Developing a Business Plan for a Web Based Shop

E-Commerce Vape Shop

Overview/Summary Description

Vape Shop Online is an e-commerce business that specializes in marketing and distributing vaping technology supplies, such as vaporizers and e-liquids. It is supported by brick and mortar kiosks across the country and currently has 100 of these in operation.

Situation analysis

Vape Shop Online is situated to capture a significant portion of the online market by marketing itself through its kiosks and by using big data/relational database systems and techniques that can be used to gather information about web users (Wambler, 2015). This information will be used to assess whether Vape Shop Online wants to focus on cost leadership or on differential marketing, though at the outset the e-commerce business will focus on cost leadership and utilize its leverage as a brick and mortar business to offset costs (Thakur, 2014).

Review overall market / complete vertical analysis

The overall market provides plenty of competition as there are several vape shops around the world that utilize e-commerce as part of their business plans. ECIG (Electronic Cigarettes International Group) is a major one in England that sells its products globally through its e-commerce sites. For Vape Shops, the vertical analysis presents a positive picture: in 2015, the cost of goods sold was exactly 50% of sales, which was $1,210,000. Thus, gross profit on the year was 605,000 dollars. Wages were $200,000, and total expenses were $305,000. Thus, net income was $300,000. This was up 25% from 2014, due mainly to the expansion of kiosks. The use of e-commerce is expected to raise net income by a further 15% over the next year.

The market as it exists is currently strong as Goodman (2013) points out, and Public Health England (2015) has recently published its report in which it found e-cigarettes and vaporizes to be 95% healthier than traditional cigarettes, which is a big boon to the industry. The FDA in the U.S. is expected to release its own guidance in the coming months. Thus vaporizers are being shown by researchers to be a good way to quit smoking and to still enjoy the relaxing exercise of "vaping" without hurting one's health.

Market Objectives

The main objective is to extend market presence by establishing an online presence that can compete with other e-commerce retailers. The main draw initial draw to promote the site is to use a giveaway campaign that will encourage users to go to the website and type in an access code that will qualify them for a new vaporizer device and e-liquid. This will generate a source of consumers for the site's database.

Mission Statement

The mission statement of Vape Shop Online is to be the best e-commerce site on the web in terms of delivering a quality web-based shopping experience for vape products, quick delivery time via superior processing and shipping, and a dedicated business that meets all the needs of the vaping community.

Strategic plan

The strategic plan is to incorporate all aspects of the business into one, tight and efficient functioning online business. The management team will consist of the owner, the CFO, the marketing manager, and the director of operations.

The segment of the market that is being targeted is the vaping segment of the smoking community, all ages over 18 in every community (primarily Western, where English is spoken, as this will be the language of the website).

SWOT

Strengths: Top of the line vaporizers; easy access for consumers; educational material: how-to guides. Weaknesses: No significant penetration in European markets to date. Opportunities: Many people especially in the UK are looking to quit tobacco; the industry is booming there. Threats: Big tobacco has deep pockets, may corner the market; Vape Shop must build a loyal consumer base by using strong marketing techniques, in the style of Red Bull, which appealed to alternative sports and was a significant sponsor of X Games. Vape Shop will do the same in order to set itself apart from other E-cig and vape sellers and build its brand identity as "the" alternative vape shop stop.

Marketing Mix

Vape Shop Online will concentrate on advertising to extreme sports fans, who are more "into" alternative concepts, such as alternative energy drinks, sports and vaping. It will market itself as "the" go-to source for all one's vaping needs, which should appeal to this niche market, and then it will gradually expand to appealing to the health market as well, by promoting itself as a way to quit smoking. Thus, it will have cross-cultural appeal and reach out to diverse audiences and ages. Likewise, the marketing will include a mix of digital ad campaigns, outdoor ad campaigns, and traditional print media campaigns.

According to the guide of Treacy and Wierseman (1993) Vape Shop Online plans to be a "Master of Two," which means it plans to offer two different value propositions to its customers: first, a great product (vaporizes and e-liquids) and second, the ease of access that e-commerce sites allow coupled with kiosks in shopping outlets to capture foot traffic.