there are 195 establishments engaged in the manufacture of multiwall bags in the US as of 2000. These are located in Missouri, Tennesse and Califonia. There are also retailers coming from Asia, notably China. D. Competitors – what are they doing Competition of paper bags comes from plastic shopping bags because of its continued insistence of use. Plastic bags are more lightweight and less expensive to manufacture. Paper bags however are more attractive because of colorful ads and are more readily recycled and reused. Recent developments is the introduction of reusable bags in year 2000 , the second competitor. According to the High Beam Business 2015 Industry Report, paper bags face an identity struggle. It was lumped as disposable along with plastics and is denounced for one time use. E. Business climate Survey results done to OVER 12,000 Small businesses in San Francisco showed the county garnering a grade of C- for overall friendliness to small businesses. It has earned a grade of D- for the friendliness of business regulations. (Thumbtack, 2014). On this basis, company will comply with all business rules in the place. F. The strategy Marketing strategy BoxPlus will use integrated marketing communication approach wherein it will use internet presence . It is going to develop own website to cater for inquiries, accept orders, and announce products and promotions. Integrated marketing communication ( IMC) approach is a combination of tools and media to spread the message to possible customers. IMC uses the traditional media and sales promotions as well as the use of new on line communication tools that include social media, (Richards, 2015) Advertisements. Advertisements will be coursed thru social media since there are many internet users today and a growing use of data based marketing Sales strategy. BoxPlus’ strategy is to convert new customers to permanent ones. This will be implemented through pleasant service like on time delivery, compliance to correct product specifications, and use of quality materials. One way of achieving this goal is to adhere to the company philosophy of 100% customer satisfaction. BoxPlus should also be aware of the competitive environment and find out what competitors are offering. By comparing, they can improve their services, and soon they will become preferred supplier. Sales Forecast For the first six months, sales are expected to be slow because it is on a start-up process. A conservative estimate of US$2000 for the second month ,increasing by 15% monthly is expected. Zero sales are expected for first month because business is on the process of introduction. A 20% growth is expected on the second year and 39% growth on the third year. Goal (activity) Goal Start date End date budget Department Completion of business plan 06/01/2015 06/15/2015 0 John - marketing Secure of building lease 06/01/2015 06/30/2015 0 Operations Profitability 06/04/2015 06/01/2018 0 Finance Sales in excess of $200,000 06/01/2015 06/01/2018 0 Sales G. (Product) BoxPlus will be known as a convenient secondary packaging that is environment friendly, reusable, and reasonably priced product. It is made from paper and paperboard It can be used as material for wrapping gifts, ready made reusable bags in assorted sizes and designs, and boxes to wrap and display foods. BoxPlus preserves foods, retain its shapes while on shipment and can be customized according to clients’ needs. The box could be customized according to the product needs of customers using our recycled paperboards. H. Communication plan Web plan Box Plus will have a website as a means of information dissemination of what company has to offer. BoxPlus will communicate its URL in sales and marketing literature. It will also submit its URL to search engines. Presence in social media will also be one of its first moves. Ads will also be coursed thru internet because it is fast and cheaper than newspaper ads. I. Distribution – BoxPlus is not going to use intermediary distributors. As a means of personalized service, once order is received, it is processed at once, and when finished, delivered by the staff to customers. A delivery vehicle owned by the company will be used for the purpose. IV. Budget a. Investment Owners, Jack and two others, will contribute $ 25,000 ea. to fund this venture ($75,000.) Fifty thousand dollars will be used to purchase die cut machine and a delivery van and the rest ($25,000) for operations. Projected financials are attached as annexes. Asset Investments DIE CUT MACHINE $30,000 VEHICLE $15,000 Other equipments $ 5,000 TOTAL $ 50,000 b. Return Ratio analysis Year 1 YEAR 2 year 3 Sales growth 0% 21%% 30% Return on investment (0.87) (0.68) (0.42) IV.Conclusion As a start-up, first year of operations is growing pains, it is expected that sales growth will continue and ROI will be gained by the 5th year of operation. The partners will actively participate in the operations of the business, each having a designated position. Other employees will be on part-time to help in miscellaneous work in the company, and as needed. There is a big jump of sales from the start of operations to second year, and on third year, maintaining loyalty of customers is attained. Partners will try to keep expenses at minimum and doing the work by themselves. Cash flow suggests that there is sufficient cash left at the end of the year to be spent for operations. The group is optimistic of this proposition and is ready to start the business. ANNEX ASSUMPTIONS: SALES TO INCREASE BY 15% MONTHLY on first year, 20% 2nd year, 30% 3rd year PROFORMA PROFIT AND LOSS STATEMENT YEAR 1 YEAR 2 year 3 15% growth 20% growth 30% growth Sales 90,088.00 127,243.00 165,416.00 DIRECT COST OF SALES 45,044.00 $ 63,621.00 82,708.00 gross margin 45,044.00 63,622.00 82,708.00 Less Expenses Sales & marketing 8,000.00 8,000.00 8,000.00 payroll 12,000.00 12,000.00 12,000.00 rent 2,400.00 2,400.00 2,400.00 utilities 1,800.00 1,800.00 1,800.00 depreciation 3,500.00 3,500.00 3,500.00 insurance 2,000.00 2,000.00 2,000.00 total expenses 29,700.00 29,700.00 29,700.00 profit before taxes 15,344.00 33,922.00 53,008.00 taxes 25% 3,836.00 8,480.00 8,480.00 interest 3% 1,500.00 1,500.00 1,500.00 sub-total 5,336.00 9,980.00 9,980.00 net profit 10,008.00 23,942.00 43,028.00 PROJECTED BALANCE SHEET Current assets Cash $ 10,008.00 $ 23,942.00 $ 43,028.00 other current assets 51,484.00 $ 34,116.00 $ 76,456.00 TOTAL CURRENT ASSETS $ 61492.00 $ 58,058.00 $ 119,484.00 LONG TERM ASSETS LONG TERM ASSETS $ 50,000.00 $ 50,000.00 $ 50,000.00 Accumulated depreciation $ 3,500.00 $ 7,000.00 $ 7,700.00 TOTAL LONG TERM ASSETS $ 53,500.00 $ 43,000.00 $ 42,300.00 TOTAL ASSETS $ 114,992.00 $ 101,058.00 $ 161,784.00 Liabilities and Capital Current liabilities 0 0 Accounts payable 29,812.00 Other current liabilities 50,000.00 Total current liabilities 79,812.00 Long-term liabilities $ 50,000.00 $ 50,000.00 $ 50,000.00 Total liabilities $ 50,000.00 $ 50,000.00 $ 129,812.00 Paid in-capital $ 75,000.00 $ 75,000.00 $ 75,000.00 EARNINGS $ (10,008.00) $ (23,942.00) $ (43,028.00) TOTAL capital $ 64,992.00 $ 51,058.00 $ 31,972.00 total liabilities and capital $ 114,992.00 $ 101,058.00 $ 161,784.00 networth $ 64992.00 $ 51,058.00 $ 31,972.00 REFERENCES High Beam Business. Uncoated Paper and Multiwall Bags. Retrieved from http://business.highbeam.com/industry-reports/wood/uncoated-paper-multiwall-bags Lifshitz, Ian, Market Forecast, Paper Industry Outlook 2013. Retrieved from http://www.pffc-.com/flexpack/substrates/11025-market-forecast-paper-industry-outlook-for-2013 Luchessi, P. 2012. Report: San Francisco has the highest density of restaurants in America, by far. Inside Scoop, SF. http://insidescoopsf.sfgate.com/blog/2012/08/01/report-san-francisco-has-the-highest-density-of-restaurants-in-america-by-far/ Richards, 2015. Examples OF Integrated Marketing Strategies. Demand Media. Small Business at Chron. Retrieved from Smallbusiness.chron.com/examples-integrated-marketing-strategies-3226.html Thumbtack.. 2014. San Francisco Small Business Friendliness. Retrieved from https://www.thumbtack.com/ca/san-francisco/#/2014/1 Read More