President/CEO
Myra A. Duke
VP Sales/Customer Service
Lamonte A. Ragland
VP Marketing
Jeanene A. Duke
VP Finance
Shaniece R. Ragland
VP Technology
David A. Duke
VP Production
Myron J. Duke
Production Chain & Supplier Relationship
IT Support & Innovation
Marketing Campaigns, Promotions & Materials
Directoring Management of Sales Force
Profitability & Growth
Business Plan 18
Myra A. Duke
Business Plan
Dr. Amona Washington
Business Plan Draft
September 14, 2015
Executive Summary
Natural Vitality Energy Drink Sole purpose is to help increase the energy level of busy and athletic individuals in today's society. With the busy lives of most people, we are all looking for a quick boost of energy to help get us through those last couple of hours at work or those late nights of cramming for a test, but we should take consider a healthy alternative to the popular energy drinks on the market today. Natural Vitality Energy Drink is for the health conscious individuals who are concerned with the ingredients that they consume. Natural Vitality Energy Drink, that is manufactured by Starrs to the Skye Manufacturing Company, is a unique blend of green tea, ginseng, B vitamins, and taurine, all natural ingredients that aides in boosting energy for several hours.
Starrs to the Skye Manufacturing Company is a start-up company that will be specializing in all natural NAB. Natural Vitality Energy Drink is the first product on the market with this company for now; however, other products are being formulated and patented and will be available for the public in 2016.
The strategic position that is going to help the success of Natural Vitality Energy Drink will be Differentiation Strategy. For small businesses, a product differentiation strategy may provide a competitive advantage in a market dominated by larger companies. The price point of Natural Vitality will be in the range of $2.89-$2.99 for a 10oz can depending on the location.
Natural Vitality Energy Drink (NVED) does not have a specific gender that it is trying to capture. NVED is geared towards male and females. NVED is an all-natural drink and it can be consumed by anyone; however, the bulk of purchasers may be between the ages of 15-40. This company identifies this age group because this window of age group makes up the athletes, gym enthusiast, college students, and the working class individual. This product will be available on college campuses such as: Everest Institute, Georgia Piedmont College, ITT Tech, and Atlanta Technical College, in the libraries (if drink machines are available) and student centers, at L.A. Fitness Gyms (with hopes of reaching Gold's Gym, Planet Fitness in the near future), Walmart, and local drugstores. The target markets of Natural Vitality Energy Drink are those that like to play sports, those who frequent the gyms, the working class, and students. The company is centrally located within miles of Georgia Gwinnett College and L.A. Fitness. Georgia Gwinnett College is within 13 miles of each other, so the company is located where distribution to Georgia Gwinnett College and L.A.Fitness will be very accessible.
Product Name: Natural Vitality Energy Drink
Company Name: Starrs to the Skye Manufacturing Company
Description: Energy Drinks are both popular and questionable. They are popular because they are an easy and quick way to boost energy levels. They are questionable because some people wonder about the ingredients and health effects. With the busy lives of most people, we are all looking for a quick boost of energy to help get us through those last couple of hours at work or those late nights of cramming for a test. However we all should take into consideration a healthy alternative to the popular energy drinks on the market today. Natural Vitality Energy Drink is for the health conscious individuals who are concerned with the ingredients that they consume. Natural Vitality Energy Drink, that is manufactured by Starrs to the Skye Manufacturing Company, is a unique blend of green tea, ginseng, B vitamins, and taurine, all natural ingredients that aides in boosting energy for several hours.
Starrs to the Skye Manufacturing Company is a start-up company that will be specializing in all natural NAB. Natural Vitality Energy Drink is the first product on the market for now; however, other products are being formulated and patented and will be available for the public in 2016. The significance of the name: Starrs to the Skye Manufacturing Company is to pay homage to special family members whose names are Starr and Skye.
The price point of Natural Vitality will be in the range of $2.89-$2.99 for a 10oz can depending on the location.
Mission Statement: We are dedicated to providing a healthy alternative to energy drinks while delivering the best merchandise, with natural ingredients, for optimal energy.
Energy drinks are a growing commodity among individuals who desires a boost of energy for various reasons. In today's fast paced society, most people are looking for a way to increase endurance and stamina. Many suffer from a lack of energy to get them through daily responsibilities. This is why many have turned to energy drinks as a means for extra fuel. These quick pick-me-ups promise to give an energy boost that lasts for hours.
Trends
There are (3) reasons why I have chosen energy drinks as my NAB. First off, there is a growing market for energy drinks. Red Bull and Monster Beverage Corporation, together, form over 80% of domestic energy drinks volumes by estimates. Dollar sales for energy drinks grew almost 6% to $6.67 Billion in measured channels in 2013, which propelled sales growth for convenience stores (Team, 2014). A growing thirst for caffeinated "energy" drinks, which include the likes of Red Bull, Monster, and Rock star, has spurred a heart-thumping surge in sales. Globally, the energy drink industry has gone from a $3.8-billion business in 1999, to a $27.5-billion business last year, according to data from market research firm Euro monitor. That's a more than 620% jump (Ferdman, 2014).
The second trend in the nature of Energy drinks is that energy drinks are useful when one is training hard and need an extra boost of energy to get through a tough session. Most energy drinks contain caffeine which acts as a powerful aid in boosting energy. Endurance athletes benefit from the use of drinking energy drinks around the time of exercise. It also helps one to get through the last couple of hours at work or give them energy to push forward during a busy day. It helps to deter daytime sleepiness so that one can feel more alert and awake.
Lastly, energy drinks are easily accessible. Energy drinks can be found at any convenience store, local drugstores, Walmart, and even game venues. Grabbing an energy drink is much quicker than trying to brew a cup of coffee. So because buying an energy drink is easily accessible, they are good for the on-the-go type of people. With environmental scanning, it was determined that there is a growing need for energy drinks; however, there is greater need for healthy alternative energy drinks.
The strategic position that is going to help the success of Natural Vitality Energy Drink will be Differentiation Strategy. Product differentiation is a marketing strategy that businesses use to distinguish a product from similar offerings on the market. For small businesses, a product differentiation strategy may provide a competitive advantage in a market dominated by larger companies. The differentiation strategy the business uses must target a segment of the market and deliver the message that the product is positively different from all other similar products available (Kelchner, L. n.d.). A successful product differentiation strategy creates brand loyalty among customers. The same strategy that gains market share through perceived quality or cost savings may create loyalty from consumers. The company must continue to deliver quality or value to consumers to maintain customer loyalty. In a competitive market, when a product doesn't maintain quality, customers may turn to a competitor (Kelchner, L. n.d.).
Although the quality of a product is very important, it equally important to know how and where to sell a product for it to be successful. Natural Vitality Energy Drink will be distributed through grocery stores, drugstores, Walmart, SAMS, GNC, on college campuses and libraries, and L.A. Fitness. It is important that Vitality Energy Drink have a specific distribution strategy to maximize revenues and to increase competiveness and sales. Natural Vitality Energy Drink is manufactured by Starrs to the Skye Beverage Company and all of the products will be distributed from the manufacturing company straight to the designated sellers.
Risk management is a significant function in organization/business today. Companies undertake increasingly complex and ambitious projects, and those projects must be executed successfully, in an uncertain and often risky environment (Learning to Prioritize Risks, n.d.).
Risk Management Matrix
No.
Risk
Level of Risk
How to Mitigate?
New Level of Risk
1.
Competition Risk
High
Price products at a reasonable price
Moderate
2.
Potential customers not believing in the product
High
Conduct a store set-up to give out free samples of the products
Moderate
3.
Target Market
Moderate
Visit different gyms, college campuses, and track & field events to offer samples
Low
4.
Marketing Strategy
Moderate
Follow some of the trends and revamp product to make it more marketable.
Moderate
5.
Regulatory Risks
High
Ensure timely approval from FDA regarding ingredients and natural products
Moderate
SWOT Analysis
Strengths
Natural Vitality Energy Drink is a product of natural ingredients
Leadership skills within the company are good with communicating effectively and delegating responsibilities.
Employees are performing well and loyal to the company
Natural Vitality Energy Drink are manufactured and supplied by Starrs to the Skye Beverage Company and there is a good working relationship between Starrs to the Skye and the distributors.
All employees are properly trained on the technology and innovation.
Our company has all the right people in the right places.
Weaknesses
In some instances, there is a lack of awareness of the products and its features.
Well known competitors such as Red Bull and Monster limits Natural Vitality Energy Drink customer relations.
Lack of in-store set-ups to give out samples to promote product in a variety of stores.
Natural Vitality Energy Drink is only supplied by one manufacturing company, in the event the production is slow, it can affect bottom-line of the company.
Opportunities
Natural Vitality Energy Drink will be available and all convenience stores, gyms, libraries (when applicable), and drugstores.
Natural Vitality Energy Drink will be sold for $2.89-$2.99 (depending on location) for a 10oz bottle compared to Red Bull-$2.99 for an 8.4oz can. Natural Vitality Energy Drinks are made from healthier ingredients than competing energy drinks.
Natural Vitality Energy Drink has had a potential to grow with advertising and in-store display in some places such as QT convenience store and L.A. Fitness.
Natural Vitality Energy Drink offers a whole new way of promoting good health while gaining energy.
Threats
Natural Vitality Energy Drink only operates with one manufacturing company, and in the event the production is slow, that affects the Natural Vitality Energy Drink bottom line.
There are now issues with the FDA in some of the other competitors because of the ingredients which may affect Vitality Energy Drink,
Well known competitors such as Red Bull and Monster limits Natural Vitality Energy Drink customer relations.
Target Market
In order for Natural Vitality Energy Drink to be successful, there has to be a defined target market identified. Natural Vitality Energy Drink should focus on reaching a target market that shares common characteristics and behaviors. To be successful the company will have to identify how to reach the target markets. A company or brand may want to be all things to all people, but it cannot. It's best to identify groups or segments, of customers, who share similar needs and wants (Iacobucci, 2014); therefore, Natural Vitality Energy Drink has to be creative in the approach taken to reach the defined target market.
Natural Vitality Energy Drink (NVED) does not have a specific gender that it is trying to capture. NVED is geared towards male and females. NVED is an all-natural drink and it can be consumed by anyone; however, the bulk of purchasers may be between the ages of 15-40. This segment has been identified because this age group makes up the largest number of athletes, gym enthusiast, college students, and the working class individual. This product will be available on college campuses such as: Everest Institute, Georgia Piedmont College, ITT Tech, and Atlanta Technical College, in the libraries (if drink machines are available) and student centers. Additionally it will be available at L.A. Fitness Gyms (with hopes of reaching Gold's Gym, Planet Fitness in the near future), Walmart, and local drugstores. NVED is an all-natural energy drink that helps one sustain a tough workout, achieve endurance as an athlete, boost performance while at work, and stay focused while studying. NVED is made from natural ingredients: B-12, green tea, ginseng, Splenda, honey, Vitamin B, sparkling water, and lemons. Other NVED drinks will become available with a variety ingredients and flavors as they are currently being tested for production.
It is tempting to want to judge your competition solely on the basis of whether your product or service is better than theirs (Abrams, 123). NVED is a new product and will definitely face stiff competition as it makes its way into the energy drink arena. Top competitors for NVED are Red Bull and Monster. NVED will be competing with Red Bull and Monster because they are both geared towards providing supplements for energy recovery and/or sustainability. NVED will become a leading competitor to Red Bull and Monster because it will stand by its mission in providing energy with natural ingredients. When NVED reaches the masses, this product will surpass its competitors because there will be no health concerns associated with this product and it will provide one with energy that will allow them to do exactly what they are trying to do, whether it is to perform well in athletically, endurance to reach new heights while working out, boost performance while working at the day job, or staying focused while studying.
There are two products that may be potential competitors in the future that include: Eboost Energy Drink and Guayaki Yerba Mate Energy Shot, but both of these products are energy shots and not a sparkling water beverage. These two beverages based with natural ingredients, however the products are different and result in a distinct finished product. NVED is not a shot type of energy drink but a drink that one can consume and enjoy at their own pace and still the same benefits. As of now, NVED does not consider these products as a serious threat considering these products have not been very marketable and after conducting research, and they are not as readily available as NVED. NVED plans to differentiate itself from the competitors because it will be a sparkling water, all-natural energy drink that will be bottled in cold-activated cans.
NVED message will be portrayed utilizing the 5 F's to describe what the potential buyers may be looking for including: Functions, Finances, Freedom, Feelings, and Future.
Functions- NVED will meet the needs of customers by providing them with energy by using all natural ingredients that will not cause health concerns.
Finances- - NVED will be very cost effective as it will cost from $2.89-$2.99 for a 10oz can. One can of NVED should serve the purpose of the user and they should not require more than one can. Considering this customers can potentially save money with only one can being required.
Freedom- It is convenient to purchase NVED as they will be available on college campuses, L.A. Fitness, Walmart, local drugstores, local convenient stores, and potential bookstores. Buyers will not have to look far to purchase our product.
Feelings- This product is going appeal to many buyers and leave them with a sense of satisfaction. The satisfaction is linked to the lack of health concerns while still achieving the boost of energy. Additionally, this product will allow the buyer to more productive and increase their endurance which will boost confidence.
Future- Buyers of this product will start believing in the product leading to improving the bottom line of NVED because this may lead to more purchases by others giving their reviews of the products to their friends, co-workers, teammates, and gym buddies
In order for NVED to be successful it has to identify marketing vehicles to utilize to reach the masses of people and most importantly to its target market. One of the main marketing vehicles will be utilizing social media, Facebook and Instagram primarily. Social Media Sites will be highly effective since it is the quickest and easiest way to reach a multitude of people in a short period of time. NVED will advertise on Facebook by providing an ad to the social media site and on IG by providing an 8 second commercial about the product. NVED will also utilize signs inside of the libraries in the gyms so that they potential customers will know that the product is available and the signs will list the benefits and the ingredients. Also, billboards will be used as way of marketing the product so that it will be made visible to those that frequent the major highways. The last marketing vehicle that will be used is an in-store set-up to give out samples of the product. The reviews of the samples will be used on the Social Media Sites to assist in promoting the product. This tactic of using Social Media has been successful in other beverage products such as Starbucks, as the advertisement captures the attention of the audience by displaying the variety of drinks available during different seasons.
Operations
As a potential competitor to popular energy drinks, Red Bull and Monster, Starrs to the Skye Manufacturing Company realizes the importance of being innovative and unique. This same strategy applies to all aspects of the business and a heavy focus in marketing strategies to attract the already established target market of these energy drinks to be successful. Starrs to the Skye is a small start-up company that will manufacture and distribute its first NAB, Natural Vitality Energy Drink which is an all-natural energy drink made with carbonated water. The success of Starrs to the Skye Manufacturing Company will be dependent upon the success of Natural Vitality Energy Drink. The headquarters of this manufacturing company is currently in an old warehouse that was used to store antique cars that was once a business of CEO, Myra Duke's father. This building is 7500 square feet and is located in a strip mall. There is no monthly rent on this building as it was donated by family to assist with establishing the business. Starrs to the Skye Manufacturing Company is located in Duluth, Ga (Gwinnett County). The target markets of Natural Vitality Energy Drink include avid sports players, fitness-conscious individuals, the diligent working class, and overtaxed students. The company is centrally located within miles of Georgia Gwinnett College and L.A. Fitness approximately 13 miles from each location making it convenient for easy distribution.
As of now, the production of Natural Vitality Energy Drink will be completed by five employees, all which are family members that have invested in the business giving them a vested interest in the success of the company. The production will done at an open warehouse retrofitted with large walk-in coolers to store the finished product. The production area also includes a large storage space and two truck loading docks at the rear of the building, along will a long list of other machines used for extraction, compression, and mixing of raw materials used in the manufacturing of the product.
Operating Expenses:
January/February/March 2015
Starrs to the Skye Operating Expenses/Monthly
Supplies
$2500.00
Insurance
$830.00
Maintenance/Utilities
$1700.00
Marketing-Billboards, Social Media, sampling, etc.
$1200.00
Administrative Expenses (fax, copies, postage, office supplies).
$250.00
1 mixer (mixes up to 300 gallons)
$17,000
1 bottling machine
$7,500
Cans (for packaging)
$575
Salaries
$0
Grand Totals
$31,555
Technology is highly critical to the success and growth of Natural Vitality Energy Drink. Lucky for Starrs to the Skye Manufacturing Company, one of the investors is an IT Specialist and he keeps the website updated with the latest software for marketing. The software is very easy to use and to navigate. It has the ability to be upgraded and expanded. This company technology is compatible with other technology. The needs are basic and the system will be easy to use. HubSpot is the technology software that will be utilized as this software is not too complicated but it offers great marketing incentives.
The management team of Starrs to the Skye Manufacturing Company is one of great talents and unique abilities. This business is being managed by six team players, who are also investors, and no one is accepting a salary right now. CEO, Myra Duke, is a graduate from Strayer University and holds a MBA degree. Other stakeholders are graduates from prestigious universities and other successful businesses. See organization chart with corresponding responsibilities below:
Today the concept of corporate "good" is synonymous with corporate social responsibility (CSR) (Baylis, n.d.). Corporate citizenship is about companies taking into account their complete impact on society and the environment, not just the economy. Corporate citizenship is both a moral responsibility an economic necessity. Natural Vitality Energy Drink and all of its personnel will thrive to be socially responsible while demonstrating integrity. Starrs to the Skye Manufacturing Company that manufactures Natural Vitality Energy Drink will be committed to being a good corporate citizen.
Starrs to the Skye Manufacturing Company will display the following characteristics to our community:
Truth- The management team will be transparent with the business plans for city, state, and federal officials. Additionally, the management team will be very clear with consumers on informing them on how NVED is made and the ingredients that are used. The team will also be open and honest about the plans of giving back to the community and what type of sponsorships we are willing to be involved in for community outreach.
Shared Values- Starrs to the Skye Company will participate in community sponsored activities that share the same values as Starrs to the Skye.
Creating Job- Starrs to the Skye Company employees are currently all family members and close friends that are really just donating some of their time. No one is really receiving a paycheck at this point because the company is a start-up company. In a few years, when there has been significant growth and revenue generated, Starrs to the Skye Company would like to begin hiring individuals in the community. Employees will be individuals that are people oriented that enjoy either working in a factory setting and/or help distributing the products in the community at various stores and other locations.
No Discrimination- Starrs to the Skye will adhere to the policies set forth in the Equal Employment Opportunity Commission (EEOC) and the Americans with Disability Act of 1990.
Starrs to the Skye Manufacturing Company will work diligently to not pollute the earth with chemicals and products that are not environmentally friendly. Considering Natural Vitality Energy Drink is made of all natural products, there will not be any chemicals used that will cause pollution to the air. There will be no by-products nor any preservatives added that can contaminate any water through the sewage and/or drainage areas. Also, Natural Vitality Energy Drink is made of aluminum cans that are considered to be a natural resource. The aluminum cans that are being used to package Natural Vitality Energy Drink can be 100% recyclable.
Since the cans are 100% recyclable, we could drastically reduce the energy needed to produce brand new cans simply by recycling. Please consider the following recycling process to understand why Starrs to the Skye Manufacturing Company overwhelming chose this packaging:
Customer takes can to a recycling center or puts it into a recycling bin.
The can is transported to a processing facility.
A giant magnet lifts out cans that are made of metals such steel. Since aluminum cans aren't magnetic, they drop down to a conveyor belt and are gathered.
The aluminum is shredded, washed and turned into aluminum chips.
The chips are melted in a large furnace.
The melted aluminum is poured into molds called "ingots."
The ingots are taken to a factory where they're melted into rolls of thin, flat sheets.
From the sheets, manufacturers make new products, including new beverage cans, pie pans, license plate frames, and aluminum foil.
Beverage companies fill the cans and deliver them to grocery stores for customers to purchase.
Customers take used cans to a recycling center and the process starts all over again (www.wm.com).
There has not been any identified health risks associated with NVED and mainly because the products are made with natural ingredients such as: B-12, green tea, ginseng, Splenda, honey, Vitamin B, sparkling water, and lemons. Consumers should keep in mind that NVED is made with B-12 so it will be recommended not to be drinking before going to bed. There are no major side effects associated with B-12 but rash, hives, and tightness of chest may occur, but not likely. B-12 also has positive benefits that include: boost in energy, mood, and concentration. Vitamin B is also an ingredient in NVED. There are no major side effects associated with Vitamin B but during research, the research team read about occasional dizziness and frequent urination; however, Vitamin B helps to promote proper metabolism.
Starrs to the Skye Manufacturing Company stands by NVED and we believe in the product. We are optimistic that there will not be any major health concerns associated with this product. The beginning stages of this product will be distributed and available on college campuses such as: Everest Institute, Georgia Piedmont College, ITT Tech, and Atlanta Technical College, in the libraries (if drink machines are available) and student centers, at L.A. Fitness Gyms (with hopes of reaching Gold's Gym, Planet Fitness in the near future), Walmart, and local drugstores which is our correct Target Market. However, if a child was to drink this product, it will be safe with no health concerns. Children will be advised not to consume too much because of the B-12 because most children are naturally energetic and doesn't require any supplements, but it won't harm them either. Expecting mothers and breastfeeding mothers, although not part of the target market, can drink NVED because all products, including the B-12 is safe when taken by mouth in the amounts recommended (www.webmd.com) .
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Running Head: Business Plan 1
President/CEO
Myra A. Duke
VP Production
Myron J. Duke
Production Chain & Supplier Relationship
VP Technology
David A. Duke
IT Support & Innovation
VP Sales/Customer Service
Lamonte A. Ragland
Directoring Management of Sales Force
VP Marketing
Jeanene A. Duke
Marketing Campaigns, Promotions & Materials
VP Finance
Shaniece R. Ragland
Profitability & Growth
