"The Scoop Loop'- Business Plan

As a part of the course requirements for my Fundamentals of Entrepreneurship course, a few peers and I teamed up and created an original business idea. We then had to create formal feasibility analyses, business models, elevator pitches, presentations, and the overall business plan for these original ideas. Below is samples from this model, which is just over 15 pages in length.

Marketing Strategy

Unique Selling Position

While there are separate scoops that can be purchased (different from the ones that come with protein and baby formula containers), these products are separate from the baby formula and protein containers and therefore are just another item for customers to keep up with. What makes our product unique is that it allows consumers the ability to use the scoop that comes with that particular container (the right fit every time) as well as allows them to keep that scoop inside of the container lid for easy storing and access. This convenience factor is what separates us from other scoop products. We will focus on this in our messaging and marketing materials, as part of our differentiation strategy.

Pricing

We will sell this packaged product at a cost of $10.95 each. With a cost-of-goods sold of $2.25 per packaged product, and with the selling costs associated with selling this item through Fulfillment by Amazon being $2.92 per sale, this allows us to make a reasonable profit while adhering to a similar, or an even lower price point to other similar convenience items in the market such as The Scoopie Powder Supplement Container (4 pack-$14.99) and WOWHOUSE Protein Supplement Funnel Powder Tablet Container (2 pack-$11.99).

Selling Locations

As outlined in the Business Model section, we intend to sell our product via two channels: on Amazon using Fulfillment by Amazon, and through local gyms that sell merchandise.

Marketing Strategies

As we have two separate sales channels, we have built a marketing strategy for each. To grow awareness of our product and sales via Amazon, we will utilize Amazon ads, specifically the Sponsored Products and Sponsored Display ad options. For all verified purchases on Amazon, we will reach out via email post-purchase and offer a 10% discount on future purchases for their honest review. As we have complete faith in our product’s quality and our customers’ satisfaction, we expect to see many positive reviews using this strategy. As many consumers rely on peer reviews to help them determine if a new, untested product is worth the money, this will ultimately help increase our conversion rate. We also intend to use Facebook advertising, using the ever-popular video ad format to draw in new audiences, sending them directly to our product page on Amazon. Facebook is one of the best performing B2C advertising platforms, so we believe this will help us to grow brand awareness and drive sales. We will follow the lead of companies such as Lume and Southwest by creating funny and engaging content that will help us grow brand personality and trust. Alongside our paid activities, we will begin building an organic community through social media profiles and our website, which will serve not only to introduce our product and company but also will tackle common health and wellness topics. We will build a blog into our website and encourage customers to join for content around two key topics: nutrition (for both gym goers and babies), and wellness issues. This will help grow a reputation for our company beyond simply selling a convenience product, and help us position ourselves as thought leaders in the health and wellness space. It will also allow us to capitalize on the SEO opportunity around keywords with significant search volume. Lastly, we will work with a select number of micro-influencers. They will be provided with an affiliate link; if the micro-influencer chooses to promote our product on their blogs and in their social media content, they will receive a 5% fee on every sale driven. While this lowers our profit for these sales, ultimately it is the lowest cost advertising option and has the greatest likelihood of driving sales. Our strategy for retail sales through local gyms is a bit different. We will work to build relationships with gym chains, and offer to sell our inventory to new customers in packages of 100 at a 5% discount ($10.40 per item), which allows them to sell our product at the retail price of $10.95 and make a 5% profit on each. This allows us to make a generous profit, and also gives them a great incentive to want to offer our products in their gyms. Each first-time buyer will receive a promotional kit that includes a cardboard cut-out advertising our product.

Goal Setting

Looking at industry benchmarks, in the first year we expect our Amazon ads to drive 30% of traffic, Facebook ads to drive 35% of traffic, organic to drive 10% of traffic, and referral marketing to drive 25%. In years 2 and 3, we expect all traffic driven by marketing campaigns to increase by 25% per year, and for organic traffic to account for 40% of that traffic. This is significant because organic traffic is nearly free (outside of the cost of maintaining our website and writing blog content), and therefore we want to win against related competitors in the organic search and social space.

Below are financial projections for the first year of business. Not pictured are IRR and NPV calculations for the return on interest: