My business entails the creation and provision of a detox tea enriched with Moringa herb. The market opportunity that I will be taking advantage of is the fact that most detox teas make people sick and have no taste. Additionally, most of the detox teas available in the market contain Senna, a component that is harmful when congested in the body for a long time. These detox teas are not effective as they only help the users to lose water weight and as soon as the use of the teas stops, the people gain the weight back. My business, Paradise Tea, will address this market gap by adding the nutritional herb moringa. To differentiate it from our competitors, additional passion fruit, and mango flavors will help to stir up the taste of the detox tea. The aim is to help young people lose weight, fight anorexia and boost their health. Some of the Caribbean herbs product in addition to mango and passion fruit that I will use in my tea to achieve this include ginger, green tea, lemon grass, aloe, oolong tea, and thistle. These herbs are highly effective in cleansing the body.
2. Summary of the business
My business plan will involve targeting the young people who want to lose weight in a healthy manner. As such, I plan to provide them with my moringa enriched detox tea as described above. I will relentlessly market my product as the best product competitively in terms of its nutritional value as well as its health aspects. The problem that detox tea users have is the lack of effective products in terms of health benefits, cost, taste and long-term results. This is what Paradise Tea plans to address effectively and efficiently to ensure the customers are fully satisfied. The business model that I will follow will be characterized by prioritizing my customers, maintaining high levels of business ethics and quality service. I will customize the product in accordance to customer need and preferences such as having a mango only flavored tea, passion fruit flavor or both flavors in line with customer tastes and preferences. Moreover, I will employ several marketing and pricing strategies depending on the target market and business objective.
One of the objectives that I will consider in determining the business strategies is to penetrate the market. In this regard, I will use strategies such as online marketing and pricing for market penetration to ensure I gain a solid ground in the detox tea industry. This will involve gaining public trust in my product and consequently gaining a bigger share of the market. Once I have gained and maintained new and existing customers, I will employ subsequent pricing and marketing strategies such as having a social media presence and targeting youth events to promote sales of my moringa tea. Another business objective is customer satisfaction. My target customers, the young people, demand excellent service delivery and visible results. My plan will involve the prioritizing of the customer needs since I consider them as the most important stakeholders of Paradise Tea. I will ensure flexibility to keep up with the latest trends in the highly fluctuating market environment.
3. Industry Analysis
According to Klein and Kiat, the detox tea industry is riddled with unhealthy products and short-term results. I realize the fact the competition in the market is stiff given the high number of detox tea business available now. However, as much as there is high supply of the product, demand is equally high. The increased demand has been attributed to increased population and the increasing rates and awareness of obesity. The World Health Organization explain in their report on weight problems that more and more people, especially the young, are putting on extra weight due to unhealthy lifestyles. A significant percentage of such people are actively seeking means to cut weight, and therefore the industry promises a lot of potential for tapping the growing detox tea market. Increased cases of anorexia also help to drive the demand for detoxifiers high and therefore the industry is projected to continue having a considerable growth rate in future. The negative aspect of the business, one that provides an opportunity for Paradise Tea, is that most of the products on offer are homogeneous, thus constraining the availability of variety to the customers. Offering a differentiated product in terms of quality and health benefits will help to attract potential customers and increase the loyalty of the existing ones.
A brief outlook of the market reveals that there is a lot of information available on these products. Most customers have basic knowledge of the products they are using or intend to use. This is the characteristic that will help in promoting Paradise Tea as I will inform the customers of the differentiated aspects of my product and its competitive advantage. Market trends include the offering of specialized and medicated instructions on the consumption of detox teas. Important to note is that the structure of the industry is comprised of raw material suppliers, detox tea providers, and the customers.
The graph below represents the trend in the industry’s growth rate over the last decade as explained in a report by Klein and Kiat;
4. Competitive Analysis
a. Competitor identification and assessment
In my intended market of operation, my main direct competition is from two established companies, Asphalt Detox and Westeros Tea. These two direct competitors have been established in the market for a longer time and therefore enjoy a bigger market share. Asphalt Detox offers a wide range of detox products and services, but their Asphalt brand is the main competition for my product. As already stated earlier, however, my product is superior in quality and its health aspects, and therefore I enjoy a competitive advantage. One strength that this company has is that due to its early establishment, they have penetrated the market and therefore enjoy a bigger customer pool. It will be difficult attempting to wrestle some of these customers from Asphalt Detox. However, extensive marketing of Paradise Tea will fulfill this objective. Another strength is that since they have taken deep root in the market, they enjoy relatively more customer loyalty and public trust. On the other hand, Westeros Tea offers a wide range of detox tea and also has a considerable market share. The company also has various branches spread across the region, and this enables them to access a wider market base. Consequently, Westeros Tea has lower prices due to their solid stability attributed to being in operation for many years. They are also well known, and most customers prefer their products over other companies. The two direct competitors have weaknesses which Paradise Tea will seek to exploit. One weakness is that the products they offer are homogenous. This limits the range of products that customers can choose from. As a result, there is ambiguity in product choice, and my detox will address this. One threat posed by Asphalt Detox and Westeros Tea is that they can drive my business out of the market through price wars.
b. Competitive advantage
What differentiates my business from the competitors is that I offer a product of high quality in terms of results, taste, and health. My detox tea combines several Caribbean herbs as well as flavors, and this is an opportunity that I will use to attract and keep customers. I bring a new and innovative product to the market, and this will excite the customers who will want to try it out. Another advantage of my business is the extensive research I have conducted about detoxification, and therefore I have a lot of information at my disposal. I will use this information to provide technical assistance to my customers and help them decide the best routine to use to lose weight, gain energy or detox. This strategy will be part of my after-sales services aimed at further promoting the business.
5. Target market
a. Size of the overall market
Paradise tea will focus on serving young people between the ages 18 to 35 interested in detox, weight loss of energy gain. They form the larger part of the population as well as the market. Since this are the initial stages of market entry for my business, the target market will not be as extensive physically since my operations will be local. However, in future, as the business continues to grow, I plan on expanding my operations to the national and even international scope. The local market will provide me with the young people who I plan to reach and are available. One market segment is the school going youths who can use the detox tea as medication even in the school environment. The other segment is the working population who want to keep fit as they conduct their everyday business.
b. Consumer segments
The demographic market segmentation of my target market includes all the young people, either working or schooling. Both male and females are potential customers of my detox tea. Geographically, my business will be based in my local community where I can use it as a base to penetrate the market and grow to expand operations to other regions. In regard to attitudes, most of my customers will purchase the product emotionally to help them deal with weight problems and other health-related issues.
c. Consumer demand
Contemporary society is characterized by a continued increase in population, high rate of unhealthy lifestyles such as unhealthy diets, inactive schedules and high prevalence of alcohol and drug abuse among the youth. As a result, the demand for detox products is high as more individuals seek to reduce weight, gain energy or rid their body of unhealthy accumulation of chemicals (toxins).
d. Market penetration goals
Since the existing market is large enough to accommodate a new business in the detox industry, paradise Tea aims at gaining at least 3% of the addressable market share in the first year of operation. Another goal is to maintain a constant level of sales to ensure a given level of revenue and profitability.
6. Product/Service Overview
a. Description
Paradise Tea will offer a moringa enriched detox tea flavored with mango or passion fruit. Additionally, this product will have additional Caribbean herbs such as aloe, soursop, lemongrass, ginger, oolong tea, and thistle. The detox tea will help customers who want to reduce weight, gain energy or remove toxins from their bodies. This is a market need I have identified since most individuals in my community are grappling with the effects of weight gain and obesity in the extreme cases. Unhealthy lifestyles, alcohol, and smoking have also led to health issue resulting from the accumulation of toxins, especially for the young people. As such, my moringa detox tea will solve these problems of weight gain, lack of energy and accumulation of toxins in the body. Reid explains that toxins can lead to further complications such as aches, constipation and pains.
b. Uniqueness
What makes my product special and unique is the fact that it has a combination of many important herbs as well as the more important moringa herb. Moringa is a plant used for various reasons including as a vegetable and as a herbal medicine. Its variety of many uses is attributed to the fact that it is highly nutritious and therefore good for boosting overall health. Additionally, almost all parts of the plant from the leaves, seeds and roots are useful. Furthermore, moringa is rich in antioxidants such as chlorogenic acid and quercetin (Abdull, Razis, et al). The herb is useful in lowering blood sugar levels, inflammation, lowering cholesterol and detoxifying the body. Since my detox tea is rich in moringa additives as well as other herbs, it makes it a healthy product and guarantees results.
c. Pricing
The strategy I will employ in pricing will entail going with the existing market price for market penetration. I will therefore price my detox tea at the going market rate at par with the other businesses. After realizing my market penetration goals, I will adjust the price accordingly since my product is of a higher quality.
d. Suppliers and Vendors
As already pointed out earlier, the market structure of this industry consists of suppliers, sellers and the consumers. In this regard, I have identified my suppliers to provide me with the necessary raw materials especially the herbs like moringa. One requirement that I will need to distribute the product to my customers is a distribution channel that will be made possible by designated vendors and outlets. The location of my business will also need to be accessible for those customers who will physically visit the premises to make requests. Moreover, I will have an online presence where I will interact with customers.
e. Intellectual Property
I plan to have intellectual property rights on the business name ‘Paradise Tea’ as well as the technology that I use in incorporating moringa to my detox tea.
7. Marketing Strategies
a. Promotion strategy
To promote my business, one communication avenue I will take advantage of is online presence. In this case, I will connect with potential customers via online platforms such as Facebook, LinkedIn and Twitter. I will ensure a constant flow of online content marketing my business and my detox tea. Since I am targeting the young people who are the biggest users of online services, it will be a perfect opportunity to reach most of them. Another communication effort I will employ is personal marketing where I will approach individuals and explain my products and services to them personally. I will also distribute printouts and brochures which will offer a description of my business and product to potential customers. Word of mouth will equally be important in spreading news about Paradise Tea. To ensure effective marketing is done, I will oversee the undertaking myself and conduct constant monitoring and evaluation to establish if the strategies being employed are translating to the desired results. As my business grows, I will extend my marketing strategies to include media and billboards.
b. Distribution " Logistics strategy
My distribution system will involve personal distributors who will receive the supplies from the business premises and hand deliver them to the required destination. The supply chain will not involve many middlemen in a bid to reduce on distribution costs and thus value will be created from reduced costs and increased efficiency in delivering. Paradise Tea will make use of distribution agents who will have transport means at their disposal. The channel will involve the business, the distribution agents and finally the consumer. The fact that there are not many components in this distribution chain, value will further be boosted through reduced delays, elimination of risk of damage to the goods, reduced misunderstandings as the products will reach their intended consumers as ordered and storage costs will be eliminated. My clients will get their goods through the distribution agents who will deliver them to their addresses or by the customers physically visiting the business premises and receiving their order.
c. Sales strategy
The process of selling my detox tea will entail personal selling and online selling. Personal selling will be characterized by the physical interaction with my clients following their placement of orders. The sales agents of the business will meet with the customers and deliver the product personally in exchange for payment. Payment will be received upon receipt of the product as this will help the business foster confidence and trust with its customers and clients. On the other hand, online selling will be the process through which I interact with my clients on an online platform where they will place their order. The business will then ensure that the order is delivered at the designated place by the sales agents. The client will then send their payment and collect the product at their time of their convenience.
8. Human Capital
a. Management team
Paradise Tea was founded by me and one other partner (John Snow). I will take the responsibility of CEO and oversee the daily running of the business while John Snow will act as the chairman. His tasks will include monitoring and oversight and assessing the progress being made by the business. Currently, the only existing gap in our key management plan is the lack of a human resource manager to manage and oversee the administration of our distribution agents. This is a position that is open and recruitment will commence as soon as all the other aspects of establishing the business are conclusively addressed. The management team will work in close cooperation to ensure efficiency and effectiveness in product and service delivery.
9. Operations
a. Location
Paradise tea will be located in my community neighborhood in Castery Rock. I chose this location since it is convenient in regard to my knowledge of the neighborhood and the market.
b. Facilities machinery, equipment, technology
The facilities that the business will be making use of is a physical building as the center of operations and as a storage premises and transport vehicles to distribute and deliver the products to our customers. I plan to use premises solar system machinery and equipment for additional power, outdoor furniture for our customers and clients, electric blenders and other relevant tea making machinery as well as herb extractors. Herb extraction technology as well as equipment to store the tea will also be useful requirement s to this business.
c. Production/Operations or service procedures
Service procedures or operations will entail the making of the moringa detox tea, packaging it and then storing the product safely in the business premises to await customer orders.
d. Production/Operations or service capacity
Paradise Tea has the capacity to meet demand since we shall ensure our output is in line with the required supply to the market. We also have enough resources and personnel to keep production going and address all the orders of our customers.
10. Financial analysis
For the business to be successful, all the required investment has to be allocated and utilized effectively. One such investment is in acquiring the necessary, premises infrastructure, machinery and equipment. According to the financial analysis that I conducted, the premises in which the business will be, located will take up most of the financial location. The cost of putting up a business building will be approximately USD 15000. This takes into account the cost of refurbishing the building, customizing it as required, electrifying and putting the necessary additional finishing touches. In addition to the cost of the premises, obtaining license from the government allowing me to conduct business in the area will cost $500. Another fixed cost of starting the business is acquiring transport vehicles while has been allocated $1000. Additionally, the cost of furniture, machinery and equipment is approximately $800, $700 and $500 respectively.
Variable costs include marketing and advertisement costs, hiring, maintenance, sales promotion, branding, taxes and transport costs. The figures related to each of this are;
Marketing and advertisement $880
Human resource hiring $200
Maintenance costs $790
Sales promotion $400
Product branding costs $420
Taxes $350
Transport costs $330
Source of funding will include investors, bank loans, donation from well-wishers and business savings.
The above details are represented in the table below:
ITEM
ESTIMATED COST
Fixed costs:
Premises
Infrastructure
Machinery
Equipment
Obtaining license
Transport Vehicles
Furniture
$ 1500
$ 950
$700
$500
$500
$1000
$800
Variable costs:
Marketing and advertisement
Human resource hiring
Maintenance costs
Sales promotion
Product branding costs
Taxes
Transport costs
$880
$200
$790
$400
$420
$350
$330
Total
$22,820
Assumptions
1. The market prices of the above requirements do not change
2. Interest rates remain constant
3. Availability of the items is guaranteed
4. Inflation is kept at a minimum
5. Tax policies do not fluctuate
Works Cited
Abdull, Razis, et al. "Health benefits of Moringa oleifera." Asian Pacific Journal of Cancer Prevention 15.20 (2014): 8571-8576.
Klein, A. V., and H2 Kiat. "Detox diets for toxin elimination and weight management: a critical review of the evidence." Journal of human nutrition and dietetics 28.6 (2015): 675-686.
Reid, Daniel. The Tao of Detox: The Natural Way to Purify Your Body for Health and Longevity. Simon and Schuster, 2016.
World Health Organization (WHO). "Obesity and Overweight factsheet from the WHO." Health (2017).
