marketing plan report

Marketing 440 Sec 2

Services Marketing

Produced by:

Group 4

Leslie Armstrong

James Barber

Nicholas Colella

Olivia Derby

Store to Door Marketing Plan

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TABLE OF CONTENTS

Executive Summary …………………………………………………………………………… 2

Service Description ……………………………………………………………………………. 3

Environmental Analysis ……………………………………………………………………….. 3

Competitive Analysis ………………………………………………………………………….. 5

SWOT Analysis ………………………………………………………………………………... 6

Market Analysis ……………………………………………………………………………….. 7

Market Segment ………………………………………………………………………………... 8

Perceptual Map ………………………………………………………………………………... 9

Proposed Position …………………………………………………………………………….. 9

Target Segments ………………………………………………………………………………. 9

Service Product Description ………………………………………………………………….. 11

Distribution Channels ………………………………………………………………………… 11

Integrated Promotional Plan ………………………………………………………………….. 12

Pricing Analysis ………………………………………………………………………………. 14

Cost Analysis ………………………………………………………………………………….. 14

Pricing List ……………………………………………………………………………………. 15

Break-Even Point …………………………………………………………………………… 15

Appendix A-Factor Impact For Service Businesses …………………………………………… 16

Appendix B-Competitive Analysis …………………………………………………………….. 17

Appendix C-SWOT Matrix …………………………………………………………………… 18

Appendix D-Population Break-down and Income per Household ……………………………. 19

Appendix E- Website Screen Shot ……………………………………………………………. 20

Appendix F-Mobile App………… …………………………………………………………… 21

Appendix G-Facebook page…………………………………………………………………… 22

Appendix H-Billboard……. …………………………………………………………………… 23

Appendix I-Print Ad …………………………………………………………………………... 24


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EXECUTIVE SUMMARY Store to Door (S2D) is an interactive grocery delivery service that will shop and deliver groceries to its

members. Members are able to place their grocery order by phone, website or by downloading S2Ds easy to

use app for smartphones. Groceries will be delivered within 24 hours of placing their order. Members will

have the option to pick up their order at the store or S2D will deliver to their preferred address.

Currently there is little to no competition in Erie County for a grocery delivery service. This is surprising

since Erie County has a large market that would benefit from this service. Elderly residents, busy

professionals, families, and college students would benefit from a grocery service.

Elderly residents may have trouble reaching stores in the area due to inclement weather or lack of

mobility. These residents would benefit from a delivery service which is tailored to their needs and delivers

right to their doorstep.

Time is valuable and no one is more understanding of that than busy professionals, families, and college

students. S2D will save time and allow these members to devote their time to other activities that they enjoy.

With S2Ds unique partnership with local area grocery stores we will bring a much needed and wanted

service to the Erie area. S2D is affordable, dependable and timesaving.


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1.1 SERVICE DESCRIPTION

Store to Door (S2D) will offer an interactive grocery shopping experience. Members of S2D will be able

to grocery shop without leaving the comfort of their own homes. Members will be able to create a shopping

list and order their grocery items by phone, online, or by using the S2D app for smart phones. Once their

order is placed a S2D grocery specialists will shop for their items. Members can chose if they want to pick up

their items at the store or S2Dwill deliver the items to the members preferred address.

S2D eliminates the need for senior citizens to maneuver massive grocery store parking lots and drive when

the weather is poor. Mothers will no longer have to lug their small children from the car to the store in the

rain, snow and ice. College students will no longer have to break from their studies to grocery shop. Busy

professionals will come home after a long day of work to find their groceries on their door step.

S2D will eliminate the dreaded chore of grocery shopping. No more waiting in line.

This service was chosen to review due to group interest. The group felt that shopping for groceries was one

of the most undesirable chores we complete.

1.2 ENVIRONMENTAL ANALYSIS

Social/Cultural Changes:

Baby Boomers (generation born between 1946-1964) have started to retire in 2011. As the

population of Erie ages they will be looking for convenience services such as grocery

delivery.

As more women enter the workforce there is a need for an “extra hand” with the household

duties.

Due to the economy some working professionals are under employed and often need two

jobs to bring home the same salary that they use to make prior to the recession. These

professionals are looking for time saving services.


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Business Trend Changes:

As the economy struggles to move out of recession consumers are tightening their budgets.

They may not have the budget for services that they can accomplish themselves.

Information & Technology Changes:

When consumers do purchase services they are looking for more information on the services

they purchase. They are also looking for the latest technology to accomplish tasks. Web and

app services will need to be fast and work as expected each time a consumer places an order.

Software will need to be up to date and maintained.

Globalization Changes:

With civil unrest in the Middle East and an empowered Iran gas prices have been steadily

rising. This will negatively impact our delivery business with higher fuel charges. A charge

we may have to pass along to the customer.

Government/Political Changes:

As government pressure increases for less CO2 emissions, a push for alternative energy, and

pressure to decrease in the use of fossil fuels will impact the delivery portion of our business.

The government may decide to increase the price of fuel or increase taxes on small

businesses using fossil fuels.

Government mandated healthcare may impact our service business. Small businesses may

have to provide healthcare to all employees. This would be an enormous cost to the

business.

A summarized version of the environmental analysis is provided in appendix A under Factor Impact for Service Businesses.


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1.3 COMPETITIVE ANALYSIS

The competition for our service will come from four main areas; brand competition, service product

competition, budget competition, and do it yourself. There will be some indirect or substitute competition for

companies such as Schwan Food Company who deliver groceries and food services to the home, and

traditional grocery store models. Our service, however, will offer a different shopping experience than

anything available currently.

The first type of competition is brand competition which is competition from similar product or service

but with different companies, such as Coke-a-Cola vs. Pepsi. Because our service is unique by having no

other company offer what we do, brand competition initially will not be much of a factor. If there is any

brand competition, it would come from Schwan Food Company because their service is the closest relation to

ours.

Service product competition is completion that comes from the same service being offered. There again is

little service product competition because we are a unique service. The little competition that would be

present would most likely be from grocery stores which do not have our service in them. We would need to

persuade customers to use our service over using traditional methods of shopping.

One of the biggest competitions we would be facing is budget competition. Many people try to keep cost

as low as possible when shopping so our service, which would cost a little extra, would have focus more on

the benefits in order to compete.

The other major form of competition would be from “Do it Yourself”. Most everyone already does their

own shopping and has time already set aside for shopping. This will have to be overcome by convincing

people that their time is valuable and our service makes shopping way more convenient.

A summary of the competitive analysis is provided in Appendix B.


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1.4 SWOT ANALYSIS

Strengths

We have excellent customer service available 24 hours per day 7 days per week.

Provide three options to customers when ordering. Phone, web or app.

Weaknesses

Being a start up company we do not have a reputation in the area.

Employees may not be well trained or difficult to hire.

Opportunities

Time is of value to most consumers.

Large number of people without mobility.

No competition.

Americans are time conscious.

Smartphones are popular and consumers would like using the app to order.

Threats

Consumers may see the service as a luxury.

Consumers may not have the budget to use this service.

Competition will enter the market if service is successful.

A summarized version of the SWOT analysis is provided in Appendix C under SWOT Matrix.


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1.5 MARKET ANALYSIS

ERIE COUNTY

Population Information

Population: 288,5661

Population Breakdown: See Appendix D

Household Information

Households: 110,4131

Households with children under 18 years old: 30,0441

Male Households w/o wife present with children under 18 yrs old: 2,9291

Female Housesolds without husband present with children under 18 yrs old: 8,8961

Householders living alone; Male over age 65: 3,5251

Householders living alone; Female over age 65: 8,9571

Income Information

Per Capita Income: $22,1922

Income Per Household: See Appendix D

Student Enrollment:

College Undergraduate as of 2010: 20,3333

Graduate, Professional School as of 2010: 4,0653

1 Source: U.S. Census Bureau, 2010 Census: (http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=table)

2 Source: U.S. Census Bureau, 2010 Census: (http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_1YR_DP03&prodType=table)

3 Source: U.S. Census Bureau, 2010 American Community Survey:

(http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_1YR_S1401&prodType=tabl

http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=table

http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_1YR_DP03&prodType=table


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1.6 MARKET SEGMENT

Seniors – This market is going to want this service mainly due to their lack of mobility (such as trouble

walking), and also because they may have a hard time finding all of the items that they need.

PROS:

-There is a growing number of baby boomers and it is on a steady increase.

- People are living to be much older, and may be a loyal customer for years.

- Most older people are having more trouble walking, therefore making our service more useful to them.

CONS:

- They may not be able to drive in order to pick up their groceries.

- Some may even forget that they placed an order, and not show up to receive items.

- Their kids may do the shopping for them already.

- They may be in a retirement home, where they don’t need groceries.

College Students: This market will greatly appreciate our service due to lack of time they have to grocery

shop.

PROS:

- There is a large group of college students in Erie County.

- Most use their parents money, and will buy a lot more groceries than most consumers.

- College students don’t have a lot of time to spend in grocery stores.

CONS:

- They may make prank calls and waste our time, which leads to missed profit elsewhere.

- Their peers may make comments about them using this service.

- They might bring groceries back from home, and not need to shop while at school.

- College students may have a meal plan and may not need other groceries.

Families: This group also has a lot of responsibilities and may not have enough time to go grocery shopping.

PROS:

- The divorce rate is getting higher, which leads to the population of single mothers increasing.


4/13/2012 Page 9 of 24

- They require a large amount of groceries for their kids.

- They are likely to become loyal customers if they like our service.

CONS:

- Single mothers may have a nanny that can go shopping for them, or watch the kids while she shops.

- They may not have the extra money to spend on our service.

2.1 PERCEPTUAL MAP

Our service currently does not have any competitors. We are a start-up business and we are the first to

provide this type of service. Since we cannot create a perceptual map we will explain how we will create a

perception of our service.

We want people to perceive our service as very convenient. We believe this is the most important

characteristic. Our team also views price as an important variable, especially now in our time of recession.

Our customers should see our service as a great value to them, as well as close enough geographically to

them. We think that our customers should have easy accessibility to our service, and have that available to

them for a reasonable price.

In summary, we would create a perceptual map using the following factors: Convenience/Price,

Value/Location, Accessibility/Price, and Customer Service/Service Performance.

2.2 PROPOSED POSITION

We do not have the perceptual maps in order to provide our proposed position relative to competition.

2.3 TARGET SEGMENTS

The S2D grocery service option eliminates the dreaded household chore of grocery shopping. Rated high as

the most disliked household chore, grocery shopping is time consuming, tedious, and tiresome. Our service

will eliminate this activity for stressed college students, over worked professionals, busy families, and the

senior markets.

The key market segments for grocery services as follows:


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College Students: In Erie County there are approximately 25,0001 college or graduate students. Highly

focused on their studies these students do not have the time to shop and cook for themselves. These

students can use our technology to order their grocery needs in an easy convenient way right from their

smartphone or computer. These students will be eating healthier while saving time.

Professionals/Work Force: There are approximately 125,0003 employed individuals in Erie County. These

individuals are busy, juggling home chores with work-loads and family lives. Seeking to stretch more free

time into their busy schedules these consumers would benefit from grocery service.

Busy Families: Over 30,0002 households have children under the age of 18. Time is also limited for these

families. Between school activities, their children’s social lives, and family chores these households are

looking for time saving services. With a grocery service busy families do not need to drag their young

children in and out of the car during rain or snow storms. Instead the family can stay warm and cozy in their

own homes while their groceries delivered to them.

Seniors: There are over 11,0002 residents over the age of 65 in Erie County. Grocery shopping can be

difficult for this segment of the population. For seniors it is more difficult to physically navigate the large

parking lots and the mammoth stores. The weather in Erie also provides a challenge. Some seniors do not

want to venture out of their homes and risk dangerous road conditions when the weather is poor.

Our focus for the grocery service would be college students, families, working residents and seniors. With the

exception of the college students, we will focus on households with incomes over $50,000/year. This is 43%

of the 109,388 households in Erie County or 47,000 households.

1 Source: U.S. Census Bureau, 2010 American Community Survey:

(http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_1YR_S1401&prodType=tabl

2 Source: U.S. Census Bureau, 2010 Census: (http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=table

3 Source: U.S. Census Bureau, 2010 American Community Survey.

(http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_1YR_DP03&prodType=table)

http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_1YR_S1401&prodType=tabl



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2.4 SERVICE PRODUCT DESCRIPTION

Our service is a shopping helper service. For many people, there is not enough time to do your day to day

activities and do all the grocery shopping. This is why our service will do the actual shopping for you inside

the grocery stores that you preferably shop.

Our service will start with the customer browsing a store’s many items and adding them to the customer’s

virtual shopping cart via our mobile app or our website at the customer’s convenience. Our shopping

representatives will receive your order at the location of the customer’s choosing along with his/her desired

pickup time and they will go throughout the store gathering the items the customer have selected. When all

of the items have been collected, the groceries will be waiting at the pickup center outside of the store at the

time specified for pickup.

The pickup will be very quick and easy. There will be no need for money to change hands at that moment

because the account will be charged when the order is placed, minimizing the time at pick up. We guarantee

the groceries will be freshly taken from the store and stored in an appropriately conditioned area to prevent

spoiling and rotting of sensitive products.

2.5 DISTRIBUTION CHANNELS

Our distribution channels will all be located at grocery stores. Our business will work along side the already

existing grocery stores by adding a more convenient way to shop. We will have our own employees working in

the various store locations doing the shopping. Because we will have locations at many stores, customers will

have access to more products and they can choose the most convenient location for them.

For our customers, they will be able to access our service either from a mobile app or our website. Both of

them will have the ability to show all available products, allow the customer to choose a pickup time and pay

for the groceries and service. This will allow for the customer to do his/her shopping at their convenience.


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3.1 INTEGRATED PROMOTIONAL PLAN

PROMOTIONAL PLAN To reach the target market, S2D will produce the following materials: Website (Provided in Appendix E) Facebook Page (Provided in Appendix G) Twitter Sales Brochure Print Ad (Provided in Appendix I)

WEB PLAN

The S2D web site will offer information for current members and for potential members. The web site will

have complete information on how to use the S2D membership as well as the S2D app, membership and

usage costs as well as the benefits of using the service.

The web site will include the following information:

Membership Fees

Service Rates

Customer Service Contacts

Services

Delivery Options

FAQs

App Download

Calendar

Membership form

The website will target college students, working professionals and busy families. S2D will create its own

website, Facebook and twitter account without costs to the company. The website will be marketed in the

following ways:

Facebook-we will use FB to add friends and access college accounts to add members

Twitter

Search Engine Target goal of 500 new memberships in six months measured by new memberships.


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Personal Selling S2D will sell our service to local grocery stores in the Erie area (B2B). Partnering with local stores will

improve customer service, allow for store pick up and allow S2D access to store coupons and discounts. S2D

will improve store sales and give consumers choice for shopping. Personal selling information will include:

App instructions

Expectations for increased store sales

Sales Packet Personal selling will target local area grocery store chains. Target goal of all major grocery chains

obtained in 6 months measured by store agreements.

Print Ad

Our print ad will target seniors, busy professionals and families. The print ad will be used in local Erie

magazines such as Lifestyle and the Erie chapter of AARP magazine. This ad will also be featured in the Erie

Times. To reduce the risk that may be associated with our service we are offering free delivery for the first

purchase. We will also reach out to our target market by placing billboards in strategic locations in the Erie.

S2D’s print promotional advertising will include the following:

Billboard (See Appendix H)

Print Ad (See Appendix I)

The print ad will target all segments of our market by reaching out to prospective members at locations they

are most likely to be. With this ad and featured promotion, our objective is to get the local shopper to try

our service to see firsthand how easy and convenient our service is. This is the most effective and low cost

promotion of our service. We expect this promotion to compel consumers to try our service at least once by

offering free first time delivery. This promotion will be measured by the number of new memberships and

the free delivery code. We will be able to quantify how effective this promotion is by seeing the percent

response rate with increase in new memberships.


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4.1 PRICING ANALYSIS

S2D’s closest competitor is Schwan’s home delivery service. While Schwan’s is not a direct competitor to

S2D since Schwan’s does not offer local grocery store items, we have listed the competitor pricing as follows:

* prices based on Schwan’s web prices as of 3/28/12. (www. http://www.schwans.com/products/categoryDetail.aspx?c1=11452&c2=9434) Store to Door prices based on Wegmans, Erie, PA as of 3/28/12. (http://www.wegmans.com/webapp/wcs/stores/servlet/ProductListView?forwardto=ProductListView&langId=-1&storeId=10052&catalogId=10002&N=207)

4.2 COST ANALYSIS

Labor Costs:

Employees (This assumes labor is a fixed cost)

3 Shopping Specialists

1 Delivery Specialist

1 Customer Service Specialist

$7.50/hr-In store shopping specialist

$7.50/hr -Delivery specialist

$7.50/hr-Customer service specialist

20% of payroll-Administrative/benefit costs

Labor is based on 8 hour day (assumes no lunch or vacation) Other Expenses:

$1,000/mth-permission to have specialists in stores and store pick-up

$250/mth – delivery truck payment (includes gas)

$1,000/yr – insurance

$5,000/yr – advertising

$500/annually - equipment

Schwan’s Home Delivery

Store-2-Door

Orange Juice-192oz $11.99* $7.47* Strawberries- 2 lbs $7.67* $5.00* Pizza-serves 8 $7.70* $5.49* Fettuccini Alfredo-serves 2 $10.48* $5.00* Delivery Charge $1.79* $10.00* Total $39.63 $28.01

http://www.schwans.com/products/categoryDetail.aspx?c1=11452&c2=9434

http://www.wegmans.com/webapp/wcs/stores/servlet/ProductListView?forwardto=ProductListView&langId=-1&storeId=10052&catalogId=10002&N=207

http://www.wegmans.com/webapp/wcs/stores/servlet/ProductListView?forwardto=ProductListView&langId=-1&storeId=10052&catalogId=10002&N=207


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4.3 PRICING LIST

Time to complete tasks:

½ hr = time per order

½ hr = delivery time

Frequency of tasks:

7 days a week, 52 weeks per year = frequency of grocery delivery

Estimated current orders: 35 orders per day

Estimated current deliveries: 12 per day

Estimated members: 1,000 per month

Current pricing:

$20 per month membership fee

$10 per trip delivery fee

4.4 BREAK-EVEN POINT

Labor Costs= $109,200

Admin Costs= $21,840

Other Expenses= $21,500 BREAK-EVEN POINT: $152,540 Revenue = $283,680

Net Income = $131,140

MAX OUTPUT:

Membership fee: $282,240

Delivery: 58,240

Total: $340,480


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APPENDIX A

Factor Impact For Service

Businesses

Factor Changes Impact

Social/Cultural

-Baby Boomers Retiring -More Women in the Workforce -Under employment

-These factors will impact our services in a positive way. With more people retiring, more women entering the workforce and with more people in the workforce under employed they will all be looking for low cost services to save them time.

Business Trend -Current Economy -Due to the decline in the economy people may not want to pay for a service they can complete themselves

Information & Technology -Consumers are more tech savvy and looking for the latest technology to perform tasks

-Need the most updated technology that is easy to use which may be expensive

Globalization -Unrest in oil producing regions

-This may cause a rise in fuel prices that will be passed on to the customer in the form of higher prices.

Government/Political -Push for alternative fuels -Government mandated healthcare laws -Increase in taxes on small businesses

-These factors could raise the cost of doing business


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APPENDIX B

Competitive Analysis

Schwan's Food Service

Grocery Store

Neighbor or relative

DIY


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APPENDIX C

SWOT MATRIX

STRENGTHS

-Excellent Customer Serivce

-Numerous Ordering Options

-Open 24/7

WEAKNESSES

-No reputation

-Untrained employees

-Employees diffiuclt to hire

OPPORTUNITIES

-Time is valued

-Lack of mobility

-Little/No Competition

-New technology making service easier

THREATS

-Service seen as a luxury

-Competition entering the market

-Smaller consumer budgets


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APPENDIX D

Source: U.S. Census Bureau, 2010 Census Source: (http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=table)

Source: U.S. Census Bureau, 2010 Census Source: (http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=table)

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APPENDIX E - Website


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APPENDIX F – Mobile App

https://webmail.psu.edu/webmail/get_file.cgi?dir=attach&fname=app.png


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APPENDIX G –Facebook page

https://webmail.psu.edu/webmail/get_file.cgi?dir=attach&fname=FAcebookPage.gif


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APPENDIX H –Billboard Promotion


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APPENDIX I – Print Ad

marketing plan report

Education