The potential competitors are shops, which are located in 5 to 10 minutes to the field. In general, they provide wide range of products that varies from small household items to everyday amenities, like packs of laundry detergent or cereals.
The distinctive feature of our service is the provision of sportsmen with specified selection of foods and beverages that meet their needs in recharging body’s energy balance. Moreover, it is not necessary for them to be distracted from the game, by leaving the field and looking for shops. Besides the above mentioned facts, psychological phenomenon takes place: when people see food, they unconsciously want to eat it. So, the demand is provided anyway simply by human nature. Another feature that significantly differentiates our product positively among our competitors is that regular monthly surveys will take place. Based on the most desirable and preferable items the selection of products will constantly change and improve.
As the business project is related to the food-service industry, the competitive-pricing strategy will be selected. The fact remains that it is the most highly used way of pricing strategy. All the costs will be definitely covered.
In order to have profits in the both short run and long run, the prices will be established according to the market price of all the food and beverages we are going to sell.
Firstly, it is not necessary to establish higher price at the earliest stage because the first impression of customers is the main objective of any beginner project. Moreover, low rental costs allow us to establish market price for the products and, anyway, expect the reaching of market equilibrium.
Secondly, implementation of lower prices is also inefficient due to human nature factors. Football is the most popular sport in the world and it is all about passion, competition and constant tension. Thus, when football players are immersed into the game, the only factor of being a champion puts backwards all the thoughts about the price, whether it is 10 KZT more or less than the market price. A constant need of water and beverages definitely will keep the demand constant and even make it higher.
The vending machine market is quite familiar in Almaty; so there are almost no ways to completely differentiate among other competitors with a brand new distribution strategy. Analyzing the industry, one should note that almost all VM operators mainly distribute their products through buying it from wholesalers at lower price and thus, make an appropriate markup when selling them.
As the project location is Almaty city, almost all branches of food-service industry, as shops, bean-wagons, vending machines, and so on, purchase their products from wholesalers in Altyn-Orda, “Optovka” and official suppliers.
At the first stage, it was decided to purchase products from suppliers in “Optovka” and other bazars, which is the common practice in this area. During the first time, we are planning to build up relationships with the official suppliers as “Coca-Cola”, “Nestle” and others. Hence, as one of the main goals in the nearest future is to expand the business and provide the service on other highly demanded fields in Almaty, the direct supply from manufacturers of the products is cost-effective strategy.
Company that owns these football fields is named “OLZHASPORTS” and has own website http://osport.kz/, site provides improved booking system where visitors can reserve fields on time convenient for them, see general information about the fields, price list, photos and map.
Due to the convenience of the website, people are more likely to visit it in order to put a reserve on a field. Therefore, in the main menu of the website we are going to put an advertisement of vending machine with all available assortments. The price of the advertisement per month will cost 7000 KZT.
Customer service policies:
Due to the reason that Vending Machine industry does not require direct contact with a customer, service is carried through sufficient measures that provide customer’s safety, comfort and timely satisfaction. Therefore, technical inspection of machine’s moving parts, refrigeration equipment, scanner of banknotes and coins will be held on a regular basis. As it was mentioned before, based on a feedback from clients, products with the highest demand will be defined and provided to customers. Consequently, as products’ flow is continuously changing according to customers’ needs, we will deliver right amount of units so that all types of beverages and food would be sold out preventing their spoilage.
This business is run by a group of four people; one of them is the CEO - Alibek Abdygapparov. Salesperson is not required in VM services. However, purchasing agent and vending operator are needed, whose functions are performed by Ainur Alimbetova and Saida Dagubayeva respectively. Purchasing agent’s duties include acquiring products from suppliers. These products are stored in an empty apartment owned by CEO. Accounting procedures are conducted by the accountant - Aidana Baigutanova. In the future, in case of the successful expansion of the business additional staff is going to be hired.
Taking into consideration all necessary aspects, such as average number of customers, their desires, weather conditions and others, it was forecasted that at least 80 of 300 football players will buy food and snacks and 160 will buy beverages (per day). According to the formula
(T)*(A) =(S), where T (for one year) =66,240 people; A =107; S =7,065,600.
After thorough exploration and analysis of the market in general, its segments; target market; sales and promotion plans, appropriate strategy which will allow us to move forward is developed and considered in details.