markting assignment

Pioneerware

Executive Summary

Pioneerware is an edible cup that will be exported to the international market. We are focusing on three specific countries: United Kingdom, Brazil and France. Pioneerware is an edible cup that will enhance your experience with your beverage of choice and also eliminates the threat to our environment. This cup is the first and only edible plastic looking cup. It’s completely all natural, non-GMO, gelatin free, gluten free, plastic free, BPA free, non-toxic and even FDA approved. Pioneerware is comprised of seaweed, organic sweeteners, flavors and colors straight from organic fruits and vegetables. Our goal is to market and strategize into the international market so we can expand our vision of enhancing the experience of your beverage.

Market Analysis

Our customers are going to be Starbucks coffee lovers and also those who travel and stay in Marriott property hotels in France, United Kingdom and Brazil. We are targeting women between the ages of 18-35 due to the high level of caffeine and alcohol consumed in this age bracket. We will also have shelf space in the Marriott Hotel gift shops. As we hope to continue the sales in the US to event planners and party supply stores, expanding this idea into the international space is new and exciting.

Market for our business is growing, since our product is First-in-Market. Due to lack of competition our business is considered a monopoly in the market. Market share for the product is growing, because our markets total sale will be earned by a “particular company” over a specific time period. Our Market is segmented through France, Brazil and the United Kingdom, where our product is directly exported. We export our product to the Starbucks franchise within each country and then they will distribute to each store. Market for our product is large enough to expand, as more Starbucks franchise are open within and around the world. In order to attract, hold, and increase market share, we plan to have special promotional products, such as: seasonal flavor, seasonal designs, limited time flavor, and also hold contests were our customers will get an opportunity to participate and win prices. In order to promote our sale, we are planning to have pop up signs in each Starbucks locations and Marriott gift shops promoting thirty days before the product hits each location. We will also have space on each of their websites to promote Pioneerware.

Competitive Analysis

It will be fairly difficult for other companies to enter into this unique industry—because of the high levels of technology needed to enter—making Pioneerware threat of new entrants into the industry fairly low. This means that this company will not face much competitive pressure from outside firms at first. But, like most new technological developments, once one company develops it, many other companies will follow. Unfortunately, the threat of new entrants into the industry will increase greatly once Pioneerware competitors develop similar technology. It will be fairly easy for new and existing companies (with existing and established brand names) to enter this industry once they have the technological capacity to do so. Because Pioneerware is a consumer product, the company will not need to worry too much about supplier bargaining power or the bargaining power of buyers, which are primarily the concern of business-to-business markets. There are substitute products that exist, but Pioneerware is not too threatened by the existence of these products because they lack the uniqueness of the specific design that Pioneerware has.

Product Pricing and Profit Maximization

Typically, since our product is one of a kind and there is rarely any competition, we will use

the monopoly pricing strategy where prices would be relatively high and the supply is relatively

low. Unlike a perfectly competitive market, a monopoly has the whole market for its self and

can act based on the fact that there is no supplier but it. Since there is only one supplier in the

market, the prices of the goods would not be price elastic, which means that a change in the

prices would not reduce the demand of the good significantly. However, we can find the

monopoly’s price, output, and profit by exploring the demand, marginal cost, and marginal

revenue of the product.

Our strategy is a monopolistic since there really is no competition. Nevertheless, by selecting a higher price and lower quantity, we would be able to influence the price and price elasticity of the good and would also be able to run a positive economic profit.

If we assume that the market demand for our edible cups is Q=200–8P, where if our goods

are priced at $1, the market would demand would be 192 units per business hour. And if the

price was $3, the demand would be 176 units per business hour. On the other hand, the monopoly total revenue would equal the price of the edible cups multiplied by the quantity sold per business hour where P(200-8P). If we sold a unit (a pack of 6 edible cups) for 6 Dollars, the revenue would be $912, and if we set the prices at 12 Dollars our revenue would be $1,248 per business hour. Here, the Factory can produce a single unit at total cost of 3Q’1.2, where a unit of production would cost us $3, and 100 units at $200.

As you see on the graph, our profit maximization would be at the price of 13 Dollars and the

quantity of 96 units per business hour. Although the pricings of $13 and $12 per unit would

generate the same revenue, but by setting our prices at $13, the quantity would be set 96 units

where we would save some cost as shown in the table. This way, we would able to maximize our

profit via increasing the revenue and reducing the products produced (the cost). At the profit

equation (profit=revenue-cost), Pricing the goods at $13 would maximize the profit where the

profit at $12 would be ($721.42=$1248-$526.58) and the profit at $13 would be (769.64=$1248-

$478.36).

price	quantity	revenue	Total cost	Marginal cost	Marginal revenue	profit
$1	192	$192.00	$1,098.98			($906.98)
$2	184	$368.00	$1,044.26	$ 6.84	($176.00)	($676.26)
$3	176	$528.00	$990.02	$ 6.78	($160.00)	($462.02)
$4	168	$672.00	$936.27	$ 6.72	($144.00)	($264.27)
$5	160	$800.00	$883.02	$ 6.66	($128.00)	($83.02)
$6	152	$912.00	$830.31	$ 6.59	($112.00)	$81.69
$7	144	$1,008.00	$778.15	$ 6.52	($96.00)	$229.85
$8	136	$1,088.00	$726.56	$ 6.45	($80.00)	$361.44
$9	128	$1,152.00	$675.58	$ 6.37	($64.00)	$476.42
$10	120	$1,200.00	$625.24	$ 6.29	($48.00)	$574.76
$11	112	$1,232.00	$575.56	$ 6.21	($32.00)	$656.44
$12	104	$1,248.00	$526.58	$ 6.12	($16.00)	$721.42
$13	96	$1,248.00	$478.36	$ 6.03	$0.00	$769.64
$14	88	$1,232.00	$430.93	$ 5.93	$16.00	$753.64
$15	80	$1,200.00	$384.35	$ 5.82	$32.00	$721.64
$16	72	$1,152.00	$338.71	$ 5.71	$48.00	$673.64

Operations section:

For production, we would be producing and packing our product in the United States where the corporation originally exists. It makes more economic sense to reduce overhead for the first year of entry into the international space. However, delivery and shipment would be processed by a third party and the customer would be would cover the shipping expenses.

For our company, we have decided to do Direct Exporting. This type of exporting has a greater cost but it is the best for the company. Through Direct Exporting we have appointed an agent which is where they will act as an intermediary but doesn’t take any sort of title of our goods. There has to be an appointed agent in each market and or country in order to take orders, with goods and payment for the goods have to be happening directly between the agent and the consumer in the other country. As a result we will be having an agent in Brazil, The UK, France, and The Americas.

We will establish umbrella insurance since it is an inexpensive policy to carry as well as a liability insurance that is in excess of other policies and also potentially primary insurance for losses not covered by the other policies. The pros to the Umbrella Insurance is that it is a single policy that covers most aspects of the financial area of our company and also this type of insurance is very inexpensive. The cons to this insurance is that it doesn’t cover the following: malpractice lawsuits, workers compensation claims against employers, damage caused by a business, or by any business-related activity, and damage that we may cause intentionally to any person or property, but will carry additional insurance such as workers compensation to protect the business.

As a company, when we are shipping a product overseas as part of a commercial transaction, our exporter must be aware of packing, labeling, documentation, and insurance requirements. As a result, our company will also have a Freight Forwarder which is defined as, under the US Law, a carrier and is subject to specific regulations. This allows our qualified company superior to those who are qualified solely as a broker. Also, our carrier, which is our freight forwarders, will be entitled to issue its own bill of lading.

The Schedule B for our edible cups that consist of gelatin is as follows:

U.S. Census Bureau - Foreign Trade Schedule B (2015)

21.06	- Food preparations not elsewhere specified or included:
2106.10.0000	- - Protein concentrates and textured protein substances	kg	394,161,750	366,206,632
Schedule B Number	Description	Unit of Quantity	Export Value (Dollars)

· The following is a more descriptive table of our product:

U.S. Census Bureau - Foreign Trade Schedule B (2015)

21.06	- Food preparations not elsewhere specified or included:
2106.10.0000	- - Protein concentrates and textured protein substances	kg	394,161,750	366,206,632
2106.90	- - Other:		3,305,150,286	2,991,303,956
2106.90.1650	- - - Compound alcoholic preparations of a kind used for the manufacture of beverages	kg
2106.90.3900	- - - Artificially sweetened cough drops	kg
	- - - Fruit or vegetable juices, fortified with vitamins or minerals:
2106.90.4800	- - - - Orange juice	liters
	- - - - Other:
2106.90.5200	- - - - - Juice of any single fruit or vegetable	liters
2106.90.5400	- - - - - Mixtures of juices	liters
2106.90.5800	- - - Of gelatin	kg
	- - - Other:
	- - - - Preparations for the manufacture of beverages:
2106.90.6571	- - - - - Containing high-intensity sweeteners (e.g., aspartame and/or saccharin).	kg
2106.90.6572	- - - - - Containing sugar derived from sugar cane and/or sugar beets	kg
2106.90.6573	- - - - - Other	kg
2106.90.6575	- - - - Non-dairy coffee whiteners	kg
2106.90.6580	- - - - Other cream or milk substitutes	kg
2106.90.6585	- - - - Confectionery (including gum) containing synthetic sweetening agents (e.g. saccharin) instead of sugar	kg
2106.90.6587	- - - - Herbal teas or herbal infusions comprising mixed herbs	kg
	- - - - Other edible preparations:
2106.90.6592	- - - - - Canned	kg
	- - - - - Other:
2106.90.6595	- - - - - - Frozen	kg
	- - - - - - Other:
2106.90.7020	- - - - - - - Containing cane and/or beet sugar	kg
2106.90.7090	- - - - - - - Other	kg
Schedule B Number	Description	Unit of Quantity	Export Value (Dollars)
			2010	2009

Source: FTDWebMaster, Foreign Trade Division, U.S. Census Bureau, Washington, D.C. 20233 Location: MAIN: REFERENCE: CODES: SCHEDULE B 2015

Suppliers:

Mainly, the ingredients would be supplied by an American supplier. Vegan fruit pectin candy

sweetened with natural cane sugar which is the main ingredients could be supplied by either a

domestic or an international supplier as long as we keep the costs at minimum. Buying inventory

would be the best solution in order to drop the costs where “a reduction in cost per unit resulting

from increased production, realized through operational efficiencies. Economies of scale can be

accomplished because as production increases, the cost of producing each additional unit falls.”

Plant & Equipment:

The Corporation has a main office, a factory, laboratory, and a warehouse within the US. Equipment

purchased are 10 Pc computers, 14 land phones, 4 specialized production

machines, and 1 packaging machine.

Inventory: No inventory will be stored as it reduces our liabilities

Technology: Website to sell and distribute the product.

Point of sale software: computerized network operated by a main computer and linked to

several checkout terminals monitor changes in unit dollar costs, calculate when you need

to reorder, and analyze inventory levels on an item-by-item basics

Accounting package: software that records and processes accounting transactions within

functional modules such as accounts payable, accounts receivable, payroll, and trial balance.

Manufacturing Machinery: Special food processing and manufacturing machines.

Trading hours: Trading ours consists with the normal working hours for direct or over the phone orders are 08:00-17:00 and the website is 24-7. The expected peak trading times would be after noon – evening time.

Payment types accepted:

Customers: Cash, Credit, PayPal, and gift cards.

Distributors: all type of payments.

Quality control:

The product that is approved by the FDA (Food Drug Administration) for manufacturing and distribution within the United States as well as United Kingdom, France and Brazil. The firm runs a number of checks and balances with our QC team by random selection on a daily basis to ensure Pioneerware exceeds quality expectations at any given time.

Credit policy:

“Detail the terms of your credit policy for customers/suppliers. Include the length of your credit

period, and your collection strategies/procedures. Also detail what credit your business receives and

the terms that apply.”

Warranties & refunds:

As we want to keep our customer service at a Service Level Agreement above 97%, we will make exceptions for returns due to medical issues- such as allergic reaction. Otherwise we will review the returns at a case by case situation.

Our Management Team

President Briganti and Vice president Tucker (along with two other pioneer alums) entered a few design competitions. One design competition was for the Jell-O Mold. Within this competition they designed an edible drinking glass. After experimenting with several materials that included gelatin and agar (a seaweed-based gel that is odorless and tasteless and can be flavored in many different ways) the product originally named Jelloware earned a prize for structural integrity and generated a huge success of viral views. As designers they realized that Jelloware could become a viable business.

President:

Chelsea Briganti graduated from Parsons School of design (NY) in 2010 with a BFA in industrial design. Chelsea produced a body of work and a collection of biodegradable products now including edible cups that we call pioneer ware. Chelsea, drives the force behind the company; she put together the resources to support the company and take the product to the market place.

Vice President:

Leigh Ann Tucker graduated top of her class from Parson School of Design (NY) in 2010 with a BFA in industrial design followed by a minor in Business Entrepreneurship in the spring of 2010 for Cal State East Bay. Tucker is the one who will make sure company operations flow smoothly and economically. She is responsible for making certain that necessary work is done properly and on time.

Vice President of Marketing or Marketing Manager:

Meagan Murchism Graduated from CSUEB (Hayward) in 2010 with MBA in marketing she is responsible for making sure that our company can be successful to the customer by having the experience in the industry as well as market.

Chief Financial Officer (CFO)

Edwards Singh Graduated from CSUEB (Hayward) in 2011 with MBA accounting. He is responsible for managing the money and watching over the assets our company.

Production Manager:

Ali Dashti Graduated from CSUEB (Hayward) in 2011 with MBA Strategy and International Business. With his specific industry knowledge and experience with packaging, ordering transportation for delivery, receiving incoming material and warehousing of finished goods and stock.

Office manager:

LaShara Jones, Graduated from CSUEB (Hayward) in 2012 human resource mgmt. she oversee everything not involved in production and may also handle some marketing duties but mainly recruiting professional staff of accountant (CPA), a lawyer, a computer consultant.

Quality control, safety, environmental manager:

Janet Zarco, Graduated from CSUEB (Hayward) in 2012 B.S information technology key function in any industry Compliance, EPA compliance, monitoring air and water quality, product quality, training of employees in each of these areas and filing all necessary monthly, quarterly and yearly reports.

Marketing manager:

Swastika Prakesh, Graduated from CSUEB (Hayward) in 2012 B. S in Marketing. She handles all aspects related to promoting and selling of our product pioneer ware.

Accountant, bookkeeper, controller:

Joe, Graduated from CSUEB (Hayward) in 2011 B.S in Accounting with a minor in Economics. He is responsible for monthly income statements and balance sheets, collection of receivables, payroll and managing the cash.

Operations manager

Abdullah Alotaibi, Graduated from CSUEB (Hayward) in 2011 with B.S in operations and supply chain mgmt. He is responsible for the financial success of our business. Abdul handles the external relations with lenders, community leaders and vendors. He will set in motion the vision, strategic plan and goals for our business.

revenue quantity 72 80 88 96 104 112 120 128 136 144 152 160 168 176 184 192 1152 1200 1232 1248 1248 1232 1200 1152 1088 1008 912 800 672 528 368 192 Total cost quantity 72 80 88 96 104 112 120 128 136 144 152 160 168 176 184 192 338.71 384.35 430.92999999999978 478.36 526.58000000000004 575.55999999999949 625.24 675.58 726.56 778.15 830.31 883.02 936.27000000000044 990.02 1044.26 1098.98