Executive Summary
This business proposal discussed whether opening a snack bar based on campus will be a
success or not. The female students were identified as target group at first after a series of
market research. An in depth SWOT provides a general analysis of major internal and
external factors for the business to succeed in the long run; Key external factors include
seasonal sales, rivalry competitions, social trends; The main internal factors consist of
nutritional value, multi- flavors, low-price; And 4Ps model is used as a tool for strategic
planning by combing the core factors in the SWOT matrix to formulate strategy. The snack
bar's pricing strategy is to sell high-qualified frozen-yogurt and fresh smoothies at reasonable
price by applying self-serve concept. Besides, due to the seasonal issues, the products offered
will be some slight changes in winter and the location of the store will be chosen at
Sportspark to ensure the sales in summer peak season. However, the geographical location of
the snack bar results in the expansion of target customer group, from female students to the
people who have the demands for deliciously guilt-free treats. Combined with the overall
financial analysis, it is estimated that the annual profit is up to £100,000 a year.
Background
A study (Brad. C, 2011) shows the eating habits of college students are far from healthy. High
frequency of skipping meals has become the main cause of lower fiber intake. The study
pointed out that college students these days don't have proper amount of fruits and vegetables;
and sometimes they even don't have one serving per day, way below the recommended five
daily servings. Moreover, both male and female students were consuming more than 30
percent of calories from fat. Looking at the eating environment on UEA campus, I found out
the snacks and lunch meals offered in convenience store are neither healthy nor delicious.
Although the campus kitchen is trying to provide the nutrition-balanced meal, the price is not
too friendly (usually cost £3.5-5).
In addition, it is also found out that yogurt, which is thought of as a healthy food by a lot of
people, is not healthy at all. The truth is that many of the most popular yogurt brands have
more sugar than a junk food (Katrin. S, 2007). A lot of so-called low fat yogurt sometimes is
just a marketing gimmick and is often high in sugar. In order to make yogurt more palatable,
nearly all big brands such as Yoplait and Dannon will put fruity-syrup into plain yogurt and
sneakily reveal how much of that added sugar. "For example, the average fruit-flavored
yogurt can contain close to 32 grams of sugar per 6-ounce serving." (Gurdal. T). Moreover,
apart from yogurt, a lot of artificial sweetness is also used in bottled juice. Take the
co-operative pure juice sold in the convenience store for example, it contains to be pure juice,
however "it contains just as much calories and sugar as sugary soft drinks and sometimes,
even more." (Mill. J and Sattar. N, 2014) Now an opportunity is given to start a business
based on UEA campus, so the idea of opening a healthy and cost-efficient snack bar by
providing frozen-yogurt without added sugar and fresh smoothies for college students is
generated.
Marketing Research
In order to find out if there is a demand for frozen-yogurt without added sugar and smoothies,
I did some research in the form of questionnaire (methods and questionnaire are both shown
in Appendix 1) by randomly interviewing 20 people based on data given by UEA annual
report 2012-2013. The result showed there is a positive demand (85%) from the students for
the products after being fully aware of the unhealthiness of yogurt and juice sold on campus.
It needs to be noticed that among those 85%(17 people), female students are up to 15, which
means female students is going to be the target customer. When asked about the price, 70% of
the students prefer the price below 3 pounds, and the other 30% think the price between 3-4 is
acceptable. In a word, there is a great demand for the fro-yo and smoothies on campus but
they must be affordable for college students.
Strategic Capabilities
To examine if the snack bar has the resources and competences to survive on UEA campus in
the long-term, SWOT analysis is conducted in Appendix 2 to explore the strategic capabilities
of business (Strengths and Weakness) and evaluated the environment (Opportunities and
Threats).
It has shown that the strengths come from healthy and low-calorie value of the products.
There will be no additive sugar added in the products. The smoothies will be blended with
100% juice made with fresh fruit and the calories are quite low. According to the data
provided by Jamba Juice, which is a restaurant retailer whose core products are smoothies, the
average calories of smoothies is around 400 cal with serving size of 750g. The smoothies can
be a perfect substitute for meal to help people lose weight and stay healthy. A study (2013)
from the journal of Nutrition & Metabolism shows that people who drank about 1/2 cup of
unsweetened white grapefruit juice before every meal for 12 weeks lost 13 pounds and 2
inches off their waists; having sour juices can help them consume up to 30 percent fewer
calories a day; And the frozen yogurt, which combine the healthiness of yogurt and tastiness
of ice-cream, will be made as naturally fat- free as possible. Also, more creative flavors will
be developed to satisfy different people for different preference such as fruity ones for women
and alcohol-flavor for men.
The weakness results from less variety of offers. The core products of smoothies and
frozen-yogurt are not enough to become a sustainable advantage to compete in the future
since people are not nuts for such food. We need to create a buzz for the business for future
survival.
The opportunities stem from low rivalry in the chosen area and the low cost of opening one
fro-yo and smoothies business. Also, the public's growing concern of living and eating more
healthily has become the core competence of the business. The eating behavior has been
changed rapidly over the last decade. More and more people have realized the bad
consequence of eating junk food and try to have a more balanced lifestyle. However, despite
of the awareness, people always have the natural crave for fat and sweet food. No matter how
much they try to control that, sometimes people need indulgence. So it is all about healthy
treating to make people guilt-free. If they sit down and eat a tub of Haagen-Dazs, people feel
guilty, especially for girls. It has almost 800 calories for one tub. So the fro-yo is what gives
people indulgence without the worries to go to the gym or go on some crazy diet.
Seasonal issues will be the main threats. The situations of fewer students on campus during
the summer vacation and less sales of frozen yogurt in winter can be predicted. The threat
also arises from low switching costs for buyers. Furthermore, even though some people do get
aware of the harm of added sugar and junk food, they still don't care about that and just want
to have something cheap and delicious instead. How to change those buying behavior?
4Ps
In order to define' where to go' and ' How to get there', marketing mix theory (aka 4ps) is
used for strategic planning to organize marketing activities in the target market.
The core products will be fresh smoothies and frozen yogurt with multi flavors. We will have
smoothies made with daily fresh fruit and multi-flavor frozen-yogurt with various toppings,
such as fruit and nuts etc.so that the customers will not be overwhelmed by the calories of
fro-yo. However, there will be a little change during winter. Instead of smoothies, fresh juice
is going to be offered. The flavor will be the same but no more ice. Frozen-yogurt is still
available but we are going to introduce new specific flavor during that time: alcohol-based
flavor such as brandy or wine flavor mixed with nuts. Moreover, traditional herbal tea with
the ingredient of rose, jasmine and lavender will be offered in accordance with the healthy
value of the business.
The price for smoothies or fruit juice will be differed depending on the serving size the
customers want, but the average price of smoothies will be less than 3 pounds. While for
frozen-yogurt, instead of putting a price tag on every different fro-yo product, we charge
customers by weight and the price will be universal, £ 1.5/100g. In that case, a customer can
pay the actual amount of frozen yogurt he wants and it is quite economical.
For location (Place), Appendix 3 shows a vast advantage to open the store in Sportspark
compared to the campus. For example, the threat like less target customers during peak season
can be eliminated since "Sportspark attracts 1.3million visit a year, including both students
and members of public". (Norwich Evening News 24. 2010). In addition, there is also a huge
market demand for deliciously guilt-free snacks for people who are into health kick and
exercise. The reachable healthy and diet-friendly treat is a good to way to satisfy the target
customers need.
The promotion of the products is all about distribution. First we are going to adopt self-serve
model for frozen-yogurt. There will be a lot of machines in the store where the various
options of flavors are offered. Customers are given choices of different size of containers and
they can serve themselves of any flavors and toppings available. The best part of this model is
that customers can mix up the flavors and they can control the amount of serving they want
without worrying the calories of intake. What's more, a fruit bar will be set near the counter
where customers can pick the ingredients they want for the smoothies so that they can feel the
healthy value we has delivered.
Brand Marketing
Providing good products for target customers in the right place is not enough to make a
business survive in the long- run. As discussed earlier, one threat of the business is that the
eating behavior of some people is so stubborn that they are not willing to try the
frozen-yogurt and smoothies. However, three laboratory-based intake studies (Wilcox. B,
Cantor. J, Dowrick. P, Kunkel. D, Linn. S and Palme. E, 2004) showed there is a correlation
between the eat behavior and food brands. Therefore if the amount of food exposure the UEA
students get is increased, maybe we can change the buying behavior of those 'stubborn'
students by branding. First, a recognizable image needs to be created. Then, we deliver the
superior value for the customers by creating the experience they like to achieve
mouth-to-mouth effect. All the target customers want is to keep healthy and fit when having a
delicious treat. Therefore, the calories and nutrition value of every product sold in store will
be shown on the menu board. Also, we will provide a fruit bar letting customers pick the fruit
and vegetables by themselves to ensure them every ingredient is fresh and healthy. What's
more, to highlight the healthy value of the products, some posters will be put on the campus
and Sportspark promoting the low-calories, nutritious image of the products by contrasting
the unhealthiness of flavored-yogurt and bottled juice.
Financial and Operational Summary
The only resource available now is the access to Sportspark building. Before the snack bar is
open, a general forecast of profits needs to be calculated first. According to entrepreneur
magazine, starting a frozen yogurt store can cost between $10,000 and $50,000 considering
the cost of rent and hiring employees, the cost of inventories and supplies. However, both
frozen-yogurt and smoothies are lucrative business. Take Pinkberry (a franchise of frozen
yogurt dessert restaurants) for example, the average shop in America attracts 1,500 customers
a day generating revenues of £170,000 a month. The total number students and staffs in UEA
are 18,310 and average daily visits at Sportspark are 3000 including 20% of the UEA students,
it is estimated that the snack bar should be able to attract at least 300 customers a day and the
cost of ingredients is comparatively low. And the employees wont be an issue since loads of
students in UEA will apply for the part-time job. Therefore, I expect the annual profit is up to
£100,000 a year.
Risks and Further Discussion
The frozen yogurt will not suffer the risk of high inventory levels since they are not easy to
spoil, whereas due to the perishability of the fruit, there might be an inventory issue for
smoothies. Therefore, maybe some trial operation can be adopted to see how many smoothies
will be consumed on a daily basis so that the amount of ingredient can be calculated. Besides,
it is quite debatable if the students on campus will still go to Sportspark for a treat since there
is still some distance between the campus and Sportspark. Without some personal experience,
I doubt UEA students will be motivated to go all the way to Sportspark for a healthy treat.
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Appendix 1
Questionnaire:
1. What is your gender?
a. Female b. Male
2. If you are full aware of the amount of sugar added in the yogurt and bottled juice sold in
the convenience store, would you still eat them?
a. Yes, I would. b. No, I wouldn't. c. Maybe I would occasionally.
3. If a snack bar open based on campus that sold low-calories, healthy and delicious
frozen-yogurt and fresh smoothies without added sugar, how often do you think you will
pay it a visit?
a. Once a week b. twice - three times a week c. more than three times.
4. What price do you think is acceptable for frozen-yogurt?
a. p<=2 b. 2<p<=3 c. 3<p<4 d. p>=4
5. What price do you think is acceptable for frozen-yogurt?
a. p<=2 b. 2<p<=3 c. 3<p<4 d. p>=4
Results and methods:
According to the UEA annual report 2012-2013, the proportion of male and female students is
41.25% and 58.75% respectively, of which there are 77.72% from EU and UK and 22.28% of
students come from overseas. Therefore, I randomly choose 16 female students (3 overseas
and 13 EU/ UK) and 4 male students (1 overseas and 3 EU/UK). Being full aware of the
unhealthiness of yogurt and juice sold on campus, they made their choices, 85% of the
students love the business idea and think they would totally go for the frozen yogurt and
fresh-squeezed juice if the business were open. For other 3 people who seemed not so
appealing to the business idea, when asked the reason, they thought they just don't care that
much about being healthy or not as long as the food is delicious. However, if the frozen
yogurt offered is below 2 pounds, which is a little bit higher than the yogurt sold in the
convenience store, they might consider buying the products occasionally. Those who loved
the business idea are also quite price-sensitive, 70% prefer the price below 3 pounds, and the
other 30% think the price between 3-4 is acceptable.
Appendix 2
SWOT Analysis
Internal S (Strength)
lï¬ Multi- flavor products
lï¬ Low- price
lï¬ Diet-friendly
lï¬ Convenience
W (Weakness)
lï¬ Isolated offers (just
smoothies and
frozen-yogurt)
lï¬ No brand effect
External O (Opportunity)
lï¬ Growing amount of
healthy conscious
lï¬ Lucrative Business with
high turnovers
lï¬ Low rivalry in the
chosen area
lï¬ The cost of opening one
snack bar is
comparatively low
T (Threat)
lï¬ Easy entrance of the
business
lï¬ Less sales in Winter
lï¬ Some people don't care
about being healthy and
they just want to have
something cheap and
delicious
Appendix 3
Comparisons between the location of UEA campus and Sportspark
Campus Sportspark
Target Customers Female Students Female Students and Sports Lover
Market Demand Comparatively small Big
Seasonal Issues Cannot Solve Solved