mktg project(pk pantry)

Marketing Plan-Pk Pantry Spring 2015 SemesterPuneet Navin Soni 900385026

Term Project for Marketing Strategy Course:

Pk Pantry- A local business in the heart of the Elmwood Park neighborhood

By:

Puneet Navin [email protected]/21/2015

MKTG 406-11,Marketing Strategies: Theories and Practice2015 Spring SemesterWelter E. Heller College of Business Administration/Roosevelt UniversityProfessor: Gordon Patzer Ph.D. [[email protected]]

I

mailto:[email protected]

mailto:[email protected]


Executive SummaryIt is astounding at how fast the rate of small businesses is rising in the past years and

years to come. With less headcount, more decision-making on your own without reporting to

corporate and customer loyalty, these are the true economists of the industry, controlling it in

their own special way. In 2011, according to U.S. Census Bureau data, there were 5.68 million

employer firms in the United States. Firms with fewer than 500 workers accounted for 99.7

percent of those businesses, and businesses with less than 20 workers made up 89.8 percent. Add

in the number of nonemployer firms – there were 22.7 million in 2012 – and the share of U.S.

businesses with less than 500 workers increases to 99.9 percent, and firms with less than 20

workers increases to 98 percent. With this in mind, the marketing plan will focus on increasing

revenue for the business year over year and to make the brand more marketable while appealing

to new customer base too.

Although the opportunity for business is wide open, it is not easy to bring a customer in without

establishing a brand and creating a relationship. Trends clearly show that the smaller firms are

the race competing with large firms and take advantage of the market. With a more branded

business, increase in customer loyalty programs, and even delivery options with more parking

spaces, there can be potential for a complete monopoly of the Elmwood Park area.

The target market for this marketing strategy is all ages of individuals with all genders and races

with the business being so diverse to begin with. With having an array of items but adding on the

features of loyalty program and stock plus a delivery system, it can be the start of a new age for

local businesses.

This marketing plan will outline how to address the issue of branding as well adding the benefits

of coming to PK Pantry and the loyalty to drive revenue up while addressing new customer base.

II

http://www.census.gov/econ/nonemployer/index.html

http://www.census.gov/econ/nonemployer/index.html

http://www.census.gov/econ/susb/


Table of Contents

Executive Summary………………………………….2Introduction…………………………………………..3Objective……………………………………………..6Competitive Advantage……………………………...8Product……………………………………………….9Price………………………………………………....10Distribution………………………………………….11Promotion……………………………………………13Uncontrollable Variables…………………………….15Target Market………………………………………...15Buyer Behavior……………………………………….16Marketing Research…………………………………...17Perceptual Maps……………………………………….18International Market……………………………………19Ethics……………………………………………………19Conclusion………………………………………………19Refrences………………………………………………..AAppendix………………………………………………...B

III


Introduction

To be quite frank, this is a personal marketing plan with PK Pantry being a family owned

business. It has been the neighborhood favorite for years with loyal customers coming back day

after day. The goal for the business is simple:

To market the business at a higher level while increasing revenue year over year. To add to that,

create a niche within the business to set us apart and bring in a new customer base.

The look and feel of the place is like no other with family running the whole business and room

for changes of price without reporting to higher authority and being dog friendly in a vastly

populated dog carrying neighborhood. With the right marketing material and position, we can be

at the pinnacle of the revenue in the city of Elmwood Park. After researching many statistics on

small businesses, it is evident that these entities thrive and drive the economy. Without them,

there would be fewer jobs and less product moving around and stock dropping.

IV


-In most states, small businesses count for 30% of economic activity

-Small businesses with less than 100 employees represent 99% of all employers

-The average small business generates $1.3 million in annual revenue

-Small businesses have generated over 65% of the net new jobs since 1995

-Over 50% of the working population (120 million individuals) works in a small business

Clearly states by the facts above by Forbes, the small businesses create jobs, account for half the

population and drives the economy. In a recent talk with Joe Fugere, Ceo of Tuta Bella Pizzeria,

he was asked what the biggest threat to small businesses today is and he said, “The failure of our

elected officials to understand that small businesses are the backbone of the American economy.

It is estimated that small businesses create at least 80% of jobs in the US. It only makes sense

that legislators be focused on supporting the needs of the foundation of this country’s economic

force.”

It should be understood that these entities run the economy on the backend and there will only be

a rise in this over the years.

Sales are skyrocketing by the year and the effect of these small businesses can play out if

importance is given to them at the appropriate time. Like Joe, Navin Soni my dad and 100%

owner of PK Pantry once told me that “venturing will only take you so far, but only if you try”

He branched out of the corporate feel and his business has blossomed ever since. With sales

driving by the year, it only makes sense to invest back into the small business that has people

coming back for years.

V


VI


ObjectiveYear 1Product/Inventory 300,000Staff/Wages $100,000Marketing/Research $10,000Design $5,000

Total $415,000

The goal for PK Pantry is to be the “go-to” place for all your needs and increase revenue and customer base with the following agenda:

Year 11. Build Brand by re-establishing logo and location2. Drive sales with promotional programs3. More convenience and wider variety of product4. Establish presence with social media effect

Year 21. Implement delivery system for goods 2. More parking space and remodel3. Potential partnership with Subway to drive business

Year 3-51. Take market share and be niche in local area2. Expand to different cities in suburbs3. Generate growth revue of sales and more employees

Year 1 Expenses

VII


Sample Small Business Report

Five Year Sales ForecastYear 1 Year 2 Year 3 Year 4 Year 5

Sales Revenues $200,325 $315,687 $345,119 $392,904Expenses $12,000 $15,000 $18,110 $19,200Staff $74,003 $81,902 $83,992 $93,112Inventory $20,009 $21,992 $22,999 $22,345Marketing $4,976 $0 $0 $0Marketing Research $773 $0 $0 $0Misc. $502 $320 $431 $559Net Profit $88,062 $196,473 $219,587 $257,688Taxes $21,500 $31,334 $19,876 $21,993Operating Cash Flow $234,905 $130,990 $345,998 $431,009Capitol $55,009 $34,008 $24,887 $67,891Total Cash Flow $289,914 $164,998 $370,885 $498,900

VIII


Competitive Advantage

The main competitive advantage that Pk Pantry has as a small business is the customer

loyalty. A small niche, but goes a long way in because it can put the customer over the edge

when one goes the extra mile for the customer. It is all about the customer at this friendly store

and that is the reason for the constant returns on investments, in this case the time invested in the

customer. Another great competitive advantage is the location in the heart of town center. In the

circle of the park district, town hall and other restaurants, it is ideal surrounded by tons of

houses. To add, it is pet friendly which most bigger franchises do not allow and also the

Strengths- Friendliness/Caring- Variety of products including/

foreign- Location ideal/convenient- Pet-friendly-

Opportunities- Increase number of

products- More parking space- Delivery- Partnership w/franchise- Expansion to suburbs

Weakness- No brand awareness- No social media coverage- No promotions-

Threats- Competition nearby- Timings-

Imported products in stock. As Gordon Patzer states, “ A company gains when deliver more

value and satisfaction” With the 4 P’s in mind as a basis, a firm can build sustainable competitive

IX


advantage. There are not much stores with this enigma in the area, which gives the competitive

advantage to us.

Swot Analysis

Product

Pk Pantry is a family owned business that started as a White Hen Pantry in 1997 and was

later taken over by a local business owner, Navin Soni and renamed Pk Pantry. It is at the heart

of the city of Elmwood Park and the place to get all your daily needs such as food, beverages,

toys, liquor, lottery and everyone’s favorite candy.

Products offered- Food, Liquor, Lottery, Toys, Candy, Cigarettes/Smokes, Coffee and beverages,

etc.

Size- 1560-2000 square footage

Location- Elmwood Park city circle

Makeup of store- Coolers- Far right

Food/Grocery- Two middle aisles

Lottery- Front Register

Candy-first row

X


Coffee/Slurpee-Back right

Smokes-Behind register

Price

XI


The price points for the products within the store will start at a lower margin with the

new promotions and loyalty programs coming out. The needs of the consumer will be at an all

time high by the season and constant needs for groceries, lottery and cigarettes. The wants of the

consumer change with new products coming out and our price point’s change with old product

going out and new product coming in. The cost to maintain this location comes out to be

$107,287 with all expenses being reported over the year. In this case, costs need to be cut to

create a deficit in this number too. The price points for small things like Red Bull can go from

$3.95 to $3.25 with more stock coming in and getting better pricing points from the companies

as well. With a local Walgreens about 2 miles away, there is still a chance that customers might

want to head there for a certain promotion going on like 2 for $1.00 Arizona cans for example. It

is our job to save them the drive and drive them to our store by even price matching deals going

on outside with evidence of the ad. With the use of the push-pull strategy, it is our goal to take it

directly to the customer so there is less work for the consumer when coming in to grab a product

instead of looking around to find it online. Pk Pantry should be the place to go always and

without a doubt the first thought that comes through your mind when needed a public good. Our

goal is to make the consumer come in on the day and find all their daily needs in one place at the

right time and make it the place to go from then on.

XII


Distribution/Marketing Channel/Place

The goal is to make Pk pantry the ideal location for the city of Elmwood Park residents to

come to at anytime of the day for the “one-stop” shop for everything. In this regard, it starts with

location. The location is ideal on the corner in the middle of the city traffic and other restaurants

such as Bacami Pizzeria, a famous Italian pizzeria next door, the park district pool and

recreational facility as well as many other small shops like a bakery, dry-cleaning, kindergarten

school and bars. With these factors in play, it is an ideal place to have but the other goal is to

expand, meaning more parking spaces, and adding on to the location in terms of space. The

current contractors working with Pk Pantry such as Frito-Lays, PepsiCo, Illinois Lottery, etc.

needs to be increased to create a more diverse atmosphere and more variations in stock within

the store. While also looking to advance and expand, the goal is to create a relationship with a

company like Eby-Brown that has been a leading convenience store supplier for over 120 years

and can replace that marketing tool and the new products that are introduced without our

knowledge. As stated by the Distributor directory, “Eby-Brown has been owned by members of

the Wake family for over 55 years. Dick and Tom Wake continue to aggressively invest in our

business so that we can provide the highest level of service to our customers. Eby-Brown owns

and operates a successful commissary where we manufacture our own fresh, never frozen

sandwiches under the Wakefield Sandwich Company label. Providing our customers with the

best service in the industry is a value that is engrained in the Eby-Brown culture”. It would help

tie our appeal to new products with customers and increase awareness with marketing materials

provided by Eby-Brown. Ina addition, this would be the correct strategic move because a brand

like this could get our name out there more via social media tools such as Facebook, Yelp,

XIII


Google Reviews and directly impact the business. Just a glimpse at some of the remarkable stats

Eby Brown has produced over the years:

$4.5 Billion in Annual Sales

13,500 Retail Locations Served

7 Distribution Centers

1,433,000 Square Feet of Warehouse Space

2,000 Employee Members

This would also help play into the logistics and supply chain of the product moving from supply

to shelf, with that process being much slower right now and all could be channeled through one

head instead of multiple. Instead of 5-7 suppliers coming in by the week, we could have one

head doing the entire store. With less headcount, it can make for a smoother prices and more

efficient, resulting in more revenue year over year.

Eby-Brown

Pk Pantry

XIV


Promotion

The simple message to sway across the consumer base is as solid as this: “The place to be

to get your everyday needs!” To push the promotions for this, it begins with media coverage and

the best way to represent this slogan would be through billboards along the streets and flyers

being handed out across the neighborhood. Following the first hint of flyers stating, a question

for what is to come in the first 3 weeks, we would leak one our new features like PK Loyalty

Program, where one can redeem points for free items. The promotion would take place year on

rolling and when certain amounts of dollars were to be reached, they would receive a good worth

a certain amount. Also, every month with a transaction, consumers could be thrown into a

monthly drawing for a free gift card to PK’s. To go along with that, once a month, we would host

a Consumer Appreciation Day, the goal here being that we hit the consumers post purchase

behavior stage with a good feeling to come back time again. With the promotion mix, we spoke

of the advertising, which leads into the public relations that starts with a relationship build with

the customers. We would start a 5 question survey that would touch base on what would like to

be seen in the future as well as what is working in the store right now and adjust after reviewing.

Next comes the personal selling, which comes down to a simple training of employees, and

being the best personal salesman to the customer and meeting all needs. Training would take

place once a week and would be followed with dummy tests. Last, being the sales promotion.

Sales promos would come off new products coming in and pairing with compliment goods. For

XV


example, Milk selling for $3.99 paired with cereal would drop to a mere $2.99. This scheme

seems to fit well with consumers. To fade with the promos going on, we would ask consumers to

represent their feelings on Google reviews, Trip advisor, and Yelp for more publicity and the

true picture for future consumers. With the “People love us on Yelp” and running promotions

through the website, we would increase traffic through the door.

Uncontrollable Variables

Environment- there are some things that we cannot control like weather but this can do wonders

for Pk Pantry too. On rainy days, business may be slow but being so close to houses, more

people would want to get up from staying all day inside to come pick up a beverage or to add on

to their movie day inside. In addition, during snow there are more car problems and with our

automotive supplies, it can be a benefit. In summer days, the pool being so close and kids being

tired from a warm day could come in for candy, beverages, ice cream, slurpees and more.

Competition- With Walgreens not too far away, we do have a simple name brand that the

average Joe may know but some individuals do not like the idea of a powerhouse and much

prefer the small business because of the atmosphere and old feel compared to the new feel.

XVI


Age Demographics- With a wide area of ranges to hit in this business, it is important to

remember that we must appeal to all ages. The neighborhood is a diverse setting with Italians

being prominent so it would be in our favor to hold Italian items on hand as well as every other

type of ethnic food. The age population in the area is prominently old, but there is a wide range

of teens as well.

Target Market

The target market for Pk’s will be males and females between ages 2-75. As this may seem a

wide number, it should be evident that there will be items of some sort that catch the eye for each

age level. Evidently, it comes to no surprise that consumers like convenient stores because of the

convenience of shopping at any time of the day with tons of variety.

Buyer Behavior

As you can see from the graph below, shopping trips by the household have been at an

all-time high in 2013, with 56 trips on average for the household. This is more than once a week

XVII


that it comes out.

ut

Iri, a Chicago based market researcher states, “Increasingly, consumers would rather

make more frequent trips to smaller stores where they can pop in and out with ease” Busy young

millenials are behind the idea with ease of shopping and always on the go. It makes it easier to

just stop in a grab a bag of chips to snack on before heading out for a meeting rather than sitting

down for a meal and leaving tip and time. There are special considerations also to this- with the

wide range of demographics in the area, buyer decisions are sometimes determined by parents of

kids, racial or ethnic restrictions and even age. If a kid is too small to eat a candy bar, that can be

restricted. In the same case, families have their own ways of running their kids and can stop the

purchasing of an item. Also, families might be tight on budgets and at the time be frugal while

the opposite effect can take place too being posh and trying to find all they can take home with

them.

Marketing Research

Pk Pantry will be tested by surveys and customer feedback will feed back into the taste

for the store and likings and disliking’s. There will also be a focus group brought in before

XVIII


opening of the new look and asked on their individual thoughts of it. The focus group will

consist of individuals from other neighborhoods in different suburbs outside Chicago land for a

different perspective and will be given an initial survey to fill out before and after and a grocery

list to go about the store on their own to fin all given items and will be asked about how easy it

was and how the look and feel of the store was. There will also be secondary data used like

growing trends in the marketplace to see what is a “hot-ticket” item to have on hand at the time

and by the quarter as well as post interviews with the individuals to see how they reacted to a

small store compared to a large Walgreens. These research methods will help clear up the

following:

-Rank Pk’s has in the industry

-Pro’s and Con’s of the business

-Look and feel of the location

-Improvements and Keepers

Perceptual Maps

Below is a perceptual map of Pk Pantry compared to other major players in the industry

in relation to price and quality sensitivity. It is important to keep in mind that even with such a

competitive market for “all you can get” stores, Pk has a chance to fight and compete with these

big retailers at a high revenue and quality.

XIX


International Market

International expansion is in the works with specific designs to import products from

each county over the years. In the immediate year, it would be focused on finding a partner to

trade goods for goods and in the long term, turning that into a contract for goods not available in

the states to sell and appeal to the customer for higher margins.

Ethics

Ethically, it is in our favor to play by the rules and be the best salesman to our customers.

To not do fraud and provide the best service at the best cost. We do not believe in being in

business just for the money, but to build long-term relationships.

Conclusion

Pk’s Pantry is a local family owned business that has potential to soar through the roof

with its capabilities but with the help of a new marketing scheme and various tests, this can turn

into a 25-45% increase in revenue over 5 years. The old and new traditions will continue to keep

old customer base but add a new customer base. In the future, looking to increase parking space,

possibly turn into 24-hour service, partnering with other companies to drive the brand, increase

inventory, and price match with local stores. These are all a part of the plan and will sting and

kill the competition away.

XX

mktg project(pk pantry)

Documents