School Works-Writing

1. Market Research
Primary Research
After looking at some research we were able to find that Birmingham, MI was a great location for a
smoothie shop. Out of 140 surrounding businesses in the area there are no direct smoothie shops. The
area is filled with boutiques and women’s fashion stores that are considered to be high-class stores.
Birmingham is also one of the richest counties in the country as well as being considered one of the top
20 best walking towns in the United States. The wealthy side of this county shows through the average
cost of homes being set at $172,000. Other very wealthy towns and suburbs thus stimulating the
economy of the area as well also surround the area. Groovy Smoothie would fit right into the boutique
and dining services, sticking out as one of the innovators in health and quality taste.
Secondary Research
Population for Birmingham, MI is upward from 20,000 residents.
One of the best walking towns in the country
Birmingham Zip Code Map
Estimated median household income in 2009: $93,992 (it was $80,861 in 2000)
Birmingham:$93,992
Michigan: $45,255
Estimated per capita income in 2009: $64,461
Birmingham city income, earnings, and wages data
Estimated median house or condo value in 2009: $338,434 (it was $300,700 in 2000)
Birmingham:$338,434
Michigan: $132,200
Mean prices in 2009:All housing units: $512,264; Detached houses: $543,358;
Townhouses or other attached units: $349,576; In 2-unit structures: $303,054; In
3-to-4-unit structures: $346,818; In 5-or-more-unit structures: $178,277; Mobile
homes: $404,619; Occupied boats, RVs, vans, etc.: $238,515
Median gross rent in 2009: $1,145.
Read more: http://www.city-data.com/city/Birmingham-
Michigan.html#ixzz2Ne1wuPjD
Niche
Our niche is our dedication to health and wellness. It is a well-known fact that in order to lead a
healthier life people need to eat better. Our company would be dedicated to serving the healthiest, but
tastiest smoothies as possible. We would use local farmers crops as our product supply that way we are

2. also supporting our community as well. We would also pride ourselves on serving people that are in
need of nutrition and diet advice. Our staff would be trained in the nutrition department that way we
provide the best advice available to hopefully help lead others to a healthier lifestyle. As for our actual
physical product we would try to have locally grown supplies along with some of the freshest fruits and
vegetables possible for quality taste. Our product coupled with our dedication to health and superior
service would be the way to describe our niche as best as possible.
Strategy
Our strategy at the start would be to try and gain the most market share in our own backyard. We would
try to first get our residence of Birmingham, MI as the most market. To do this we would focus on the
local aspect of our company. We would try to use local TV ads, local radio, billboards, and other types of
marketing such as booths at fairs. Our main message would be to get the word spread that we are
dedicated to quality taste, health and wellness, and supporting our local community. With Groovy
Smoothie being a local brand we want to generate good local buzz. Some of our other strategy would be
our competitive pricing. With Groovy Smoothie getting our raw materials from local farmers it would
keep costs at a minimum. We would then also gain our products such as cups, straws, and etc. from
local businesses as well. Our prices at $6 per smoothie we are able to make a significant profit per
smoothie at a relatively low cost.
Promotion
How will you get word out to customers?
Groovy Smoothie would use many things to get the word out to customers about our emergence into
the local environment. Through the use of local TV ads, local radio broadcasts, and also through
billboards in our surrounding areas. This would give us a good start on getting the word out about our
opening and what we offer.
Advertising: We would use local TV ads much like the ones you see for local car dealerships. These
commercials are easy to generate and would not cost too much. These commercials would just let
people know our location, what we sell, and also some of the other features that we offer as well such
as the nutrition classes we would offer. Our choice would be to run these ads initially during the local
news broadcasts. These could be run during the afternoon news broadcasts and the evening news
broadcast as well. Since many local people watch the local news this would be a good way to get the
word our about our business and also generate a buzz among the local community. Groovy Smoothie
would also use radio broadcasts to get even more local buzz. We would make it a point to find the most
popular radio shows in the Birmingham area and choose to bring in some samples for the radio
broadcast crews and on air talent to try. We would just request a small segment to talk live on air about
some of the things we offer and see some of the reaction from the on air talent as well. This would be
done during the most popular shows at the most popular local stations and odds are these would be
during the morning shows while everyone is on their commute into work. This would be done a short
while before our grand opening and every time possibly when we have a new product line coming out as
well, but that could be decided at a later time depending on budget plans. We would also use billboards

3. to get our message out as well. Initially we would have a Groovy Smoothie billboard on the highway
nearest to us coming in and out of the town. If we started out with just 4 billboards I think that would be
enough for us to get the idea across. We could have the billboards coming in to Birmingham and out of
them surrounding the area in almost a box shape.
Other Advertising: As stated above we are a proud local brand that supports its local farmers and
businesses in order to keep our business afloat. With that said not only would we buy locally, but we
would also have a presence at the farmer markets we purchase food from as well. We would have a
booth at the local farmer markets telling about our products and how we buy and sell locally. We would
also have signs up telling how much we bought locally and how grateful we are for our local supporters
and local businesses. Social media is also something Groovy Smoothie must use in order to properly
market. Groovy Smoothie will have a Facebook, Twitter, and Instagram. These are free tools that we
could use in order to spread the word about our business and reach across not only the local area, but
even the entire state.
Our Image
As stated above we want to be known as a local brand first and foremost. We buy and sell locally and
that is a great way to draw initial interest from those customers that live in the area. We also want the
image that we are promoting health and wellness into the community. By providing nutrition and diet
classes as well as the healthiest smoothies around, those that are interested in high quality taste and
health benefit would think of our business first.
Repeat Customers and Contact
After each purchase we could ask if the customer is interested in becoming a premium member and/or
if they want to leave their cell phone number in order for us to text updates to their phone about
contests, nutrition classes, and other promotions that occur. Premium members would get discounts
and also access to our nutritionists and other benefits as well. This would all come to a cost of $50 per
month and would have no contracts that way it is strictly a monthly issue.
Promotional Budget
According to tvads.shoppingrocks.com we should expect to pay about $2000 per month for our TV ads
during local broadcasting. Also according to localmarketingideas.com/how-much-does-radio-
advertising-cost/ our radio spots for our region would cost on average about $800 per month. With
these figures we could run two our promotions for two months, one month before our opening and the
month of our opening. This would give us good exposure to our local community. For those two months
for radio and TV advertising it would cost a total of $5,600 for both months. For a small billboard it
would cost $500 per month and we plan on having 4 billboards. For two months we could have the 4
billboards in the surrounding area it would cost $2,000. After the first month we would drop it down to
only 2 billboards for 6 months that would leave us at a cost of an additional $5,000. Our grand total
would be $7000 for billboards and our local advertising for TV, radio, and billboards would be $12,600
for the first 6 months. For our booths at markets and any other marketing booths we have materials will

4. probably cost around $400 and that would bring our total promotional budget to $13,000 dollars for the
first year.
Pricing
All of our smoothies are priced at $6 at the most. We have this price because it is competitive with most
other chains of smoothies. For example, Tropical Smoothie drinks are typically anywhere from $5-$10
for each drink. Our prices are competitive, but due to the relative low costs of production for our
smoothies we have a 72% profit per smoothie. We do not intend for our prices to be the main reason for
customer attraction. We have set low prices, but intend on those to come in based on their preferred
taste and need for healthy drinks. Our service will be extremely well trained as well, that way if any
customer has any sort of health questions or questions in general we are able to answer them to the
best of our ability. As far as customer service goes we will make sure to be as speedy as possible, but
with high quality. If customers have special requests we will do our best to ensure them that the
product matches the request. We will offer payment for customers through cash, credit, or debit card.
That way we do not miss any sort of business due to lack of payment options.
Location
Our location is extremely important for our success. It is a place where customers come to receive our
product and nutrition classes. Being located in Birmingham is a huge advantage to our company. Groovy
Smoothie would be located in an area that is one of the top 20 walkable towns in the country along with
one of the wealthiest counties in the country as well. We would offer our customers parking despite this
being a walking town. The parking would be limited, but would still be available to our customers. As far
as our competition is concerned after looking at the markets in downtown Birmingham, Groovy
Smoothie would be one of a kind in the area. After looking at yelp.com we were able to find 140
businesses in the Birmingham area and surrounding the area and outside of any grocery stores or
drugstores we are the only business to offer drinks. Smoothies and specialty drinks are not offered
anywhere in the immediate area. Being near our competitors would not be an issue due to the fact that
our product and service is very specialized and hard to imitate. We offer just more than healthy
smoothies, we also offer nutrition services which is also not found anywhere in immediate Birmingham
area.
Distribution Channels
Groovy Smoothie would sell directly to its customers right out of our shop. A delivery service seems to
be a little bit of a reach due to the relatively cheap costs to our drinks and with our business not offering
food at this time delivery would wind up costing us more money. We would also sell drinks at some of
the marketing functions we would attend like when we show our presence at the local farmers markets.
As far as our nutrition services we would offer online help as far as using simple items such as Facebook,
Twitter, or email for our premium customers. Once it has been identified that a customers dues are up
to date we would then do our best to answer any questions they may have in order to provide quick and
immediate results without having to come directly into the store location in order to get a simple
question answered.

5. Sales Forecast
Year 1 Sales Forecast Best Worst
Year 1 Total Sales Budget $13,000.00 $13,000.00
Sales Year 1
Smoothies $158,045.00 $79,022.50
Nutrition Meetings $18,250.00 $9,125.00
Membership Sales $5,400.00 $2,700.00
Total Sales $181,695.00 $90,847.50
Production Expenses
Fruits and Vegetables $54,750.00 $27,375.00
Paper Products $6,205.00 $3,102.50
Nutritionist Classes(1 person
certification) $2,881.90 $2,881.90
Sales Budget $13,000.00 $13,000.00
Total Expense $76,836.90 $46,359.40
Total Revenue $104,858.10 $44,488.10
Monthly Projections
Sales
Smoothies $18,600.00 $9,300.00
Nutrition Meetings $1,550.00 $775.00
Membership Sales $4,050.00 $2,025.00
Total Sales $24,200.00 $12,100.00
Production Expenses
Fruits and Vegetables $5,177.00 $2,588.50
Paper Products $527.00 $263.50
Sales Budget per month $1,083.33 $1,083.33
Nutritionist Classes (monthly Payment) $240.16 $240.16
Total Expenses $7,027.49 $4,175.49
Total Monthly Revenue $17,172.51 $7,924.51