Marketing Strategy Argumentative

1.0 Executive Summary

The goal of this marketing plan is to outline the strategies, tactics, and programs that will make the sales goals outlined in the Smoothie King business plan a reality in the year 2006.

Smoothies are one of the hottest franchise concepts going right now with the market in its infancy. The Smoothie King concept was founded in 1973 and the franchise company, Smoothie King Franchises, Inc. was founded in 1973 with the idea of helping people achieve wellness through good nutrition. Smoothie King was the originator of the nutritional smoothie. Smoothie King starts with natural fruits and 100% fruit juice concentrates, adding vitamins, proteins, and minerals blended together with filtered ice to make a delicious, refreshing drink. Smoothies are consumed as a snack or a meal and at all times of the day.

Smoothie King Franchises, Inc. operates over 300 franchised retail stores selling nutritional fruit smoothies, vitamins, minerals, sports nutrition and other healthy food, snacks, and nutritional products. Healthy Blend, LLC dba Smoothie King is a part of that franchised system, enjoying support in every facet of the business including product development, marketing, and operational expertise. Our company belongs to a strong buying group with the purchasing power of over 300 units and growing. We expect to catch the interest of a regular loyal customer base with over 60 different fruit-flavored smoothies and nutritional products.

Smoothie King, unlike a typical smoothie bar, provides a unique forum for communication and entertainment through the medium of the internet. Smoothie King is the answer to an increasing demand. The public wants: (1) nutritional fast-food alternatives, (2) access to the methods of communication and volumes of information now available on the internet, and (3) a place to socialize and share these experiences with friends and colleagues.

Marketing will play a vital role in the success of Smoothie King. Smoothie King has built a brand but must build a bigger brand around the services it offers by heavily promoting itself through radio, print, and outdoor advertising. Marketing efforts are just beginning by the time a customers enters Smoothie King for the first time. A strong emphasis will be put on customer retention and building brand loyalty through programs focused on staffing, experience, and customer satisfaction.

2.0 Situation Analysis

Smoothie King just opened its doors for business under three months ago. Business is good, and customers have been impressed with our offerings, but we need to focus our efforts on implementing the strategies, programs, and tactics outlined in the original business plan.

Differentiating ourselves from other more traditional smoothie bars has given us the ability to effectively compete on the nutritional product side of the business with the already entrenched competition. Sales are brisk and in-line with projections.

The internet services side of the business is rapidly being accepted by the local community. Frequent buyers are meeting the projections outlined in the business plan, and sales of smoothies have increased thus allowing customers to browse the internet while enjoying their beverages. Students love to gather for evening sessions, nearby seniors are getting a glimpse of what the internet offers, and local business people love to stop by for a quick smoothie and an email check.

2.1 Market Summary

Smoothie King is faced with the exciting opportunity of being the first-mover in the local cyber-smoothie market. The consistent popularity of smoothies, combined with the growing interest in the internet, has been proven to be a winning concept in other markets and will produce the results here.

The market for the products sold in Smoothie King is the general public. In addition, being competitively priced will meet the demand of the middle-to-higher income local market area residents and tourists. Although the market for the nutritional products carried in the store are more developed, the market for smoothies is developing and gaining recognition. However, smoothies still may be relatively unknown in certain markets. We’re faced with a large number of potential customers, and we’re offering a needed service. Altogether the dominant target market for Smoothie King is a regular stream of local residents. Personal and expedient customer service at a competitive price is key to maintaining the local market share of this target market.

Target Market Growth:
▪ Women, who perceive smoothie stores as friendly, non-threatening meeting places continue to grow at a steady pace, at nearly 4% ▪ Many customers are young and fairly affluent, heavily basing their choice of smoothie stores on image and location, growing at 2% ▪ Older customers tend to prefer in-store restaurants and tea rooms; however by offering services geared toward this group they provide an invaluable source of custom in off-peak periods, growing at almost 6% ▪ Shoppers primarily base their choice on an accessible location and make up the bulk of a smoothie store passing trade, growing at 6% ▪ Office workers looking for a quick snack and drink or a relaxing meeting place, growing at nearly 4%

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2.1.1 Market Demographics

Smoothie King customers can be divided into two groups. The first group is familiar with the internet and desires a progressive and inviting atmosphere where they can get out of their offices or homes to enjoy a great smoothie and internet access. This group is made up of students and people from the nearby downtown offices and professional centers.

The second group is not as familiar with the internet. This group is made up of seniors from local churches. Seniors represent a growing segment of internet users. They use the internet to communicate with family and they will be regular users of Smoothie King service.

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2.1.2 Market Needs

Factors, such as taste, and historical sales data ensure that the high demand for smoothies will remain constant over the next five years.

The rapid growth of the internet and online services that has been witnessed worldwide is only the beginning of a long-lived trend towards an economy built on the infrastructure of the internet. The potential growth of the internet is enormous, to the point where one day, a computer terminal with an online connection will be as common and necessary as a telephone or toilet. This may be 5 to 10 years down the road, but for the next five years, the online service provider market is sure to experience tremendous growth. After establishing itself as the first cyber-café Smoothie King in the area, Smoothie King is enjoying the competitive advantage of name recognition and customer loyalty. Initially, Smoothie King will hold a 70% share of the cyber market locally. In the next five years, competitors will enter the market. Smoothie King has set the goal of consistently maintaining a market share of greater than 50 %.

2.1.3 Market Trends

The Internet has become a point of conversation in almost all social groups. People are talking about sites they visited, business people are talking about Internet-based businesses, and kids are talking about the latest Internet clubs and chat rooms. People like to communicate their Internet experiences with their friends, colleagues, and family. However, it can be difficult to do it in front of a computer terminal at the office or in the family study. A comfortable place to gather and share these experiences is becoming a real need.

Smoothie King will provide:
• A meeting place for business people interested in sharing their Internet-based business ideas. • A social hub for students and young people interested in sharing a smoothie and their internet experiences with friends. • A place for nearby seniors to gather and learn about the powers of the internet and better communication methods. • A stopping point for travelers in need of an internet connection. 2.1.4 Market Trends

The market for the services Smoothie King will offer is growing rapidly. The Smoothie King hasn’t come to this area yet, but similar services are growing rapidly on a global scale. Large cities that cater to large numbers of traveling business people and tourists have been saturated with businesses offering the services Smoothie King Franchises, Inc. will offer. Business people use the internet services to catch up on email and communications with their family, and tourists do the same. Our area supports a population that has many of the same needs and interests of this larger group.

2.2 SWOT Analysis

The SWOT analysis provides us with an opportunity to examine the internal strengths and weaknesses Smoothie King must address. It also allows us to examine the opportunities presented to Smoothie King as well as potential threats.

Smoothie King has a valuable inventory of strengths that will help it succeed. These strengths include: a knowledgeable and friendly staff, state-of-the-art computer hardware, and a clear vision of the market need. Strengths are valuable, but it is also important to realize the weaknesses Smoothie King must address. These weaknesses include: a dependence on quickly changing technology, and the cost factor associated with keeping state-of-the art computer hardware. Smoothie King’s strengths will help it capitalize on emerging opportunities. These opportunities include, but are not limited to, a growing population of daily internet users, and the growing social bonds fostered by the smoothie experience and new internet communities. Threats that Smoothie King should be aware of include, new entry to industry with emerging local competitors. 2.2.1 Strengths

1. Knowledgeable and friendly staff. We’ve gone to great lengths at Smoothie King to find people with a passion for educating the customers and sharing their internet experiences. Our staff is both knowledgeable and eager to please. 2. State-of-the art equipment. Part of the Smoothie King experience includes access to state-of-the-art computer equipment. Our customers enjoy beautiful flat-screen displays, fast machines, and one flat screen ceiling monitor showing random movies. 3. Up-scale ambiance. When you walk into Smoothie King, you’ll feel the healthiness & technology. Wall paneled tables with chairs with flat-screen monitors onsets onto the tables provide a comfortable place for surfing the internet and/or checking emails while waiting for that delicious smoothie.

Medium-sized round tables with Wireless Fidelity access provide a location for customers with personal laptops. Aluminum track lighting and visuals of fresh fruit, activities, and technology sets the mood. Last, but not least, quality smoothie machines behind a glass display case provide enticing smoothies being made to order. 4. Clear vision of the market need. Smoothie King knows what it takes to build a profitable smoothie store. We know the customers, we know the technology, and we know how to build the service that will bring the two together. 2.2.2 Weaknesses

1. A dependence on quickly changing technology. Smoothie King is a place for people enjoy a healthy smoothie and to experience the technology of the internet. The technology that is the internet changes rapidly. Product lifecycles are measured in weeks, not months. Smoothie King needs to keep up with the technology because a lot of the Smoothie King experience will be technology. 2. Cost factor associated with keeping state-of-the-art hardware. Keeping up with the technology of the internet is an expensive undertaking. Smoothie King needs to balance technology needs with the other needs of the business. One aspect of the business can’t be sacrificed for the other. 2.2.3 Opportunities

1. Growing population of daily internet users. The importance of the internet almost equals that of the telephone. As the population of daily internet users increases, so will the need for the services Smoothie King offers. 2. Social bonds fostered by the new internet communities. The internet is bringing people from across the world together unlike any other communication medium. Smoothie King will capitalize on this social trend by providing a place for local internet users to meet. Smoothie King will grow this initiative by establishing chat areas and community programs. These programs will be designed to build customer loyalty. 2.2.4 Threats

1. New entry to industry with emerging local competitors. Currently, Smoothie King is enjoying a first-mover advantage in the local cyber-smoothie market. However, additional competitors are on the horizon, and we need to be prepared for their entry into the market. Many of our programs will be designed to build customer loyalty, and it is our hope that our quality service and up-scale ambiance won’t be easily duplicated. 2.3 Competition

The dual product/service nature of Smoothie King’s business faces competition on two levels. Smoothie King competes not only with juice bars, but also with nutritional supplement providers. The good news is that Smoothie King does not currently face any direct competition from other cyber cafes in the local market. There are a total of one cyber smoothie store in Atlanta: located in Lithonia, Georgia. The market is highly competitive and we will be competing with other smoothie businesses, juice bars, national and local general nutrition businesses and health food businesses. Heavy competition between smoothie stores creates an industry where all firms face the same costs. National and local restaurants may also develop smoothie drinks as additional menu items and national and local supermarkets and other retailers may carry some of the same or similar product lines. In addition, there is a positive relationship between price and quality of our smoothies. Some smoothies retail at $5.00 per 32 oz. cup, while other more expensive smoothies may sell for as high as $8.00 per 40 oz. cup. Smoothie King believes that our emphasis on high quality nutritional drinks that taste good and our combination refreshment/general nutrition business and its operating system gives Smoothie King a competitive advantage over the competition in the market. 2.4 Services

Smoothie King will provide its customers with full access to the internet while waiting for their delicious smoothie(s). Some of the internet and computing services available to Smoothie King customers are listed below: • Access to external POP3 email accounts.

• Customers will be introduced to the Smoothie King website. From here, customers can simply educate themselves on the unique products we sell. • Access to Mozilla Firefox or Internet Explorer browsers. Smoothie King will also provide its customers with access to introductory internet and email classes. These classes will be held in the afternoon and late in the evening during off-peak times. By providing these classes, Smoothie King will build a client base familiar with its products and services and generate more traffic. The computers, internet access, and classes wouldn’t mean half as much if taken out of the environment Smoothie King will provide. Great smoothies, nutritious goods, and a comfortable environment will provide Smoothie King customers with a place to enjoy the benefits of surfing the internet in a well kept environment. 2.5 Keys to Success

The keys to the success for Smoothie King are:
• Great smoothies and nutritious items.
• The creation of a unique, innovative, upscale atmosphere that will differentiate Smoothie King from other local coffee shops and future internet cafes. • The establishment of Smoothie King as a community hub for socialization and entertainment. • The creation of an environment that won’t intimidate the novice user. Smoothie King will position itself as an educational resource for individuals wishing to learn about nutrition and the benefits the internet has to offer. 2.6 Critical Issues

The risks involved for Smoothie King are:
• Will there be a continuing demand for the product offered by Smoothie King? • Will the popularity of smoothies and the internet grow, or is it just a fad? • Will the 4 months of cold climate remain profitable? 2.7 Macroenvironment

The health food industry in this area experienced rapid growth at the beginning of the decade and is now moving into the mature stage of its life cycle. Many factors contribute to the large demand for good health. The popularity of smoothies and the internet is growing exponentially. Those who are familiar with the taste and information superhighway are well aware of how fun and addicting sipping on your favorite smoothie and surfing the internet can be. Those who have not yet experienced the internet need a convenient, relaxed atmosphere where they can feel comfortable learning about and utilizing the current technologies. Smoothie King seeks to provide its customers with cost-free internet access in an innovative and supportive environment.

3.0 Marketing Strategy
Smoothie King has three main strategies. The first strategy focuses on attracting local residents and providing them with expedient customer service with smoothies at a competitive price. By providing a novice-friendly environment, Smoothie King hopes to educate and train a loyal customer base. The second and most important strategy focuses on pulling in wireless internet users. Wireless internet users are extremely familiar with the internet and its offerings. This group of customers serves an important function at Smoothie King. These users have knowledge and web-browsing experience that novice internet users find attractive and exciting. The third strategy focuses on building a social environment for Smoothie King customers. A social environment that provides entertainment will serve to attract customers that wouldn’t normally think about purchasing a smoothie or using the internet. Once on location at Smoothie King, these customers that came for the standard smoothie offerings will realize the potential entertainment value the internet can provide while enjoying their smoothies. 3.1 Mission

Smoothie King has one purpose.
Smoothie King aims to offer high quality smoothies and nutritional products at a competitive price to meet the demand of the middle-to-higher income local market area residents and tourists. Smoothie King’s marketing will consistently build on this mission. Everything we do, from the pricing structure for our products to the ambiance we create, must be done with this mission in mind. We cater to: downtown business people, traveling business people, university students, and seniors. Our ambiance and our services are designed for this clientele and our marketing efforts are focused on capturing this market. 3.2 Marketing Objectives

Smoothie King’s marketing objectives for the first three years of operation include: • Grow total sales by 10% annually.
• Smoothies and supplements are our products. They must be of the highest quality and value. • Service: Our customers are paying for great-tasting smoothies and expect expedient service. Their experience will suffer if service is not of the highest caliber. Each member of the staff will be courteous, efficient, and attentive. • Marketing: We will need to target our audience early and often. While the business is located in a central and accessible location, many people will have to be reintroduced. Continue to build the Smoothie King brand to the point where it becomes a household word in the area. • Management: We will need to have a firm grasp on beverage, and labor cost. The smoothie store experience must be delivered in a fashion that will not only inspire repeat business, but also encourage word-of-mouth recommendations to others. • Proper inventory, employee management, and quality control are key. 3.3 Financial Objectives

The goal of this marketing plan is to outline the marketing strategies, tactics, and programs that will make the vision outlined in the Smoothie King business plan a reality in the year 2006. The vision outlined in the business plan includes sales of roughly $275,000 in the first year with that figure increasing 5% annually. 3.4 Target Marketing

Smoothie King intends to cater both to people who want a delicious smoothie and to users eager to indulge their passion for surfing the internet in a social setting. Furthermore, Smoothie King will be a magnet for local and traveling professionals who desire to work or check their email messages in a friendly atmosphere. These professionals will either use Smoothie King’s PCs, or utilize their own laptop computers with our wireless internet connection. Smoothie King’s target market covers a wide range of ages: from members of “Generation X,” who grew up surrounded by computers, to seniors from local retirement centers. Our primary target markets include:

• Students. The large student population will become an important part of the Smoothie King customer base. The student population continues to grow with the success of Clayton State University. Access to the internet and the up-scale ambiance will attract this demographic. • Business people. The downtown business community is growing rapidly with the addition of a new buildings and a flurry of professional centers. Smoothie King will provide a perfect setting for business individuals taking a break. It will also give traveling business people an opportunity to connect their laptops via Smoothie King’s wireless network to check email communications. 3.5 Positioning

Smoothie King will position itself as an upscale smoothie bar and cost-free internet service provider. Business people of all types will use Smoothie King as a place to recess and catch-up on email communications. Students from nearby downtown housing centers will use Smoothie King as a place to socialize and discuss the latest internet sites. Seniors from the area will experience the internet for the first time at Smoothie King. Simple programs designed to educate customers about nutrition and the power of the internet will help build customer loyalty and spread the word about the products and services Smoothie King offers.

3.6 Marketing Mix
Smoothie King’s marketing efforts will focus on building a loyal base of customers that will purchase smoothies and use the internet services provided on an almost daily basis. 3.6.1 Products and Service Marketing

As the popularity of the internet continues to grow at an exponential rate, easy and affordable access to the information superhighway is quickly becoming a necessity of life. Smoothie King provides the local community with the ability to access the internet, enjoy a smoothie, and share internet experiences in a comfortable environment. People of all ages and backgrounds will come to enjoy the unique, upscale, and innovative environment that Smoothie King provides. 3.6.2 Pricing

Smoothie King bases its prices for smoothies and specialty drinks on the “Retail Profit Analysis” provided by our supplier, VISTAR. Smoothie King pricing will be comparable to the competition, but with the value-added feature of immediate convenience.