Design Innovation Development and Marketing Strategies â€“ DMGT 720 | Spring 2018 Instructed by: Dr. Hilary Collins Pablo Portilla del Valle, Hillary Stefanec, Maria Zapata
Meet the team How we got here
Mission, Vision, Values, Ethics Problem and Opportunity Statement Value Proposition Target Customer Overview
Understanding Our Industry Industry Analysis Why food? Why social networks? SWOT
PESTLE Key Drivers Porterâ€™s 5 Forces Key Success Factors Analysis Conclusion Resources and Capabilities Competitive Advantage Differentiation Strategies Stakeholder Map
Understanding Our Consumer
What do we know? What do we need to know? Moving forward User Research Strategies Consumer Journey Map
Market Overview Strategy Canvas Framework Positioning by Differentiation Red Ocean Strategy
Determining brand personality Typeface Logo development Color scheme App Design Mockups
Understanding Our Market
Meet the team Hillary Stefanec
Understanding Our Business Model Business Model Canvas Legal and Funding Cost structure Long term goals Short term goals
References and Reflections
Co-founder –– Experience in Design Strategy, Graphic Design and General Business
Pablo Portilla del Valle
Co-founder –– Experience in Design Strategy and Journalism
Co-founder –– Experience in Design Strategy, Industrial Design and Service Design
HOW WE GOT HERE
10 weeks. This entire project is a painstaking, sleep-depriving, head-scrambling effort to shift our design backgrounds into kickstarting a successful business in 10 short weeks. The chart below is a glimpse of how it went down; of how we started with a concept of Modern Love, and ended on the Food Kit Delivery industry, and all the coffee consumed in-between. And just for fun, we graphed it against how confident we felt on every step of the way.
CUPS OF COFFEE CONSUMED
SOMEWHERE IN BETWEEN
LEVEL OF CONFIDENCE
MODERN R E L AT I O N SHIPS + FOOD
FOOD SOURCING + SOCIAL NETWORKS + STORYTELLING + E D U C AT I O N
2 “ T R U T H F U L” STORIES ABOUT F O O D + E D U C AT I O N
WEEK 3- WEEK 4
WEEK 5- WEEK 6
SUBSCRIPTION-BASED SERVICE PROVIDING OVERSTOCKED FOOD F R O M FA M R E R â€™ S MARKETS
E-COMMERCE FOR USERS + BRANDING F O R FA R M E R S
STORYTELLING FOR USERS + BRANDING F O R FA R M E R S
FOOD STORYTELLING + ADVERTISING
WEEK 7 - WEEK 8
To create a food-conscious community in Savannah, support local farmers and reduce food waste. We aim to create an engaging online platform that bridges the relationship between local farmers and citizens. Our organization stands for a sustainable, eco-friendly, collaborative culture built to promote local food sourcing online.
LocalBox will completely change the way farmers deal with overproduction by becoming an online network solution that connects farmer and consumer. The project will start small, using Savannah as testing grounds, but will grow and branch out to other cities nearby, adopting the same business model to help their respective communities. As it stands, close to 50% of produce is thrown away—that is, 60 million tons or $160 billion worth of produce annually in the US is completely wasted. By empowering local farmers, we aim to support agriculture diversity, helping small farms survive against massive food producing corporations and helping reduce wasted food, giving it back to the community in need.
LocalBox drives ethical and sustainable business practices in both internal and external relations. We aim to promote trust and transparency by giving more than a glimpse into the story and lives of the people behind our product. According to our research, this information has the potential to bridge the relationship not only between users and our company, but between users and local farmers. We believe in the motto “eat good, feel good” and doing it in a way that supports the environment with a minimal carbon food print and support to the community. It’s local farm-totable taken to the extreme.
Waste Reduction -- We wish to promote a positive community culture around reducing food waste. Our platform will incentivize people to eat foods that would normally be wasted from overstocked inventory. Education -- We believe that food is medicine, and knowledge is power. Our service hopes to educate our users about the importance of eating high quality, local foods. Affordability -- Our business model is built upon our belief that affording local, organic foods should never be a question, and that these foods should be accessible for all. Community building – We wish to connect local farmers and residents through food. By doing this, we feel that communities will develop a deeper sense of pride to their local area, as they have gained an awareness to the origins of their
As Big Food gets bigger, one farmer loses their job everyday (Smith, K., 2018, May 02). As populations grow (Currie, A. (2018), the demand for food increases and these massive corporations are profiting off-unsustainable business practices (Taylor, K. 2016, September 28), mass-production and mono-agriculture. A 2010 report by the United States Department of Agriculture (USDA), Economic Research Service noted that one of the main constraints to the entry and expansion of local foods is the â€œlack of distribution systems for moving local foods into mainstream markets,â€? and our business model aims to address just that.
OPPORTUNITY STATEMENT To build a sustainable business model that promotes and supports small local farmers through produce curation and food kit delivery.
Value proposition statement EXTERNAL For people with a strong sense of community who care about the quality, ethically, sustainability, and origins of their food. LocalBox is a subscriptionbased food kit delivery service that sources all of its produce from the overstock of local farmers markets. Unlike the many meal kit delivery services and applications that only provide recipes and food products to cook with, our guidelines help us deliver an innovative business model that captures the needs of community-driven, health-conscious consumers who are seeking convenience around their grocery shopping experience. INTERNAL For farmers with overstocked produce and distribution problems who put passion into their work and prioritize quality rather than quantity. LocalBox design team initiative is a subscription meal kit delivery service that helps local farmers thrive by buying overstock and selling it back to the consumer online. Unlike the many meal kit delivery services that rely on â€œbig foodâ€? and source their ingredients from all over the country, our guidelines help us deliver an innovate business model that focuses on locally-sourced ingredients.
TARGET CUSTOMER OVERVIEW Food at home
In 2017, the food service industry grown to be nearly equal in size to food retailing. The food marketing system, including both service and retail, supplied $1.46 trillion worth of food in 2014, $731 billion of which, was supplied by food service facilities (Elitzak, H. 2017). Within the food industry, commercial establishments such as fast food outlets, fullservice restaurants, caterers and cafeterias account for the bulk of food away from home. As shown in the chart below, the relationship
Food away from home
between food away from home and food at home retail suppliers, such as grocery and convenience stores has grown proportional to each other.
LocalBox, as a supplier of produce to community homes, is focused on this segment of the industry. Within the industry, we find one of our main demographics: millennial. According t analysts at Bernstein, millennial are the largest living generation, and, unsurprisingly, they are about to have more spending power than baby boomers (Hamel, K., Fenz K., Hofer, M., 2018). Another report by the USDA that studies Millennialâ€™s purchase preferences in grocery goods, shows that Millennial exhibit a higher preference for convenience than previous generations, when making food-at-home purchases. Whatâ€™s more, Millennial spend less money on food overall, and prefer to make fewer trips to the grocery store (Kuhns, Saksena, 2017). When partitioning by income per capita, fruit expenditure shares for Millennial essentially matched those of Traditionalists, who allocate the largest share to fruits. Moreover, as Millennial become richer, they apportion more of their budget to vegetables, suggesting that the Millennial generation may have a stronger preference for fruits and vegetables compared to older generations (Kuhns, Saksena, 2017). For this reason, we have separated our target consumer segment into three categories: Healthconscious millennial, young millennial parents, and retired seniors.
Millenials People born between 1981-1996
YOUNG Millenial parents Millenials parents of children who are under 18
retired seniors People age 65+ with a passion for community and time for hobbies
MILLENNIALs Millennial, also known as Generation Y or the Net Generation, are the demographic cohort that directly follows Generation X. The term Millennial is usually considered to apply to individuals who reached adulthood around the turn of the 21st century.
WHY MILLENNIALs? More specifically, the health-conscious group that care strongly about their diet. These are young professionals and food-enthusiasts that proclaim deliberate diet lifestyle choices like Paleo and Keto on their in instagram bios. Our research shows that whilst previous generations counted calories, millennial care more about food being â€œfresh, less processed and with fewer artificial ingredients.â€? (Lutz, A. 2015, March 25). LocalBox addresses this group, and uses them as microinfluencers to spread the word about our product.
YOUNG Millenial parents Among the older half of millennial, those between ages 25-34, there are now 10.8 million households with children. Further, with millennial accounting for 80% of the 4 million annual U.S. births, the number of new millennial parents stands to grow exponentially over the next decade.
WHY YOUNG Millenial parents? Studies show a positive value of shared family meal times and family dinners (Eisenberg, Olson, Neumark-Sztainer, Story, & Bearinger, 2004). In fact, research shows children whose parents spend more time cooking choose healthier foods later (Society, 2014). And as more parents take notice, the amount of middle-aged and millennial parents making homecooked meals for their families with fresh and organic produce is steadily increasing.
RETIRED SENIORS As the oldest Baby Boomers turn 65, the question of senior citizenship is becoming more relevant to this generation. In 2010, 96 percent of 50-year-olds, the youngest of the Baby Boomers, rejected the term “Senior” in a Del Webb Baby Boomer survey. The 64-year-olds who embraced the label, did so for senior discounts. For the sake of our target demographic, we consider every retired person above the age of 64 a “Senior citizen.”
WHY retired seniors? While millennial are the main demographic we are targeting, our primary research and observations pointed to them as another promising client. Extensive secondary research on the age group--at least in the context of Savannah--is fairly limited. However, on a national-scale, there is a clear demand for fresh, local and premium food with seniors. So much so that hundreds of retirement homes, which were once infamously mocked for their bland, institutinal fare, are now touting restaurant-like dining experiences Jaffe, I. (2015). Our research also shows that many people experience loneliness either as a result of living alone, a lack of close family ties, reduced connections with their culture of origin or an inability to actively participate in the local community activities (Singh, A., & Misra, N,. 2009). LocalBox is an opportunity for them to reconnect with their community, to get a glimpse of what people are doing and how they can get involved.
Understanding Our Industry
food INDUSTRY ANALYSIS The food industry is subdivided into many sectors; each sector presents its own set of complexities and issues. To start, the Federal Drug Administration’s low nutrition standards are thought to have a direct effect on the overall health of Americans, yet the FDA recently re-approved an inflammatory food additive called carrageenan in April 2018 that is linked to intestinal inflammation, cancer, and other human health risks (The Cornucopia Institute 2018, April 06). This shows a clear disconnect between public opinion and enforced food regulations. Nearly 70% of Americans obese or overweight and the leading cause of death and disability in the US is heart disease and cancer (American Heart Association February, 2014). According to our research, this is due both to the heavy subsidization of high-caloric food products and the consumer’s preference for high caloriebased diets (Oaklander, M. 2016, July 05). This, combined with the lack of transparency and education between food producer and food consumer signals a huge problem in the food industry (Forbes, G. 2015, November 30). It’s also created a massive demand, and in in order for the agriculture to keep up,
the industry has shifted towards practices of monoculture, and an unnatural and environmentally unsafe method of farming and using pesticides and fertilizers on natural wildlife that go straight into our water supply (R. S., Dr. Industrial Agriculture. Retrieved March 14, 2017). Currently, there is a “dead zone” in the Gulf of Mexico, where no fish or animals can live, that has grown to the size of the state of New Jersey (K. B., 2002, July 12). This is due to the chemicals that have flowed into the Mississippi River from monocultured farming lands. Large farms that embrace such farming methods like Monsanto, Inc. have monopolized the industry, because smaller farms could not keep up with the high yield demand. Between 1980 and 1990, rural workforce employment dropped by 50% as a result of this monopolization . All this, paired with the over saturation of restaurant businesses in the US (Alexander, K. 2016, December 30), has rendered the US food industry highly competitive, unsustainably fostered and incredibly unhealthy to the average consumer.
SOCIAL NETWORK INDUSTRY ANALYSIS As the app market grows more everyday, and social network platforms are generated by a larger developer base with little training, the result is an Oversaturation of these platforms (Takahashi, D., 2016, November 04). More than 17,000 apps are launched every month into the app store and yet, there is a misconception of how successful these venture venues can really be (A. O., 2018, May 25). Yes, Apple paid more than 6.5 billion to developers, but not everyone can be a heavy-hitter in this highlycompetitive market (L. I., 2018, May 20). Another issue entirely is the consumer relationship with these virtual gateways. Social media has grown to become a behemoth industry in the modern age, with more than $28 billion revenue accrued in 2015 (CFA, J. J. 2017, February 28). Not only does social media offer an unprecedented advantage in advertising vs TV and Radio through precise and targeted demographics, but it also offers a new level of connectivity between brands and users. Shopping is now a two-way street, and communication between user and business can be streamlined and facilitated. Shopping has also shifted to a mobile experience. Instagram is now a one stop-shop, where users can both browse influencers and buy products directly from the app (Shankar, V., Narang, U., Research, & Business Administration., 2018, May 24). So where’s the problem? Well, the
average person has 7 social media accounts and spends well over two hours on them everyday (C. H., 2017, November 17). There’s research that suggests a strong correlation between the unprecedented proliferation of mental disorders and social media (Toseeb, U., & Inkster, B., 2015). Experts believe this is due to the unrestrained and convenient source of dopamine that these platforms provide. Negative effects include, but are not limited to depression, anxiety, cyberbullying, worsening sleep conditions and feelings of anxiety. This is a growing concern for future generations, and one that is directly tied to our economy, the way brands conduct business, and a void that is filled through consumer habits and Addiction (Polcyn, J., & Ruciński, A., 2009). Finally, there’s also a huge problem with misinformation. As social media is becoming a more popular way for people to catch up on real world events, we are seeing a new pattern of “fake news” start to emerge. About 70% of stories shared on a daily basis are fake, and yet the go viral six times faster than real ones (Reuters. 2018, March 09). Truth is, whether we like it or not, social media has a massive influence over our perception of ourselves, each other, and the kinds of products and services that will either enhance or affect our quality of life.
WHY FOOD?... Our macroenvironmental analysis of the food industry flooded our minds with problems. We identified major environmental problems that affect not only farmers, but consumers and every stakeholder in between. A motif in our research were Big Food corporations. The complexity of food production and delivery, as well as spiking demand, has given way to unsustainable practices. On the resistance, local farmers and mindful consumers, looking to improve the quality of their food. This group of people became the inspiration for our business model.
...VIA SOCIAL NETWORKS
Through our social network analysis we found the blueprints to our platform. By incorporating elements of successful online networks, we sought to create an app that connects farmers and consumers.
swot ANALYSIS FOOD INDUSTRY
A SWOT analysis is a study to identify internal stregnths and weaknesses as well as external opportunities and threats.
STRENGTHS • Organic, high-quality food • Envioronmentalist repuation • Fair labor wages for the farmers • Economies of scale • Strong cash flow and stock position
WEAKNESSES • Weak international operations • Healthy food is a luxury and difficult to access • Fast foods have manipulated teh industry
what THIS MEANS
The food industry is monopolized by large corporations that are damaging the environment, affecting the businesses of farmers and affecting the health of the consumers. There are opportunities to help the farmers who produce oganic and environmentally conscious foods to sell their produce, and also to feed the consumers healthy foods.
OPPORTUNITIES • Market leadership in high demand segments • Expand private labels • Wide amount of areas where stores are located dis-allows for individual farmers to sell their produce so the farmers market can be expanded • Introduce new products and experiences
T H R E AT S • Increased competition • Changes in economic conditions
PESTLE ANALYSIS FOOD INDUSTRY
A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macroenvironmental (external marketing environment) factors that have an impact on an organisation.
The FDA promises to consider revising to consider nutrition and health issues further
Rural workforce employed on US farms dropped by about 50% in the 1980’s due to food industrialization
(Center for Food Safety and Applied Nutrition. 2016, February 28) (American Heart Association February, 2014) (Oaklander, M. 2016, July 05) (Forbes, G. 2015, November 30) (R. S., Dr. Industrial Agriculture. Retrieved March 14, 2017) (K. B., 2002, July 12) (Changes in the American workplace., 2016, October 06) (Alexander, K. 2016, December 30)
SOCIAL People eat with their eyes– #foodporn has become it’s own industry as 122 million Instagram posts up to date use the hash-tag. Many people now look online for food inspiration
Good quality smartphone photography allows spreading of food information easy and attainable
Multiple legal constraints with food trucks including costs, zone laws, competition, health and safety issues, etc.
E N V I R O N M E N TA L The meal kit delivery industry will be oversaturated by 2020. Recent innovations of cloud kitchens, neutraceuticals, kitchen pods, and global culinary experiences through Air Bnb + Blue Apron partnership. Monoculture is becoming normalized.
KEY DRIVERS 1
Assurance and reliability on the quality of food
The industry as a whole is seeing a shift from cheap and convenient to all-natural, organic and less processed goods. So much so, that even fast-food chains are changing marketing strategies to appeal millennial consumers (Woodyard, 2016). There is a rise of organic, health-conscious foods. As obese and overweight statistics skyrocket, people, especially the younger demographic are steering towards more healthy and premium quality produce (Nielsen 2018).
Ability to keep up with demands of food consumption through production
Big Food corporations are rushing to meet the high demand of food production, but in doing so, they are resorting to unsustainable and environmentally harmful farming methods. (Taylor, K. 2016, September 28),
Ability to meet the standards set by the consumer for healthier options
As the food industry shifts to meet increasing demands for healthier, organic and sustainable food options, producers must are close to follow. Even massive corporations like Monsanto are shifting strategies to meet new trends in the industry (Paynter, B. 2017).
PORTER’S FIVE FORCES ANALYSIS MEAL KIT DELIVERY INDUSTRY
COMPETITION IN THE I N D U S T R Y: M O D E R AT E The meal-kit delivery service is heavily fragmented; there are over 150 competitors of small and medium size. Furthermore, the attractiveness of this segment is increasing the attention of large competitors, such as Amazon, that could potentially explore ways to enter the industry (Wilson, 2017). Products of many companies are highly undifferentiated, which increases rivalry. As a response, many companies are shifting their strategy towards niches or by offering additional services to consumers, as mentioned before. Low fixed costs and dynamic market revenue growth in recent years alleviate rivalry to an extent, limiting the onset of price wars, and as long as the market keeps expanding competition could still be assessed as a moderate threat (Marketline, 2016).
The Porter’s Five Forces is an extremely helpful tool to help broaden conventional understanding of a business strategy. By looking at an industry in terms of its customers, suppliers potential entrants and possible substitutions, it’s possible to gain an overview of what the industry looks like. Normally, its used to determine an existing organization’s place in the market, but we given this is a preliminary step in our process, we are using it to determine whether or not it’s a good idea to dive into this market.
POTENTIAL OF NEW ENTRANTS INTO THE I N D U S T R Y: S T R O N G
The allure of cost savings, access to a greater variety of products and services, coupled with the increased convenience of online retailers has driven more and more consumers to purchase goods online. This situation significantly increases the likelihood of new entrants/competitors. The ease of search engines and price comparison websites mean that the sector is highly competitive. Consumers, now more than ever before, have access to large sources of information that allows them to be more informed about the characteristics of a product and how it compares with the competition. The leading online retailers can reduce prices significantly because of their large scale. This situation could be deterrent for prospective new entrants. However, constant change in consumer behavior
and diversified audiences creates sufficient opportunities that can be exploited by new entrants. There are few entry barriers to the market due to low fixed costs, little regulation, and easy access to suppliers for virtually everything in the value chain of the meal kit delivery service segment.
POWER OF SUPPLIERS: M O D E R AT E
IT infrastructure providers have a strong power and much depend on them. There are numerous players in the industry which has driven the operating costs of every ecommerce related activity down and has made it less costly than running a traditional brick-and-mortar store. Virtually all companies in the meal-kit delivery service rely 100% on their online platforms for their operations. There is a risk of forwarding integration from large corporations (like Amazon) in the food industry, including large food chains.
However, the need for specific skills and resources required for the meal-kit delivery service represent a challenge that many of these companies are not willing to take. Businesses in the meal-kit segment have a high reliance on delivery service companies, like FedEx or UPS for the delivery of their products. Suppliers of delivery services are usually large and diversified which give them the capacity to exert substantial power in negotiations. The scale of these providers allows them to offer expedited deliveries which is a characteristic greatly appreciated by the end consumer and that can hardly be provided directly by a food delivery company on its own.
POWER OF CONSUMERS: M O D E R AT E Buyers are on average small but significant in number; consumers are highly fragmented. Buyers are assumed to be individual people making orders online. Reliable internet access is contributing to this trend (internet penetration lies around 88% in the US.), (MarketLine, 2016). This aspect is appealing to the meal kit delivery service as companies need to achieve a sufficiently large customer base to remain competitive. Technology has given consumers the ability and tools to
find any product/service for the lowest price. The growth of social media, review sites, and price comparison sites has led to the emergence of an increasingly informed consumer. Switching costs are virtually non-existent, the vast offering of products in the market makes it easier for consumers to find alternatives across various companies.
T H R E AT O F SUBSTITUTE PRODUCTS: M O D E R AT E Even though the meal-kit delivery service sector is growing and the market keeps expanding, many consumers still prefer the traditional experience of buying groceries and preparing meals directly or simply going out for food. Over 68% of consumers have no interest in ordering online (Statista, 2016). There are many companies offering products with similar characteristics, which paired with the increasing availability of information and low switching costs, makes it easy for consumers to buy from multiple companies. This is an accepted reality among the industry and has shifted efforts of many businesses to offer additional services (such as increased customization) that could capture the attention of their potential clients and ultimately increase the frequency of their purchases.
WHAT THIS MEANS
Companies are focusing more on using mobile technology as a more attractive and convenient alternative to promote their products and services to potential buyers. Over 27% of consumers in the food industry now use mobile technology to purchase meal kits (Statista, 2016). Online operations are significantly easier and less costly than running a traditional brickand-mortar food chain (Marketline, 2016). This increases the likelihood of big companies entering the market as less investment is required. Low fixed costs and relatively low barriers to entry entice new competitors into the industry (Marketline, 2016)
KEY SUCCESS FACTORS 1
Reliability of product quality
As meal kit delivery services seek to outcompete each other, one of the main ways they seek to gain a competitive edge, is by upping each other out in terms of product quality: offering organic , non-gmo, pesticide free and other labels that reassure the consumer of the quality of the product (Judkis, M. 2017). This, paired with the price tag behind some of these box kits places quality as one of the most important key success factors.
Dependable delivery services
Additionally, a meal kit delivery service is, well, dependent on a reliable delivery service. If the consumer gets their package late, even once, it can negatively impact their trust in the product. Companies like Blue Apron and Hello Fresh also remain extremely competitive in their pricing against each other, offering free shipping and pushing their marketing aggressively to express a reliable, convenient service to your doorstep.
Food information and recipes
Part of the charm of meal-kitdelivery comes with the recipes. People like being exposed to the recipes that are offered as an important part of the service itself. Moreover, it’s become a way for these companies to differentiate themselves from each other. For example, Hello Fresh uses their “Vegeterian-based” subscription option as a marketing tool to cater to a very specific consumer (Lamberti, P).
Trader Joe’s Local farmers markets
Aldi Home Chef
what THIS MEANS
The following matrix demonstrates that organic food vendors are mostly high priced and the popularity is high. Meal kit delieveries are popular though they are mostly higher in price than most organic grocery stores. (FMI, 2016) This shows that that organic services are “red-ocean” strategies. There is an opportunity for an organic food service that charges less money and delivers the produce straight to the consumer giving the business a competitive advantage.
A competitive analysis identifies our competitors and evaluates their strategies to determine their strengths and weaknesses relative to those of our service.
macro-environemntal analysis conclusion Based on the data gathered thus far, we find a strong and growing shifts in the food industry towards organic, sustainable and quality food products. As the millennial generation grows older and richer, their spending is preference for this kind of produce is becoming more alarmingly clear (Kuhns, Saksena, 2017). Pair this with the fact that one of the main barriers of entry for local famers is the lack of distribution systems moving local foods to mainstream markets, and you have a recipe for a successful business innovation. The target markets for local food produce services are typically wholesale customers – institutions, restaurants, and grocery stores – which have a harder time buying local product in the desired volumes. Food hubs are a good example of how farmers are finding innovative ways to stay in business. More importantly, however, they signal to a very real and growing group of consumers that are not only willing, but happy to pay a premium for a product they can trace the origins of, and feel a greater sense of community and ethical responsibility in its purchase (Matson, J. Sullins, M 2016). On the other hand, big corporations like Monsanto provide greater delivery reliability than can be obtained through
purchasing from many producers selling independently (Matson, J. Sullins, M 2016). Which is exactly why the direct purchase of produce from farmer to consumer (rather than away-fromhome purchasing of pre-package or processed goods such as restaurants, diners and cafeterias and ready-to-eat meals), is an essential part of the success behind farmer’s markets and local food hubs. Finally, Meal kit delivery is a growing market that is most likely here to stay. They provide a convenient factor of home-cooking that has never before been so widely available--consumers like not having to grocery shop or think about finding recipes. They like being exposed to recipes they wouldn’t have thought to make on their own. They like cooking as a special occasion, like a casual date night (Judkis, M. 2017). By merging key success factors from the health food industry and the meal kit delivery industry, we aim to create a new and innovative business model. It’s the best of both worlds: the health, ethical and sustainable benefits of local produce and the convenience appeal of Meal Kit Delivery.
BFA in Graphic Design
Ability to design brand identity
BFA in Journalism/Writing
Ability to do quick prototypes/blueprint
BFA in Industrial Design
Able to communicate well and gain trust
BFA in Service Design
with people easily
Access to SCAD prototyping machinery
Can have conversation in Spanish,
English, and Italian
Mariaâ€™s large network in Savannah
Ability to information outsource and have
contextual understanding of multiple
Connections in Mexico, Bolivia, Colorado
Nonprofit & fundraising knowledge Storytelling skills Army connection Access to professional medical advice Adobe program knowledge Lawyer friends
A competitive advantage is what makes our product or service superior to all of a customerâ€™s other choices. To be successful, you need to be able to articulate the benefit you provide to your target market thatâ€™s better than the competition. Thatâ€™s your competitive advantage. (Harvard School of Business, 2018)
LocalBox is a service that provides mutually beneficial relationship between local farmers and health-conscious food consumers. Our target customers need more accessible and convenient options to purchase local, fresh and healthy produce; most of the existing health food stores cannot cater to the busy life-style and budget that the consumers have. LocalBox uses a social platform for the convenience of our customers and delivers a box of produce from the farmers market to the individual consumers home for lower price than the farmers market. Our Target market includes millennial, young millennial parents and retired seniors. Millennial do not frequent the farmers market because it does not fit in their lifestyle or interests but are socially conscious and interested on a healthy diet. Young millennial parents are concerned about the health of their children and are willing to spend extra money to purchase healthy, organic & local produce, however are often too busy to attend the farmers market. Retired Seniors are invested and care about supporting local farmers, but attending and carrying all the products from grocery stores and farmers market is inconvenient to them. There is a demand for a service that caters fresh, locally-produced and healthy produce that considers the busy lifestyle and needs the consumers have. Our main competitors would include existing meal kit delivery services, organic food vendors and and the farmers market. Our competitive advantage however, differentiates us from all those by delivering straight to the consumers home, reducing waste, and selling the produce at a cheaper price than the farmers market. Given that our business model is socially and environmentally conscious, our customers would be incentivised to subscribe to our beneficial and convenient service.
differentiation strategies Understanding how trends influence the industry was essential for our business plan. The following differentiation strategy is based on trends of the industry and it provided us with a scope of current/future directions to help guide us make better competitive decisions as well as making sure we meet all prominent consumer demands.
Develop a locally-sourced reliable delivery system A report produced by McKinsey & Co regarding customer behavior in the food industry marked how convenience matters more than price (Hirschberg et al., 2016). The time required for preparation is critical, and so is the diversity of options for meal-planning and customization. Likewise, speed of delivery is another relevant variable in customer satisfaction, with an average 60 percent of consumers across markets citing it as a key factor. The latter presents challenges for the industry, particularly for smaller firms, that do not have enough scale in their operations to reduce the cost of offering shorter waiting times for customers. What this means: keeping things in a local, manageable scale is an important part of our business strategy.
Guarantee a partnership with local farmers Most farmers produce overstock and have a difficult time selling and distributing their produce before it goes to waste. By providing a constant revenue stream for the local farmers as an incentive, we would buy the overstock produce for 70% of the original price. Since we would buy the product for a less expensive price, this which would give us the opportunity to sell the produce to our consumers at a cheaper cost than the farmers market price rate. Selling overstock that would have gone to waste introduces another of our key differentiating factors regarding reducing the waste of food. What this means: We are a social and environmental conscious business that differs from other companies by helping farmers maintain a steady and more profitable revenue stream and reduce the amount of food wasted in our community.
Assuring our customers that the product they are buying is really fresh and natural The increasing need for people to know more about the food they are eating and its origin has been pushing companies to focus on fresh, natural and organic products. Consumers are now more interested in understanding the nutritional value and overall health benefits of the food they eat. This trend drives an increasing demand for transparency, such that consumers want to know the origin of their food as well as what it can do for their well-being (Kuhns, Saksena, 2017). What this means: showing the origins of the food to our consumer is a priority, and part of our core competence as an organization focused on healthy, natural and local food sourcing.
MEASURING strategies 1
Assuring our customers that the product they are buying is really organic and fresh Guarantee a partnership with farmers
Develop a thourough and reliable delivery system
D I F F E R E N T I AT I O N S T R AT E G I E S
E X I S T I N G H E A LT H CONSCIOUS CONSUMER BASE
RELIABILITY OF PRODUCT QUALITY
TRUSTWORTHY DELIVERY SERVICES
KEY SUCCESS FAC TO R S
EVALUATING BUSINESS STRATEGIES The SFA strategy model is used to evaluate options within our business concept and the acceptability of them in the context of our environment. Within this context, we then measure them up to our resources and capabilities.
K E Y S U C C E S S FAC TO R S
S U S TA I N A B I L I T Y
A C C E P TA B I L I T Y YES
EXISTING H E A LT H CONSCIOUS CONSUMER BASE
The strategy was the strengths of: ability to create and deliver information in a way that is easy for our consumers to understand.
M O S T LY Y E S
RELIABILITY OF PRODUCT QUALITY
The strategy is able to communicate properly with the consumer, making the business platform reliable. However, the company relies on the production of the farmers which is a factor we can not control.
We are able to manage information regarding food from both public information that is published, and also the information from the farmers. Our capabilities as design managers and researchers allow for this to be feasible.
M O S T LY Y E S
The stakeholders reaction regarding information about food is strategized in a way that is mutually beneficial for the food producers (farmers) and the food consumers. The food producers would benefit from exposure, therefore marketing the uniqueness of their product. The consumers will have a user friendly platform to learn more about the food they are consuming.
In terms of the food producers, they will be able to rely on us. Regarding the platform that serves as a marketing tool for them, and also as an additional revenue stream that buys food would not have produced an income otherwise. For our consumers however, we can only guarantee consistency regarding the delivery and information, but not the quality of the product.
M O S T LY Y E S
Our stakeholders on the food production side will have a reliable platform to sell their overstock produce to, therefore creating a consistent revenue stream. Our other segment of stakeholders wcould have an inconsistent quality of product since it is a factor we can not control.
TRUSTWORTHY DELIVERY SERVICES
Although delivery services are not within our resources and capabilities, through our macro-environmental analysis we have identified this criteria and have created a strategy to overcome it, therefore meeting our long-term goals.
what THIS MEANS for us
After analyzing our three Key Success Factors in terms of suitability, acceptability, and feasibility, while keeping in mine our resources and capabilities, we were able to identify what strategies need further development. In terms of suitability, all of our strategies seemed to fall in line with the goals of our business. We were also able to confirm that all of our strengths have the capabilities to make our strategies suitable. For teh accessibility column of the analysis, we understood that there is a clear opportunity for both our stakeholder segments, in which they both rely on us to make the connection. Thirdly, the feasibility column allowed us the chance to evaluate the organizational structure and market needs our business has for our strategies to work, in particular the ‘trustworthy delivery service’ strategy. We re-evaluated the feasibility of this strategy regarding machinery, management, money, manpower, and materials.
This fits into the red-ocean strategy criteria where an option like this has already been tested and is accessible.
Our data shows that by providing a convenience factor through a delivery service, our stakeholders would accept our platform.
Looking at the SFA model holistically, we can observe that our second strategy of ‘reliability of product quality’ is the only stragey we can not account for, 100% since in all terms of feasibility, acceptability, and sustainability, we depend on the production of the food producers. This analysis has helped us understand what we need in order to enter and be sustainable in our market, as well as a guide in regards to what else we need to explore. Finally, it suggests that we belong with a ‘Red Ocean Strategy.’
STAKEHOLDER MAP A stakeholder map is a visual analysis to understand who the key stakeholders to a market belong, where they come from, and what their relationship to a business would be.
what THIS MEANS
The first map to the right represents the direct and indirect influences the stakholders have in our market. By visualizing them on a matrix, we can observe that the stakeholders with the most power and interest on our market are the local farmers, the farmers markets, foodies, and health-conscious consumers. The stakeholders with high interest but
Social Media Platforms
Social Media Platforms
Farmers Markets Technology Developers
Processed Food Brands Parents Farmers
Restaurants Internet Providers
Foodies Food Regulators Macro and Micro Influencers Convenience Stores
Weight Loss Programs
PRIORITIZING OUR STAKEHOLDERS
high Local Farmers Parents
Farmers Markets Foodies
Health Conscious Consumer
Delivery Services Weight Loss Programs
Convenience Stores Food Regulators
what THIS MEANS, contâ€™d.
Influencers Food Critics Social Media Platforms
Processed Food Brands
Software Developers Internet Providers Technology Providers
low power on this market are mostly food vendors, meal kit delivery services and parents who donâ€™t mind spending more money for healthier foods for their families. This suggests that within the food industry, there is an opportunity in the market of local farm vendors and health-concious consumers since they both hold a similar interest and power in this market.
Understanding Our MARKET
MARKET OVERVIEW As food demand rises to meet the convenience “supermarket” ecosystem, agricultural products are mixed together and combined or aggregated in larger groups to be sold. Usually, this means little to no identification is put on the labels, indicating where the product was grown. This has led to the emergence of food value chains, local food hubs and farmer markets as an option for farmers and ranchers to differentiate their product and enter a more promising and financially viable market (Adam, Barham, 2011) What’s more, as farmers and local sellers started to realize consumers are willing to pay a premium if they can be sure of the origins of their purchase (DayFarnsworth 2009). However, as noted by a 2010 report by the United States Department of Agriculture (USDA), one of the main barriers of entry in the expansion of local foods, is the “lack of distribution systems for moving local foods into mainstream markets (Martinez et. Al., 2010). If we look at the USDA’s definition of food hubs, “a business or organization that actively manages the aggregation, distribution and marketing of source-
identified food products, primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail and institutional demand,” our business model fits this description perfectly. In fact, the only thing separating us from traditional food hubs, is the online component of our platform. What’s more, in the past few years, food hubs have been gaining recognition as a way for producers to share information with end users on where or how food is produced, as a way to bridge access to information on food between farmers and consumers. As such, LocalBox represents a strategy for producers, particularly small and mid-sized producers, to market their production locally on a greater scale. It’s a business solution that creates new marketing opportunities for farmers. It helps connect the everyday consumer that values convenience, with the industry professionals struggling to outsource their produce (Matson, USDA, 2018).
Innovativeness Community building online Hello Fresh
Supports local business Yelp
Georgia Farmerâ€™s Market Association
Our research shows the biggest competitors on the core functions of our service (food kit delivery and information sharing), are Whole Foods Inc. and Hello Fresh respectively. Whole Foods Market is the worldâ€™s largest natural foods grocery chain, according to OneSource. It operates more than 470 stores throughout the US. Whilst Whole Foodsâ€™ approach to sustainability and premium service has cemented its place in the Brick and Mortar grocery store market, its acquisition by Amazon has shifted and transformed its operating strategy, cutting costs and integrating the giant company into its online ecosystem. This also affects long-standing business practices such as sourcing locally from farmers and producers, efforts that are being redirected to other ventures (Gara, 2017). This, paired with the fact that Amazon is stepping into the market with its own meal kits, puts Whole Foods is in the map as a big contender and long-term threat (Shead, S. 2017). Luckily, their focus seems
to be solely on specific-order delivery, rather than an assortment of produce like our business model proposes. Additionally, its funding cuts in locally-sourcing most of their inventory is affecting local consumers negatively, which further establishes the need for a businesssolution like ours to step in and pickup some of that slack. Another interesting company that appeared in our radar was Yelp. Itâ€™s a company that accrues revenue through marketing to smaller businesses. It retains customers by giving incentives to use the app, and keeps its platform open and free to use. This business model relies heavily on advertising, but depends entirely on a steadily growing userbase (Gaille, B. 2015). Hellofresh is another important competitor, but their approach is based on a meal-kit delivery basis, that brings in Chefs and Nutriologists to make recipes with their boxed products, to later give to the consumer. While rising in popularity, the costs associated
with arranging new recipes every week for their consumers weighs on their profitability (Ghosh, S. 2017). LocalBox borrows this concept, but shifts its focus on the produce itself. By highlighting where the products come from, we are giving the consumer a complete picture of how its sourced locally in their community.
Mindful producers and consumers
Farmer’s market (organic, healthy, local)
Offline traditional users
Chefs, cooks, and foodies Local-driven food groups
Individual Demographics: (millenials, seniors, young parents)
Individual Users Online Users
Once we identified our key competitors, and we had a clear understanding of our macro-environmental analysis, we took into account our competitive advantage as a locally-sourced, sustainable meal-kit delivery solution, and we mapped ourselves against other brands and firms that we share a market with. The “x” axis is based on our research; it indicates how the more ethical, sustainable and individualized a food-related firm, the less affordable it tends to be. Our “y” axis maps how a service is either entertaining
POSITIONING BY DIFFERENTIATION or informative. How these companies tend to fall into both spectrums gave us a clear correlational picture of where we fit. As seen in this perceptual map, our business model stands out in a mostly blank space of opportunity unoccupied by other competitors. By seizing this part, we are connecting more with our target consumer’s needs and reaffirms our key success factors that started us on this path.
LocalBox Whole Foods
Ethical Culinarie Kit
Plated Home Chef Blue Apron Food and Wine
Entertaining Meal-kit delivery Food Information Food Seller
PURPLE OCEAN STRATEGY Our industry analysis shows how “Local Box” fits in a highly competitive industry. Meal and food kit delivery is a fiercely sought after industry worth more than $1.5 billion. It dominates the market for cooking-enthusiasts who value quality and convenience. In order to gain a competitive edge, we identified an opportunity in partnerships with local farmers, reducing food waste by selling their overstocked goods.
The red/blue ocean strategy, a tool developed in 2005 by W. Chan Kim and Renee Mayborgne, is a gateway strategy into business opportunities; a way to find less competitive markets to reach more consumers. As entrepreneurs, we are taking existing ideas of food delivery, and compressing them into a local scale, combining key elements of both the food and social network industries.
Futhermore, the research on the organic food market has shown there is a “public” understanding of the environmental soundness of organic farming. This, paired with the “private” motives relative to the pre-conceived quality, health and safety of organic produce are the driving force of consumers’ purchasing intentions (e.g., Gracia and De Magistris 2008; Honkanen, Verplanken, and Olsen 2006; Magnusson et al. 2003).
This is an opportunity not only to appeal to the ethical, socially conscious consumer, but to tap into a preexisting market in an online platform. By taking the essence of what the farmer’s market and local food hubs stand for, we’re infusing that sense of community and support into the time-saving convenience of online food ordering and delivery.
This behavioral pattern, originally known as “green consumerism,” has subsequently broadened its meaning and nowadays “green”—or, in general, “ethical”—consumers consider organic food consumption a “matter of lifestyle choice (Fotopoulos and Krystallis 2002).
We used the business model canvas tool to understand which elements of the industry could our company borrow, compete and invest in. This confirmed our suspicions of fierce competition, but it also reaffirmed where value could be added.
understanding our consumer
what do we know?
• 86% of millenials prefer to be healthy than wealthy (Weinswig, 2017) • “There is a tremendous opportunity for food manufacturers and retailers to lead a healthy movement by providing the products and services that consumers want and need. The first step is knowing where to put your product development efforts.” (Nielsen., 2015) • Evidence shows that Millennial exhibit a higher preference for convenience than do other generational cohorts when making food-at-home purchases. Additionally, Millennial make fewer trips to the grocery store. (Kuhns, Annemarie and Michelle Saksena, 2017) • Food waste is often described as a “farm-to-fork” problem. Produce is lost in fields, warehouses, packaging, distribution, supermarkets, restaurants and fridges. Half of the US produce is thrown away (Suzanne Goldenberg, 2015)
what else do we need to know?
• • • • • •
how will we find this out?
Primary Research is used to generate information that is not justified and/or is not available in other secondary sources. Our micro-environmental analysis and secondary research was able to guide our business plan and strategy, at the moment of conceptualising a prospective business plan proposal, it was necessary to conduct primary research. For this step we used various contextual research methodologies in order to maximise our data sets and be able to properly understand the needs and wants of our potential users. To begin, we observed different spaces where food vendors, and customers frequent to be able to set our research in context. By combining our secondary research analysis, our stakeholder map and our observations we developed an initial survey that was sent to the general public. The survey was able to communicate which kind of audience we should do further research on and what questions needed to be further explored. The next step included a follow-up survey--a set of poll questions--that was sent to over 100 participants and interviews to food vendors at organic food stores, health-conscious food consumers and farmers. Finally, we followed two particular case studies to test the feasibility of working with farmers.
Who are the people who frequent the farmers market? Who are the people who don’t? And why? What type of demographics prioritize eating healthy? How much do consumers know about the food they eat? How do the farmers feel about food distribution and food waste? What challenges do farmers face? What do consumers care about when buying food? (quality, price, nutritional value, cruelty free, taste, etc…)
USER RESEARCH STRATEGIES
CONSTRUCTING QUESTIONS Constructing questions is a very important step for primary research. The questions will generate either quantitative or qualitative data. In order to gather quantitative data the questions are mostly closed and are brain based, usually focused on past experiences. Qualitative questions generate open answers that are heart/feeling based and are solution oriented. The construction of these questions are then used to generate our surveys, interviews and polls.
PA R T I C I PA N T O B S E R V AT I O N S
GENERAL PUBLIC SURVEY
M A R K E T- S P E C I F I C SURVEY
Participant observation is a data collection method used mostly when generating qualitative research that helps set other primary research methods in context. The reason we chose this method to begin our primary research, was to be able to understand the context in which our potential user groups interacted with different kinds of food purchasing environments. The first space where we conducted participant observations was at The Farmers Market. In this scenario we learned that the majority of the people who attended were young parents, retired seniors and only a few millennial. The two Organic foods stores were Whole Foods and Brighter Day. In both establishments we observed that the organic food sold in these places were more expensive than other food stores. Additionally, the majority of people who bought the food in these places were young adults and seniors. Through our observations we learned that the most frequent food customers in spaces that sell organic foods are local seniors and young parents. The information gathered in this exercise, combined with our secondary research analysis lead to our next step, creating questions for our first survey. The first Survey we sent out was to the general public. The goal of this questionnaire was to identify our main consumer segments and understand how the general consumer feels about organic foods, meal kit deliveries and their food shopping experiences.
This method allowed us to know the age and lifestyle of each of our 137 respondents. We asked three questions that identified the reasons and conditions that would be necessary for our potential consumers to use a service that aligned with our mission statement.
“It would make my life so much easier if they [distributors] could send a truck, buy everything I grow and distribute it in Savannah for me.” –Billy Dugger, Billy’s Botanicals, Savannah GA
Interviews produce qualitative answers through conversations where the questions are formulated to elicit the most amount of information from the interviewee. We decided to choose this method because after analysing our stakeholders, and the data collected thus far, we needed to have a conversation with the food producers (farmers), food vendors, and our potential users.
Case studies are a research methodology that involves an up-close, in-depth, and detailed examination of a subject of study, as well as its related contextual conditions. We chose to use this technique in order to understand one of our key players in our business plan, the farmers/food suppliers.
GENERAL SURVEY FINDINGS
Through this initial survey, we learned that our market segment is dependent on two main factors. The first is that more than half of our respondents care and want to be healthy about the foods that they eat, however less than 23% of them are able to afford the lifestyle. This insight lead the conditions for our next three data collection methods.
Q U O TAT I O N S F R O M G E N E R A L S U R V E Y TA K E R : “I would like if there was a way to aid the user in achieving their health goals by informing them of the appropriate benefits from eating something” –Unknown “As a person from a farming background I would love for the consumers to understand where the food comes from” –Unknown “I want more transparency about the farming practices” “How long it’s been in the stores on shelves, etc!” –Unknown “I want to know whether it was farmed sustainably.” –Unknown “I’d like to know about the origins of my food” –Unknown
MARKET SPECIFIC SURVEY FINDINGS
Solum inam tu esum deatili caequa ma, qua nox nocae con dem ta con se tuidestrae inatis is hebatidente que no. Simpotam cri consimum iam, quos porudest? Ebem musquit. Habenemus, nemur lostemque dena, eniu cum, no. In ad C. Habem nos hos iae menteri terurberit.Sena rem. Gra, etilis furaequame ine te tam tem. Habefaci ficiis. Siname intractora coniu isses nos, erni consusquem nena
I realized an opportunity to grow my own food nearly year round when I moved form Kansas City to Savannah. This realization was followed by the want to distribute clean food to those around me. When people shop for their produce at a grocery store, many may not realize the environmental degradation that occurs from unsustainable agricultural practices world-wide. There is a price the environment pays for our diverse plethora of culinary plunder. I am certainly guilty of supporting it at times, however I do what I can locally to give balance.
Lauren Gallet de Saint-Aurin, Case Study participant
CASE STUDIES & INTERVIEWS Through the development of our research we followed two local farmers who allowed us to shadow their production process and gave us insightful information on what it would be like to form a business relationship with them. The connection with both farms is part of our resources and capabilities regarding our friendship and connections in Savannah.
CAROLINA GOLD RICE PLANTATION The first farm is called Carolina Plantation Gold Rice based in Darlington, South Carolina. Their farm is committed to providing authentic Carolina-grown products and the cultivation of true “Carolina Gold” rice. Through our conversations we learned that one of the main reasons they do not cater or deliver to the individual consumers is because it would not be worth the time and effort. Mailing the product in low quantities means that the consumer has to pay additional mailing fees to a product that is already pricey because of its high quality and unique history. Fortunately, for this particular farm, they do not have to worry about the product spoiling the way that most farmers at the farmers market do.
Lauren Gallet de Saint-Aurin’s farm The second farm we shadowed belongs to a young entrepreneur name Lauren. Her farming practices have been adopted from her mother and she sells her produce to restaurants and food vendors within a 3 mile radius. We learned that in this case, her produce is time-sensitive and the distribution factors are very sensitive.
INTERVIEW QUESTIONS AND ANSWERS 1. What does farming mean to you? Farming, for me means the sustainable utilization of the natural world through cultivation of food-bearing plant matter. 2. Why is your product special? My product is unique in the sense that it is grown directly in my backyard with a minimized carbon footprint. The plants are sourced from a local grower and my sowed seeds are sourced from an environmentally conscious producer. Additionally my product is distributed within a 3-mile radius. 3. What do you feel is important for your consumers to know about your product? I would like my consumers to know that the product is grown locally, sans the application of herbicides, pesticides and fungicides. It is grown with permacultural practices such as companion planting and environmentally preferential cultivars. 4. Do you have passion/love for what you do? The passion and love I have for my urban farming/gardening shows in the result of the product. Farming is a tedious, physically laborious feat - one does not take on organic farming without a passionate drive. 5. What is your story? How did you begin to get into the farming business? It has taken nearly 15 years of gardening, both for pleasure and business, to arrive to this point of urban farming. It begin in my mother’s garden where her passion for the natural world and all it’s living members instilled a lifetime flora fixation.
internet access QR code produce smart tech device transaction operation delivery truck delivery supply kit information card
our consumer journey SMART TECH, QR CODE
INTERNET, TECHNOLOGY, TRANSACTIONAL OPERATIONS
FARMERS MARKET/GROCERY STORE Walk throught the farmer’s market & is primed with LocalBox branding
Scans QR code that a food vendor recommends. Code opens LocalBox App
Interaction and trust building with farmers to form partnerships & recommend us
Downloads LocalBox App with incestive of receiving a discount
Creates account and taylors the box according to individuals needs, chooses subscription type
Active presence at the farmers market, strong brand identity presence
Server maintanance while recieving new customers.
Annoyance because user does not have INTERNAL INTERACTION enough time to go through the market
TRUCK & PRODUCE
Curiosity is formed about the new recommended App
Processes new user information
sets new order in place
Intriguied by discount and is hopeful about the LocalBox
Feels satisfied by the personalized choices that LocalBox provides.
Waits for LocalBox delivery, and tracks package delivery schedule
Recieves LocalBox in time which includes info card, and fresh produce
Buys overstock produce from farmers and packs boxes
Delivers LocalBox packages to individuals homes on time
Tracks inventory bought & indicates how to package each box.
Provides GPS directions and track locations for delivery service and users
The wait of the first box delivery is annoying and sets expectations high
Excited to recieve the package in time and is eager to discover what is inside of it
PRODUCE INFORMATION CARD
PRODUCE COOKING SUPPLIES TECHNOLOGY
TECH DEVICE, TRANSACTIONAL OPERATIONS
Reads information card, incentivates user to open LocalBox App
App suggests recipes, provides food education and infomation about the farm the produce came from
Follows a recipe while considering the food benefits and the farmers who produced it
Consumes rest of produce during the rest of the week.
Gathers information from farmers new harvest and designs the information card for the ucoming week.
Server maintance and customer service keeps up with recipees, farmers news feed, and customers updates
Feels informed and connected to the produce, is intriguied to know more
Feels appreciation for the thoughtful and healthy food produced by local farmers
Excited to be able to follow recipes using the produce. Users time is being well spent.
Feels relieved to have enough produce for the rest of the week
Confirms subscription renewal
Recomends LocalBox to other community members
Creates incentives for new subscribers and rewards for repeating customers
Prepares inventory for the new supply demand to inform farmers
Reminds existing consumers to confirm new order
Processes new orders and new subscriptions
Satisfied with service and begins customer cycle again
Sense of belonging by being part of the this community building service
DETERMINING OUR BRAND PERSONALITY An important part for our business strategy was to create a brand that inspires a sense of transparency and trust. Following our research, we created a set of guidelines that determines the personality of who we are. If our business model was to be successful, we needed to create a brand that the consumer can relate to (Aaker (1991). An important part of increasing brand equity is to keep a consistent set
of traits that appeals to our target demographic (Keller, K.L 1993). After identifying our position in the market, the lens by which to scale the elements of our personality where inspired by an executive summary of Web equity by Christine Lepwoska, and a study of the impact of brand communication on brand equity by Bruno Schivinsky and Dariusz Dabrowski (1991).
ESTABLISHING GRAPHIC IDENTITY TYPOGRAPHY
DDC HARDWARE CONDENSED
When building a visual brand identity, it is sometimes difficult to prescribe tangible qualities to an intangible idea. For this reason, it was important to analyze our brand personality at its core in order to develop an appropriate color scheme. A playful, yet traditional array of soft pastels was chosen to give the viewer a feeling of hometown comfort, which is reflective of the local nature of our business.
ABCDEFGHIJKLM NOPQRSTUVWXYZ 1234567890 Reflective of the physical nature of a box, we chose DDC Hardware Condensed as the primary typeface of our brand. Contemporary and wholesome in nature, DDC Hardware is accurate representation of our brandâ€™s progressive yet grounded personality.
This mark was developed to relay the essence of our business in one glance. Therefore, this logomark uses elements of color theory in stylized carrot that aims to tell a story of freshness and locality throughout the customerâ€™s journey.
understanding our BUSINESS MODEL
BUSINESS MODEL CANVAS
Business Model Canvas is a strategic management and lean startup template for developing new or documenting existing business models. It is a visual chart with elements describing a firm’s or product’s value proposition, infrastructure, customers, and finances. More specifically, it helped us situate and polish the inner workings of our business architecture. It is a bluepring by which we were able to map out and describe how our business operates at its core.
• Partnership with farmers • Transportation/ delivery service • Database company • Our consumers
• Mantaining relationships and trust with farmers • Creation and maintanance of website & App • Weekly content creation of information card • Transport & deliver food on time
• Website • App • Produce • Customer Service • Delivery Service
• Strong sense of community who care about the quality, ethicality, sustainability, and origins of their food •Waste reduction • Promotes food education for the consumers • An affordable alternative for health-conscious food consumers •Produce is delivered to your home
• Familiarization of the farms and farmers for the consumer • Community building between all key players •Our platform provides services that allows users to integrate w/ the platform •Face to face at farmers market.
Channel for consumers: - Website - App - Word of mouth - QR codes
• People who are health-concious food consumers • People who want to help reduce waste • People who don’t have time to go to the farmers market • People who don’t mind spending a bit more money if it means consuming healthier foods. •People who are interested in community building.
Channels for farmers: - Website - face to face interaction
• Buying the overstock from the farmers market at 70% of the price • Delivery kit supplies • Gas and transportation costs • Mantaining our server running / database companies • Salaries • Marketing
• Subscriptions of the consumers to buy the produce box from the overstock. • The advertising of every different food producer who wants to be featured in our platform
LEGAL AND FUNDING Our decision to ground “Local Box” in the US was made based on our research and geographic constraints. Not only are we students living in Savannah, with established networks and multiple resources/capabilities (see resources and capabilities section) directly linked to this city. One of our main resources is based on the Savannah College or Art and Design and tethers us strongly to its ties. According to SelectUSA, the US is the largest consumer market on earth, with a GDP of $18 trillion and 325 million inhabitants. Following our business plan, we aim to acquire a Limited Liability Company, and pursue all associated trademarks. According to LLC university, the costs associated (including lawyer fees) branch from $1,000 to $1,500, or in the case of using an online incorporation website, anywhere in between $99 and $900. Then there’s filing taxes, which range in between $50 and $500, with the average filing fee in the US for an LLC marked at $127. Additionally, a delivery truck is required for the business to work and make appropriate deliveries. According to our research, one of the best choices for the kind of logistics work we are conducting is a Ford Transit, which is marked at $35,050 MSRP. An earlier or used model could be considered to further reduce these costs. It’s worth noting that a full breakdown of all other associated costs (gasoline, advertising, farmers partnership) is pending and would be impossible to fully flesh out until the test prototype is established in Savannah.
APP COST STRUCTURE
S TA R T U P COSTS
APP COST STRUCTURE F E AT U R E S T H AT W I L L R E Q U I R E OUTSOURCING Email login: collecting emails is essential for marketing efforts. Social login: same principle as email, but with enhanced identifying user information. Social integration: part of the core business model deals with a social component that enables users to create, share and edit recipes. User Profiles: “LocalBox” allows users to create their own profiles with our system, further ensuring feature integration. In-App purchases: essential to our app is the ability to make weekly payments with a credit card by subscribing to our online box-delivery service. Geo-location: this will allow us to map out deliveries and precisely and accurately plan out delivery schedules with subscribers.
S TA R T U P C O S T S Our team will employ every resource at our disposal in order to promote our brand in multiple spots of Savannah’s local community including restaurants, cafes, diners, farmer’s market, etc. We will also seek to promote our brand through partnerships with farmers, further establishing an advertising spot on their websites and they farmer market stands.
WEBSITE COST STRUCTURE
Estimated Marketing Cost: $1,200 “Local Box” is a food kit delivery service that seeks to be an active part of the local community. Part of marketing efforts will include blogging, hosting events for brand awareness, and connecting with local farmers to establish partnerships and promote our service. Additionally, we will hold a stand in Farmer’s Market.
DESIGN COST STRUCTURE
Visual design: Pablo will work on the visual design of both the app and website for “LocalBox.” Zero Cost. UX Design: Hillary will support Pablo by assisting him with her Graphic Design experience and together they will create an ideal user experience. The resulting application will be an optimized, streamlined delivery service based on user subscription. Zero Cost.
Pablo has website building experience and can design it entirely at no cost. Zero Cost.
MANAGEMENT OF THE WEBSITE COST
Maria will be appointed as the project manager, responsible for managing the website. Zero Cost.
WEBSITE TESTING, MAINTENANCE, SUPPORT AND LAUNCH COST
Estimated Cost: $500 “Local Box” will have IT support to help maintain the website up at all times, as well as to test changes and ensure all features are working properly. Bugs, improvements and all other changes will be transitioned smoothly with the help of IT.
Icon, logo and branding: the three team members have D E V E L O P M E N T C O S T been and will continue to work on the branding for the Estimated Cost: $200 per year organization. Zero Cost. “Local Box” will be fully designed and developed by Pablo using the Webflow Application. By doing so, we Copywriting: Any good marketing campaign starts with ensure we have full control over the design and any advertising. Pablo’s expertise in writing will allow the changes made to website. We can also use Webflow’s team to crank out fast and catchy copy for any and all own support system to answer any questions regarding required services. special coding or plugins. All costs based on “How much does a website cost” guidelines by Black Bear Design https://www.blackbeardesign.com/blog/how-much-does-a-website-cost/
SHORT TERM GOALS Our short-term goal is to establish two robust online platforms (Website and App) that partners with local farmers to distribute produce to consumers and to build our core digital recipe library that meets the needs of millennial according to our weekly rotations of produce. GOALS BREAKDOWN By January 31st, 2018 the project start date, constitute and register a Limited Liability Company (LLC) and associated trademarks. By the end of February 2018 start recruiting external consultants/outsource companies for core areas including IT/ web development, marketing, recipe development/chef(s). By June 30, 2018 the end of a 6-month period after the project start date, create, test and approve at least 100 core recipes based on established recurring overstocked produce.
upload the App to the Apple and Google stores. This will be achieved by using online prototyping tools to create a detailed, screen-by-screen mock-up/layout of the Website and App, and working with an outsource app designer company. By December 2019 launch a “food delivery pilot” in Savannah and expand operations geographically in accordance to demand. Within one-year period after launching online platforms recruit at least one part-time position to aid with social media management and content development.
By June 30, 2018 create baseline content and wireframe for online platforms (Website & App) and establish network of advertising partners.
Obtain funding in seed capital from varied sources (i.e., Angel investors, start-up competitions, grants, charity fundraisers) over a one-year period after the project start date, to aid with funding of the company’s operation for the first two years.
By December 2018 launch fully functional online platforms (Website & App), and
By the end of a three-year period after the project start date and in preparation
for Phase II, develop strategic partnerships with at least two major distributors (i.e., In Laws Produce and possibly even retail and wholesale stores) and one or more service providers, including marketing and extended delivery services.
LONG TERM GOALS GOALS BREAKDOWN
ADDITIONAL EXPERTISE NEEDED
Expand services by further incorporating targeted food delivery, and establish the required infrastructure.
Within a five-year period after the project start date, build business partnerships with:
Within a five-year period after the project start date, further refine the most convenient packaging, logistics and distribution channels based on research and market analysis.
Major food ethically-sourced food distributors such as Wholefoods, Blue Apron and Instacart from across the country to promote business and brand awareness.
By January 31st 2023, five years after the project start date, launch another “food delivery pilot” this time in Charleston or somewhere in South Carolina and expand operations geographically in accordance to demand.
Selected chefs/cooking institutes to design new menu options.
By December 31st, 2023, achieve a solid customer base and maintain a customer retention rate between 10 – 15% (in alignment with industry trends).
Within a five-year period after the project start date, recruit at least one full-time position for each core area including IT/ web development, marketing, logistics, food safety.
By December 31st 2023, aim to increase the scale of food production by at least 50%, and incorporate new distribution channels accordingly.
Third party locations to increase service coverage and offer alternative delivery channels (i.e., food pickup).
IT/Web developer builds and manages online platforms, works with marketing to improve interface and usability to enhance customer experience, works with logistics to facilitate order processing. Marketing: monitors and analyzes market trends to define the best product mix for LocalBox, analyses competitors’ products and services to define most appropriate positioning strategy and price for products, revises marketing strategy to promote product and brand awareness, produces engaging content to capture the attention of target market. Chef(s)/Recipe Developer: provides expertise on menu planning and recipe development per established guidelines, contributes to product testing, follows food safety standards. Logistics: manages the supply chain of LocalBox including order processing, material handling, and delivery; establishes procedures for the reception, storage, and inventory of produce; works to create, maintain and expand distribution channels.
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REFLECTIONS M A R I A Z A PATA
Coming from a background that relies heavily on process design, I believed that understanding the process to innovate and develop a business from a innovation development & marketing perspective would be easier to understand. Understanding the innovation process from design is necessary to be creative and challenge possibilities that must then be researched and explored. Developing an innovation beginning from a business perspective however is now clearly a condition that needs to be explored before ideating creative solutions. Understanding and analysing the macro-environmental industries we were interested in allowed us to justify values, missions, feasibilities, understand restraints and strategies all possibilities. This project has been one of my most challenging courses in my academic career, but one I am very proud and thankful for. Working with this team has been a pleasure, and I look forward to applying these new methodologies in my upcoming projects in both academia and professional career.
HILLARY S T E FA N E C
The expression “hindsight is 20/20” has never been more applicable to me than it has through this journey. Ten weeks ago, this team consisting of a product and service designer, a journalist, and a graphic designer dove into a new method of research that we had never had exposure to before. We had hopes that with faith and hard work we would somehow unveil a viable business idea if we simply trusted the process. For eight of those ten weeks we did just that–we trusted. And nothing was sticking; nothing that we pieced together made money or provided true value. It wasn’t until the last two weeks that we grabbed the bull by the horns and said, “let’s go back to square one and try this again.” This process have proved to me that viable business opportunities are not just pulled out of thin air. They are not something that one simply trusts the process by, or has a hunch about and thinks up one day. They are very strategically planned and done with careful attention. This ten week process I see as something that must be redone and reevaluated much more than one time when starting a viable business. That being said, there are certainly remaining
gaps in terms of distribution logistics, expenses, and overstock quantities from farmers in our deliverable. With these details, our business idea would be enhanced far beyond what we present to you today, and perhaps further proving of the legitimacy of our idea. However, given time constraints I am extremely proud of our work, and I am happy to have had this real-world experience to give me insight into how to start a business, as entrepreneurship is something I am curious about for my future.
PA B L O P O R T I L L A D E L VA L L E This class has been a bit of an eye-opener. Going back to the basics of Design Management, diving into tools like the Porter’s 5 forces and PESTLE; developing macroenvironmental analysis; working on a strategy canvas; perceptual map; figuring out how our ideas could fit into the market; all of these have been insightful opportunities to remind ourselves of the value of information. Knowledge is power, and so much more so when you’re starting a business.
These past 10-weeks have been hectic to say the least, and it’s had a lot of ups and downs, arguments, confusing and stressful moments,
but I would do it all over again in a heartbeat. That’s how happy I am with the results. I poured so much of what I know and love into this project, working on visual mockups, cranking out entire pages of written information like a printing press, and digging into paper after paper, researching every nook and cranny, and making sure we covered all our bases. I think what really made this class different from anything else I’ve taken in the past is that the stakes felt real. I wasn’t just doing a school project, it genuinely felt like I was starting a business and investing a lot of money, time and effort into making it work. I feel a lot more prepared for the future, and I’m excited to take so much of what I learned and apply it somewhere, sometime down the road, perhaps in a business of my own. Part of my learning here has been a reminder of the kind of person I am, and why I’m innately drawn into entrepreneurship in the first place. Ralph Waldo Emerson said it best: “Without ambition one starts nothing. Without work one finishes nothing. The prize will not be sent to you. You have to win it.”