1) Location: Thomas has to choose the right location so that it would maximize sustainable revenue stream in the long run. 2) How should Thomas market her store with $10,000 promotion budget to attract maximum attention from the community? 3) How should new store offering catering option so that it can generate additional revenue and be competitive over other MSC stores that also have catering option?
Marble Slab Creamery is a strong healthy business that has more strength over weaknesses and more opportunities that could cover threats (Exhibit 1-SWOT Analysis). By selecting the optimum location, MSC could avoid direct competition which is strongly impact the company. Location decision would directly impact the retail store in many aspects, such as customer’s profile, demographic, and revenue stream. MSC products appeals to all ages with a wide range of product lines that target different segments: ice cream and other cold drinks for all ages with different flavors, fat-free frozen yogurt for people with more health concern. Therefore, MSC already has a strong customer base. Since Thomas has to pay 2% of gross sales to national advertising fund that advertise MSC brand awareness, Thomas should focus on promoting her new store awareness and create purchase intent to her store. With limited promotion budget $10,000, the store should have target market, product mix and promotion tools for her new store grand opening. Since catering is the only option that Thomas can have control over prices, catering option gives the flexibility to increase revenue, store’s traffic during winter (slow walk-in) and also the store’s awareness. However, Thomas’s store has to stay competitive since she would not be the only one who offers catering option in MSC chain.
Location has to be in area with substantial population that can afford the product, and has limited or none powerful competitors 2.
Target market has to be substantial, identifiable, measurable, accessible and responsive 3.
The promotion has to increase the location awareness and should increase and retain the customer base 4.
The promotion cost has to stay within marketing budget
The catering option should provide additional revenues to secure MSC position in the market
Since Marble Slab carries premium products at premium prices, customers at higher income areas like Oakville and Vaughan would have higher purchasing power (Exhibit 2-Location Analysis). In order to achieve the revenue goal of $400,000 in the first year, the store has to sell 58,824 ice cream (Exhibit 4- Revenue/Breakeven Analysis). Residents in Toronto Annex and The Beaches areas might not consider buying premium price products due to their low income and the number of ice cream required to sell to earn $400,000 revenue is more than the number of population. Toronto Annex and The Beaches should not be chosen because of its small size of population and low household income. The two location options left are Vaughan and Oakville. Advantages of Vaughan are that it has the largest population and the second highest household income, the plaza where store would be located is across from a major shopping centre, this location is a heavy traffic area, close to the Thomas’ home (Exhibit 3- Locations’ Pros and Cons). Moreover, the number of ice cream required to sell in order to achieve its revenue goal is only 26% of its population, which means if 26% of its population each buy one Marble Slab ice Cream, Thomas would achieve $400,000 revenue in the first year. However, disadvantages of Vaughan are that there is one large and strong direct competitor, Baskin Robbins, and Thomas has to commit to a 10-year term lease with this location. Advantages of Oakville area are that it has second largest population, highest median household family with highest purchasing power, little direct competition and the least expensive lease. In addition, similar to...
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