Free Essay

Tanning Market

In: Business and Management

Submitted By blaine
Words 1393
Pages 6
Opportunity
The United States is fat. The fruit and juice industry is a 3 billion dollar industry that needs to be addressed by my company Sun Tan. The indoor tanning industry is a 5 billion dollar industry serving more than 30 million Americans. We intend to merge these two productive industries under one roof and reap the benefits of a combined 7-8 billion dollar industry. From 2001 to 2006 smoothie sales grew at a rate of 82%. People need somewhere they can go and get a quick tan followed by a refreshing healthy beverage or meal replacement. Busy people find ways to work more efficiently in order to achieve desired results; that includes tanning then reaching for a refreshing beverage. Sun Tan is a full service smoothie café and tanning salon offering a fun Polynesian theme including healthy snacks and collectibles.
The smoothie and tanning industry are some of the fastest growing industries in history. Few shops offer both tanning and smoothies in one location. You can find such business endeavors on each coast, but not here in the Dallas Ft. Worth metroplex. Dallas has the perfect demographic makeup to support such an undertaking. The target market for this opportunity is actually comprised of a couple of different groups. Primarily the targets are 18-34 year olds and women. Generation X and Y consumers are demonstrating a huge concern with nutrition and fitness that separates them from the Baby Boomers and older generations. Smoothies have emerged as the best vehicle for providing heath-oriented consumers with a complete, convenient option for a tasty meal or refreshing snack that is also packed with nutrition. In addition, Sun Tan will also be a great place to get a tan.
There are a couple of places currently that have a smoothie offering, but none will be even close to the fresh amazing smoothies and tanning that will be available at a one-stop-shop like Sun Tan. As of now if people want to get a tan they have to go to places like Planet Tan, which is ran like an assembly line by a couple of “faceless” teenagers that have no excitement for the product or the happiness of the client. In order to get a decent smoothie, clients would have to get in their car again and drive several blocks to the nearest Jamba Juice or Smoothie Factory, if there is one around. Jamba Juice is one of the larger players in the market with around 700 locations nationally and is based out of San Francisco. Their size is the result of the purchase of Zuka Juice. Jamba Juice has a strong brand name on the west coast and is attempting to branch out. Jamba serves soup, breads and different snacks. Another competitor is Smoothie King, which has around 450 stores and they are based out of New Orleans. Smoothie King is more of a supplement store offering health supplements. There are no places within the target areas to purchase a smoothie in addition to getting a great tan and having the dual experience.

Business Concept The basic concept of this business is simple in the fact that we are going to revitalize and combine the two lucrative businesses of selling smoothies and indoor tanning services. We are going to locate our stores in a high traffic affluent area in which an active lifestyle is historically supported. The store will be comprised of 10 tanning beds and a full service smoothie bar. There will be a couple of comfortable couches along with several diner style tables. Available within the store will be a live upbeat entertaining atmosphere along with free Internet access. This will enable the patrons to purchase a great tasting smoothie and get a tan in one convenient location.

Differentiation The primary difference between alternative offerings will be that Sun Tan will be a tropical experience by offering a full range of tanning solutions and products with a Polynesian tropical flare. The store will be filled with cutting edge tanning and smoothie creation technology that will invigorate and motivate the customers to return. The store atmosphere will be more like a tropical excursion rather than a trip to the health store to grab a nutrient filled medicinal drink like Smoothie Factory, and the like, promotes. Our smoothies will be great tasting in addition to great for you! In addition several of the products in the store will be 100% natural in order to promote a greener healthier environment. All cups and packing supplies will be recycled and a recycling promotion will be in place. In order to maintain differentiation Sun Tan will become a brand synonymous with great smoothies and tanning with positive support of a greener healthy environment. A great marketing campaign will ensure that our store is the only store of its kind; maintained and supported by a wonderful management team that is fully supportive to the success of the store. The financial metric of this business will be measure by the value that the customer places on beauty through tanning, health through the smoothies and environmental causes through support of a greener business. We want our customers to maintain a healthy lifestyle in order for them to come back for generations to come. This is not a get rich quick endeavor that will be abandoned once a small measure of success has been gained; this is a legacy in the making.
Operations
It will take approximately $180,000 to get the initial store off the ground:
Consulting Fees 3,000
Construction 50,000
Equipment 30,000
Working Capital 10,000
Leasing 6,000
Misc. 7,000
Design Plans 4,000
Opening Inventory 7,500
Signage 5,000
Legal Fees 3,000
Advertising (Opening) 1,500
Computer/Printing 2,300
Deposits (Utilities) 1,000
Tanning Beds 40,000
Interior Designs 10,000
Total $180,000

Following the initial store there will be a minimum of two corporate stores in appropriate locations. The stores will be managed by an experience team of managers with several years experience in retail, sales and entrepreneurship. In addition we will reserve the services of an industry experienced consulting firm. The organizational charts are attached to the appendix of this discovery.

Marketing and Sales Sun Tan will market to the local businesses and residents of the area chosen for the store. Coupons, heavy sampling and cross promotions will all be used as effective ways to get customers to visit the store. We will deliver free smoothie samples to the press including local news papers to help with concept and exposure. Sun Tan will direct mail ad campaigns to reach local residents within an appropriate radius in order to increase customer awareness of the trading opportunity. In addition we will sponsor local high school and youth athletic teams and associations. Sun Tan will emphasize the benefits over the traditional fast food that is offered to our target market. We will serve our products quickly in a controlled and entertaining environment with the ultimate goal being a fun purchase experience. In addition we will participate in local health fairs and community outreach programs in order to develop a support community reputation. When our customers experience the fun atmosphere, great products and fast and friendly service they will become a Sun Tan customer for life.
We will be more fun than Smoothie King or Jamba Juice because we just have more fun to offer. In addition we have a more sophisticated offering than just a traditional smoothie jerk experience. Initially the competitors will consider our store just another “flash” in the pan, but once they realize how effectively managed and positioned we are, they will begin to take notice. Possible results of these realizations may result in a price war, but neither of them offer tanning, which will be the complimentary offering we solely possess. Our pricing strategy will fall in line with the other providers of smoothies and tanning. We will offer tanning packages that include bonus samplings of our goods that are only available in our store. The pricing must maintain a competitive advantage because the worst thing we could do is under price our goods. Our target market is one that expects to get what they pay for, and undercutting on pricing would be considered a lesser product. See attached for a full pricing schedule.

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