Entrepreneurship Final Word

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ACKNOWLDGEMENT To start with, we thank Almighty Allah as without the grace of Allah our objective would have never been accomplished successfully. Not forgotten to our family for providing everything, such as money, to buy anything that are related to this project work and their advise, which is the most needed for this project. They also supported us and encouraged us to complete this task so that we will not procrastinate in doing it. Internet, books, computers and all related stuff also helped us, as our source to complete this project. Then, we would like to express our profound sense of heartfelt gratitude and gratefully acknowledge the encouragement and guidance we received from our faculty member Dr. Mohammad Ali Shamim. We express our sincere thanks with great respect for his valuable guidance and moral support during the whole semester. In the end, very special thanks to the floor managers of all retail outlets – SNOG, TUTTI FRUITI & BERRYLICIOUS - for giving their precious time and also for providing essential information

description

start up of business..production marketing plan

Transcript of Entrepreneurship Final Word

Page 1: Entrepreneurship Final Word

ACKNOWLDGEMENT

To start with, we thank Almighty Allah as without the grace of Allah our objective would have

never been accomplished successfully.

Not forgotten to our family for providing everything, such as money, to buy anything that are

related to this project work and their advise, which is the most needed for this project. They

also supported us and encouraged us to complete this task so that we will not procrastinate in

doing it. Internet, books, computers and all related stuff also helped us, as our source to

complete this project.

Then, we would like to express our profound sense of heartfelt gratitude and gratefully

acknowledge the encouragement and guidance we received from our faculty member Dr.

Mohammad Ali Shamim. We express our sincere thanks with great respect for his valuable

guidance and moral support during the whole semester.

In the end, very special thanks to the floor managers of all retail outlets – SNOG, TUTTI FRUITI

& BERRYLICIOUS - for giving their precious time and also for providing essential information

regarding the frozen yogurt industry without which this report would not have been possible.

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Table of Contents

ACKNOWLDGEMENT....................................................................................................................................................1

Executive Summary......................................................................................................................................................4

1. INTRODUCTION..................................................................................................................................................5

1.1 Background.................................................................................................................................................5

1.1.1 Our Mission........................................................................................................................................5

1.1.2 Our Vision..........................................................................................................................................5

1.2 Name of Business.......................................................................................................................................6

1.3 Nature of Business......................................................................................................................................7

1.4 Name of Partners........................................................................................................................................7

2. INDUSTRY ANALYSIS...........................................................................................................................................8

2.1 Threats of New Entrants.............................................................................................................................8

2.2 Bargaining Power of Buyers........................................................................................................................9

2.3 Rivalry among Competitor’s.....................................................................................................................10

2.4 Bargaining Power of Suppliers..................................................................................................................11

2.5 Threats of Substitutes...............................................................................................................................12

2.6 Overall Industry Attractiveness.................................................................................................................13

3 DESCRIPTION OF VENTURE...............................................................................................................................14

4 PRODUCTION PLAN..........................................................................................................................................15

4.1 The Manufacturing Process......................................................................................................................15

4.2 Machines..................................................................................................................................................18

4.3 Name of Suppliers....................................................................................................................................18

5 OPERATIONS PLAN...........................................................................................................................................19

6 MARKETING PLAN............................................................................................................................................20

6.1 Competitor’s Analysis...............................................................................................................................20

6.1.1 Tutti Fruiti........................................................................................................................................21

6.1.2 Snog Frozen Yogurt..........................................................................................................................21

6.1.3 Berrylicious......................................................................................................................................22

6.2 RESEARCH & ANALYSIS.............................................................................................................................23

6.3 Goals & Objectives....................................................................................................................................30

6.3.1 GOALS..............................................................................................................................................30

6.3.2 OBJECTIVE........................................................................................................................................30

6.4 Marketing Mix..........................................................................................................................................31

6.4.1 Product............................................................................................................................................31

6.4.2 Place.................................................................................................................................................34

6.4.3 Price.................................................................................................................................................35

6.4.4 Promotion........................................................................................................................................36

6.5 SWOT Analysis..........................................................................................................................................37

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6.5.1 Strengths..........................................................................................................................................37

6.5.2 Weaknesses.....................................................................................................................................38

6.5.3 Opportunities...................................................................................................................................38

6.5.4 Threats.............................................................................................................................................39

7 ORGANIZATIONAL PLAN...................................................................................................................................40

7.1 Form of Ownership...................................................................................................................................40

7.2 Background of Partners............................................................................................................................40

7.3 Roles of Partners......................................................................................................................................41

8 ASSESSMENT OF RISK.......................................................................................................................................42

8.1 Potential Areas of Risk..............................................................................................................................42

8.2 Categorization of Risk:..............................................................................................................................43

9 FINANCIAL PLAN...............................................................................................................................................46

9.1 Financial Assumptions:.............................................................................................................................46

WORK BREAK DOWN OF GROUP MEMBERS..............................................................................................................47

APPENDIX...................................................................................................................................................................48

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Executive Summary

Frozen yogurt is a refreshing, fruitful dessert that includes the flavors and textures of ice cream

and sherbet. Frozen yogurt is a relatively new-comer in the dessert market in Pakistan. The

name that we have chosen for our business is Krazy Cups which will be a frozen yogurt café and

we chose this name because it represents fun, excitement, exuberance and energetic feel that

we want our consumers to have when they visit our outlet. Krazy Cups will provide outstanding

customer service while serving affordable, plentiful, and quality frozen yogurt to its customers.

The Frozen yogurt Cafe will be owned by six partners, it will run as Partnership Company and all

the partners are going to invest equally in order to make operations and strategies run

successful.

The manufacturing process consists of processing mix, pasteurizing the mix, homogenizing mix,

Inoculating yogurt culture, cooling and including flavors and toppings. Two machines will be

purchased to produce frozen yogurt that will meet the desired output to achieve expected

results and meet customers’ demands. Main competitors in the market are Tutti Fruiti,Snog and

Berrylicious. The product frozen yogurt provides number of benefits some of them are low

cholesterol, helps to release stress and improves mineral absorption.

The price that we have calculated after financial projections is Rs. 1.5 per gram and we will use

different means of communication to promote and create awareness such as use of print

media, social media and positive word of mouth. Currently the segment of Frozen yogurt café is

attractive and it is at growth stage but their some risk also associated with business such as

financial risk, procurement risk, business risk and other kinds risk which are mentioned in the

report.

This report entails financial projections for five years which includes income statement, cash

flows and balance sheet. Krazy Cups are able to generate profits from year 1 and the partners

are given Rs. 50,000/- Salary. Cash flows are also in Positive from year 1 showing the strength of

the business.

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1. INTRODUCTION

Frozen yogurt is a refreshing, tangy dessert that combines the flavors and textures of ice cream

and sherbet. Frozen yogurt is a relatively new-comer in the dessert market in Pakistan.

1.1 Background The history of frozen desserts dates back thousands of years to Asia where water ices were first

made. Although Roman literature describes how the Emperor Nero was treated to exotic fruit

juices and wines chilled with mountain snow, it was not until the 13th century that Marco Polo

introduced Asian water ices to Italy. The popularity of these frozen desserts spread throughout

Europe and within a few centuries, European colonists introduced ice cream in the U.S.

1.1.1 Our Mission

To entertain customers by providing sensational and relaxing atmosphere, leisure and quality

services at competitive price.

1.1.2 Our Vision

We predict to be one of the market leaders and boost our sales in 2013 through effective cost

leadership, strong consumer awareness and knowledge, quality services and capturing market

share.

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1.2 Name of Business The name that we have chosen for our business is Krazy Cups which will be a frozen yogurt café

and we chose this name because it represents fun, excitement, exuberance and energetic feel

that we want our consumers to have when they visit our outlet. Krazy Cups will provide

outstanding customer service while serving affordable, plentiful, and quality frozen yogurt to its

customers. Our products will include various flavors of delicious frozen yogurt with toppings of

their choice that will help our customers to create their dream dessert. Being able provide a

versatile and hygienic products in our menu will help us to sustain and compete for long term.

Most dessert places have a stagnant menu and a disappointing delivery to the customer. With

these changes in our offerings, we will enhance the customers experience by “over serving”

their needs. By having an easy to read menu, lots of color and exciting music playing, getting

dessert with us will be a treat in more than one way. The focus of Krazy Cups Yogurt will be to

encourage all age groups to come and enjoy a healthy snack while enjoying the company of our

service.

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1.3 Nature of Business

The Frozen yogurt Cafe will be owned by six partners, it will run as Partnership Company and all

the partners are going to invest equally in order to make operations and strategies run

successful.

Since there are few competitors already existing in the market, the main aim of the business is

to provide varieties in flavors and toppings that others do not provide. Initially the project is a

small-scale business.

Each partner is appointed as head of different departments. With this each partner will be

concentrating on their work and would be held responsible for what their subordinates are

working. With this arrangement fewer conflicts will occur. However, monthly meetings will be

held in order to discuss about the current situation and future outlooks. The overall plan of the

business is to sustain growth and profits.

1.4 Name of Partners Each partner has agreed to perform the following roles:

Samran Ali Malik

M. Owais Aden Walla

Wajeeh Ali Syed

Jahanzeb Malik

Yasir Jahangir

Samrah Anis

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2. INDUSTRY ANALYSIS

2.1 Threats of New Entrants

Yes

(+)

No

(-)

• Do large firms have a cost or performance advantage in your segment of the industry? √

• Are there any proprietary product differences in your industry? √

• Are there any established brand identities in your industry? √

• Do your customers incur any significant costs in switching suppliers? √

• Is a lot of capital needed to enter your industry? √

• Is serviceable used equipment expensive? √

• Does the newcomer to your industry face difficulty in accessing distribution channels? √

• Does experience help you to continuously lower costs? √

• Does the newcomer have any problems in obtaining the necessary skilled people, materials or supplies?

• Does your product or service have any proprietary features that give you lower costs? √

• Are there any licenses, insurance or qualifications that are difficult to obtain? √

• Can the newcomer expect strong retaliation on entering the market? √

Since (-) are six and (+) are five i.e. why threat of new entrants is more towards unfavorable.

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Unfavorable

Favourable

Moderate

Low High

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2.2 Bargaining Power of Buyers

Yes (+) No (-)

• Are there a large number of buyers relative to the number of firms in the business?

• Do you have a large number of customers, each with relatively small purchases? √

• Does the customer face any significant costs in switching suppliers? √

• Does the buyer need a lot of important information? √

• Is the buyer aware of the need for additional information? √

• Is there anything that prevents your customer from taking your function in-house?

• Your customers are not highly sensitive to price. √

• Your product is unique to some degree or has accepted branding. √

• Your customers’ businesses are profitable √

• You provide incentives to the decision makers. √

Since (+) are much high than the (-) i.e. why bargaining power of buyer’s is favorable.

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Unfavorable Favourable

Moderate Low High

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2.3 Rivalry among Competitor’s

Yes (+) No (-)

• The industry is growing rapidly. √

• The fixed costs of the business are relatively low portion of total costs.

• There are significant product differences and brand identities between the competitors.

• The competitors are diversified rather than specialized. √

• It would not be hard to get out of this business because there are no specialized skills and facilities or long-term contract commitments etc.

• My customers would incur significant costs in switching to a competitor.

• My product is complex and requires a detailed understanding on the part of my customer.

• My competitors are all of approximately the same size as I am. √

From the work sheet above our analysis is that the rivalry amongst the competitors is slightly

towards moderate (overall 5 unfav. & 3 fav.)

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Unfavorable favourable

Moderate Low High

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2.4 Bargaining Power of Suppliers

Yes (+) No (-)

• My inputs are standard rather than unique or differentiated. √

• I can switch between suppliers quickly and cheaply. √

• My suppliers would find it difficult to enter my business or my customers would find it difficult to perform my function in-house.

• I can substitute inputs readily. √

• I have many potential suppliers. √

• My business is important to my suppliers. √

• My cost of Purchases has no significant influence on my overall costs. √

Through the analysis of the work sheet we conclude that the supplier power is LOW. This is

because 5 are (+) and 2 are (-).

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Unfavorable favourable

Moderate Low High

s

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2.5 Threats of Substitutes

Yes (+) No (-)

• Substitutes have performance limitations that do not completely offset their lowest price. Or, their performance is not justified by their higher price.

• The customer will incur costs in switching to a substitute √

• Your customer has no real substitute. √

• Your customer is not likely to substitute. √

Threat of substitutes is considered to be above moderate / slightly high because (-) are three

and (+) is only one.

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Unfavorable favourable

Moderate Low High

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2.6 Overall Industry Attractiveness

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MODERATE

RIVALRY

Slightly High

THREAT OF NEW

ENTERANTS

LOW BUYER POWER

HIGH SUBSTITUT

ES

LOW SUPPLIER POWER

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3 DESCRIPTION OF VENTURE

Krazy Cups offer a delicious and healthy combination of non-fat frozen yogurt with a dazzling

variety of fresh toppings. The delicious flavor does not come from artificial sweeteners, but

from the natural goodness of the fruits and berries arrayed in our toppings bar. Customers can

choose their own combinations and explore new flavor sensations during every visit they make

to Krazy Cups.

Yogurt has been studied for possible roles in improved immune function and even the reduced

risk of certain kinds of cancer.

Good health is good business. According to a report by market researcher Packaged Facts,

frozen yogurt sales are expected to jump from $1.7 billion to nearly $2.7 billion over the next

five years.

Frozen yogurt business is in the growing stage and one of the most in-demand businesses

today. The combination of low start-up expenditures and low maintenance costs has made the

frozen yogurt business very attractive and restaurateurs looking to add additional lines of

revenue.

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Krazy Cups secret to success is simple: a complete menu of delicious and healthy products,

flexible store configuration, choice location, and unparalleled support for the business partners.

4 PRODUCTION PLAN

4.1 The Manufacturing Process

Processing the mix

The ingredients are chosen for freshness and quality. They are measured in precise quantities

as per to the specific recipe. Liquid and dry ingredients are combined separately.

The liquids are poured into a vat, mixed together, and heated. Next, the dry ingredients are

added to the liquids in a particular order. Meanwhile the batch is stiffed and the temperature

gradually increased. Most ingredients must be incorporated before the mix is heated to 120°F

(49°C) so that the mix does not become lumpy. The mixture must be heated to dissolve and

blend the ingredients.

Pasteurizing the mix

Pasteurizing the batch is necessary to destroy pathogenic bacteria and to help preserve the

finished product. Pasteurization is a simple process that involves quickly bringing the mix to a

high temperature for a specified time and then quickly reducing the temperature to less than

40°F (4°C). The trend in the industry has been toward increasing the pasteurization

temperature to about 175°F (79°C) for about 25-40 seconds. For greater results, batches can be

pasteurized at temperatures as high as 210°F (99°C) to 220°F (104°C). These high temperatures

also improve the flavor and help blend the ingredients more effectively.

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Homogenizing the mix

Homogenizing the batch makes it smoother, primarily by decreasing the size of fat globules to

less than two micrometers.

Without homogenization fat could rise to the top of the mixture and create a layer of cream.

Homogenization consists of pumping the batch through a small valve and against an impact

ring. Three forces are at work. As the mix passes at a high velocity of about 30,000 fpm (feet

per minute) through the valve, shear forces begin to break up the fat particles. The impact ring

ruptures the fat further. Completing the process is cavitation, in which vapor bubbles are

created by a sudden discharge of pressure. Within the bubbles the fat droplets crash against

the vapor walls and disintegrate; thus, the more fat, the more homogenization required.

Inoculating with yogurt culture

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While the temperature of the mix is 90°F (32°C), it is inoculated with 1% yogurt culture. The mix

remains at this temperature until it sets and is ready for cooling.

Cooling and aging

After homogenization, the mixture must be cooled. If it is cooled slowly from about 90°F (32°C)

to about 40°F (4°C), the mix will become more viscous. Once the temperature falls between

32°F (0°C) and 40°F (4°C), the batch is stored in aging tanks inside coolers. The mix is aged for

up to four hours.

Flavoring, coloring, and freezing

The final ingredients are mixed together in a flavor vat. These include sweeteners, flavorings,

and coloring. This mixture is then pumped into the freezer with the rest of the mixture which is

about 20°F (-6°C) to 28°F (-2°C).

While the mix is hardening, it is agitated to incorporate air and create over-run,

or excess volume. The addition of air also smoothes the consistency and creates a more

palatable product. In about three minutes the mix begins to freeze and within a few more

minutes, the desired overrun, about 50%, is achieved.

Packaging and hardening

After the desired overrun is reached, the mixture is packaged and placed in freezers where the

freezing process continues. The temperature falls quickly, within one or two minutes, to at least

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0°F (-17°C) but ideally -15°F (-26°C). For best results, the freezing process should occur rapidly

so that the mixture does not form large, coarse ice crystals but small, smooth ones. The frozen

yogurt may be stored in continuous or batch freezers. Depending on the type of freezer and the

size and shape of the package, the final hardening takes between 30 minutes to 12 hours.

4.2 Machines Two machines will be purchased to produce frozen yogurt that will meet the desired output to

achieve expected results and meet customers’ demands.

Machine names and model number: IMPRESSA 717/738tw

Specifications -  Two motors, two compressors, two displays, Elvaria Dual Belt Drive, two

microconttrollers, etc, the company claims that Impressa 717/ 738 can handle any

yogurt stores' machine needs.

4.3 Name of Suppliers

The suppliers have all been in business for a number of years and have dependable reputations.

a) OLPERS – ENGRO FOODS

Premium quality fat and non-fat milk will be supplied by Engro foods and we chose Olpers Milk

because it has a creamy and rich taste compared to other dairy companies that will assist in

delivering unique taste of frozen yogurt. The company has a well-established reputation in the

market and is known for its hygienic and high quality standards.

b) KEY RETAIL OUTLETS

Fresh fruits and toppings will be purchased from Hyperstar and Metro as per requirement at

wholesale prices.

c) PACKAGES LTD

Cups, spoons and lids will be provided by the company Packages ltd at a pre decided prices.

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5 OPERATIONS PLAN

We will operate on two frozen yogurt machines, each spaced at least eight inches apart with a

three foot clearance behind them. We will do daily inspections to make sure our air

conditioning is working well to maintain pleasant environment. We will keep perishable

products (milk, certain toppings) in our refrigerators. The yogurt powder can be stored at room

temperature in the back. We plan to open our doors at 10 am and close at 1 pm on weekdays

and on weekends. In the morning, each machine will be started at least 20 minutes prior to

opening because it takes 10 to 12 minutes to start the machines up and 5 to 10 minutes to

blend the products to form a frozen yogurt. To mix the product requires a bag of yogurt

powder, 2 gallons of non-fat or normal milk, misc. flavoring, and a gallon of purified water.

The main job of the people manning the store is to greet customers, add yogurt into machines

in the morning and then again when the sensor alerts them that there is less than half a gallon

of yogurt left (as necessary throughout the day), replace toppings as needed, to work the

cashier and scale (which will determine the price), and to clean the machines and the store. At

the end of the day, the machines must be completely sanitized. It takes about 5 minutes to

clean each machine by the assigned peon. Overall, day to day operations can be simple, but it is

critical that employees do their jobs correctly.

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6 MARKETING PLAN

6.1 Competitor’s Analysis

Although frozen yogurt’s market is niche, the demand for it has been rapidly growing and to

cater to this demand, a number of international chains have opened up local franchises in the

last few months. We are opening Krazy Cups in Karachi therefore our direct competitors are:

Tutti Fruitti

Snog

Berrilicious

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COMPETITOR’S ANALSIS

BERRYLICIOUS

TUTTI FRUTTI

SNOG

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6.1.1 Tutti Fruiti

Our major direct competitor is Tutti Frutti. It was one of the international food chains to

operate in Pakistan. The world-renowned Tutti Frutti chain came to Pakistan in 2012 and now

has around 9 dine-in and takeaway outlets in the major cities i.e. Karachi, Lahore etc. It

provides no sugar added mixes, smoothie base mixes and twenty plus natural flavors. It is a

premium quality yogurt. Tutti Frutti Frozen Yogurt has three outlets in Karachi:

1. Hyderi

2. Muhammed Ali Society

3. Bahadurabad

Tutti Frutti outlets retain the family-style enjoyment concept and offer a casual dining

environment. The range is complimented with other mouth-watering menu items including a

wide range of Blueberry, Lemon, and Strawberry Fields. Tutti Frutti has taken over the

traditional dine-in format. All in all the huge range of Ice creams Items with different styles

affordable prices and local popularity make it a hot spot for company lunches and birthday

dinners.

6.1.2 Snog Frozen Yogurt

Snog is also our direct competitor. SNOG Pure Frozen Yogurt launched its first outlet in Karachi

on 18th February 2012. It is a frozen yogurt chain which offers fat and sugar free frozen yogurt.

It is low in calories and served with a combination seasonal fruits. It has various flavors like

natural strawberry, blueberry, passion fruit or chocolate, and the toppings of fruit, nuts, &

seeds, or brownie or freshly baked cookie. Snog is an international frozen yogurt franchise that

is based in the UK. In Karachi it is located in Clifton and DHA. Its timing is 12pm-12am

(Weekdays) 12pm-12am (Weekends).

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6.1.3 Berrylicious

It is another direct competitor and introduced for the first time in Pakistan, 99% Fat Free

Californian Frozen Yoghurt with ingredients imported from Californian and mixed with the best

high calcium and virtually non-fat yoghurt. It aims to keep the products ‘affordable’. Large and

medium cups cost Rs240 and Rs110, respectively and toppings such as fresh fruit, chocolate

chips and syrup, are priced between Rs15 and Rs25. Its timing is 10am-11pm (Weekdays) 10am-

11pm (Weekends). It is located in DHA and Clifton. The prices of their small cups are around

Rs.150 and large cups for around Rs.250. they charge separately for toppings

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6.2 RESEARCH & ANALYSIS

An online survey was conducted as a tool for generating responses from individuals on

determining their consumption habits of ice cream and if they would like a healthier option to

ice cream.

The questionnaire consisted of 10 questions with the sample size of 300. After getting the

questionnaires filled verbal questions were asked, just in order to check whether there is any

biasness or not.

AGE GROUP

34% of the respondents’ age group was 26 to 35 where as 66% of the respondents’ age group

were 18 to 25.

Respondents’ Age Group %

Under 18 0%

18 - 25 66%

26 - 35 34%

36 - 45 0%

46 - 55 0%

56 and above 0%

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GENDER

In the determined age groups, 26% of the respondents’ were female where as 75% of the

respondents’ were male.

Male 75%

Female 26%

OCCUPATION

Most of the respondents’ were Students, a few home makers and there were significant

number of professionals as well which includes Doctors, Student, Marketers, marketing

managers, Financial Analysts, Teachers, Businessmen, Account Manager Sales and Marketing

and so on.

Q1. How often do you consume ice-cream?

When asked about their consumption regarding ice cream, most of the respondents’ (63%) said

that they consume ice cream once a month. Second most of them (31%) said once a week

where as rest of them responded in the categories of 2-3 times a week and never.

every day 0%

2-3 times a week 3%

once a week 31%

once a month 63%

Never 3%

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Q2. Would you like a healthier option to ice cream?

The survey resulted in determining that there is significant demand for a healthier option to ice

cream, with 63% of the sample demanding for such an alternative. However 34 % of the

respondents’ refused to have a healthier alternate to ice cream.

Yes 66%

No 34%

Q3. Would you like fat-free frozen yogurt as an alternative to ice cream readily available in

Karachi?

When asked about the fat-free frozen yogurt as an alternative to ice cream readily available in

Karachi, most of the respondents’ (51%) said they would like to have a fat free frozen yogurt as

an alternative to ice cream in Karachi. However 49% of the respondents’ would not like to have

it.

Yes 51%

No 49%

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Q4. Have you been to frozen yogurt shop in Karachi?

In order to analyze the competition we asked the respondents if they have been to frozen

yogurt shop in Karachi. In response, 71% of the respondents’ replied positively. However 29% of

respondents’ replied negatively.

Yes 71%

No 29%

Q5. What reasons attract you to choose frozen yogurt?

We asked those respondents’ who like to have frozen yogurt that what reasons attract them to

choose frozen yogurt and in response most of the respondents’ chose health and tasty toppings

as an attractive reason to choose frozen yogurt.

Healthy 54%

Tasty Toppings 51%

Comfortable Environment of Shop 9%

Good service provided 9%

Reasonable Price 9%

Can control the amount yourself 11%

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Q6. Which of the following are your favorite frozen yogurt chains in Karachi?

When asked about their favorite frozen yogurt chains in Karachi, Tutti fruity seems to be a very

popular frozen yogurt chain, 57% of the people said that their favorite frozen yogurt chain is

Tutti Fruity, and when asked verbally, WHY? They said its value for money. Second most

popular frozen yogurt chain turned out to be Berrilicious (26%).

Snog 6%

Berrilicious 26%

Tutti fruity 57%

Others 11%

Q7. Which obstructions do you face choosing Frozen Yogurt?

49% of the respondents said Expensive is the main obstruction they face when choosing Frozen

Yogurt. However 26% of them chose not tasty at all as an obstruction and 20% of them chose

few toppings as an obstruction. Least number of respondents’ (6%) chose poor environment as

an obstruction.

Expensive 49%

Few Toppings 20%

Not tasty at all 26%

Poor services provided 0%

Poor environment 6%

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Q8. Do you think Frozen Yogurt is passing a trend?

60% of the respondents’ think that Frozen Yogurt is passing a trend where as 40% of them think

otherwise.

Yes 60%

No 40 %

Q9. If Walls release frozen yogurt will you be interested in buying it?

35% of the respondents’ said that they won’t be interested in buying it, but a very significant

65% of the respondents’ said that they will go for it.

Yes 65%

No 35 %

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Q10. What tastes of frozen yogurt would you prefer? Select all applicable options.

When the respondents’ were asked to choose from the given options of frozen yogurt flavor,

most of likely choices were strawberry, chocolate and mango where as other choices were

mixed fruit, blueberry, raspberry, peach and grape.

Strawberry 63%

Grape 11%

Chocolate 54%

Mango 40%

Raspberry 20%

Blueberry 31%

Mixed fruit 26%

Peach 11%

Green Tea 0%

Other 9%

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6.3 Goals & Objectives

6.3.1 GOALS

For the First Year:

Our goal is to capture 30% Market Share in the first year

Our sales target for the year is 25,000 kg (Excluding Toppings)

Our aim is to earn profit up to Rs. 1 million per month

6.3.2 OBJECTIVE

We want to grow at the rate of 15% per year.

To become the market leader in Frozen yogurt Category

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6.4 Marketing Mix

6.4.1 Product

Krazy Cups Frozen Yogurt captures the centuries-old goodness of the ultimate health food and

delivers a delicious serving of light, tasty yogurt. Now people have become more health and

hygienic conscious due to unscheduled dietary so its best substitute for them.

Also, frozen yogurt has become much more like ice cream, and is served in a wide variety of

flavors and styles. We will be offering our target audience option of adding various toppings, or

of ordering their frozen yogurt in cups or in cones.

Not only that we will also be offering sugar-free varieties. Our main focus is on making our

frozen yogurt taste like ice cream so that people can have ultimate pleasure with a very healthy

yet tasty treat.

It has numerous health benefits:

i. Easier to digest

ii. Contributes to colon health

iii. Increases the absorption of other nutrients such as calcium

iv. Boosts immunity

v. Aids in healing process after infections in the intestines

vi. Prevents infections, constipation, diarrhea and bloating

vii. A rich source of calcium

viii. Good source of protein

ix. Lowers cholesterol

x. Lowers blood pressure

xi. Releases stress

xii. Improves mineral absorption

xiii. It is a “grow food” meaning it helps children to grow.

xiv. It is a rich dairy food item for people suffering from osteoporosis, especially women.

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FROZEN YOGURT

Our main product is frozen yogurt with various flavors available in cups and cones with

following toppings:

OFFERED TOPPINGS

Chocolate Brownies

Oreo Biscuits

Walnuts

Mixed Fruits

Almonds

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SIZES

There is no particular size given for the frozen yogurt. Customers will be given authority to

pour in their cups as much as they want. Maximum they can pour is 700 grams and minimum

they can pour is 150 grams. It would give them sense of customization as the customer is

itself involved in the making of the frozen yogurt.

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6.4.2 Place

Initially we will be operating in Zamzama because our target audience is located there and our

major competitors lie there as well. For he facilities in our location include car park area, wifi

support and different lounges.

Initially we will be operating in Zamzama because our target audience is located there and our

major competitors lie there as well. For the convenience of our target audience we will be

providing them facilities in the location which include car park area, wifi support and different

lounges.

In our café we will also cater birthday parties, other occasional parties, corporate events etc.

Keeping that in view we will be design our café that will provide appealing atmosphere to our

target audience.

The Outlet would be designed from the known Architecture Company that is ASA.

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6.4.3 Price

Competitive pricing would be practiced to let down the competitors which was extracted

through our research. In order to cement high quality product perception in the mind of

consumers and maintain sustainable competitive advantage we are using low pricing strategy.

We are providing added value to our target audience with superior quality compared to our

competitors that is why we are offering frozen yogurt at competitive price.

Prices would be charged as;

Rs. 1.5/gram

Customers would be given an opportunity to pour as much as they want to, in their cups and

prices would be charged after pouring and toppings. Each topping would be charged Rs. 40. It

depends on the quantity as much as they want to pour into the cups and according to the

weight, prices would be charged.

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6.4.4 Promotion

Krazy Cups is a new frozen yogurt café in the market therefore, we need to promote it well

which requires promotional budget so that we can gain customers trial and aware them of this

value added café. So our promotional budget would be allocated on the basis of sales

generated. That is on the basis of percentage of sales.

We will be doing promotion through:

Print Ads

Social Media

BTL activities

Newspaper

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6.5 SWOT Analysis

6.5.1 Strengths

I. Health Aspect

People are concerned more than ever about eating more healthy products than they have in

the past. Non-fat frozen yogurt has fewer calories than other desserts and provides nutrients

that will help them to make it through their day.

II. Low Start up Costs

One of the greatest strengths of a frozen yogurt store is the fact that they require small amount

to get started in comparison to many other businesses.

III. Variety and Customer Control

The ability to select the amount and type of yogurt and toppings gives the customer a sense of

power over their choices.

IV. Quick Service

Quick serving of hygienic and high quality frozen yogurt with variety of flavors and toppings.

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6.5.2 Weaknesses

i. Lack of Franchise support (no brand recognition)

Since we will be starting our own business without any franchise help, we will have to depend

on ourselves for managing training, marketing, and supplying of our products

ii. Very dependent on Location

A good location is one of the most important parts of starting a frozen yogurt business.

6.5.3 Opportunities

i. Few Competitors

The market of frozen yogurt is new in Karachi therefore there are less number of direct and

indirect competition; hence it will be relatively easy to penetrate and gain market share.

ii. Strong Supplier Relationships

If we are able to form a good relation with our supply chain, we will be able to get our materials

faster, cheaper, and in better condition than the competition.

iii. Shifts in Consumer Habits

During summer months, when everyone is trying to get into shape, we will have the ability to

put more focus on the health aspects of our product. During the winter months, we can focus

on our products taste (and less on health).

iv. Strategic Alliance

Strategic alliance with restaurants, café‘s, caterers and could be served in different occasions

such as weddings and birthday parties.

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6.5.4 Threats

i. Substitute Products

Although there are not many outlets as direct competition, since frozen yogurt is in the food

industry, there is a huge threat of substitute products such as ice cream, smoothies and

restaurants.

ii. Barriers to Entry

There are very few barriers to entry in the frozen yogurt business.

iii. Lack of Brand Recognition

Since Krazy Cups is are going to be a brand new start up, we will have no brand recognition at

first. It will be important for us to put a lot of focus on marketing.

iv. Average disposable income of household in Pakistan is decreasing, hence reducing the

buying power.

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7 ORGANIZATIONAL PLAN

7.1 Form of Ownership The business that we set to open up is a retail outlet with the name Krazy Cups. The product is

frozen yoghurt that will be opened at the main Zamzama commercial Karachi.

The form of ownership is that of partnership with a total number of six partners. The name of

the partners along with their designation and age is as follows:

S.

No

NAME DESIGNATION AGE

Samran Ali Malik Chief Operating

Officer

23 years

Jahanzeb Malik Chief Strategy Officer 26 years

Wajeeh Ali Syed Chief Human

Resource Officer

25 years

Samrah Anees Chief Marketing

Officer

23 years

Yasir Jahangir Director Procurement 27 years

Ovais Adenwala Chief Financial Officer 23 Years

7.2 Background of Partners The partners of Krazy Cups are students of Institute of Business Management, Karachi pursuing

their MBA in the fields of Marketing and Finance.

These young entrepreneurs are keen, efficient and dedicated in performing their duties and

responsibilities with an aim of touching heights by producing high quality product for their

target audience. Moreover, they tend to delight the customers by offering them variety of

flavors that would leave an everlasting impression in their minds.

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7.3 Roles of Partners

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Samran Ali Malik - Chief

Operating Officer Wajeeh Ali Syed

- Chief Human Resource

Officer

Yasir Jahangir - Director

ProcurementJahanzeb

Malik - Cheif Strategy Officer

M. Owais Aden Wala -

Chief Financial Officer

Samrah Anis - Chief

Marketing Officer

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8 ASSESSMENT OF RISK

Effective Risk Assessment and management are crucial to ensure the feasibility of business and

identify the possible areas for growth as well as weakness. (Risk management )

Dealing with risk requires the combination of four strategies, which are avoiding; reducing,

anticipating and transferring risk/spreading risk.

The Business people can avoid the risk by practically sound, thoughtful business practice. Even

though the positive management actions by the managers could simply help to avoid the risk.

8.1 Potential Areas of Risk The Frozen yogurt business has potential to cater the needs of a market where customer base

and the trends are quite positive. But, it also has few challenges for the management to deal

with.

Innovations

The Frozen yogurt is relatively new idea/

concept in the market. So, Customers may

react differently than expected and there

is a chance of financial pressure.

Seasonal Sales Drop

Because of the climatic condition of the

country, people consume less Frozen

yogurts during winters. So, it is not the

healthy indicator for Sales and it has to be

addressed effectively.

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8.2 Categorization of Risk: The risks are further categorized as following:

Business Risk

The Frozen yogurt industry is at the

growth stage that would be inviting more

competitors to enter the industry and

compete with profits. Consumers are

getting affected by this lifestyle and are

grasping the trends of such shops much.

As the barriers are low to enter the Frozen

yogurt industry, it’s more of a threat for

Frozen yogurt business, as more

competitors would be entering.

As the USP of Frozen yogurt is the

distinctive nutritious and low fat Frozen

yogurts, which no other competitor has.

Therefore other competitors can come up

with the same and much better menu,

which is a risk for our shop

Operations Management Risk The lead time for the order processing and

delivery is one of the key risk factor, that if

any delay in the order processing, that

would lead to consumer dissatisfaction. It

also portrays an overall bad image of

business.

We also need to keep our taste and quality

stable. A little defect or change in the

menu or in the final product can divert the

consumer. So, consumer feedbacks would

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be applied to avoid this.

The electricity breakdown is another risk.

To cope up with it, the stand by generator

operated from gas is installed.

Financial Risks

As Pakistan is a politically unstable country

for operating business, as riots, strikes and

procession are a usual factor, and food

franchises and restaurants are targeted

mostly. Any harm or damage to the

physical location of our restaurant can

cause huge financial loss. And business

would also suffer loss due to any strike or

closure

Procurement Risk

Strong procurement relationship is needed

to develop with our suppliers.

Information Technology Risks

As Krazy Cups Cafe would be providing

WIFI environment to the consumers, any

delay or power break down in the Internet

service would cause inconvenience to the

consumer.

Reliable anti-virus software’s would be

installed to make the Wi-Fi environment

safe for the consumers, as it is vulnerable

to external and internal threats.

Human Resources Risks

Effective Training to the employees is

necessary, otherwise the proper ambiance

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and service would not be available to the

consumer and what the consumer is

paying for.

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9 FINANCIAL PLAN

9.1 Financial Assumptions: It is assumed that average daily customers are 100. Average daily consumption per customer is

250 grams. Average daily sales are estimated to be 25kg. Thus, purchases of different raw

materials are made for 10,000 kg of frozen yogurt for the first year.

Selling price is Rs 1.5 per gram including toppings.

There will be 3 workers each in a shift to produce frozen yogurt who are paid Rs 10,000 per

month. There will be two shifts.

Rent is Rs 150,000 per month of which 40% is allocated to manufacturing overheads and 60%

allocated to administrative and selling expenses.

Utilities expense is allocated 65% to the manufacturing overheads and the rest to

administrative and selling expenses.

Depreciation of fixed assets is calculated by the fixed installment method.

See notes to income statements for detailed workings and assumptions.

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WORK BREAK DOWN OF GROUP MEMBERS

Samran Ali Malik: Table of Contents, Compiling and Formatting of Report, Part of Financials

Team, Part of Marketing Research Team and Organization Structure

Jahanzeb Malik: Introduction, Production Plan, Operation Plan, Executive Summary and

SWOT Analysis.

Wajeeh Ali Syed: Financial Assumptions, Risk Assessment and Part of Financials

M. Ovais AdenWalla: Part of Market Research team & Part of Financials Team.

Samrah Anis: Marketing Mix, Competitor’s Analysis, Cover Page, Research Analysis, &

Part of Market Research Team.

Yasir Jahangir: Description of Venture, Industry Analysis & Part of Financials Team.

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APPENDIX

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