Business Plan – Draft

Part 2: Business Plan – Lamar Rene
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Part 2: Business Plan – Lamar Rene'
A business plan for a start-up business clarifies the business idea and defines the company’s long-term objective. Moreover, a business plan offers a blueprint for running the company in addition to a series of benchmarks for checking the progress against (Brad, 2014). This paper provides a draft of my Business Plan as well as an Income Statement that contains the financials of my business plan for my start. The following components of the previously submitted sections are revised basing upon the received feedback: Company Description, Industry Analysis and Trends, Strategic Position and Risk Assessment, Target Market, Competition, as well as Marketing Plan and Sales Strategy. In addition, this paper provides an Ethics and Social Responsibility Plan which describes how Lamar Rene’ is committed to being a good corporate citizen.
Section 1: Business Plan
Company Description
The name of the start-up company is Lamar Rene’ Inc. It would be involved in production and marketing of an all natural, organic champagnes. This product is made with fresh fruits and is a non-alcoholic version of typically alcoholic drinks for instance cocktails and beers. As alcohol-free beverages, they would be produced yeast free to ensure the product is 0.00% alcohol by volume. It is worth mentioning that beverages that have labels stating the actual alcohol by volume help people from unknowingly becoming drunken drivers or inebriated (Roche, 2014). The organic beverages would be made using the best raw materials: organic fruits including passion fruit juice, mango juice, organic pineapple juice, and organic apple fruit juice. There would also be champagne with flavours of pear, peach and plum. This product offering is in line with the mission of this start-up, which is to provide consumers with a healthy alternative to the wide range of unhealthy beverages available in the marketplace.
The start-up company would be based in Washington DC area and the products would first be marketed and distributed throughout Washington DC suburbs of Alexandria, Forestville, Arlington, and Congress Heights before expanding across the North-East United States and in the New England region. It would be launched in Washington DC area where a gap in this market has been identified especially for people who do not drink alcoholic beverages. The organic beverages would be available in 700 ml and 300 ml glass bottles as well as 5 L cartons and 200 L barrels. The bottle’s classy design would give the product the image of a mature and premium brand. The beverage would have a sparkling texture to the consumer’s tongue albeit smooth in taste. My new brand called Alvaro will consist of two variants of non-alcoholic malt drinks, annex passion and annex mango, for which the company will seek to secure a wider customer base in the domestic sector of this new brand.
Industry Analysis and Trends
In the health-conscious world of today, a lot of people are cutting their consumption of alcohol. A survey conducted by the National Institute of Health revealed that 35 percent of all adults in America lead alcohol-free lifestyles and a lot of these individuals choose to do so thanks to health reasons (Tlapa, Miller & Washington, 2010). Whether marketed as soft drinks or non-alcoholic beers, Roche (2014) reported that malt-based and organic drinks are projected to grow as a category in the next few years. The consumption of organic and healthy non-alcoholic drinks is likely to rise. To further highlight that there are health concerns among consumers is that manufacturers are increasingly producing zero-sugar drinks given the concerns about the impact of sugar on obesity (MarketWatch, 2015). There has been an upward trend in sales of non-alcoholic beverages worldwide, with a projected revenue growth of 4.3% growth in revenue from 2014 to 2020 (Release Wire, 2015). There is a considerable potential to market non-alcoholic beverages on their health credentials to a wider audience.
In recent years, there has been a growing trend towards malt-based beverages and organic beverages in Western markets including the United States with consumers being watchful for healthier alternatives to the conventional alcoholic beverages and soft drinks. On the whole, as people are becoming increasingly health conscious, they are trying to cut on their alcohol intake and are looking for delicious, refreshing, healthier alternatives. Organic non-alcoholic beverages made using fresh fruits are considered the healthiest non-alcoholic alternatives to alcoholic drinks and soft drinks (Mirasgedis et al., 2014). There is a growing number of smart consumers who are more informed and aware of the negative health effects of alcoholic beverages and artificial drinks, and are increasingly concerned with the processed foods and drinks and their sugar contents. Non-alcoholic beverage producers are reaping the rewards from the current health trend. Non-alcoholic beverage manufactures are increasingly focusing on health and wellness through the manufacturing of natural organic drinks (Sohrabvandi et al., 2010).
Strategic Position & Risk Assessment
The relative position of a company in its industry matters for performance. According to Parch and Rubinson (2011), strategic positioning essentially reflects choices made by a firm with regard to the type of value it would create and how that value would be created in a different way than its competitors. Lamar Rene’ will compete on low cost basing on cost leadership. Cost leadership entails balancing price with acceptable quality. Relative cost would be shifted in the favour of the company in order to attain competitive advantage. Consumers would perceive Lamar Rene’s products as very healthful, high-quality, inexpensive, suitable for all ages, and the product would also be related to happiness and joy. This perception of Lamar Rene’s brand by the consumers would translate into a high level of loyalty and would make buying decisions more automatic.
The product would be strategically positioned in the mind of consumers as not only suitable for adults, but also for minors and the family as a whole. Furthermore, the messaging would be conveyed portraying the product as a non-alcohol alternative. Through bottle labelling and various commercial adverts, consumers would be informed that the product has no added artificial products such as sweeteners or concentrates, and this is meant to maintain Lamar Rene' brand quality and improve its image and reputation. The company’s strategic position will eventually solidify the firm’s reputation for producing high quality, all natural, organic champagne made with fresh fruits. Even as the company guarantees quality, the pricing strategies are necessary to marketing (Parch & Rubinson, 2011). Hence, Lamar Rene's products will be reasonably priced with marketing highlighting both high quality and reasonable pricing to enable customers get value for money.
The following are the potential risks that would be encountered with the product: Risk of non-compliance to safety standards: Due to concerns about the health implications of non-alcoholic beverages especially those containing sugars, regulatory authorities are highly strict and manufacturers are expected to demonstrate that their products are healthy. Regulators need to ensure the health safety of consumers and put in place relevant regulations for which producers in the foods, drink and beverage industry have to abide by (Rayner et al., 2013). Safety regulation is necessary and Lamar Rene’ start-up will have to comply will all the relevant regulations although this may mean a higher cost implication. Since Lamar Rene’ beverages would be natural and organic, no artificial elements or additives would be added and all necessary efforts would be undertaken to ensure there is no contamination during processing.
Risk of inadequate and intermittent supply of raw materials and high cost of raw materials: Lamar Rene' Inc. will need to procure fresh fruits from fruit farmers to make the organic alcohol-free beverages. However, the changing weather patterns mean that this start-up company is unlikely to have continuous and consistent access to the required raw materials all the time even if they are imported. There is also a risk that there will be a rise in the cost of raw materials since the supply of raw materials may not adequately meet the demand. This might also exert pressure leading to higher costs on business operations resulting in higher prices. To minimize the risks, it would be important to strengthen relationships with suppliers as they are better placed to provide information on likely shortages of mangos, apples, pineapples, peaches, passion fruits and other raw materials.
Government influence through taxation and other regulations means that the government will most likely raise taxes in the foods and beverage industry to raise revenue. Even though ‘sin taxes’ on alcoholic drinks are the most common type of tax to rise, the tax rise also affect the non-alcoholic drinks (Blank, 2013). This is likely to have a negative impact on the sale of organic champagne, and even if there are no tax increases the businesses are obliged to show that their products really have a health benefit. Hence, there is a need to adhere to safety quality standards to avoid litigations and fines, while regulations affect the industry as a whole and this influences price adjustments with the bigger players more likely to weather the higher cost related to more regulations.
Target Market: Urban, 16-30 year-olds
Many times, social events mean discomfort for those who do not consume alcohol who often find it hard to fit in as various alcoholic beverages oil the conversation and the mingling. Taking water or soft drinks would often attract tense small talk or discomfort (Sohrabvandi et al., 2010) but this would change considerably when the product of my start-up company is launched. The target market for the alcohol-free organic beverages produced and marketed by my start-up company mainly includes people who do not consume alcohol. Specifically, the target audience includes urban young people aged 16 – 30 years since the product has the alluring appeal to cater for this broad age range. Alvaro would be a premium style beverage that would complement the elite lifestyle in the Washington DC area. The beverages would be sold in a wide range of places including places where alcoholic beverages are sold. The product, Alvaro, is a classy alternative for non-alcohol drinkers or those who do not want to drink alcohol.
Competition: soft drink producers and companies that make alcohol-free beer
There are quite a few major competitors offering diverse assortment of non-alcoholic beverages in the marketplace today ranging from the traditional champagne producing companies to rather new competitors who have entered this lucrative industry just recently. The existing brands of non-alcoholic beverages that pose a threat to Lamar Rene’s Alvaro include the following brands of non-alcoholic beer: Miller Sharp’s, O’Doul’s Premium, Beck’s non-alcoholic, O’Doul’s Amber, Bitburger Dive, St. Pauli N.A., and Coors Non Alcoholic. Other brands are Paulaner Thomas Brau, Gerstel Non Alcoholic, Buckler, Clausthaler Premium, Kaliber, Erdinger Non-Alcoholic, and Clausthaler Golden Amber. According to critics and reviewers of non-alcoholic beverages, these aforementioned non-alcoholic beverages are not organic and some of them have metallic taste. Furthermore, although some of them are labelled as non-alcoholic, they have content of alcohol in them, albeit a little amount. For instance, Clausthalers have 0.5% alcohol by volume whilst Miller Sharp’s, Bitbunger Dive and Buckler have 0.45% alcohol by volume (Roche, 2014).
Therefore, people who are trying to avoid consuming alcohol for whatever reason for instance the person is in recovery, is going to drive, is pregnant, or the person just does not want alcohol in his or her system right now may end up unknowingly consuming a beverage that has alcoholic content. This would be different compared to the non-alcoholic beverages that would be produced and marketed by my start-up company. Lamar Rene’ drinks would be 0.00% alcohol by volume. Other than the abovementioned non-alcoholic beer producers and marketers, other noteworthy competitors for the product of my start-up company include soft drink companies such as Pepsi and Coca-Cola, which have an extensive assortment of non-alcoholic beverages and are actually 2 of the world’s largest makers and marketers of soft drinks.
Marketing Plan & Sales Strategy
The product would be advertised using the label Alcohol-Free or Non-Alcoholic. Alcohol is generally a psychoactive drug and using these labels would mean that the products are appropriate to recovering alcoholics, to those who are driving, to pregnant women, and to those who do not want alcohol in their system (Rayner et al., 2013). For the first six months of the company being in business, I will start marketing and selling in my local community in a radius of 25 miles from where I live. This will give me time to perfect my product and learn from actual customers. The product would be sold in outlets and stores located in the main population centers across the Washington DC area including Alexandria, Forestville, Arlington, Congress Heights, Burke and Silver Springs.
The product would be marketed through a multi-channel approach. This will entail marketing online, through dealers and though catalog. It is notable that multichannel marketers often attain the greatest success given that consumers however and whenever they like are inclined to spend more and even shop more (Arnold, 2015). In essence, traditional direct marketing would be employe...