Marketing Plan, Media Plan and Creative execution for a business app (capstone)

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 provide kids with healthy and artistic food design in their childhood. In other words, it is also a reference for moms to prepare foods for their younger children to make them good mood with visual satisfaction and not lose daily necessary nutrition. It can not only express mom’s love for kids, but also exercise their DIY or hands-on ability, and cultivate kids’ senses of creativity and imagination.

· BUSINESS MODEL

Our company’s revenue will come from: Mobile App fee $1.99, 1-7 days Meal Plan fee average in $24 to collaborate with local farms to get fresh food and the US mail office to help us deliver food and Kit Sales average in $15 to collaborate with Bed Bath & Beyond.

We will also collaborate with Blue Apron in the future to provide them with our designs to get common profits.

· GOALS

Market share: 30% in Year 2

Customers: 20% in Year 2 and 50% in Year 3

Breakeven before Year 3

Revenue:

	Year 1	Year 2	Year 3
Customers/year (download apps)	19,635	23,562	29,453
Customers/year (purchase kits)	12,764	15,317	19,146
Customers/year (purchase meal plan)	7,854	9,425	11,781
Total Revenue	$1,744,431	$2,093,353	$4,313,109

· 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 (FOOD DELIVERY INDUSRTY)

The need prepare food and to be eaten on time has given rise to application being developed that provide the solution to the preparation problem. Food delivery industry is growing at a fast rate. My app will provide guidelines through which food can be prepared at the shortest time possible. It can be installed on mobile phones. It notifies when the time to prepare is due and provide the recipe or food ingredients that will be used in food preparation. Its ability to give notification and recipe at the time the meal is prepared saves a great deal of time to customers who is preparing meals.

· INDUSTRY SIZE & GROWTH RATE

Food delivery industry is seemingly an insignificant to many people. However, its growth is depicted by the trend in revenue which indicates that this industry is growing significantly and viable to the needs of the targeted customers. In fact, with various cultural beliefs pertaining the way children should be fed the food, the revenues in the industry seems not to be affected in any way.

The trend in revenue depicts consistency in growth from year to another. The main reason for this trend is that many perspective customers, particularly mothers join the industry having witnessed its effectiveness in providing healthy feeds to their infants. It should be remembered the ultimate goal of any business is to enhance a satisfactory feeling. When this objective is reached, then there is high likelihood that more customers will be attracted while retaining the current ones.

By 2022, the revenue will reach $220 billion, compared with current of around $30 billion.[footnoteRef:4] From the following graph, we can find that customers’ demand for online delivery is growing fast. Online delivery to grow by 25.0 percent per year from 2015 to 2018 in key markets, after which it will taper off to 14.9 percent per year until 2020.[footnoteRef:5] [4: https://www.morganstanley.com/ideas/online-food-delivery-market-expands] [5: https://www.mckinsey.com/industries/high-tech/our-insights/the-changing-market-for-food-delivery]

· INDUSTRY STRUCTURE

The Life Cycle Stage is in a growth rate thanks to three different reasons. First one is the growth of US GDP over the 10 years to 2022, which helps the industry to start with a good base. Second is the growth of number of industry participation. The industry can accept more new business to enter. It will be an opportunity for my app. Third one is the technology change.[footnoteRef:6] [6: http://clients1.ibisworld.com.proxy.library.nyu.edu/reports/us/industry/industryoutlook.aspx?entid=5085#IL]

My app ware based in the online mobile phone platform. As any other software, the app is managed since there are adjustments to be done on daily basis to improve the app. The industry is still but many players have entered in to the industry. Each has its own management structure. Since the companies are many and small the structure of the industry is fragmented. Each company has its own management structure which is independent of other companies in the industry. Therefore, the cute meals will have its own unique management.

· INDUSTRY TRENDS

1. Economic Trends

· An increasing number of capita disposable income will lead to an increase in demand and revenue, since more customers will purchase more industry products. In 2017, per capita disposable income is expected to increase, representing a potential opportunity for the industry.[footnoteRef:7] [7: http://clients1.ibisworld.com.proxy.library.nyu.edu/reports/us/industry/currentperformance.aspx?entid=5085#CP]

· The development of online shopping can also increase the demand and revenue of my business. It is more convenient for customer to do digital shopping with some discounted price and coupon. According to IBISWorld, it predicts that E-commerce sales are expected to increase over 2017, representing a potential opportunity to me.

· The agricultural price index indicates trends in the overall price of food. The agricultural price index is expected to fall in 2017.[footnoteRef:8] [8: http://clients1.ibisworld.com.proxy.library.nyu.edu/reports/us/industry/currentperformance.aspx?entid=5085#CP]

2. Social Trends

With the introductions of the app in the food industry, the ever-busy people will be busier since the app has enabled them to spend less time preparing their meals; my app also enables customers eat food that the recipe is already provided, therefore, there will be no repeat of meals; and, good eating habits is encouraged using the app since the recipe provide meal with balanced diet.[footnoteRef:9] In 2016, around 48 percent of U.S. diners stated that they enjoy using food delivery services 'very much' or 'quite a lot'.[footnoteRef:10] [9: https://futurism.com/the-food-delivery-industry-is-changing-the-way-we-think-about-] [10: https://www.statista.com/topics/1986/food-delivery-industry-in-the-us/]

Delivery services becomes more and more popular as an option for costumers. There is a survey finding that 20 per cent of respondents use food delivery at least once a week.[footnoteRef:11] [11: https://www.statista.com/topics/1986/food-delivery-industry-in-the-us/]

3. Technological Trends

The food app makes use of the current technology. The apps are installed in the personal computers and smart phones. Smartphone enable one to access the app and see the recipe that is provided to make purchases in advanced. Also, customers can send the recipe to home when he or she is away for the meal to be prepared.

The number of mobile internet connections represents the number of consumers that have an active internet connection on devices such as smartphones and tablet computers[footnoteRef:12], which will increase the customers’ behaviors to online shopping. And the demand for online food or grocery delivery service will also increase, which is a potential opportunity for the industry. [12: http://clients1.ibisworld.com.proxy.library.nyu.edu/reports/us/industry/currentperformance.aspx?entid=5085#CP]

According to eMarket.com, U.S. millennials are more willing to do online shopping than in-store.[footnoteRef:13] [13: http://totalaccess.emarketer.com/chart.aspx?r=192740]

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:14] So I assume that in 2016, there are approximately 17.5 million Millennial moms in U.S, which is a relatively big market. [14: 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:15] So there are approximately 1,925,000 U.S. millennial moms will purchase the app in the following years. [15: 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. Around 48 percent of U.S. diners stated that they enjoy using food delivery services 'very much' or 'quite a lot'.[footnoteRef:16] [16: https://www.statista.com/topics/1986/food-delivery-industry-in-the-us/]

2. Millennial Moms care about their kids’ health. They prioritize nutrition over price and convenience when preparing kids breakfast or lunch.[footnoteRef:17] [17: http://www.adweek.com/brand-marketing/infographic-how-millennial-moms-shop-fill-their-kids-lunch-boxes-166383/]

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:18] [18: https://www.peppergang.com/healthcare-marketing-millennial-moms/]

4. 64% of Millennial Moms share information and advice on health services.[footnoteRef:19] [19: https://www.peppergang.com/healthcare-marketing-millennial-moms/]

· MARKET STRATEGY

1. Differentiation

Food: DIY breakfast and lunch box with artistic designed food Healthy with rich nutritional value Unique recipes	Customization: Personalize menu for customers who have allergy
Service: Meal plan with delivery service and free videos Surprised menu to collect personal design	Customer Service: 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

· Provide young adults a sweet moment and idea to prepare surprise for their boy/girlfriends

3. Target Market

Primary Target: U.S millennial moms

· Age: 25-34

· Married

· Has at least on child aged 0-5

· Working or stay-at home moms

· Median income and high education level

· Interested in DIY products

· Concerned about kid’s health

· Likes to try new things

Secondary Target: U.S. Grade-schoolers and Teenagers

· Age: 7-18

· Have do-it-yourself abilities

· Interested in DIY food

· Have an ability of creative

· Like to try new things. 

4. Customer profile

Persona 1: Amy

· Age: 32

· Marital status: Married

· Location: New York

· Position: Saks 5th Avenue sales

· House Income: $85,000/year

· Kid: 3-year-old son Tom

· Hobbies: Social media savvy

Advocate a healthy diet

Baking and cooking lover

DIY lover and always buy some DIY cakes

Download some cooking apps

· Goals and Values: Since Amy is very busy for work, she needs to save time on doing the breakfast or lunch box for her kids. So, our app will provide some save-time meals with rich nutritional value and good looks. And it can deliver their love and heart to their kids to make them good mood.

Persona 2: Mandy

· Age: 27

· Marital status: Married

· Location: San Francisco

· Position: Housewife

· Spouse: Jack-Senior Executive

· House Income: $90,000

· Kid: 5-year-old daughter Emily

· Hobbies: Social media savvy

Like to make DIY on some crafts

Read some cooking books daily

Like watching cooking TV shows

Study making some customized meal from Internet or TV

Spend time with her kids to watch cartoon TV shows together

· Goals and Values: Since Mandy has some time to study how to cook, she wants to make creative meal and work together with her kids to cultivate the relationship and kids’ ability of imagination and manipulation. And she still wants her kids to get rich nutrition from meals.

· COMPETITOR ANALYSIS

Direct Competitors: Blue Apron, Lala Breakfast or lunchbox, Marley Spoon-Cooking Redesigned (Apps)

Indirect Competitors: Pinterest, Google

1. App: Blue Apron

Strengths:

· Healthy food delivery service

· Ingredients in detail

· Already well-known brand

Weaknesses:

· Lack of creativity

· Only one week meal plan

2. App: Lala Breakfast or lunchbox

$1.99

Strengths:

· Cute design (monsters) and game mode to engage with children

· Customization

Weaknesses:

· Limited food design

· Limited app function

· No customer engagement

3. App: Marley Spoon-Cooking Redesigned

Strengths:

· Delivery to home with whole ingredients

· Friendly use

· Free app

Weaknesses:

· Not focus on nutritional value for kids

· Only focuses on dinner

4. Pinterest, Google

Strengths:

· Free recipes

· Convenient and easy use

· Social media connected with each other

Weaknesses:

· Not focus on nutritional value

· No shopping list in detail

· No customization and personalization

· SWOT ANALYSIS

Marketing Plan, Media Plan and Creative execution

· BRAND POSITIONING

a. Positioning Map

1. Blue Apron

Introduction:

2. Lala Breakfast or lunchbox

3. Marley Spoon-Cooking Redesigned

4. Pinterest, Google

5. My app: Cute Meals

a. Positioning Statement

b. Brand Laddering – Attributes, Benefits, Values

c. Brand Identity

· CAMPAIGN STRATEGY & OBJECTIVES

a. Business objectives

b. Marketing objectives

· Market Share

· # of Customers

· Sales

· Profits

· PRODUCT, PRICE, PROMOTION, DISTRIBUTION

a. Product

b. Price

c. Promotion

d. Distribution

· CUSTOMER ACQUISITION PLAN

· Customer Purchase Funnel, customer acquisition channel

· Acquisition Strategy

· CUSTOMER LIFETIME VALUE

· CRM Policies

· Use of Customer Database

· Retention Plan

· Loyalty Program

· LTV Calculation

· 1st Year Campaign Objectives

· MEDIA PLANS

Create Awareness, acquire customers, build loyalty

Media Plans: offline/online (9-10 plans)

Information: Objectives, cost, KPI’s

Marketing Budget in Year 1

· BUDGET

· Marketing Budget in Year 1

· Marketing Flight Plan

· Cost by Media - should include metrics - impressions, clicks, conversion, customers, etc.

· Media Budget Allocation: Pie Chart

· Cost per Acquisition

OPERATIONS PLAN

· BACK STAGE & FRONT STAGE

1. Back Stage

· Location: Flushing, New York

· Hours of Operations: Mon-Fri, 9 am-6 pm

· Staff: CEO/CFO, CMO, CTO

· Kits Suppliers: Bed Bath & Beyond (retailer of home products)

· Food Suppliers: Building long-term relationships with local farm

· Delivery Service: USPS

2. Front Stage

· Procedures:

Tutorial videos and recipes to teach moms to cook

· Sales Items:

There are 1-7 days’ plans with food and recipes delivery service and kits to purchase.

· Design:

App functions and app appearance, food design

· Creative:

Customers can provide own DIY products like pictures to win coupon.

· Communications:

Online customer service

3. Staff Functions

· Back Stage

CEO/CFO: Director, Financial Accounting

CMO: Marketing (social media), Analysis

CTO: Technology development, design work

· Front Stage

Chef: food design and making tutorial videos, make nutrition list, time use

Customer Service Representative: answer the questions, organize social media posts, kits sales

Food deliver staff 1,2: meal plan staff, contact with mail office USPS to deliver food, communicate with local farm

MANAGEMENT TEAM & COMPANY STRUCTURE

Our company have one CEO and 6 employees in different positions.

Jessica Pan, the owner of the App Cute Meals, will be the CEO and CFO at the same time. Combining two senior roles is typical for small business.

Yuexin Pan (Jessica)’s background information:

· Graduated from Pace University with Finance major and Study Accounting for one year

· Masters in Integrated Marketing degree from NYU

· 2 years’ intern experience in Chinese bank

· Comfortable with financial information and numbers

· Passionate about food, cooking and healthy lifestyle

· Love DIY and have a good manipulative ability

· Like cute things and always watch cartoon TV shows or books

Ideal Chef Candidate:

· Passionate for food

· Great creative

· Great cooking skills

· Great communication skills

· Great background of nutrition

· Under 35 years old

Primary Source:

· Graduated from great cooking school

FINANCIAL PROJECTIONS

· Revenue & Expense Assumptions

Revenue assumption

Expense Assumption

1. Fixed Assets:

Not taking depreciation into consideration

· App creation fee: according to an online app-maker website, our Apple iOS app with social login, personal profiles creation, in-app purchases, rate or review things, bare-bones look and an app icon will cost

$28,400[footnoteRef:20] [20: http://howmuchtomakeanapp.com/estimates/results]

· Laptops fee: our company will provide 4 laptops for CEO, CTO, CMO, customer representative and 2 other staffs will share 1 laptops. According to the website, the average price of a laptop is around $500.[footnoteRef:21] So, total cost will be: $500*5=$2,500 [21: https://www.bestbuy.com]

· Kitchen Utensils: around $300

· Delivery Fee: similar as Blue Apron $7.99 (one-week meal plan will waive the shipping fee)

2. Operating Expenses

· Rent: Coop Office Space with kitchen. We will rent an office space in Manhattan, NY. It will be used for 7 days with one long desk and 6 chairs. All amenities included (Internet, telephone). The average monthly fee is $1500/month.[footnoteRef:22] [22: https://www.squarefoot.com/ny/new-york]

· Utilities: water, electricity and other Assume $500/month

· Marketing budget: Events and promotion Preliminary $15,000

· Salary and wage: CEO: $50,000/year, CTO/CMO: $40,000/year

· Salary and wage: Chef: $35,000/year

· Salary and wage: Customer Representative: $25,000/year; 2 food deliver staffs: $35,000/year

· Others: General Liability Insurance: average $2000/ year[footnoteRef:23] [23: http://www.startupspecialistnetwork.com/a-tech-startups-guide-to-navigating-insurance/]

· Others: Office Supplies: pen, pencils, notebooks, $200/year

· Others: Apple Fee: $99/year [footnoteRef:24] [24: http://www.techrepublic.com/blog/software-engineer/app-store-fees-percentages-and-payouts-what-developers-need-to-know/]

· Others: Unexpected items: $5,000 for totally

3. Cost of Goods Sold

· Cost of Ingredients is based on the wholesale price for organic products.

· Cost of Kits is 10% of the revenue.

Our company collaborate with Bed Bath & Beyond to get the kits and kitchen supplies. The average price for a Kit Sale is $15 for retail price. Research shows that retailers usually markup wholesale price at least 2 times.[footnoteRef:25] [25: https://www.launchgrowjoy.com/how-to-price-your-products/]

P&L Statement

Breakeven Analysis