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- Executive Summary
Summer Grocery Store (SGS) is a grocery store intended to be established at the South Boston Farmers Market. The main objective of the business is to provide healthy organic food stuffs to the local community at a low price. The products to be sold at the store include organic vegetables, fruits, spices and chilies. The market for organic agricultural produce is growing in the US and in the local South Boston community. The competitive advantage of the firm will be in application of marketing strategies in beating the competition and attracting customers in all social classes. The venture will be managed solely by the owner, with outsourcing of professional expertise in the various areas of business. The start-up cost is estimated to be $24,000, of which 60% will be financed through debt and 40% equity. The venture expects its sales to be consistent in the first year of its operation then increasing yearly.
- Business Description
Introduction
Summer Grocery Store (SGS) is a grocery store to be established in South Boston. The business is to commence its operations in the summer, so as to take full advantage of the high number of customers in that season. The location of SGS is to be on the South Boston Farmers Market. The objective of the business is to provide fresh and healthy organic fruits, vegetables, spices and chilies to the city dwellers. The products offered will also be low priced so as to suit consumers from all economic and social classes.
Products
The products to be offered include various types of fruits like pineapple, mangoes, oranges and tangerine. Vegetables like kales, lettuces, aruguna and various Asian greens and spices are also to be offered, among others. The products to be sold will be chosen on the marketability and the health benefits to the consumers. This will be to ensure consistency in sales and that the clients always come back to the store for more purchases. Genetically Modified products will be highly avoided due to the health risk they pose to the consumers. Only organic fruits and vegetables will be purchased from trusted suppliers and farmers.
- Industry and Market Analysis
Industry Analysis
The agricultural industry, especially the organic industry in the United States has grown rapidly over the years. In the 1960s, the organic agricultural industry came into high recognition because of the awareness to the dangers posed by use of pesticides in the farms. This awareness can be attributed to a publication about the dangers of misusing the pesticides in agriculture after the World War II (Carson, n.p). This fact raised awareness among the consumers. More focus was aimed at the personal and environmental health. This consequently affected the consumption and buying patterns. In fact, by the year 2001, the sales for organic food had hit $8 billion (Dimitry & Green, 42). Organic products’ consumption increased, and this led to the focus of farmers to produce shift their focus from the use of pesticides and other chemicals.
Market Analysis
The South Boston Farmers Market located in MA, 02127 is sponsored by the South Boston Community Health Center. The mission of the health center is to provide health care to the community at large while also providing utmost care to the people in need. This fact makes the products sold in the farmers market to be fit for consumption. A bigger portion of the consumers tend to prefer purchasing the vegetables and fruits at the farmers market because of this. However, the purchase of products in the farmers market has also been highly influenced by the Supplemental Nutrition Assistance Program (SNAP). This is evident in the fact that 70% of the people who do not shop at the farmers market can be influenced to do so by this program (Obadia & Porter, 4).
Competition
Competition in the South Boston Farmers Market is a bit high. This is caused by the existence of several grocery stores which offer organic products. Some of the grocery stores are owned by farmers, who sell their produce at low prices. The fact that they obtain the produce from their own farms reduces the length of the distribution channel which cuts down the costs. However, there exists several gaps in the market as the grocery store owners have not applied adequate marketing strategies to fully utilize the advantage they have. This makes the consumers to purchase highly priced products in other stores.
- Marketing Plan
Marketing and Promotional Strategies
Several marketing strategies are to be used in the attempt to obtain a bigger market share as to that of the competitors. The produce will be obtained straight from farmers around the area. This will be to reduce the size of the distribution channel. Farm products are highly perishable thus this will enable the business to offer fresh products. To promote the products, the entity will focus on each consumer segment. Different strategies will be used in luring the high-end, middle-level and the low end consumer. However, several general techniques like, educating the consumers on the importance of organic food products and offering nutritional advice and information on each produce will be used. Product branding and packaging will also be taken into consideration as the competitors have not given a huge interest in it.
Other techniques that will be used to draw the customers will include offering of free samples and setting up cooking competitions around the neighborhood. This will be done so as to attract the customers and make them develop a good attitude towards the entity. Advertising of the entity’s products will be though setting up of branded garbage collection and other environmental conservation measures on the neighborhood. The intention of this advertising strategy is to relate the business with environmental conservation thus portraying it as community friendly. This will also enable the business to take a different direction in advertisement to that of other competitor firms which rely on the mainstream and social media.
- Management Plan
SGS is intended to be a sole proprietorship. It will therefore be solely managed by the owner, who has experience in business management. Other technical functions of the business like financial management, marketing, accounting and supply chain management will be outsourced. This will be to reduce the operation costs associated with the employment of permanent staff. The small size of the business would not enable it to afford the salaries of the staff given that it is still in the start-up phase.
- Financial Plan
Start-up
The start-up costs for the venture has been estimated to be $24,000. The capital structure at start-up is expected to be 60% debt and 40% equity which translates to $14,400 and $9,600 respectively. The equity is to be funded through the savings of the owner, with a little support and contribution from family members. The 60% debt is to be obtained from a financial institution in form of a loan.
Sales Forecast
The sales forecast provided s according to the market trends of the South Boston Farmers Market:
Sales forecast table
Works cited
Carson, Rachel. Silent Spring. Boston. Houghton Press, 1962. Web.
Dimitri, Carolyn & Green, Catherine. “Recent Growth Patterns in the U.S. Organic Food Markets,” ERS Agriculture Information Bulletin No. AIB777. (2002): 42. Web.
Jennifer Obadia & Jennifer Porter. “Farmers Markets: Impact on Fruit and Vegetable Consumption of Supplemental Nutrition Assistance Program Clients,” Boston Collaborative for Food and Fitness (2013): 1-17. Web.
