PREPARED FOR : DR FAIZAH BT ABD RAHIMPREPARED BY : NOR ISMAWARNI BT ISMAIL (2010130259)

MKT 700MARKETING PLAN FOR VAVAVOOM

ICE CREAM SHOP

2

1.0 EXECUTIVE SUMMARY

The purpose of this marketing plan is to outline the parameters under which

the idea of producing and marketing Vavavoom ice cream in the industry.

Vavavoom ice cream is a new invented product that gives benefits to society. An

evaluation will be made for Vavavoom Ice Cream Shop. The evaluation will

incorporate a substantial amount of factors and various criteria, pertinent to the

organizational assessment. An external analysis and appraisal of current and future

market segments will also be included. The present segmentation approach will be

analysed and future possible market segments, with a light to future expansion.

Concerning possible future expansion, the possible impact on the current market will

also be assessed. Resultant opportunities and threats will consequently be

evaluated. This evaluation will be undertaken mainly from a marketing perspective

concerning the situation at hand, incorporating various marketing applications and

related methodologies. Consequently, the evaluation will lead to the discussion and

assessment of a substantial number of marketing principles and the application

thereof. The marketing environment, competitive and customer analysis will be

undertaken. After this marketing analysis has been completed therefore, the actual

answer concerning potential segments to be targeted regarding expansion will be

forthcoming. All of product, price, promotions and place, could be considered as

being part of the organizational resources strategy, target market and marketing mix,

consisting of the actual marketing strategy.

3

1.1.Products and Services

Vavavoom ice cream is innovated from local Tongkat Ali coffee, Kacip

Fatimah coffee Manjakani coffe and Spirulina tea which is very popular

among the locals. Some people are reluctant to take tea or coffee, thus the

idea to use the extract of Tongkat Ali, Kacip Fatimah, Manjakani and Spirulina

foe ice cream comes into reality. It is a healthier ice cream that consists of no

artificial coloring and sweetener which can cause allergic reaction such as

abdominal pain, hyperactivity, hives, nasal congestion, kidney tumors and

many more. This product also used soy milk instead of dairy milk. Thus, this

ice cream will not make consumer becoming fat, as soy milk is proven to have

less fat and control calories in the body. Thus this product is suitable for

current type of consumer who is more cautious about health. Besides that

each and every flavors will bring a lot of benefits to customer. The benefits of

each flavors will discussed below:

1.1.1Tongkat Ali benefits

Anti-Fever Effects

In 1995 it was reported that the quassinoid from Tongkat Ali has an

anti-fever effect. The quassiniod was two times more effective than

aspirin.

Anti-Cancer

Researchers in America and Japan reported that some plant chemicals

found in the quassinoids and alkaliods found in Tongkat Ali have an

effect of inhibiting the growth of cancer cells in laboratory experiments,

which included breast cancer cells, colon cancer cells and leukemia.

Anti-Oxidant Properties

4

Studies conducted by the Forest Research Institute Maylasia (FRIM)

and the Department of Science, University Kebangsaan Maylasia

(UKM) discovered that Tongkat Ali contains SOD (Superoxide

dismutase), an anti-oxidant enzyme.

Thermogenic/Energy

Tongkat Ali increases body's metabolic rate and enhances blood

circulation. These factors contribute to the heat-generating

characteristics (thermogenic) of Tongkat Ali (Longjack).

Anti-Anxiety Effects

Studies conducted on mice showed that Tongkat Ali has an anxiolytic

effect.

Tongkat Ali has a direct effect on the testosterone level or the

testosterone tone in the human body. Since testosterone drives sexual

performance, Tongkat Ali has its stake in man’s sexual drive. But that

does not necessarily mean that Tongkat Ali is not effective on women.

1.1.2. Kacip Fatimah benefits

Anti-Ageing Agent

UNIVERSITI Teknologi Malaysia (UTM) and South Korean researchers

have found an anti-ageing agent in the traditional herb kacip fatimah

which stimulates the production of collagen and acts as an anti-oxidant.

Healthy Female Reproductive System

Kacip Fatimah is traditionally used to maintain a healthy female

reproductive system, to help tighten and lubricate, and to enhance

sexual function. Oak Gall is rich in antioxidants and is traditionally used

as postpartum care to tighten the reproductive system.

5

Ease Menopausal Smptoms

Kacip Fatimah is rich in phytoestrogen and isoflavones, that may ease

menopausal symptoms.

1.1.3. Manjakani benefits:

Be Young – The anti-oxidants in manjakani reduce the process of

aging

Diabetes Prevention – Gallic Acid can help in preventing diabetes and

asthma.

Healing tissues in vagina – Tannins in manjakani has the properties of

tightening the vagina muscle and helps reverse loss of elasticity

caused by ageing, hormonal changes and childbirth.

Healing external tissues – Astringent in manjakani also aids in healing

external tissue damage after childbirth.

Firmer and smoother skins – Astringent in manjakani help for a

smoother skin and also prevent acne.

Breast treatment – Due to elasticity properties in manjakani in treating

muscles, therefore the habit of consuming manjakani can help improve

the breast elasticity.

Teeth and bones – Calcium in manjakani helps to strengthen teeth and

bones.

Rich in food vitamins – Due to fibres which contains in manjakani, it

helps in preventing constipation. Vitamins, minerals, carbohydrate, and

protein are also beneficial for a healthy life style.

6

1.1.4 Spirulina benefits:

Spirulina is the richest beta carotene food,

With a full spectrum of ten mixed carotenoids. About half are orange

carotenes: alpha, beta and gamma and half are yellow xanthophylls. They

work synergistically at different sites in our body to enhance antioxidant

protection

Spirulina is an ideal anti-aging food

Concentrated nutrient value easily digested and loaded with antioxidants.

Beta carotene is good for healthy eyes and vision. Spirulina beta carotene

is ten times more concentrated than carrots.Spirulina is the highest source

of B-12, essential for healthy nerves and tissue, especially for vegetarians.

Healthy Dieting with Spirulina

About 60% of spirulina’s dry weight is protein, which is essential for growth

and cell regeneration. It is a good replacement for fatty and cholesterol-

rich meat and dairy products in one’s diet. Every 10 grams of spirulina can

supply up to 70% of the minimum daily requirements for iron, and about

three to four times of minimum daily requirements for vitamins A (in the

form of beta carotene), B complex, D,and K. By itself, it does not contain

vitamin C, but it helps maintain this vitamin’s potency.

7

Vavavoom Ice Cream Shop will serve several flavours as mentioned above as

well as many flavors/combinations of smoothies. Within the Vavavoom Ice Cream

Shop’s facility, the company will always properly handle the products, which have

higher incidences of spoilage. The Owner will ensure, at all times, the company’s

facility is in compliance with all health and food safety laws. Management intends

to further the support for the business by franchising of ice cream, ice, and other

food products to local .This will allow the business to further its ties to the local

economy. The main items for sale will be hand dipped ice cream and yogurt

cups/cones, sundaes finished with a variety of toppings such as hot fudge,

caramel, butterscotch or fruit, banana splits shakes malts and ice cream sodas

1.2 Company and Financing Summary

1.2.1 Registered Name and Corporate Structure

Vavavoom Ice Cream Shop, Inc. The Company is registered as a corporation

under Suruhanjaya Syarikat Malaysia (SSM). This company is consider as

small and medium enterprise (SME).

1.2.2 Required Funds

At this time, Vavavoom the Ice Cream Shop requires $100,000 of debt funds.

Loan will be applied from Majlis Amanah Rakyat (MARA). Below is a

breakdown of how these funds will be used:

8

9

1.3 Investor Equity

The company is not seeking an investment from a third party at this time.

1.4 Management Equity

Nor Ismawarni bt Ismail owns 100% of the Vavavoom Ice Cream Shop, Inc.

1.5 Exit Strategy

If the business is very successful, the company may seek to sell the business

to a third party for a significant earnings multiple. Most likely, the company will

hire a qualified business broker to sell the business on behalf of the

Vavavoom Ice Cream Shop. Based on historical numbers, the business could

fetch a sales premium of up to 4 times earnings.

10

2.0 STRATEGIC PLAN AND FOCUS

2.1 Mission Statement

The mission of Vavavoom Ice Cream are as follows:

"To deliver a quality product in a consistent, courteous and timely manner in

order to have the customer return again for another satisfying, flavoursome

treat, while at the same time earning a reasonable return on the initial

investment"

The principals believe that for an company to be successful, the company

must ensure that the customer continues to return to purchase the product,

again and again. One way to ensure repeat business is to provide consistency

in both the product and service. Vavavoom’s product speaks for itself; the

service of our Shoppe provides will be a function of training, evaluation, and

retraining in order to deliver it courteously and in a timely manner.

In order to earn a reasonable return on the investment, along with the ability

to repay debt, strict cost-control measures will be implemented. These

measures will include, among others, proper and prudent purchasing

practices, maximization of product distribution through strict adherence to

weights, amounts and recipes (portion control), effective utilization of

personnel, and the constant search for ways to reduce the cost of sales of our

products without sacrificing quality and service.

11

2.2 Goals and Objectives

Non - Financial

Vavavoom Ice cream is focused to achieve the highest level of customer

satisfaction in relation to both the product and service provided by the

company. This is further achieved by ensuring that the highest quality

standards are adopted on all levels of manufacturing and production, for

guaranteed 100% customer satisfaction when consuming the product. The

company is committed to further enhancing health awareness amongst

Malaysian.

Financial

The company expects a strong rate of growth at the start of operations. Below

are the expected financials over the next three years.

Proforma Profit and Loss

12

2.3 Core Competencies / Competitive Advantage

Vavavoom ice cream is different from any other ice-cream. Vavavoom is one

of a kind ice cream in the industry as the product varies from other brand. This

product is consider as healthy product as it consists of no artificial coloring,

contains natural ingredients and offer new type of flavours (Tongkat Ali, Kacip

Fatimah, Manjakani and Spirulina) which other competitors did not serve.

Most important is, each of the flavours offered contains its own strength and

benefits towards consumers. This product also used soy milk instead of dairy

milk. Thus, this ice cream will not make consumer becoming fat. Soy milk is

proven to have less fat and control calories in the body.

13

3.0 SITUATIONAL ANALYSIS

3.1 SWOT Analysis

Strengths

- This product is one of a kind and offered new variety of healthy

flavours.

- Healthier ice cream which brings a lot of benefits to consumer.

- Consist of no artificial colouring and sweetener

- Innovative product such as new flavours, used soy milk instead of

dairy milk. Soy milk is proven to have less fat and control calories in

the body.

Weaknesses

- Soy milk- ice cream tends to be less smooth & freezes harder than

ice cream made with cow milk.

- Considering expansion, with regards seeking certain market

segments. If these market segments are not targeted appropriately, then this may turn out to be an unsuccessful venture, when considering market impact.

Opportunity

- Everybody loves ice cream. Thus it is easier to gain consumer

awareness

- A lot of study shows that people now days (gen y) are more health

conscious.

- The Government’s policies with regards healthy eating and obesity

as well as perhaps restricting advertising concerning “junk food”,

has played a major role with possible future sales.

Threat

- Well known competitor who has captured consumer’s heart. As

example Walls, Mat Kool, Baskin Robin and many more.

- Customer acceptance is also a major concern to company as they

used to cow milks instead of soy milks.

14

3.2 Political Analysis

The Government’s policies with regards healthy eating and obesity as well as

perhaps restricting advertising concerning “junk food”, has played a major role

with possible future sales, as well as actual ice cream content. Alternatives were

also offered by the competition.

3.3 Economic Analysis

At some point in time a realisation occurred, that ice cream sales were mostly

governed by the weather and were consequently seasonal. This was a big

problem as staff employed on a seasonal basis, were a big cost element to the

company. Once again it can be clearly seen that a lack of actual control existed,

when considering this uncontrollable economic situation.

3.4 Social Analysis

Certain trends seemed to be emerging at the time, with regards a new and

healthy lifestyle consumer approach. Consumers sought healthier foods, with a

lower fat content, leading to an overall health improvement. While in prior years a

minimum fat content of five and a half percent within ice cream was sought, this

has changed dramatically. Thus provide a good condition for the company to

penetrate the market.

3.5Technological Analysis

The ice cream industry really came into being around the year nineteen twenty-

six. This was due to the technological factor concerning the development of a

viable process freezer. This in effect permitted mass production of this product as

such, giving rise to the possibility of an actual ice cream industry.

15

3.5 Industry Analysis

Due to rising disposable incomes, ice cream sales are growing steadily in

Malaysia. In particular, ice cream parlours, such as Hagen-Dazs, which serve the

more affluent and sophisticated consumers, are fast gaining popularity.

Malaysians are catching up on the lifestyle experience of enjoying ice cream in

trendy cafés. Meanwhile, manufacturers are focusing on middle-income

consumers for bulk ice cream and multipack ice cream, as seen in the

proliferation of low-end offers as example Walls. The coffee and non-alcoholic

retail shop industry has experienced a healthy level of growth over the past

decade. The Malaysia Economic Census estimates that there are over 100,000

individual cafes and specialty health food restaurants in Malaysia. This number is

expected to increase at a rate of 5% per annum. While the growth rate of the

number of establishments has increased 5% per year, the revenues generated

per establishment have increased at a rate of 10% per year.

3.6 Customer Profile

As the business offers an expansive menu of ice cream and smoothies, it is

difficult to categorize the average customer of the Ice Cream as many people, of

all walks of life, enjoy the products offered by the company. However,

Management expects that the average customer will be middle to upper middle

class man or woman living in the Company’s target market. The target age will be

around 25 – 40 years old. This product is meant for adult as the flavours and

benefits offered by the product best suits customer of this relevant age.

16

3.6.1 External Customer Analysis

Concerning ice cream sales, it seems that in previous years, the customer

has enjoyed purchasing really good tasting, “full cream” ice cream. This has

incorporated relatively high fat content. It has possibly also included desired

traditional manufacturing, branding and sales methodologies, within Malaysia.

Health and health care products seem have not featured highly on the agenda

of the customer. Certain trends however, have begun to create the opposite

effect.

Concerning the changed political environment, it can be seen that this

uncontrollable variable may have possibly changed segmentation

requirements, leading one to have to target the “healthier lifestyle” market

instead. It seems that the current segmentation approach of the high fat food

market may have become outdated.

Also, consumer psychographics segmentation could occur, which could

include the low fat element as a possible means of purity and satisfaction. It

seems that a “gap in the market” would possibly exist, which should be

utilised for segmentation purposes.

Finally, potential segments of the market to be targeted, should include the

“healthier lifestyle” market segment and the low fat and purity content market

segment. This should be accomplished, via reference to the already

established and credible, Vavavoom’s Ice Cream Logo.

17

3.7 Competitive Analysis

There are many ice cream manufactures in Malaysia. But there are four close

competitors which can be considered as threat to the company. They are Walls,

Nestle, Hagen-Dazs, and Baskin Robin. However, Vavavoom ice cream is

consider as different from any of the competitor as none of them offered the

flavours that Vavavoom ice cream offer. The price of Vavavoom ice cream is

much lower compared to Hagen-Dazs and Baskin Robin but serve better quality

and benefits to consumers.

3.8 Environment analysis

The climate in Malaysia is tropical with high temperatures and high humidity

throughout the year. Daytime temperatures rise above 30°C (86°F) year-round.

Thus sales of Vavavoom ice cream will be maintain and highly demanded in this

country. The country is affected by the south-west monsoon from May to

September and the northeast monsoon from November to March, and different

parts of the country have their dry and wet seasons at different times of year. It

makes it easy for the company to make promotional activities as we can

concentrate one place at a time. As example, on the west coast, the wettest

months are May to October, while on the east coast; the wettest months are

September to December. Kuala Lumpur is wettest from March to April and

September to November, while Malaysian Borneo sees its heaviest rainfall

between November and February and dry weather is June and July on the east

coast, January and February on the west coast, April in Sabah and June to July

in Sarawak. So the promotional campaign will be more on dry season following

the months on which each part is on.

18

4.0 Marketing Program Strategy and Tactics

Vavavoom Ice Cream Shop intends to maintain an extensive marketing campaign

that will ensure maximum visibility for the business in its targeted market. Below is

an overview of the marketing strategies and objectives of the Vavavoom Ice Cream

Shop.

4.1 Marketing Objectives

- Implement a local campaign with the Company’s targeted market via the

use of flyers, local newspaper advertisements, and word of mouth.

- Build a large word-of-mouth referral network through existing customer

base.

- Establish connections with local suppliers and vendors.

4.2 Marketing Strategies

Retail marketing will be the most difficult portion of the marketing strategy. This is

because one of the essential elements to reaching a retail food and beverage

purchasing audience is that the company must build a brand affinity with the

customer. Vavavoom Ice Cream Shop will maintain a moderate level of traditional

print and media advertising among local channels. These promotional campaigns

will provide customers with coupons and special savings deals that will entice

consumers to come to the company’s location. Prior to opening the company’s

location, Management intends to send mailing and circulars to local residents

within the Klang area so that the business has instant traffic and visibility upon its

grand opening. As stated earlier, the business will also heavily benefit from the

high visibility location which the company is currently sourcing. Management

19

anticipates that a vast majority of the company’s revenues will come from

passers-by and shoppers.

The purchase of hand-dipped ice cream and related products is basically an

impulse-type purchase by a consumer relating to one of the following stimuli:

- Passing by the Shoppe on the way to another destination,

- Visual contact with the Shoppe's signs,

- Observing someone else consuming one of the Shoppe's products,

- The final course (dessert) after a meal has been consumed elsewhere.

4.3 Product

In terms of the product offered, as has been discussed, this has been a highly

valued item, appealing strongly towards the target market. Its appeal regarding

“traditional values” including purity and friendliness and consequent highly valued

brand image, have positioned the product accordingly. Also, when consequently

referring to consumer psychographics the psychological benefits on offer to the

consumer have been substantial. The product is also available with diversification

having occurred, smoothies, hand dipped ice cream and yogurt cups/cones,

sundaes and many more. Once again competitive advantage may be seen via

product diversification, as well as purchase availability and the negation of

seasonal unpredictability, leading to increased sales.

4.4 Price

When considering price, due to this superior product being offered via its highly

effective brand image displaying superior product features, price is simply

20

interpreted as being worthy of the product on offer. Also, the substantial volume

variety on offer concerning sales, created a substantial price variety for the

customer. As the extract for Tongkat Ali, Kacip Fatimah, Manjakani and Spirulina

is quite high, thus it will affect the price of the product. However, the suggested

price of RM 3.99 per scoop is still considered as low and affordable to the target

customers. A great competitive advantage can be seen here, as the perceived

price value is worthy of product offer.

4.5 Promotions

As stated before, the climate in Malaysia The climate in Malaysia is tropical with

high temperatures and high humidity throughout the year. Daytime temperatures

rise above 30°C (86°F) year-round. Different parts of the country have their dry

and wet seasons at different times of year. It makes it easy for the company to

make promotional activities as we can concentrate one place at a time. As

example, on the west coast, the wettest months are May to October, while on the

east coast; the wettest months are September to December. Kuala Lumpur is

wettest from March to April and September to November, while Malaysian

Borneo sees its heaviest rainfall between November and February and dry

weather is June and July on the east coast, January and February on the west

coast, April in Sabah and June to July in Sarawak. So the promotional campaign

will be more on dry season following the months on which each part is on.

4.6 Place

Production is available at an adequate factory, generating wholesale market

sales and increased profits. Vavavoom Ice Cream Shop also supplies

restaurants, hotels, shops and traditional ice cream vendors, enjoying a

21

substantial amount of brand awareness, leading to the possibility of increased

retailer outlets. Competitive advantage can clearly be seen with regards brand

awareness and strong brand image. Further competitive advantage exists with

wholesale market sales and resultant increased profits.

4.7 Porter’s Five Forces Model

At this point in time, Porter’s Five Forces Model will be utilised, with regards a

finalized, external competitive analysis:

The ice cream offered by Vavavoom Ice Cream Company could be seen as

displaying competitive advantage in a number of different ways:

It could be seen as comprising of “traditional values” and “purity”, displaying high

equity. Consumer psychological satisfaction as well as diversification also seems

to feature as highly positive attributes. Wholesale market sales also feature,

comprising of substantial market output. The product is also “priced adequately”,

offering substantial price variety.

Considering Porter’s Five Forces Model as well as the above:

While considering the threat of entrants into the marketplace:

This will occur once again, while considering Vavavoom Ice Cream

Company, seen as displaying competitive advantage in the number of

different ways described. Once again a real threat occurs, as this newly

created health food market referring to the low content fat requirements

within ice cream and the attempted negation of junk foods, may create

a new target market within the food industry. This new target market

22

referring to new market segments will create a “gap in the market.”New

entrants will ultimately be attracted to new sales possibilities.

While considering barriers to entry:

Concerning government policy regarding barriers to entry, it seems as

if there are “no barriers”, since the government has actually

encouraged this new healthy lifestyle approach.

Product diversification, seems to be a solution, which could lead to

differentiation and ultimately once more to competitive advantage.

Through adequate diversification, one could even maintain, or possibly

even improve product price, relative to the competition.

While considering bargaining power of buyers:

Much bargaining leverage could occur, concerning buyers, with

regards this new food and ice cream market. This would be the case

especially concerning the availability of substitutes, concerning the ice

cream market as a whole. This would result in decreased sales for

Vavavoom Ice Cream Company.

While concerning bargaining power of suppliers:

With regards this possibly newly acquired health market, if supplier

concentration is of a sufficiently high enough volume, this will once

again lead to decreased competitive advantage with Vavavoom’s Ice

Cream.This is unless further differentiation occurs with regards product

range and ice cream modification, as regards a maximum of two

percent fat content.

23

While concerning threat of substitute products:

One of the competitors, Hagen Dazs introduces new flavour such as

ginger and antioxidants coffee that contains their benefits similar to

Vavavoom products. Moreover, if Hagen Dazs as well as other

competitors sell their product at a lower price, competitive advantage loss

could actually occur with substantial certainty.

24

5.0 FINANCIAL DATA AND BUDGET

5.1 Underlying Assumptions

The Ice Cream Shop will have an annual revenue growth rate of 10% per

year.

The Owner will acquire $100,000 of debt funds to develop the business.

The loan will have a 10 year term with a 9% interest rate.

5.3 Source of Funds

25

5.4 Profit and Loss Statement

26

5.5 Cash Flow Analysis

27

5.6 Balance Sheet

28

5.7 General Assumptions

5.8 Business Ratios

29

5.9 Expanded Profit and Loss Statements

5.9.1 Expanded Profit and Loss Statements (First Year)

30

31

5.9.2 Expanded Profit and Loss Statements (Second Year)

32

5.9.3 Expanded Profit and Loss Statements (Third Year)

33

REFERENCE

Business Resource Software, Inc.(2011) Marketing Plan Outlinehttp://www.businessplans.org/market.html

Columbus Travel Media (2011). Malaysia Whether and Climatehttp://www.worldtravelguide.net/malaysia/weather

Free Ice Cream Shop Business Plan For Raising Capital from Investors, Bankshttp://www.thefinanceresource.com/free_business_plans/free_ice_cream_shop_business_plan.aspx

Jeanna Bryner (2009). Healthy ice cream? Scientists set out to create it Probiotics,antioxidants to be added to the fat- and calorie-filled treathttp://www.msnbc.msn.com/id/33838750/ns/health-diet_and_nutrition

Mr Ghost (2011). The Health Benefits of Tongkat Alihttp://trulytimes.com/relationships-articles/health-benefits-tongkat-ali/37457

Nancy (2007). The herbs for love. The Miracles of Manjakanihttp://www.herbsforlove.com/hfl/articles/The%20Miracles%20of%20Manjakan

Richard Wilson (2009). Herbal benefits and resources. Everything about herbs.Herbal remedies, medicinal herbs, herbs in the garden, herbal recipes.http://herbalnation.blogspot.com.

Sarah Jio (2011)Glamour Magazine, Found! A New Healthy Ice CreamAlternativehttp://shine.yahoo.com/channel/health/found-a-new-healthy-ice-cream-alternative-2476086

Shelley Pewitt (2005) We All Scream for Ice Cream! A Marketing Plan.http://alex.state.al.us/lesson_view.php?id=24824

Yash Lumbao (2010) Ten Step Marketing Plan for Selected Ice Creamhttp://www.slideshare.net/yashminlumbao/10-step-by-step-marketing-plan-selecta-ice-cream