Strategic Positioning of Jolly Smoothie

Jolly Smoothie is a startup that aims to venture into the juice and smoothie business, which is a strong part of the beverage industry. The company will specifically engage in the production and marketing of smoothies, milkshakes, frozen drinks, and various fruit juices that provide high quality, delicious, and accessible nourishment to consumers. The business will be situated in Richmond, Virginia. The company will market its products directly through its smoothie bar as well as other appropriate means. Though Jolly Smoothie’s primary goal is to achieve significant financial benefits, the business also aims to promote a healthy lifestyle among the population by selling products with medical benefits. The company’s mission is to build a healthier society by delivering real and nutritious drinks. Also, from education to sustainability to the community, Jolly Smoothie is dedicated to healthy change. It is through such principles and relentless pursuit of quality that the business will set itself apart from the average juice bar in Richmond, Virginia.

Industry Analysis and Trends

The worldwide smoothie market to increase in the next five years. The projected increase is driven by the rising consumer demand for healthy, natural, and convenient foods (Technavio, 2016). The growing health consciousness among almost every population segment is increasing the desire for freshly produced juice from organic ingredients. For instance, with the obesity crisis reaching its epidemic proportion, many people have become more aware than ever before on the need adopt healthier eating behaviors. That is evidenced by the global industry revenue of $2 billion, which according to analysts is expected to increase over the next five years (Technavio, 2016). In addition, the growing number of health-conscious population, as well as preventive food habits has intensified the increase in the worldwide smoothies’ marketplace. Preventive food lifestyle, in this case, indicates consumption of healthy foodstuffs that have certain useful benefits and added vitamins and minerals (Technavio, 2016). Such foods reduce the risk of health-associated issues and increase the body’s immune system. Smoothies and fresh juices offer an excellent solution to such needs, thereby contributing to the market growth currently being witnessed.

Apart from being a favorite food option for consumers seeking additional health benefits, the busy lifestyles have transformed smoothies and other fresh juices to a convenient for on-the-go buyers (Technavio, 2016). Freshly squeezed vegetables and fruits and other nutritious drinks such as frozen yogurt are increasingly becoming a common option for working-class youths, adults, and students who have seen their time reduced due to a busy schedule. As a result, it is growing the demand for convenient and portable meal replacement smoothies. Moreover, aspects such as the rising popularity of organic and non-GMO smoothies are currently propelling the growth prospects of the marketplace. Organic smoothies, in this case, refer to drinks that are not made from blended juice and vegetables that are artificially grown by spraying with harmful chemicals. There is a mounting worry among customers about the source and quality of fruits and vegetables used in the production of fruit smoothies. Additionally, a right mixture of natural ingredients aids in cleansing and detoxifying the body (Technavio, 2016). Therefore, though organic and natural smoothies are more costly to make and are priced higher than the traditional juices, they are currently driving market growth because of associated extra health benefits.

Another essential smoothie trend is the focus on global influences (Technavio, 2016). Due to increased globalization, many smoothie bars have increased their emphasis on global tastes, such as Mexican and Asian inspired flavors (Technavio, 2016). With the current trend, it is expected that other global flavors will soon be introduced in smoothies. With an increasing number of foreign nationals visiting the US each day, smoothie stores have to stay ahead of this trend to meet varying consumer demands. Additionally, the focus on global influences also necessitates the need for smoothie bar owners to experiment with new ingredients to keep the business booming and attractive to a broad customer base.

Strategic Position and Risk Assessment

Strategic Position

Positioning a company as a leader in a given market segment is crucial to the success of the business and the ability of the firm to dominate the marketplace (Abrams, 2010). Jolly Smoothies will position itself as a provider of high quality, delicious, and healthy fruit drinks. This strategic positioning will not be based on price but on the ability of the company to engage in continuous product improvement through effective communication with consumers. The business recognizes the need of listening to consumers in a bid to respond to their interest and preferences. Jolly Smoothie’s strategic positioning as a provider of high quality, delicious, and healthy fruit drinks will also be based on the business emphasis on obtaining and responding to buyers’ feedback in the shortest time possible. Also, Jolly Smoothie will operate on the philosophy that a good customer relationship is crucial in achieving brand loyalty and positioning itself as a market leader when it comes to the provision of high quality, delicious, and healthy fruit drinks.

Risk Assessment

Recognizing and embracing risk is a fundamental aspect of a new business. There is a given level of uncertainty that the enterprise will have to anticipate. For instance, financial risk is one of the aspects that might influence the success of the business. There is no doubt that starting up the company will be costly, driven by factors such as expensive operation permits, inflation, and raw materials. However, there is no guarantee that the capital invested in the company will yield returns at all or within the expected time. Also, specific factors, such as reduced consumers spending and increase in commodity prices might affect the projected cash flow, thereby exposing Jolly Smoothie to financial risk. Additionally, there might not be sufficient demand for the company’s products, consequently making the business vulnerable to market risk. There is no surety that buyers will purchase Jolly Smoothie’s offerings, at the company’s price. Also, there is some possibility that the ingredients, which will be used in making the fruit drinks, might hurt the health of specific consumers. Such cases might expose the business to legal risk.

Target Market

Jolly Smoothie recognizes the need for identifying a target market since it is crucial in developing effective marketing communication strategies. The company’s target market will comprise of individuals sharing similar needs, preferences or characteristics that Jolly Smoothie hopes to serve. The targeted market will be grouped according to geographic, demographic, psychographics, and behavioristic traits. For instance, based on the geographic variable, the business will target all consumers within a radius of 25 miles from Richmond, Virginia. Regarding shared demographics, Jolly Smoothie will target all male and female consumers from the age of 4 regardless of their income or education status. Based on psychographics, the business aims to serve busy individuals who are looking for convenient and portable meal replacement smoothies. Finally, concerning the behavioristic variable, Jolly Smoothies’ consumers can be described as smoothie buyers who are in need of healthy and nourishing foods that have additional medicinal benefits. Also based on shared behavioristic traits, the company will target smoothie consumers who want a right mixture of natural ingredients that aids in cleansing in detoxifying the body.

Competition

Competition in the smoothie and juice industry can pose a threat to potential entrants. The sector is highly fragmented and dynamic because of the existence of many vendors that offer a wide variety of products (Technavio, 2016). As a result, it makes it difficult for startups to attain an edge in the market after beginning operations. In addition, given that the beverage industry is exposed to rapid changes in the needs and preference of consumers, the market might be impacted by the shifting buyer demands and inclinations. Businesses in the smoothies and juice industry mainly compete based on product quality, price, differentiation, distribution, and promotion to attain maximum market grip (Technavio, 2016). Therefore, it means that for Jolly Smoothie to gain significant market traction, the company will have to devise an effective marketing strategy. For instance, the business will have to ensure that product prices are competitive enough to attract consumers and at the same time enables the company to operate at a profit.

Even though companies producing similar products characterize the industry, large corporations dominate the market (Technavio, 2016). For instance, established firms such as Bolthouse Farms and Robeks invest vast sums of money in promotional activities and at the same time engages in mass production that might make it difficult for startups such as Jolly Smoothie to penetrate the market. In other words, the enormous financial capabilities of large smoothie and juice companies makes it difficult for startups to thrive. Also, the limited amount of capital makes it challenging for less established smoothie businesses to create a difference between the high and low-class customers since the products are within a similar range of quality and price. Additionally, competition in the industry is also likely to strengthen with the growing product extensions, innovation, and merger and acquisition activities.

Marketing Plan and Sales Strategy

Having identified Jolly Smoothie’s objectives and the state of the industry, a marketing plan, and a sales strategy will be crucial in helping the business to position itself in the market with the aim of acquiring a competitive edge (Abrams, 2010). The marketing plan will comprise of various approaches that the company will utilize to position itself in the marketplace and consequently realize sales for the first six months. The recommended strategies will focus initially on promoting Jolly Smoothie’s products in the nearby community, for instance, within a radius of 25 miles from Richmond, Virginia.

Jolly Smoothie Market Positioning

Jolly Smoothie’s positioning will be presented in the firm’s marketing mix, that is, through the product, price, place, and promotion strategies.

Product. Jolly Smoothie will provide a wide range of frozen drinks including smoothies, milkshakes, and yogurts. The enterprise will create customer value by marketing offerings that are responsive to the consumers’ unique tastes and preferences. For example, the business will use ingredients that offer multiple health benefits and prepare products in a hygienic environment, thereby catering for the needs of clients who are looking to invest in healthier food and drink choices.

Price. The company recognizes that implementing a competitive pricing strategy is essential to the success of the business, considering that Jolly Smoothie is a new entrant. Therefore, the company will adopt a penetration pricing approach. The purpose of the penetration pricing strategy is to capture the market share within the first six months of operation by selling the company offerings at a lower price as compared to the rates of other players in the industry (Pride & Ferrell, 2017). It is anticipated that with the penetration pricing approach, the enterprise will be able to raise awareness, thus, attracting the prospects in the nearby community to buy the products.

Place. The business will adopt different channels of distribution to enhance effectiveness. Jolly Smoothies will market business offerings in online stores as well as physical shops. For instance, the company will make direct sells to customers living within a radius of 25 miles from its shop in Richmond, Virginia. Also, the consumers can place orders through the company’s website, after which the product will be delivered to the clients.

Promotion. The company will adopt more than one promotional channels that align with the business strategy. Jolly Smoothie will use personal selling, online marketing, print media and direct mail to endorse the products.

Marketing Strategy

Jolly Smoothie’s marketing strategy will focus on how the enterprise conveys vital messages to prospects (Abrams, 2010). Also, much attention will be directed towards how Jolly Smoothie’s offerings satisfy the customers’ unique needs by fostering a long-lasting and meaningful relationship with the consumers (Mughal, Mehmood, Mohi-ud-deen, & Ahmad, 2014). The company’s marketing strategy will, thus, encompass different approaches. The proposed initiatives are based on the associated benefits.

Personal Selling. Jolly Smoothie will adopt the direct selling strategy to promote its offerings through one-on-one interaction with the prospects at the point of sale (Pride & Ferrel, 2017). The approach will involve establishing a need-based relationship between Jolly Smoothie’s sales team and the potential consumers, with the aim of encouraging repeat purchases. During the marketing process, customers will have the opportunity to seek clarifications on any concerns or complaints regarding the products. Adopting the strategy will also offer a chance for the Jolly Smoothie’s sales force to follow-up with potential buyers. In the process of personal selling, prospects will be given free samples of the company’s beverages to obtain feedback on the quality of the offerings. The marketing approach will be beneficial to Jolly Smoothie since it is less expensive and vital in establishing a seller-customer relationship at no extra cost.

Online Marketing. Internet advertising will be essential to enhancing product recognition and creating rapport with clients. The business will use social networking sites such as Twitter and Facebook to improve awareness of the company’s offerings. The primary segment that Jolly Smoothie will target include prospects from Richmond. Marketing through social media platforms is effective as it provides access to a large number of potential consumers at a low cost (Mughal et al., 2014). For instance, Jolly Smoothie will need only to create a social networking site, from where the company will interact with clients. To gain a competitive edge, Jolly Smoothie will set up a well-designed website that will be updated regularly. Jolly Smoothie will display pictures of top selling drinks and provide detailed information on the products through the website. Additionally, the site will be used for placing orders.

Direct Mails. The strategy will be adopted to strengthen product awareness. Direct mails will entail using well-designed flyers and brochures (Abrams, 2010). For example, Jolly Smoothie will issue pamphlets since such advertising materials offer a visual reminder of the business. The company will post drink menus and brochures embedded with detailed information on the ingredients used to make the products as well as the nutritional content to the customers. Also, fliers are a cost-effective advertising media that will be essential in enhancing brand recognition and encouraging consumers to try the offerings. Jolly Smoothie will design colorful and attractive fliers that will grab the attention of prospects and mail them to potential clients within Richmond. The firm will rent lists of likely consumers who meet the target market criteria from mailing list brokers or other sources, for instance, magazines or phone companies, after which personalized messages will be sent to the customers.

Print Media. Jolly Smoothie will also adopt print media that provide extensive coverage at an affordable cost. The company will partner with colleges and small organizations that are situated within a 25 miles radius from Richmond to advertise the products in the periodical magazines that the institutions issue. Additionally, Jolly Smoothie will create business cards that will provide crucial information about the business offerings as well as the physical location and hours of operation to prospects. The cards will be printed and regularly distributed to the customers at the smoothie bar to ensure increased company exposure.

Other Strategies. In addition to the strategies already discussed, Jolly Smoothie will adopt a different approach, for instance, customer referral incentive programs to market the company’s drinks. The initiative will encourage existing consumers to refer prospects to the store. The company will offer incentives such as free smoothies and discounts on products to any customers who refer other buyers to Jolly Smoothie. Using a customer referral program is efficient and less costly since it leverages the existing clientele to attract new consumers (Mughal et al., 2014).

Sales Force and Sales Procedure

Jolly Smoothie will not expect massive traffic because it is a new entrant that targets a relatively small market. Therefore, the sales team will only consist of the business owner and one assistant. The actual transactions will chiefly be managed through mail order and on-site-sales. For example, a consumer will need to be present at the physical store to purchase a product or place an order through the company’s website for the offering to be delivered to the client’s locality.

Ethics and Social Responsibility Plan

Incorporating ethical and social responsibility plan into the business strategy translates to using the public’s canons of what establishes right and wrong behavior to determine the company’s operations and policies (Chan, 2014). Jolly Smoothies’ ethics and social responsibility plan cover areas pertaining to corporate citizenship, the firm’s environmental impacts, and products related health issues.

How Jolly Smoothie Is Committed To Being a Corporate Citizen

Jolly Smoothie is a social venture based on the fact that the business will assume responsibilities that go well past the scope of simple commercial relationships. In this regard, Jolly Smoothie’s goal is not only to recognize the need to take into account the company’s impact on the economy, but also to consider the firm’s complete influence on society and the environment. The enterprise plans to achieve this goal through various ways. For instance, job creation is an aspect that could contribute to a company’s commitment to corporate citizenship. Employment creation is not only the core to economic development but also a central factor in building healthy communities (Chan, 2014) Jolly Smoothie plans to employ one individual immediately the operations commence. However, as the company continues to gain significant market traction and the demand for products increase, more jobs will be created, thereby enhancing the enterprise’s commitment to corporate citizenship.

Jolly Smoothie also plans to demonstrate the enterprise’s commitment to being a corporate citizen by abiding by the laws of the jurisdiction in which the business will operate. Laws and regulations are important external aspects of a company that can make a business have a positive impact on society and the environment (Chan, 2014). For instance, Jolly Smoothie is committed to abiding by the stipulated labor regulations of Virginia by creating a conducive and safe work environment for employees. Also, the business will abide by all financial laws, for instance, those involving taxes. Additionally, the enterprise will continually verify whether the firm’s practices and decisions are consistent with federal, state, and local operational laws.

Moreover, Jolly Smoothie recognizes the need to ensure fair and honest treatment of employees as a way of achieving the enterprise’s goal of becoming a corporate citizen. As a result, the company will establish a foundation for an equally respectful employer-employee relationship by communicating with workers openly and honestly. Also, Jolly Smoothie will devise a system that ensures that the management responds to staff needs and concerns promptly irrespective of a person’s position in the business. Furthermore, the company will develop a hiring strategy to make the workforce resemble the community the enterprise operates in, as a way of increasing employee diversity (Chan, 2014). Moreover, Jolly Smoothie will provide diversity training in the workplace to prevent instances of staff discrimination.

How Jolly Smoothie Plans To Mitigate Activities That Might Negatively Affect the Environment

The business expects that certain activities related to the production and consumption of the company’s products might have an adverse impact on the environment. For instance, the enterprise anticipates a significant amount of waste that will come from the fruits and other materials used in making the products. The leftovers from the production process might have an adverse impact on the surrounding environment, for instance, by polluting the air through or contaminating the nearby water sources. Jolly Smoothie plans to mitigate the effects of waste by first seeking expert advice on how to dispose of unwanted materials in a manner that it does not affect the surroundings. The business will also develop sustainable recycling initiatives, for instance, reusing used cans. Additionally, Jolly Smoothie will donate surplus fruits and drinks that would otherwise go to waste.

Also, as much as the business will be using recyclable packaging materials, it is expected that some might end up in landfills, thereby having an undesirable impact on the environment. For instance, after drinking their smoothies or juices, some consumers might fail to dispose of juice cans properly, hence ending up in the wrong place. To mitigate the adverse effect of such eventualities, Jolly Smoothie will come up with an initiative to sensitize customers on the need of disposing of packaging materials properly after using them. At the same time, the business plans to develop an incentive program aimed at rewarding buyers who return juice or yogurt cans at the company’s physical store after use. With such measures, Jolly Smoothie’s negative impacts on the environment can be significantly minimized.

Health Issues and the Company’s Planned Mitigation Efforts

Smoothies and fruit juices are associated with various health issues. People recognize smoothies and freshly made juice as healthy snacks because of the associated medical benefits. For instance, the fact that fruit juices will be served fresh, more of fruit’s or vegetable’s vitamins and minerals will be retained, which is essential in enhancing an individual’s immune system (Merz, 2016). Also, there is an argument that a right blend of natural ingredients used in making smoothies can aid in cleansing and detoxify the body. Similarly, consuming smoothies is seen as an ideal way of adding vegetables to a diet, more so for individuals who struggle to eat vegetables (Merz, 2016). To ensure that such positive claims are valid, the management will engage research experts to ascertain the accuracy of such information. Likewise, Jolly Smoothie can also conduct its investigation to test whether the claims have a significant level of truth.

Conversely, even though smoothies and fresh juice are widely associated with positive health benefits, their popularity raises concerns among some health experts (Merz, 2016). For instance, there is an argument that juice contains less fiber compared to an entire fruit or vegetable. Also, there is an assertion that fruit juices are likely to have higher glycemic index than whole fruit (Merz, 2016). Glycemic index, in this case, is a measure of how a particular type of food increases blood sugar levels (Merz, 2016). There is also a claim that consumers can pack in calories by consuming smoothies if they are not careful since some smoothie makers add sugar, syrup, or honey on the drinks (Merz, 2016). To mitigate such issues, Jolly Smoothie will seek accurate nutritional information for each product that the company will offer and make it known to consumers so that buyers can make an informed decision. Additionally, the Jolly Smoothie will use only natural ingredients to make its products in a bid to reduce concerns about added ingredients that might cause health problems.

How the Company Plans To Address Negative Health Impacts on a Certain Population Segment

There is no doubt that Jolly Smoothie’s products might have a negative impact on a specific population segment. For instance, even though smoothies and fresh juice are widely consumed, infants below six months old should still not feed on such products. Therefore, it means that it would be inappropriate to target infants below six months while promoting the products. However, to address the negative health impacts on such a population, Jolly Smoothie will ensure that advertisement initiative are explicitly directed to the relevant groups only. Additionally, while promoting the product, for instance, on magazines and online media, Jolly Smoothie will run an advertisement that prohibits parents from feeding children below six-month-old smoothies. Also, the information contained in product fliers will include a message that forbids parents from giving their newborns smoothies and other company offerings. Using such initiatives will eliminate the negative health impacts on infants below six months old.

Additionally, Jolly Smoothie will restrict distribution of products to children under the age of seven years unless accompanied or allowed by a parent. The rationale behind such as plan is based on the notion that youngsters below seven years are vulnerable given that they need constant health supervision. The approach will allow the company to distribute smoothies and juice only to appropriate segment, thereby mitigating adverse health impacts associated with children under the age of seven.

Section Two: Business Plan Financials

The figures below illustrate the company’s year one estimated cash flow, income statement, and balance sheet.

Table1: Projected Cash Flow Statement

Jolly Smoothie

Cash Flow Statement

CASH RECEIPTS

Income from Sales

Cash Sales

79200

Collections

11000

Total Cash from Sales

90200

Income from Financing

Interest Income

6000

Loan Proceeds

0

Equity Capital Investments

6000

Total Cash from Financing

12000

Other Cash Receipts

0

TOTAL CASH RECEIPTS

102200

[42]

CASH DISBURSEMENT

Inventory

-33600

Operating Expenses

-4700

Commissions/Returns & Allowances

0

Capital Purchases

-21500

Loan Payments

-11000

Income Tax Payments

-4815

Investor Dividend Payment

0

Owner’s Draw

-2000

TOTAL CASH DISBURSEMENTS

-77615

NET CASH FLOW

Opening Cash Balance

13500

Cash Receipts

102200

Cash Disbursements

-77615

ENDING CASH BALANCE

38085

Table2: Projected Income Statement

Jolly Smoothie

Income Statement

INCOME

Gross Income

90200

Commissions

0

Returns and allowances

-3800

Net Sales

86400

Cost of Goods

-24700

GROSS PROFIT

61700

EXPENSES-General and Administrative

Salaries and Wages

-19400

Employee Benefits

-1200

Payroll Taxes

-1530

Professional Services

-1300

Marketing and Advertisement

-3300

Rent

-600

[42]

Equipment Rental

0

Maintenance

-600

Depreciation

-300

Insurance

-700

Telephone Services

-400

Utilities

-800

Office Supplies

-700

Postage and Shipping

-1550

Travel

0

Entertainment

0

Interest on Loans

-5000

TOTAL EXPENSES

-37380

Net Income before Taxes

24320

Provision for Taxes on Income

-4815

NET PROFIT

19505

Table 3: Projected Balance Sheet

Jolly Smoothie

Balance Sheet

ASSETS

Current Assets

Cash

38085

Accounts Receivable

9600

Inventory

18900

Other Current Assets

1100

Total Current Assets

67685

Fixed Assets

Land

0

Facilities

9700

Equipment

15000

Computers

850

(Less Acc. Dep.)

-1050

Total Fixed Assets

24500

Other Assets

3200

TOTAL ASSETS

95385

LIABILITIES

Current Liabilities

Short-term Notes Payable

5000

Income Taxes Due

4815

Other Current Liabilities

2500

Total Current Liabilities

12315

Long-term Liabilities

Long-term Note’s Payable

50650

Other Long-term Liabilities

0

Total Long-term Liabilities

50650

NET WORTH

Paid-in Capital

12915

Retained Earnings

19505

Total Net Worth

32420

TOTAL LIABILITIES AND NET WORTH

95385

References

Abrams, R. M. (2010). Successful business plan: Secrets & strategies: America’s best-selling business plan guide! Canada: Planning Shop.

Chan, L. (2014). Corporate social responsibility of multinational corporations. Global Honors Theses, 18, 1-31. Retrieved from https://digitalcommons.tacoma.uw.edu/cgi/viewcontent.cgi?referer=https://www.bing.com/&httpsredir=1&article=1018&context=gh_theses

Merz, B. (2016, July 29). Are fresh juice drinks as healthy as they seem? - Harvard Health Publishing. Retrieved from https://www.health.harvard.edu/blog/fresh-juice-drinks-healthy-seem-2016072910044

Mughal, A., Mehmood, A., Mohi-ud-deen, A., & Ahmad, B. (2014). The impact of promotional tools on consumer buying behavior: A study from Pakistan. Journal of Public Administration and Governance, 4(3), 402. doi:10.5296/jpag.v4i3.6680

Pride, W. M., & Ferrell, O. C. (2017). Foundations of marketing. Cengage Learning.

Technavio. (2016). Global smoothies market 2016-2020 | Market research reports - industry analysis size & trends - Technavio. Retrieved from https://www.technavio.com/report/global-non-alcoholic-beverages-smoothies-market