We help create healthy nutrition habits in Central America’s homes by providing healthy and high quality products without sacrificing good taste.
3.2. Customer Segments
We are going to focus on a niche market comprised by consumers who have healthy eating habits, or need to follow a healthy diet. Three different segments can be identified in such category.
Diabetics. Diabetes is a chronic disease whose numbers of patients has had a drastic increase in the last years. In Nicaragua, 1 out of every 10 people has diabetes. People with diabetes are encouraged to choose a variety of fiber-rich foods, such as whole grains, fruits, and vegetables. At the same time, they have to follow a diet low in sugar since their bodies cannot process it because of the lack of insulin. However as mentioned in the industry overview, most of the traditional salad dressings have sugar added as part of their ingredients, making them not suitable for diabetics.
Gluten/lactose sensitive or intolerant. In recent years, the number of people who are gluten or lactose intolerant has been increasing throughout the world. The gluten free niche market has been a growth opportunity for many brands and many others have born just to serve this segment. Currently, there are no gluten-free salad dressings in Nicaragua and people who are lactose intolerant can only consume the Italian dressing since all the other dressings have lactose as part of their ingredients.
Health conscious. This is the widest segment that we are going to focus on. The health conscious consumers do not have a health condition that force them to consume certain type of food, but instead, they choose to eat healthy. These are people who eat salads and vegetables as part of their regular diet and because of the wider access to information are now trying to switch from the regular salad dressing to healthier options such as natural or organic.
Due to the fact that our product satisfies the needs of all of these segments, and some of the segments overlap with each other, we are going to focus on the three of them.
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Upscale and Specialty Stores. In Nicaragua there are four main specialty stores: Stop n’ Go, Porta’s, Bavaria Delicatessen and La Familiar.
Hypermarkets. There are two main hypermarket chains: La Colonia and Supermercados La Union. Each of them has several branches and presence in different areas of the capital. There is another hypermarket chain in the country, however since they target the low income segment of the population, it won’t be used as a distribution channel for our products.
3.4. Customer Relationships
Since the sale of our product is done through third parties, we do not have a direct contact with the customers. However, we want to maintain a relationship with the customers after the purchase is made.
Community Engagement. Through social media, we want to have a two way communication with our customers, listen to what they think about our products and what products they would like to see as part of our portfolio.
Email Marketing. An email marketing strategy will be implemented in order to achieve a top of mind awareness (See Online Marketing Strategy for a complete description).
3.5. Revenue Streams
Retail sales through upscale outlets. Since we are selling a product our only revenue stream will be through the direct sales of the dressings and vinaigrettes.
3.6. Key Partners
Suppliers
o Farmers. Because we are going to focus on fresh, natural products, the farmers are our main partners. We will establish collaboration relationships with hand-picked farmers that can guarantee timely delivery of premium quality vegetables.
o Other suppliers. There are other ingredients such as the olive oil and rice vinegar that will be acquired from suppliers other than the farmers. Additionally, we will have suppliers for the package and labels.
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Distributors. Upscale Stores and hypermarkets where our products will be available for consumers to purchase.
3.7. Key Activities
Manufacturing. The main activity that the company will do is the manufacturing of the products.
Marketing. From branding and promotion, to customer relationship management, our marketing efforts are essential for the products to succeed in the market.
Distribution. Because of the short expiration date of our products, it is essential that we maintain an effective distribution strategy in order to have the right quantity and flavors at the right place in the right time.
Inventory Management. Again, because of the short expiration date of our products and raw materials, we must be very precise at calculating the amount of raw materials that we need to order each week in order to reduce waste. At the same time, we must know the quantity demanded for our product in each of our distribution channels in order to have the required inventory ready to restock them in a timely manner.
3.8. Key Resources
Human Assets. Our personnel will be the ones responsible for our products to maintain their fresh, rich flavor and high quality.
Raw materials. The raw materials of ingredients are essential for maintaining a high quality in the final product. We will only use premium quality raw materials in order to assure that our product meets the quality standards promised to our consumers.
Brand. Our brand will be one of our main assets. It will be a guarantee for our customers that they are buying fresh products elaborated using only organic ingredients.
Know-how. Our recipes and the different flavors that we offer are what make us different from all the other competitors.
3.9. Cost Structure
Relevant fixed costs.
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Wages. At the beginning, one person will be hired for the kitchen and one security guard in order to protect the premises. Administrative wages are also considered.
Rent. A small house will be rented to establish the company. In here, we will locate the factory, administrative offices and warehouse.
Utilities. Telephone, water, internet and electricity expenses are considered per month
Advertising. A fixed amount will be established each month to promote posts in social media advertising.
Relevant variable costs.
Inventory. In accordance with the sales volume, we will maintain an inventory of raw materials for food.
Packaging. The purchase of glass bottles will be done in bulk in order to achieve economies of scale in price and transportation costs.
Economies of scale. By buying big quantities of bottles (package), and ingredients such as olive oil, lemon juice and vegetables.
Economies of scope. We will maximize our relationship with the distributors by offering several flavors. At the same time, the kitchen equipment purchased will be used to prepare and store all the different flavors and presentations.
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We help create healthy nutrition habits in Central America’s homes by providing fresh, organic, high quality products with no sugar added and free of lactose and gluten.
4.2. Target market
On the first stage of the project, we are going to focus in Managua, Nicaragua. Managua metropolitan area has a population of 2.22 Million people. According to the last national census by the National Institute of Development Information (INIDE, 2006), the average number of people per household in Managua is 5, which means that there are approximately 444,600 households in the city.
A study by Adolfo Diaz (Diaz Galindo, 2013) that analyzes the life standards in Nicaragua, concludes that in 2009 8 percent of the households in Managua had an income of more than US$1,243 per month. Taking those numbers as a reference, we assume that in 2016 approximately 15 percent of the households have a monthly income of US$800 or more. We are going to focus on that 15 percent of the population that have the economic power to purchase our product; this gives us a total target market of 66,690 households.
According to the same study, income is positively correlated to the level of education. Therefore, we assume that all of those households have a level of education of bachelor or higher.
Generally speaking, educated people tend to be more concerned about their health, their eating habits and the quality of the food they consume. Therefore, we consider that all of them are potential customers for our products.
In the second stage of the project, we will expand to other Central American countries. We plan to expand to Costa Rica and El Salvador first because of the already existent relationship with suppliers in those countries.
4.3. Consumer Behavior
Buying a salad dressing is seen as a habitual buying behavior because of low perceived brand differences and low involvement. Through our Marketing efforts, we want to make buying a salad dressing a variety seeking behavior by increasing the consumer’s involvement.