Convenience Store Assessment of Business Idea Communication Essay
- Length: 7 pages
- Subject: Business - Advertising
- Type: Essay
- Paper: #50723446
Excerpt from Essay :
ASSESSMENT OF Business IDEA
COMMUNICATION NEEDS FOR A CHANGING COMPANY
A niche' in the growing market for late night convenience store options has changed the paradigm to which the late night convenience consumer will shop. The business of change to which investment dollars are sought is for the launching of 24/7 Convenience, which is, the convenience store for the 21st century of tomorrow. The identification of this niche' market truly steered the development of this proposal. We feel this to be a market that should not be ignored.
As a result of the assessment of the target market, the decision to launch the convenience store in a subnational rollout was examined and deemed to be profitable. The underlying assumption that renders this model to be profitable is the growing market in convenience items that are heart healthy. The growing demand for heart healthy products will be reflective in the year over year growth in sales. Our profitability will therefore be a function of controlling costs and maximizing the revenue streams.
24/7 will be unique to the market for the following reasons:
24/7 will carry farm fresh milk -- delivered from regional farms contracted to supply organic milk. The supply can be shipped from as far as Longmont, Co.
Shipping strategies will include the modification of existing gasoline engine vehicles such as bread trucks to run off of renewable energy resources which will reduce cost and expenses associated with distribution of product. We estimate this method to be less expensive than contracting a trucking company to deliver our supply chain. Additionally, these costs are a taxable deduction against our revenue.
Organic convenience meals will be stocked fresh daily. A variety of heart healthy and organic delights that range from tofu and bean curd-based options to that are made of fruit and vegetables, not grown using any pesticides.
We will offer our own 'juicer' as a machine that enables consumers to purchase fresh juice using a variety of our fresh produce to create a special blend of their favorite fruit juices. As a 24/7 convenience, we feel this option to be as powerful as Seven-Eleven's, Slurpee ®.
Our target markets also identify us to be unique. We have strategically positioned ourselves to enter a market where there is a large demographic of successful females. We feel this demographic to be the most profitable considering our products and also consider the gentlemen that these women (or women) choose to date will also frequent our convenience store.
Convenience stores have accounted for $575.6 Billion in revenue for the year ending 2010 (Industry Research Solutions, 2011). Additionally, the market is expected to reach $856 Billion by the year 2014 (Industry Research Solutions, 2011). This exponential growth is expected to continue and to even increase beyond its current projected growth cycle. This is true, when considering the niche market for 24/7 convenience stores in the San Diego, Denver (6th store), Boston, and New York markets.
The heart healthy product offerings are novel to the market as there is not a convenience store that specifically provides hearth healthy and organically derived convenience food items. Additionally, the ability to obtain hormone free milk is important to the markets served. Our supply chain can facilitate milk at a lower expense than what our competition currently has on the market. The transport assures further cost savings by enabling our transportation of these goods to the target market(s).
24/7 convenience stores are unique in that our stores target a new kind of late-night convenience consumer while catering to the current market of late-night convenience shopper. The current Seven-Eleven does not provide heart-healthy choices to the extent that our stores will cater to these markets.
Often times, when one enters into the Seven-Eleven, there are numerous hot dogs and sausages for sale on the grills. Seven-Eleven does not do tremendous business in this area and this is specifically where our business model will thrive. We feel our coastal establishments, those most proximate to the beaches will yield the greatest return with regard to our specialty heart healthy and organically produced items.
ASSESSMENT OF Business IDEA
Mission Statement: To provide a twenty four hour convenience market that is eco-friendly in design, and providing low-cost, heart-healthy convenience food items.
The mission statement defines the reason 24/7 exists. The investors must be made to understand that 7/11 are also 24 hours but many do not provide the heart healthy selections that many nocturnal consumers are seeking. This is the target market, and this is the niche' the company provides against its competitors.
Vision Statement: To be the option of choice to the late night consumer in each market engagement.
The vision statement describes where the organization would like to be. It's the 'vision' of what the organization sees for in the future. The statement is succinct yet describes precisely what the nature of the business is. Indeed, by providing a niche' market, the idea is to present an advantage to the consumer for their selection. The option of choice to the late night market is the area of market share 24/7 wants to take from the Seven-Eleven.
Goals & Objectives:
Goal 1: To obtain 15% market share in the first year of operation
Objective 1: To segment each market based on the demographic of male/female and the median income.
Result: To establish operations in female dominated markets where the female median income is above the mean.
Goals & Objectives 2: Goal 2: To become profitable by year five and increasingly profitable each year after.
Objective 2: To reinvest retained earnings into improving on the profitable business areas and strategize options with the marginal performing areas.
Result: To become + beyond the five-year break-even and generate a marginally increasing profit stream each year after year five.
Pro-Forma Financial Statement
# of stores
The increasing revenue at a proportion greater than the increase in sales is a function in the basket of goods being purchased. The items of greater cost are being purchased at a higher rate from year 1 through year 5. We assume that the consumer will have a median purchase of $20USD for year one of operation and assume a cost of $13.50 per median purchase. This equates to a net revenue of $6.50. Year two: $30.00, cost $15.00. Year three: $36.00, cost $17.00. Year four: $40.00, cost $22.00. Year five: $43.00, cost $25.00
Market penetration: The ideal market is the Boston, MA area. A strong professional class and a population of working females make this an attractive market segment.
We also seek to establish markets in San Diego, CA, Beverly Hills, CA, Minneapolis MN, Boston, MA, and New York, NY.
Heart healthy convenience food items, a strong local marketing campaign that is radio promotion based and publications in relevant publications are the main focus of the marketing strategy.
Communication Needs for a Changing Company
The communication of a 24/7 convenience market is now evermore important in our technological and high speed world. The ability to order convenience food through a drive through is advancement in communication that would revolutionize the convenience market. There are currently no options that allow for a convenience shopper to procure items using a drive-thru.
Additionally, communication is now a form of service. Consumers expect reliable communication that is reflective of the service they will receive. Consumer happiness in their shopping experience is a direct reflection of the variance between what is expected and what is actually achieved. Therefore more effective communication will provide a greater customer experience, which is generally attributed to repeat sales. Consumers return to stores where they've had a positive experience and avoid stores to where their experience has been negative. Consumers also inform friends, acquaintances, and co-workers about negative experiences via word-of-mouth.
The added benefit of including a consumer response box that essentially a shopper's experience response box that allows for consumers to provide feedback regarding their shopping experience. Consumers are able to provide recommendations regarding what items to supply and other modifications that they would like to see at their particular location to enhance their shopping experience.
Communication is very important for the consumer to identify their preferences in a changing market environment. Often times, convenience stores do not supply the requisite items that many consumers demand. For instance, Starbucks ® became popular because they were able to become somewhat of an upscale convenience store that sold 'the best' coffee as well as expanding into items that appealed to their target market as well as a larger demographic.
If the Seven-Eleven had provided a more exotic blend and offerings for coffee, perhaps the market share that went to Starbucks® would have migrated toward the Seven-Eleven. The marketing of the Starbucks® brand is also critical to its success and its ability in establishing market penetration throughout the U.S.…