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The Need for Business Plan Before Launching A New Product or Service

357 Downloads1 I Published: 01 Nov ,2019

Introduction

Business plan is a formal documented layout of a new business venture and outlines its products, services, procurement routes of materials, staffing, finance, operations, goals and other necessary details (Tipu, 2018). This assignment is based upon the launch of a new ice cream bar in Kensington, United Kingdom under the name “Scoops & Smiles”. This assignment will gain an insight into the overall business plan of this venture inclusive of details about business type, unique idea, staff and probable expansion routes. Also, it will include research into the economy and rivalry in the selected business location. Further, it comprises of strategies that the enterprise can adopt in future to facilitate expansion.

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1. Outline of Business Venture

Scoops & Smiles is a new ice cream bar that is launched in Kensington, West London, UK. This venture is set to target the population of the densely populated borough within the capital city of UK. This business belongs to food & beverage industry, particularly the ice cream sector and seeks to provide ice creams of varying choices to people.

USP: The unique thing about Scoops & Smiles is that it provides innovative flavours and packaging styles for the ice-creams. Some of the examples of its unique and exceptionally innovative products are Thai-style rolled ice cream, doughnut cones, chocolate tacolates, Macaron ice cream sandwiches, hot & cold ice chocolate punch andegg waffle sundaes. All these products are fusion of two or more existing products or ideas. Thus, this creative and unique product range renders a competitive and strategic edge to Scoops & Smiles over its rivals and provides a scope for company to captivate the attention of a large base of audience towards the ice cream bar (Thébaud, 2015).

1.1 Business Type

Scoops & Smiles is a partnership firm where there are two partners with 50-50 profit sharing ratio. This model has been chosen as the whole thought about the venture idea and setup of this ice cream bar was collectively contributed by two friends. One friend, Mr. Joseph Sylvieproposed the idea of opening an ice cream bar while the other partner,Mr. Stephen Johnsonpresented the idea of various flavours and styles of ice-creams that will be served by this enterprise.

1.2 Business Research

Scoops & Smiles is operating within Food & Beverage, specifically the ice cream industry which is a lucrative market for aspiring ventures who are willing to invest less yet gain more from the population. Ice cream industry within UK is divided into two segments, namely, take-home and impulse ice-creams. As per the survey conducted by a renowned UK Government Agency, this industry has shown massive turnover by way of bringing improvements in the service quotient of ice cream manufacturers and retailers. This has been done through meal dealsand extensive New Product Development (NPD). Further, as a result of the rising inflation since 2016, consumers within UK have started opting for the premium products in ice cream sector. Thus, this market was priced at £1.4 billion in the year 2018 which reflects increase of 26% from 2013 (UK ICE CREAM MARKET REPORT, 2019). Companies such as Wall's, Morelli's Gelato, Kelly's of Cornwallare some of the top names within this sector in UK.

Also, it has been noted that healthy choice are dominating the population of UK to opt for ice cream as a lucrative dessert choice due to low presence of calories and fats than other sugar products. This has led to8.3% growthin the sales of ice cream companies. Also, products like protein and sugar free ice-creams strive to enhance the componet of turnover due to the health conscious section of population prevailing in UK. Besides this, scorching summer in UK last year led to an increase of £45 million from 2017 (Focus on Ice Cream,2019). All this strives to build opportunities for Scoops & Smiles to gain a high stake within Kensington, West London as they are offering a unique and innovative range of fusion ice-creams.

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2.1 Application of 4P's

For feasibly launching a new idea or process in market, owners of business have to carry out a market and competitive research to gain knowledge of the latest trends and techniques prevailing in the industry (McKeever, 2016). In this regard, the partners of Scoops & Smiles have conducted marketing mix of this ice cream venture to gain an insight into the products, services and prices being offered by entity. The marketing mix (4P's) of Scoops & Smiles is as follows:-

Place:The place selected by both the partner for launching this business is Kensington which is a district in the borough within West London, United Kingdom. The location is decided to be Kensington High Street which is a commercial centre visited by a large number of people every single day. This street was declared as London's second best shopping location in past owing to the wide range of products available for sale here and the number of shops prevailing in this street (Vurro and Perrini, 2018). This location has been strategically selected by both the partners due to the large number of people within UK who visit this place. Thus, Scoops & Smiles possess a unique opportunity to meet the needs and demands of health conscious and dessert captivated audience of UK and enhance its sales and profitability in marketplace.

Products:Scoops & Smiles provides a wide product range of ice creams by way of doing fusions with the flavours. This enterprise offers simple flavours like chocolate, vanilla, strawberry, black current etc. Besides this, Scoops & Smiles also strive to provide unique and innovative ice cream and snack blends such asThai-style rolled ice cream, chocolate tacolates, doughnut cones, hot & cold ice chocolate punch, Macaron ice cream sandwiches andegg waffle sundaes. In addition to this, Scoops & Smiles have low calorie and sugar free ice creams too to serve the requirements of health conscious population within Kensington, UK. All of these are unique products which are not at present being sold by any of the ice cream producers or retailer. Such range has been introduced by enterprise largely with the motive of fulfilling the needs and demands of customers of all age groups and segments (Tipu, 2018).

Illustration 1: Products of Scoops & Smiles

Price: Scoops & Smiles provides ice creams at prices influenced by3 price strategies depending upon the industry and market scenario. These strategies are described below:-

Penetration Pricing: This pricing strategy is being used by Scoops & Smiles at present. This approach aims to charge low prices in return of the unique and innovative fusion ice creams being provided by company. This strategy is being used by partners of the entity to grab the attention of a large number of individuals who visit Kensington High Street on a daily basis and to retain them for a long duration of time by offering lucrative discounts to early shop visitors.

Premium Pricing:Scoops & Smiles have planned to follow this pricing strategy after a while when they establish a positive image in market due to the unique, creative and innovative range of ice creams that this enterprise strives to render to population of Kensington, UK. This approach is utilised by the business due to the element of innovation that has been brought by enterprise and yet unexplored by other ice-cream companies (Hopp and et. al., 2018).

Optional Product Pricing:Scoops & Smiles has decided to opt for this pricing strategy when there is scorching summer season in UK so as to tap the advantage of weather and human psychology. In this strategy, the enterprise enhances the price of ice creams as they offer optional extras such as snacks or a sandwich.

Promotion: Scoops & Smiles has adopted social media as the marketing and advertising tool. This has been chosen due to the vast audience that has its presence on social media and is online for almost all the time except while sleeping. To increase communication with customers and to gain their attention towards the innovative and unique range of ice cream fusions that this firm is providing, social media channels such as Instagram, Facebook and Twitter have been used (Chang, 2017). Pages on these media will strive to communicate the vision and products of Scoops & Smiles to audience of UK.

2.2 Staff of Scoops & Smiles

Scoops & Smiles is a partnership firm having a total of 4 employees where one is a manager, 1 fixed worker and the other 2 are zero hour contract workers.

Role of Manager

The basic role of manager in Scoops & Smiles is to meet all the customers in a friendly manner so as to retain them for a long period of time. Also, their role includes ensuring that customers get best quality ice creams and flavours. Further, the manager ensures that the workers provide the consumers customised flavours which tend to satisfy their needs and demands (Hutchinson, 2017).

Zero Hour Contract

Zero hour contract is an agreement between the worker and the employer in which when the organisation needs them, they can call the workers for doing their job instantly (Burns, P. and Dewhurst, 2016).

Advantages of Zero hour contract workers:

By hiring such workers, Scoops & Smiles avoid the unforeseen situations such as upsurge in demand, seasonal work and other casualties. Also, their wages is relatively lesser than other permanent workers. Further, Scoops & Smiles doesn't have to pay them when the owners don't need them.

Disadvantages of Zero hour contract workers:

This can also have a limitation for Scoops & Smiles which is that Zero hour contract workers are not employed on permanent basis and thus can be busy in the hour of need for company.

2.3 Customers/Clients

The target audience for Smiles & Scoops is kids and the younger generation. This is due to the craze that is generally observed in this customer segment towards ice creams (Chambers and Humble, 2017). Thus, the customer segmentation on the basis of demographics, in particular, the age group, has been strategically done to enhance the sales and profitability of enterprise within UK. Thus, the customer cohort for Smiles & Scoops has been decided to be people belonging to the age group 4-18 years. This will assist the enterprise in gaining a high stake in Kensington, United Kingdom and facilitate growth of business in near future.

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3.1 Expansion routes for Scoops & Smiles in future

Ultimate goal of a company is to expand its business in near future. Global expansion plays an important role for the growth of any organisation in today's competitive environment (Chang, 2016). In this regard, Scoops & Smiles will also expand its business once it becomes successful so as to increase the base of customers and to reach a large number of people to become a leader in ice cream industry. Expansion assists the organisation in increasing the size and scale of a business geographically. Scoops & Smiles has planned to grow and expand their business in order to increase the sales and profits. For this, the firm can adopt for expansion strategies such as licensing, franchising and joint venture. All of these are described briefly below:-

Licensing: It is an agreement between two parties where one party grants permission to another party for manufacturing their products with the payment of specified amount. It is one of the most advantageous routes which Scoops & Smiles can use to facilitate expansion of their business.

Franchising: For facilitating business expansion, franchising is one of the most feasible strategies which is based on marketing concept. Franchising is basically an agreement between two parties, Franchisor and Franchisee (Ambat and et. al., 2017). Herein, Scoops & Smiles will grant permission to the other party to use its intellectual property rights such as brand name, designs, trademark. Expanding by way of expansion helps an enterprise in enhancing their goodwill in marketplace.

Joint Ventures: It is awell known path for business expansion and basically refers to an agreement between two or more parties, who combines their resources for a specific business organisation to earn profit (Baliga and Rodrigues, 2015). Scoops & Smiles can make use of joint venture with other leading ice cream companies of UK for the expansion of current product line of ice creams or for development of any new ice cream. This strategy strives to expand the share of entity in marketplace and to enhance the network of distribution.

Conclusion

On the basis of above discussion, it has been concluded that business plan is a necessary document that has to be made by business before launching a new idea or product into market. Besides this, it has been analysed that the owners have to evaluate the strategies in relation to price, product, promotion and place. In addition to this, it has been assessed that the staffing and market situation is also to be evaluated by the owners before launching a venture project within any industry.

References

Books & Journals

  • Ambat, L. M. C. and et. al., 2017, November. A Study on Designing a Marketing Plan for a Start-Up Business in the Philippines. InAscendens Asia Journal of Multidisciplinary Research Conference Proceedings(Vol. 1, No. 2).
  • Baliga, A. J. and Rodrigues, L. L., 2015. Business Plan-The Secret to Success.The International Journal of Business & Management.3(4). pp.210-214.
  • Burns, P. and Dewhurst, J. eds., 2016.Small business and entrepreneurship. Macmillan International Higher Education.
  • Chambers, I. and Humble, J., 2017.Plan for the planet: a business plan for a sustainable world. Routledge.
  • Chang, M., 2016. Entrepreneurship your business plan.IEEE Engineering Management Review.44(1). pp.21-23.
  • Chang, W. L., 2017. Online training for business plan writing through the World Café method: the roles of leadership and trust.Universal Access in the Information Society,16(2), pp.313-324.
  • Hopp, C.and et. al.,2018. Revisiting the influence of institutional forces on the written business plan: a replication study.Management Review Quarterly,68(4), pp.361-398.
  • Hutchinson, C. E., 2017. Engineering Entrepreneurship, From Idea to Business Plan.Technology and Innovation.19(1). p.451.
  • McKeever, M., 2016.How to write a business plan. Nolo.
  • Thébaud, S., 2015. Business as plan B: Institutional foundations of gender inequality in entrepreneurship across 24 industrialized countries.Administrative Science Quarterly.60(4). pp.671-711.
  • Tipu, S. A. A., 2018. Business plan competitions in developed and emerging economies: What do we still need to know?.Journal of Entrepreneurship in Emerging Economies.
  • Vurro, C. and Perrini, F., 2018. Social business plan simulation: The case of Dynamo Camp. InThe Italian Model of Management.(pp. 83-102). Routledge.
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