This essay has a total of 4161 words and 40 pages.
Marketing plan for ice dreams, an icecream shop
Ice Dreams will sell shave ice as its primary product in addition to soft drinks and frosty Latin drinks called licuados. Shave ice is the hottest new dessert since frozen yogurt! Shave ice is heating up rapidly and shows no sign of cooling (Crystal Fresh, Inc., 1995). Shave ice has been around for many years, beginning in Asia, then becoming popular in Hawaii. People would shave ice by hand, creating a cold, flaky snow. Then they'd top it with fruit juices to create a refreshing treat. Something this good couldn't remain a secret. In recent years, the taste for shave ice has spread all over the world. Shave ice is much different than a sno-cone in that it is made by a small counter-top machine that shaves ice rather than grinding it like a sno-cone machine, which results in ice so fine that it rivals real snow! The snow is then placed in bowl or cup and filled with high quality tropical fruit flavors. Because the snow is so soft the syrup is held within its tender texture versus settling to the bottom like traditional sno-cones. Since the syrup is absorbed into the snow, it must be eaten with a spoon instead of a straw. Because shave ice is so tender and made with the thickest, best-tasting tropical fruit flavors, it is preferred by adults and children of all ages and ethnic backgrounds. A drive-through business will be built on privately-owned commercial property on Highway 86 (Adams Avenue) in El Centro, California. Other products which will be incorporated into the business including beverages (soft drinks and licuados).
1. To construct a drive-through building (12' x 20') on existing privately-owned commercial property (50' x 120').
2. To produce a net profit of at least $50,000 by the third year of operation.
3. To sell 20 different tropical and Mexican flavored syrups. 4. To sell other products such as soft drinks and licuados.
Ice Dreams will produce and sell shave ice with 20 different flavored syrups, soft drinks, and licuados to consumers in El Centro, California. Retail customers will be in the low- to mid-income bracket, and will range in age from children to adults.
1.3 Keys to Success
The keys to success are:
1. Will be the first business of its kind in the city of El Centro, California.
2. Business will be located on a major city highway, next to several housing developments, the city pool, near schools and parks, and along a major restaurant and motel strip.
3. Product quality will include a large variety of tropical and Mexican flavored syrups.
4. Business has the potential for expansion into other Imperial County communities.
5. City of El Centro experiences warm to hot weather approximately seven months of the year.
6. Two-way traffic on Highway 86 averages 48,300 vehicles on a daily basis.
2.0 Company Summary Ice Dreams will be known for selling shave ice with 20 different tropical and Mexican flavored syrups to children and adults in El Centro, California.
Other products will include soft drinks and licuados. 2.1 Company Ownership
Ice Dreams will be owned by Ofelia R. Arellano as a sole proprietorship.
2.2 Startup Summary
Start-up costs will be apprximately $52,010 which will include facility construction including sidewalks, parking, inventory, mandatory city permits, and other expenses associated with opening this business. The start-up costs will be financed through a loan.
Total Start-up Expense $36,010
Start-up Assets Needed
Cash Requirements $10,000
Start-up inventory $1,325
Other Short-term Assets $675
Total Short-term Assets $12,000
Long-term Assets $4,000
Total Assets $16,000
Total Start-up Requirements: $52,010
Left to finance: $0
Start-up Funding Plan
Investor 1 $0
Total investment $10,000
Unpaid Expenses $0
Short-term Loans $42,010
Interest-free Short-term Loans $0
Subtotal Short-term Liabilities $42,010
Long-term Liabilities $0
Total Liabilities $42,010
Loss at Start-up ($36,010)
Total Capital ($26,010)
Total Capital and Liabilities $16,000
2.3 Company Locations and Facilities
Ice Dreams will be located on Highway 86 in El Centro, California which experiences a high volume of traffic on a daily basis. According to a study by Cal Trans (Traffic Volumes, 1995), approximately 48,300 vehicles pass through this location on a daily basis making it an ideal location for business. The majority of traffic enters and exits via Imperial Avenue and Fourth Avenue traveling through Highway 86. A 240 square foot drive-through facility will be built on a privately-owned commercial property which will also include parking facilities, landscaping, and a small sitting area. Other major businesses located on Highway 86 include Carl's Jr., Roberto's Restaurant, La Fonda Restaurant, Raging Bull Restaurant, China Restaurant, Donut Shop, Steak House, Big John gas station, Recreation Center, and several motels. The appendices provide additional information on the company facilities, a tentative plot plan, and highlights of the traffic study conducted by Cal Trans.
Main products to be sold through the Ice Dreams business will be shave ice topped with tropical and Mexican flavored syrups in three main sizes: small, medium, and large. Other products will include three soft drinks (Sprite, Coke, and Diet-Coke), and licuados.
3.1 Product Description
One major product will be sold through Ice Dreams which will include shave ice topped with tropical and Mexican flavored syrups. Twenty different tropical and Mexican flavored syrups will be sold and include the following:
Wild Watermelon, Pina Colada, Pink Lemonade, Guava Grape, Cherry Jubilee, Root Beer, Kiwi, Strawberry, Blue Bubble Gum, Orange Mango, Raspberry Red, Luscious Lime, Bodacious Banana, Tamarindo, Jamaica, Hortacha, Melon, Papaya, Manzana, and Limon. Other products will include soft-drinks in three flavors: Coke, Diet-Coke, and Sprite, and licuados in three flavors (strawberry, banana and mango).
0 3.2 Competitive Comparison
No other business in El Centro specifically caters to the shave ice market on a large scale. It is anticipated that prices will be competitive with other businesses who sell shave ice on a smaller basis.
3.3 Sales Literature
Sales literature to be distributed to the general community will include fliers, advertisement in the local newspaper (Imperial Valley Press), and other print media.
Ice Dreams will purchase products from Crystal Fresh, Inc. which manufactures and distributes high-quality syrups and ice shavers. All equipment and supplies are available through a regional distributor. Mexican flavored syrups will be purchased in Mexicali, Baja California, Mexico.
3.5 Future Products
It is anticipated that 10-15 additional syrups will be added such as Spearmint, Black Cherry, Cinnamon, Blueberry, Peach, Red Apple, Tutti Frutti, Coconut, Cola, Green Apple, Tangerine, and Vanilla. Also, future products to be sold will include ice cream in vanilla and chocolate flavors.
4.0 Market Analysis Summary
El Centro is geographically situated at the junction of major east-west and north-south transportation routes. El Centro is also referred to as the "center of opportunity" with benefits created by the North American Free Trade Agreement (NAFTA) becoming one of Southern California's most promising new commercial/industrial areas. El Centro is accessible via Interstate 8, State Highway 111, and State Highway 86, where Ice Dreams will be located. Shave ice is an ideal business for El Centro given both the potential market segment, location, and climate. Utilizing averaged priced units ($1.25) for shave ice and other products to be sold, the shave ice business has the potential market of $104,446 gross sales by the third year of operation.
4.1 Market Segmentation
According to Advertising Age (September, 1995), premium ice cream and frozen yogurt products are losing market share to mid-priced and other frozen dessert products. Information Resources reported that frozen ice products comprised a third of the $2.4 billion ice cream category for the year ending May 21, 1995, generating $717.7 million, up 9.3% from the previous year. Based on this information, it is anticipated that the frozen dessert market can be divided into two customer segments. The first segment prefers premium ice cream and frozen yogurt products. The other segment obviously includes those that prefer frozen ice products. Shave ice products are ideal for today's health-conscious consumers. They boast no fat, no cholesterol, and are relatively low in calories. Ice Dreams will target all segments of El Centro's population: children, teenagers, and adults. The Hispanic population will be of special interest since it comprises 65% of El Centro's total population. This population will be targeted with Mexican flavored syrups and licuados. 4.2 Target Market Segment Strategy Ice Dreams will target the low- to mid-income consumers who want to have a high quality dessert for moderate prices. Ice Dream's shave ice meets the quality required by these customers since it will also cater to the large Latino population in El Centro with its Mexican flavored syrups. 4.3 Industry Analysis One of the best known shave ice businesses is Sno Biz Shave Ice under the parent company of Crystal Fresh, Inc. Dealerships such as Sno Biz have demonstrated the success and feasibility of selling shave ice. The Sno Biz dealership has been in existence for the last 11 years with over 3,000 individual dealerships throughout the United States. Sno Biz syrups products are also sold in Wal Marts throughout the country. While no Sno Biz dealership currently exists in California, Sno Biz products are sold at the San Diego Zoo, Lion Country Safari, and the San Diego Military base with great success. The potential success for selling shave ice is attributed to the following:
1. Compared to other food service products, Ice Dreams will be a relatively simple business to operate.
2. Shave ice is similar to a Mexican favorite called raspado, but because it is softer and tastier, it is preferred over raspados.
3. Shave ice has a low food cost and is easy to prepare, which keeps speed-of-service at optimum levels to keep up with high-traffic volumes.
4. Ice Dreams will be easy to maintain and clean.
5. Shave ice is a product that has yielded a considerable profit in terms of cost to produce at $0.16.
6. Shave ice is an ideal product for the health-conscious consumer.
Market research conducted in El Centro did surface one raspado (sno-cone) business on a small scale called "Snow Shack" located on State Street. Snow Shack consists of a small trailer that accommodates only one employee. Sno-cones are sold in cups at prices ranging from $1.00 (small), $1.25 (medium) to $1.50 (large). Sno-cones were also found to be sold at Garcia's Food Market and Wal Mart. Each sold sno-cones in one regular size at $1.00 each. Research conducted in Bullhead City, Arizona noted that the Sno Biz dealership only sells shave ice as their primary product. Shave ice units sold for $1.25 (small), $1.75 (medium) to $2.25 (large) per unit. In interviewing the current owner, he indicated that during his first year in business he was selling 200 units per day. Research in San Diego, California revealed that shave ice is sold along with other products. Several businesses in Mission Bay sold shave ice with prices ranging from $1.79 (small), $1.99 (medium) and $2.39 (large). In terms of licuados, prices were $2.79 (regular) and $3.15 (large). Research conducted in Honolulu, Hawaii, showed that in some locations, shave ice sold as high as $5.00 for a regular size. However, the majority of sno-cones were sold by the flavor and not necessarily by the size. For example, one flavor was $1.79, two flavors were $2.29, and three flavors sold for $2.79.
4.3.1 Industry Participants
The shave ice industry in El Centro, California currently has no key players since no other business of this type currently exists in the Imperial Valley.
4.3.2 Competition and Buying Patterns
The shave ice business will be new to El Centro. Competitors in this type of business primarily sell raspados or sno-cones and do not focus on the shave ice market. One major competitor is the "Snow Shack" located on State Street. Snow Shack sells sno-cones through a small, one person trailer with limited choices of syrups. Other competitors sell sno-cones through Garcia's Market and the Wal-Mart store which also have limited syrup selections and do not necessarily focus on the sno-cone or shave ice industry as their primary product. The keys to success will definitely
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