capstone final project about diy food app (industry analysis)

Midterm Business Plan “Cute Meals”

Table of Contents

Business Description

· Products & Services

· Mission Statement

· Business model

· Goals

· Legal Status/Ownership

Industry Analysis

· Industry Definition

· Industry Size & Growth Rate

· Trends

· Industry structure

Market Analysis

· Market Size and Potential Sales

· Target Market Trend

· Marketing Strategy

-Differentiation

-Competitive Advantage

-Target Market and Market Segmentation

-Customer Profile

· Competitor Analysis

· SWOT Analysis

Operations Plan

· Back stage & Front stage

· Database Plan

· Supply Chain Issues

Management Team & Company Structure

· Description and credentials of team

· Company Structure

· Board of Advisors

Financial Plans

· Revenue & Expense Assumptions

· Income Statement

BUSINESS DESCRIPTION

· PRODUCTS AND SERVICES

1. Business Opportunities

Nowadays, the importance of healthy growth of children cannot be ignored. However, in fact, children began to ignore the importance of health and daily nutrition. Research shows that approximately 8 to 12 percent of all school-aged kids skip breakfast and by the time kids enter adolescence, as many as 20 to 30 percent of them have completely given up the morning meal.[footnoteRef:1] However, in fact, some moms do not attach importance to the breakfast, which reflected in the repeated food like bread eggs, milk for children to eat. Children cannot get nutrition from all kinds of food. Moms worry about what to prepare for children for breakfast or lunch box every day. Gradually, children’s expectation look to breakfast and lunch box is getting lower and lower. [1: https://www.healthychildren.org/English/healthy-living/nutrition/Pages/The-Case-for-Eating-Breakfast.aspx]

2. Business Concept

The company launched an app called “Cute Box”. It will provide artistic and designed breakfast or lunch box corresponding with ingredients (food materials), nutritional value, and the tutorial video to experience the unique breakfast or lunch box and feel delighted with the fun cartoon characters with daily needed nutrition value.

3. App Features

Our app has 5 parts.

First one is “Cute Meals” with provide cute, artistic and DIY breakfast and lunch box with cute characters. It can refine by characters, time use and kinds of food. “Characters” means different cartoon names, like Hello Kitty. “Time use” means the duration for the food preparing. For work moms, they need a save-time meals. “Kinds of foods” means different materials for main courses like bread, rice, noodles or some others, depending on the customers’ preference. There will be detailed shopping lists for all materials used and necessary nutritional value. A research shows that millennial mothers said they prioritize nutrition (88 percent) over price (65 percent) and convenience (52 percent) when planning lunches for their kids to take to school. [footnoteRef:2] Some complicated meals also provide a tutorial videos of procedures for moms. [2: http://www.adweek.com/brand-marketing/infographic-how-millennial-moms-shop-fill-their-kids-lunch-boxes-166383/]

Second one is “Personalize Meals”. To take some kids who have allergy into account, our app will provide personalize menu so that customers choose their own ingredients to use and make DIY. It also called “Surprise Meals” because every month we will pick up the most creative DIY meals to give some promotions.

Third one is “Meal Plans” similar as “Blue Apron”. To differentiate us from other competitors, our plan features from 1-7 days with whole daily recipes, ingredients which will be directly sent to your home, as well as the tutorial videos which can be downloaded for free. It will save a lot of time for moms to buy the food and think about what to prepare daily. We will collaborate with local farms to get fresh food ingredients every day. And for the shipment, we will collaborate with local mail company like USPS.

Fourth one is “Kits Sales” which provide moms some kitchen DIY accessories, for example, different shapes or characters kits.

The last one is our “Customer Service and Online Community” to help us engage with our customers. It provides moms a community to share their experience with meals preparing and ideas for kids’ health problems. A data shows that 64% of Millennial Moms share information and advice on health services.[footnoteRef:3] Personal DIY customized meal will also be posted on the community. Customer Service is for answering customers’ questions. [3: https://www.peppergang.com/healthcare-marketing-millennial-moms/]

· PRICE

1. App Fee: Free Version (limited designs with 3 free videos)

Premium Version $1.99 (all designs)

2. Meal plan fee: 1-day for $7 plus shipping, 1-week for $48 included shipping fee

3. Kit sales: $15, collaborate with “Bed Bath & Beyond”

4. Other opportunities: Social media campaign and events held

· MISSION STATEMENT

Our company’s mission is to help moms to provide kids with healthy and artistic food design and make kids good mood with visual satisfaction and not lose daily necessary nutrition. And we also encourage some kids to make food by themselves or work with their moms, which not only exercise their hands-on ability, cultivate a sense of creativity and imagination, but also enhance the relationship between moms and kids.

· BUSINESS MODEL

Our company’s revenue will come from three areas: Mobile App fee $1.99, Meal Plan fee average $24 and Kit Sales $15. For the Meal Plan, we will collaborate with local farms. And for Kit Sales, we will collaborate with Bed Bath & Beyond, which sells kitchen supplies.

· GOALS

Goal 1: Breakeven before Year 3

Goal 2: Increase market share by 30% in Year 2

Goal 3: Increase # of customers by 20% in Year 2 and 50% in Year 3

· LEGAL STATUS/OWNERSHIP

Our company will start our business as a sole proprietorship, and it is the simplest and the most common structure. While considering the risk of being personally responsible for any debts and decisions, we find some advantages of sole proprietorship

1. easy and inexpensive to set up

2. low tax rate

3. full ownership: limited liability from other partners

4. simple management

INDUSTRY ANALYSIS

· INDUSRTY DEFINITION

· INDUSTRY SIZE & GROWTH RATE

· INDUSTRY TRENDS

MARKET ANALYSIS

· MARKET SIZE AND SEGEMENTATION

According to Pew Research Center, 1.3 million Millennial women gave birth for the first time in 2015 and totally 16.2 million.[footnoteRef:4] So I assume that in 2016, there are approximately 17.5 million Millennial moms in U.S, which is a relatively big market. [4: http://www.pewresearch.org/fact-tank/2017/01/03/more-than-a-million-millennials-are-becoming-moms-each-year/]

Target market size: 16.2+1.3=17.5 million

· POTENTIAL SALES

According to exponential.com, millennial moms are 11% more likely to be interested in DIY products.[footnoteRef:5] So there are approximately 1,925,000 U.S. millennial moms will purchase the app in the following years. [5: http://exponential.com/advertising/millenialmomswhitepaper/Millenial%20Moms%20Whitepaper.pdf]

I assume that 3% will purchase the app in the 1st year, 5% in the 2nd year, and 8% in the 3rd year. So the potential sales in the 1st year shows:

1. App Fee: $1.99

1,925,000*3%*$1.99=$114,922.5

2. Plan sale: $24 (average price, including the meal ingredients)

I assume every customer purchases the plan once a month.

1,925,000*3%*12*24=$16,632,000

3. Kit sales: $15 (average price)

1,925,000*3%*15=866,250

	1st year	2nd year	3rd year
App purchase	$114,922.5	$191,536	$306,460
Plan sales	$16,632,000	$27,720,000	$44,352,000
Kits sales	$866,250	$1,443,750	$2,310,000

· TARGET MARKET TREND

1. Millennial Moms care about their kids’ health. They prioritize nutrition over price and convenience when preparing kids breakfast or lunch.[footnoteRef:6] [6: http://www.adweek.com/brand-marketing/infographic-how-millennial-moms-shop-fill-their-kids-lunch-boxes-166383/]

2. Millennial Moms are more interested in crafts; 11% more interested in DIY.[footnoteRef:7] [7: http://exponential.com/advertising/millenialmomswhitepaper/Millenial%20Moms%20Whitepaper.pdf]

3. Millennial Moms rely on Social Media. 49% said they use advice from social media to make decisions regarding their kids at least daily.[footnoteRef:8] [8: https://www.peppergang.com/healthcare-marketing-millennial-moms/]

4. 8 in 10 US millennial moms use their phone for shopping.[footnoteRef:9] [9: http://blog.mitchcommgroup.com/connecting-with-millennial-moms-shopping-and-media-habits]

5. 64% of Millennial Moms share information and advice on health services.[footnoteRef:10] [10: https://www.peppergang.com/healthcare-marketing-millennial-moms/]

· MARKET STRATEGY

1. Differentiation

· Type: DIY breakfast and lunch box with artistic designed food

Healthy with rich nutritional value

Personalize menu for customers who have allergy

· Service: Meal plan with delivery service and free videos

Kit sales

· Engagement: Customer Service to help answer questions

Online community for moms to share ideas

2. Competitive Advantage

· Provide healthy and artistic breakfast and lunch box with rich nutritional value

· Provide meal-plan service to help moms save time

· Provide nutritional value part to give a good guide for kids’ health

· Provide an online community for moms to share their experience and ideas with other moms and learn from each other.