Business Plan

Table of Contents
I. Table of Contents........................................3
II. Executive Summary....................................4
III. General Company Description....................5
IV. Products and Services................................6
V. Marketing Plan...........................................7
VI. Operational Plan.......................................26
VII. Management and Organization...............35
VIII.....................................................Financials37
IX. Capital Requirements...............................43
X. Sources Used............................................44

Note:
*Purple lettering is related to charts/graphs
*small type is background/industry historical
information

i. Executive Summary
G-IT strives to provide quality food in environmentally friendly packaging
and help decrease landfill space needed in waste management, reduce the
wholesale food industrys carbon footprint and educate consumers about
recycling and environmentalism, while still being profitable.
Our company goal is to provide customers an opportunity to give their
buyers a chance to help save the planet and raise global awareness about
the environment.
We believes that it is important to improve sustainability and is concerned
with the future state of the planet, as well as providing the upmost level of
food quality and wholesale distribution service for its customers.
Well market our products to higher end specialty food stores such Whole
Foods and Trader Joes
Our industry is a growth industry that continues to gain market share and
popularity as consumers become more and more interested in
environmentalism and healthy eating. Changes in the industry, such as
more competition, are long term. We plan on taking advantage of these
changes by having a niche recycled packaging that incorporates many of
the interests of potential consumers by providing a dual benefit for both
our customers and the final buyer of the food item.
G-ITs factors of success include young, educated employees that
appreciate and seek to save the environment and know the importance of
recycling and can spread this message. G-IT possesses a legal, distinctive
package design that provides branding that stands out to the consumer;
our company plans to copy write the packaging process and design used to
manufacture the recycled packing of our food items. We plan to market the
company as the original recycled food packaging company.

ii. General Company Description

Mission Statement:
G-IT strives to provide quality food in environmentally friendly packaging
and help decrease landfill space needed in waste management, reduce the
wholesale food industrys carbon footprint and educate consumers about
recycling and environmentalism, while still being profitable.
Company Goals and Objectives:
G-ITs company goal is to provide customers an opportunity to give their
buyers a chance to help save the planet and raise global awareness about
the environment.
Business Philosophy, What is important to G-IT:
G-IT believes that it is important to improve sustainability and is
concerned with the future state of the planet, as well as providing the
upmost level of food quality and wholesale distribution service for its
customers.
To whom we will market our products:
Well market our products to higher end specialty food stores such Whole
Foods and Trader Joes.
Describe our industry. Is it a growth industry? What changes do we foresee in the
industry, short term and long term? How will our company be poised to take
advantage of them?
Our industry is a growth industry that continues to gain market share and
popularity as consumers become more interested in environmentalism and
healthy eating. The competitors in the industry continually change over
the long term. We plan on taking advantage of these changes by having a
niche recycled packaging that incorporates many of the interests of
potential consumers and provides a dual benefit to both our customers and
the final buyer of the food item.
Describe our most important company strengths and core competencies. What
factors will make the company succeed? What do we think our major competitive
strengths will be? What background experience, skills, and strengths do we
personally bring to this new venture?
G-ITs factors of success include young, educated employees that
appreciate and seek to save the environment and know the importance of
recycling and can spread this message. G-IT possesses a legal, distinctive
package design that provides branding that stands out to the consumer;
our company plans to copy write the packaging process and design used to
manufacture the recycled packing of our food items. G-IT plans to market
the company as the original recycled food packaging company.

Legal form of ownership: Sole proprietor, Partnership, Corporation, Limited

liability corporation (LLC)? Why have we selected this form?
We are a limited liability company which means we will be taxed and run as
a partnership, taxed once, and employees are only responsible for their
personal investment in G-IT.

iii. Products and Services

Depth of our products:
The technical specifications of our company include receiving the food,
break bulking, and repacking it in our branded, recycled packaging then
distributing to our customers.
What factors will give us a competitive advantages or disadvantages?
Our competitive advantages include a strong label/logo that symbolizes our
mission, recycled packaging, packaging that is made from recycled
materials and a high level of food quality. Disadvantages against G-IT
include the task of getting people to make the commitment to recycle our
products, the higher pricing of specialty foods, educating the general
public about recycling and dealing with a smaller profit margin while
calculating financials and sales goals. Also, a large part of our product
relies on the availability of recycled raw materials such as plastics,
aluminum and cardboard.
We plan on reducing the higher price of our products by providing
coupons, advertising, in store labeling, a plan that will simultaneously
market our items and increase brand visibility. The fact that we will
distribute our food items to higher end stores means that the competition
created by lower end priced products will be reduced by the average price
of products carried in these higher end stores.

iv. Marketing Plan

Market research
G-IT used secondary market research for industry information. The
published information came from sources such as trade journals,
newspapers, magazines, census data, and industry and demographic
profiles. This type of information is available in public libraries, industry
associations, chambers of commerce, from vendors who sell in our
industry, and from government agencies.

Economics
Facts about our industrys market share:

What is the total size of our market?

The wholesale food distribution industry in the US includes about 35,000

companies and has annual sales over $600 billion. Some of the larger
companies include SYSCO, US Foodservice, Supervalu and Nash Finch.
Most of the companies in the whole sale food industry are small, with
about only 1,200 companies having annual sales over $50 million and only
about 50 companies having over $500 million in sales annually.

Government share in the industry:

In 2008, the federal government spent a total of $3,834,122,032 on

Grocery and Related Product Wholesalers, awarding 72,153 contracts to
1,241 companies, with an average value of $3,089,542 per company.

The primary activities of companies in the Grocery Wholesale Industry are

commonly divided into 4 groups:
o

General-line groceries wholesaling

Dry groceries

Perishable food products

Non-food products

How the industry sales are broken down:

The industry sells a variety of different goods, frozen foods, dairy, poultry,
fish, meat, fresh produce, baked goods, processed and prepared foods and
other related items. Only about 150 of the larger companies deal with a
broad line of food products, while the majority of the companies are
specialized in a few products.
Figure 1-1 provides a visual aid as to how the grocery wholesale industry is
broken down, above left is the 3 major areas companies chose as a focus
and bottom right are the categories that are often focused on among
specialty wholesale grocery distributors as of 2002.

Fig. 1-2

The Census of Wholesale Trade has classified Merchant Grocery Wholesale

Distributors into three general distributions types:

General-Line Distributors - Also referred to as Broad line/ Full-Line Distributors, these are
companies handling a broad line of groceries, along with health and beauty aids and
household products, companies such as C&S Grocers, Supervalu, Nash Finch and Sysco.
Companies that have traditionally purchased a wide range of food products from
manufacturers and stocked these goods in one of their distribution centers. Most broad line
distributors offer value-added services designed to meet the needs of single-store restaurants
and small chains. For instance, foodservice operators without the staff to research new
products and plan menus may rely on a distributor's sales representative for assistance which
is sometimes provided by companies such as Sysco and U.S. Foodservice that have the
resources and funds to gather the information.

Specialty Distributors or called Product Specialist - Operations primarily engaged in the

wholesale distribution of items such as frozen foods, dairy products, meat and meat products,
or fresh fruits and vegetables. Specialty wholesalers account for nearly half of grocery
wholesale sales. Companies that do not stock a wide range of products; instead they operate
in niche markets where it is necessary to have specialized knowledge about the type of
product being handled or type of operator being served. For example, there are product
specialists for specialty cut meats, produce, ice cream, and coffee. Market specialists serve a
wide range of niche operators, such as convenience stores, hotels/motels, and club
warehouses.

Miscellaneous Distributors - or referred to as System distributors are companies primarily

engaged in the wholesale distribution of a narrow range of dry groceries such as canned
foods, coffee, bread, or soft drinks. Foodservice wholesalers serve a customer base that
consists mostly of chain restaurants with centralized purchasing and established menus.
Individual operators within the chain may not require the value-added services provided by a
broad line or specialty distributor and may not inquire about information of new products or
assistance in developing and preparing new menu items.

Classification of G-IT Merchant Grocery Wholesale Distribution:

G-IT is going to be a mix of Miscellaneous Distributors and Specialty

Distributors that will primarily focus on products that can be packaged in
recycled material and can be deposed of through recycling.

These

products will promote saving the earth, recycling and sustainability. The
main products will be on dry groceries, such as canned goods, boxed
packaging goods, liquids either in canned, plastic or paper packaging.

Products such as bottled water, bottled nutritional drinks, canned soups,

canned vegetables and boxed snacks will be our staple items.

Market Breakdown of Grocery Store/Customers:

According to a report released from the U.S. Food Marketing System. The top ten grocery stores
dominated almost 50 percent of the overall market and represented $728.7 billion in sales.
According to the Report, the leading grocery stores in 2002 were Wal-Mart, Kroger, Costco
Wholesale, Albertsons, Safeway, Sam's Clubs, Ahold Retail, Super-Value, Publix, and Fleming,
leaving the remaining market share to other smaller retailers. The report found that the largest
grocery markets were in California, Texas, Florida, New York, Pennsylvania, Ohio, Illinois, North
Carolina, Michigan, and Georgia.

Grocery wholesalers and distributors claim more that 50 percent of the

complete grocery and related product sales. Manufacturers sales offices
and branches account for 25 percent, while brokers and agents account for
19 percent of sales, as shown in figure 1-3.
Fig. 1-3

G-ITs market share and sales:

The US specialty food store industry includes about 20,000 stores with
combined annual revenue of $20 billion. Major players include Whole

Foods Market and Trader Joe's. The industry is fragmented with the 50
largest companies account for less than 50 percent of sales.
We will focus on small market share due to the fact that 50 of the largest
distributors hold about 50 percent of the total market. We will push for a
market share of LESS than 1 % as a start-up company for the first five year
and a growth rate of 3% for those years. On year five we will reevaluate our
goals in relationship to the market share growth of the past and will also
factor in the conditions of the current economy

Shift of history of current demand in target market:

Beginning in the late 1980's, a massive wave of consolidation started in the U.S.
food brokerage industry, and didn't end until about 7 years ago. Industry demand
changes due to shifting consumer food tastes, but is limited by the 1 percent
annual US population growth. The profitability of individual companies depends on
popular products, contracts with large customers, and efficient operations.
Smaller companies can compete effectively by specializing in specific products or
market niches. Specialty and natural foods niche categories usually ran by
independent brokers have historically tended to do better than the large, national
mega-brokers or wholesales. Small companies can also be effective in the import
of foreign specialties. Large distributors have a cost advantage by buying in
quantity, but need to operate a more complicated distribution network.

History of growth trends, trends in consumer preferences:

Growth of the food wholesale industry has continued to climb, mainly in the retail
sector.
Grocery wholesale sales to retail food operations, such as supermarkets and
convenience stores, totaled $282 billion in 2002, the most recent year of data, or
45 percent of the total grocery wholesale sales volume. This is up from 40 percent
in 1997.
Restaurants and other foodservice companies are also major customers of
wholesalers. Sales to these firms accounted for $118 billion in 2002, or 19 percent
of all sales of groceries and related products by all food wholesalers, down from 22
percent in 1997. While retail grocery outlets and foodservice companies compete
for the consumers food dollar, wholesalers that distribute to the foodservice

industry and to food retail outlets do not compete directly with each other for
these customers.

Figure 1-1 breaks down the five top categories by percentage of who is
buying from food wholesalers or type of outlet.
Fig. 1-1

Examples of the end buyers from the outlet are as follows:

o

Exports - to foreign countries

Foodservice - to restaurants and fast food establishments

Retailers - to grocery stores, supermarkets, superstores and

convenient stores

Government - to schools, military and administrative facilities

Other Wholesalers - to other wholesalers which than sold to any of the

above types of outlets

Others - private venues, parties or individual companies

Growth potential and opportunity for a business of our size:

The grocery industry trend is one that commonly buys out other
smaller distributors as a way to expand and grow into new territories
and regions.

Barriers to entry faced when entering the market, some of the typical
barriers are as follows:
o

TAXATION - At 8.25%, California has the highest state sales tax, which can
total up to 10.75% with local sales tax included, such as the Bay Area Rapid
Transit district tax. The capital, Sacramento has a combined 8.75% sales tax
rate, and the largest city of Los Angeles has a combined 9.75% sales tax rate.
In grocery stores, unprepared food items are not taxed but vitamins and all
other items are. Rather than taxing the sale of lump quantities, for instance
each time it is sold. From manufacturer to wholesaler to consumer, it is only
taxed on the consumer final product end. California Board of Equalization
(BOE) does require a sellers and resellers to have permits to sell tangible
goods, which also regulates county, state and local district sales tax, failure
resulting in misdemeanors. There are also city and county business tax
requirements, general businesses in San Jose requires to pay $150 for up to
eight employees and $18 for each additional employee. Oakland requires
$1.20 per $1000 in gross receipt retail sales.

Theses cost cannot be avoided in some regions, because it is

vital to be located near the majority of grocery stores, which
are located in the denser populations. It is an important part
of keeping other costs to a minimum such as transportation.
In other regions we may avoid these costs by analyzing the cost
v. benefit gained of have the centers located outside city limits
and making decision based on the results. It is a cost of
business that is sometimes required to be successful in these
regions.
o

REGULATION - The Department of Health Services (DHS) has been

inspecting California processed food firms since 1907 to ensure the safety of
the food supply in California. In 1986, legislation was passed requiring any
person engaged in the manufacturing, packing, labeling, or holding
(warehousing) of processed food in the State of California to register
annually with the Department of Health Services (DHS), Food and Drug
Branch (FDB). The registration acts as a firms basic health permit, to legally

manufacture or warehouse food at the wholesale level. Currently, the

registration fee is set based on the size of the facility, number of employees,
and the activities conducted at the facility (manufacturing or warehousing).
The registration fees pay for statutorily mandated inspections of food
facilities performed by FDB investigators. Investigators examine a firms
complete production and quality assurance system including such areas as,
qualifications of responsible personnel, use of food additives, color additives,
preservatives, and other chemicals; control of critical production parameters,
and methods of product storage, labeling, and advertising. Failure to
register could lead to arrest, civil penalties, and / or the embargo of all food
products at the unregistered establishment.
o

COST STRUCTURE The major demand on capital structure is

the building and warehousing for the goods and the trucks
used for transportation if they are not subcontracted out from
a third party. The cost of equipment and products (materials)
are other major costs of establishing a new grocery wholesale
company.
o

CAPITAL AND LABOR INTENSITY

The labor intensity in the

grocery industry is usually below average with the majority of

the work force focusing on the logistic and management of
processes. Some costs related to transportation such as truck
drivers will also require a higher level of capital.
o

TECHNOLOGY AND SYSTEMS The fast changing advancements

of today technology are constant challenges for the grocery

wholesale industry. It is difficult to get companies to transition
from current technologies to new and improved ones, due to
the cost and time that is required to implement any changes.
o

INDUSTRY VOLATILITY The first obstacle to overcome will be

entry to the customers (retail grocery stores), due to a lack of

industry delivery history. The customers lack of experience of
our processes and efficiency procedures will be major obstacles
that will be focused on immensely in the beginning and into the
future of the company.
o

GLOBALIZATION - Canada exported a value of $2.5 million in food

into the United States. Thailand was second, with $1.8 million,
followed by Mexico with $659,321, China with $640,776, and Chile
with $491,247.

The increasing number of grocery distributors

from foreign suppliers penetrating the United States has made

the opportunities for market share for domestic wholesale

suppliers smaller.
o

BRAND RECOGNITION It is not uncommon for larger

distributors to contract with manufacturers in order to put

their own name on product labels. This is done so that a level of
service becomes associated with brand that is controlled by the
wholesale company rather than the manufacturer. G-IT may
also employ this technique to expand its market coverage so
resource can be diverted to other efforts.

Change in the Industry, shift to retail owned wholesale distribution center:

The number of grocery retail stores own their distribution centers is increasing, which makes it difficult for
private distribution companies to survive or enter the market with success.
In the late 1990s the industry faced diminished sales growth. In 1997, the top 50 wholesale grocery giants
reported sales of $81.1 billion, compared to $81 billion the previous year. One reason for the stagnation was
competition from vertically integrated grocery retailers such as The Kroger Co. and Safeway Inc., which was
caused by their size. They were able to buy goods directly from manufacturers as well as to make many of their
own private label products, rather than relying on other distributors for goods.
The retail food store wholesaling sector continues to undergo important structural changes. In 2003, the Nations
largest grocery wholesaler, Fleming, divested the bulk of its operations shortly after its largest customer, Kmart,
filed for bankruptcy protection and ended its supply contract with Fleming. Following the divestitures, the share
of general-line grocery merchant wholesale sales accounted for by the top four wholesalers fell from 34 percent in
2001 to 27 percent in 2004, a result of the consolidation of the wholesale industry. As consolidation in food
retailing increases, manufacturers and large retailers that are offering a broad assortment of items have found it
more beneficial to negotiate directly with each other, reducing the power and influence of traditional wholesalers.
Self-distribution has become one of the preferred methods of vertical coordination for large grocery chain stores,
mainly those with 11 or more stores. In 2001, 82 percent of chain stores had their own distribution centers.
Given uncertainty about the ability of independent retailers to compete with the larger chains, some of the largest
grocery wholesalers are placing greater emphasis on owning retail operations. This is illustrated by Supervalus

purchase of Albertsons in 2006, or the second largest grocery wholesaler purchasing the third largest grocery
retailer.

Change in technology:
Food wholesalers lead both in the economic and technological
advancements of the wholesale industry by their continued focus on
innovation and cost reduction to increase the small margins that they
make on their products.
The wholesale distribution industry leads the way in productivity
technologies that automate activities like order processing, billing,
inventory control, delivery and route scheduling, as well as automated
warehouse management. Adopting these technological advances has
allowed the productivity within the industry to outpace the entire non-farm
business sector as measured by output per hour.

RFID technology:

Radio frequency identification (RFID) technology is becoming used more

frequently by larger wholesale distributors with warehouses. RFID tags
coupled with a satellite and receiver system allow wholesalers to keep
track of the goods they have in stock and through transit to ensure
delivery.

Change in government regulations:

President Obama has supported the Employee Free Choice Act. This act will
make it easier for unions to form. If it passes, the cost of working with newly
formed unions could place added financial pressure on already struggling
distributors. Whether this legislation passes in 2009 or not, it is clear that the
current administration is pushing for unionization and labor laws. It would be wise
for those wholesale distribution companies not currently unionized to strategize
how they might respond to potential labor disputes and examine their current
labor policies to determine if unionization is likely.

G-IT will also be Certified in CFS (California Food Safety Certified/Certified

Professional Food Manager) to show we have an understanding of how to care for
and handle foods properly. The costs are less than $150 per test.
Covers:

Food hazards

Receiving standards

Cooling/reheating

Fresh/frozen food

Meats/poultry/seafood

Milk and dairy/fruits and vegetables

Processing food

Safe cooking and holding temperatures

Bacteria growth

Cleaning and sanitizing

Pest control

Facilities

Water supply

Hazard Analysis

Food borne illnesses

Employee health
Potentially hazardous foods

Change in the economy:

Despite the current economic recession in the United States, wholesale
distribution has continued to be the life blood of manufactures with
industry growth that has outpaced growth in GDP. However, the industry is
not immune from the current economic recession. Most manufacturers
continue to rely on wholesale distribution to deliver goods to their
customers because they can offer greater service to their customers due to
their local presence, quick response and flexibility.
Distributors generally experience relatively low margins with average
operating margins across product types ranging from 2%-5%. During

periods of economic recession it is particularly important that distributors

pay close attention to key performance indicators on a regular basis.

What after-sale services we will give? Some examples are delivery, warranty,
support, follow-up, and refund policy.
G-IT sale/service is going to use online linked system that track the
product from point of manufacturing, to shipping, to delivery in the stores.
The products and materials that are return will use the same systems.
Refunds for damaged products claims must be within a week of receiving
at loading dock of Whole Foods and Trader Joes or other grocery stores.
Some of the industry standard systems are created by Creative Systems
Corporation, Ramp Systems and EBE Technologies. Their systems support
staff, improves efficiency interfaces, dispatch, and automation, and are
designed specifically to streamline businesses. The systems enable
businesses to integrate their customers and partners together for quicker,
easier and a more cost effectively interaction.

Customers
Targeted customers, their characteristics, and their geographic locations,
otherwise known as their demographics.
The end consumer of G-IT products is a cost-conscious, health-conscious label-reader who
is not tied to national brand names. Pat St. John, Trader Joes vice president of marketing
says that Trader Joe's shoppers fall into several sometimes overlapping types: There's the
frugal foodie looking for the next new thing; the iconoclast who resents "customer loyalty
cards" and dislikes big-box retailers; the health-conscious, ecologically sensitive parent
seeking organic and pesticide-free foods, environmentally friendly cleaning supplies and
wholesome snacks; child-free working couples and singles who favor the convenience foods
packaged just right for one or two; and a whole lot of people who like to indulge in luxuries
like flowers, candy, cheese, wine and Greek yogurt. For Whole Foods, the company
describes its customers as 28 percent of shoppers defined as those who work to change
eating habits promoted by health concerns and interest in self-care. These individuals that
actively seek out health and nutritional information and are younger to middle aged, with
medium to high household incomes.

This graph represents the end consumer of the G-IT food products.

Most important customer groups and their demographic profile:

Age

Younger to middle aged, average age of consumer is 36 years old

Gender

Both

Location

Coastal Areas

Income level

Median Household income: $63,554

Social class and occupation

Middle Class to Upper Middle Class

Education

Based on a Nielsen study, 55% of the customers of Whole Foods possess a bachelors
degree or higher
For business customers, the demographic factors are:

Industry (or portion of an industry)

Specialty foods portion of the grocery industry

Location

Mostly coastal areas

Quality, technology, and price preferences

Higher end specialty health and organic foods

Competition (2)

San Jose Distribution

Can fruit, fruit juices
2055 S 7th St Ste A
San Jose, CA 95112
408-292-9100

History

71 plus years warehousing and transportation experience

3 pantry warehousing logistics and transportation since 1977

Established in 1956 when agriculture was at its prime

Houses food computers and consumer goods and paper products

Make Up

200,000 square feet

Green Friendly Energy Efficient motion detector activated fluorescent lighting

Single story with cement flooring

24 hour monitoring

Food Grade sanitation, FDA Registered

State health Certified

Pick /Pack Fulfillment

Front line for over 20 years

History of customer weights from 100 to 44000 SKUs

-Repackage
-Rebuild
-UCC labeling
-Same day shipping

Instant order status receipt status inventory shipment and inventory replenishment
tracking

Our supply costs are steady

C&S Wholesale Grocers Inc.

Stats

One of the largest food whole sellers and the US

53,000 grocery products
7 distribution centers on twelve states

History

Founded in 1918 Mass.

-Formed when growing urban population demanded more varied grocery
products
- Independent companies came together to for cooperatives to increase buying
power
- Provided companies to provide larger orders and to benefit the economy of
scales

Following World War II started supplying to military bases

-Currently supplies 19 bases

1958 shifted from independent retailers to chain stores

1988 developed self-managed teams

-Improvement in productivity and lower costs.

We will compete for certain items that are listed below:

We will compete with the competition by really pushing how our packaging is environment
friendly. Our brand will be our selling point. The product is the same but the backing of our
name will be what makes us stand out. Our name represents honesty, integrity and we a
guarantee that our packing is Go Green 100 percent.
Factor

G-IT

Products

Soup/Canned Goods
Cereal

Strength

Weakness

Trader Joes

Whole Foods

Soups/Canned

Soups/Canned Goods

Goods
Cereals
Cereals

Drinks

Beverages
Beverages

Price

Soup

Cereal

N/A

N/A

Excellent

Excellent

Selective

Selective

Good

Good

100%

100%

Very

Very

Advance

Advance

Good

Good

California

California

They back the

Health Conscious

Canned Goods
Drinks
Quality

Excellent

Selection

Selective

Service

Good

Reliability

100%

Stability

Very

Expertise

Sustainability

Company Reputation

Good

Location

California

Appearance

Environmentally
Friendly

Sales Method

Personal Sales

Product
Personal Sales

Personal Sales

Credit Policies

Standard

Advertising

Coupons, Labeling,

Web Page,
Commercials
Image

3 markets in CA

Standard

Standard

Frequent Flyer

Web Page

E-commerce
National

National

Competitive advantage/disadvantage:
Our competitive advantage is the backing of our name and brand. The only
disadvantage of our products is the specific and limited categories of
products, because we will be specializing in only a few areas of the food
industry. However this product specialization will also be an advantage and
work in our favor. We will be able to focus and perfecting the quality and
delivery of our products.
Being a new company that is not well known in the industry and not an
established company is one disadvantage that must be overcome.
Companies such as Trader Joes offer a wider varied of foods and drinks,
which will be one of our biggest competitors. They are a company similar
to ours focusing sale on food items, while Whole Foods will give us
competition in the drink market.

Niche
G-IT provides a sustainable, recyclable product that provides a dual benefit
to both the supplier and the end consumer.

Strategy
Marketing Strategy Niche:

Our niche is very focused on the consumer. As a result, our marketing

efforts will be directed at the consumer. In order to experience success,
our company and our products have to gain a positive reputation. We
realize that our niche will not appeal to all consumers. Since we will
focus heavily on those consumers that have a higher income and have
shown a history of being environmentally conscious, we will use
advertising channels that go directly to them. As a startup company we
cannot afford advertise to the wrong markets. A major tool we will use in
identifying our target market is demographics consulting. This will help us
determine what will be the most effect marketing strategies, and which
areas will produce the most sales.

Promotional Budget
Estimated advertising and marketing budget combined just over a $100,000 yearly
during the start up phase of the company. Throughout the years of growth G-IT
plans to grow the advertising and marketing budget by 10% of sales each year
based on its next years sales.
Pricing
The Environmental Defense Fund is an organization that partners with
companies all over the world to find practical environmental solutions. The
EDF has agreed to start a joint project with G-IT to improve Californias
recycling and landfill systems. G-IT packaging will donate 5% of the sales
price for every item it sells toward this project. Even better yet, the EDF
has agreed to match whatever funds we raise. If we meet our sales goals of
1 million dollars, G-IT and the EDF will have donated 7,575 dollars each to
the project. This, along with our increased costs from producing easily
recyclable packaging, will put G-ITs products in the higher price range
compared to our competitors.
Environmental Defense Fund
We do not expect our customers to make their decisions based on price.
Our product offers an opportunity for our customers to get involved with
environmental conservation while doing their weekly shopping. Our

customers will have a sense of pride when purchasing our products

because they know they are doing something to benefit the environment.
Proposed Location:
Location criteria affects on our customers:
We have three distribution centers in Los Angeles, Sacramento, and San
Francisco (Bay Area). Our distribution center is located next to the
recycling centers, so we can keep our costs low and the savings will trickle
down to our customers. Also our customers do not need to come to our
place for business, since we deliver what they need. The locations are
consistent with our image and advocate recycling. The competition is
located throughout the country; our specific location caters to our local
concentrations at our current level of distribution. (see layout for details of
design)
Is our location important to our customers?
Our locations are not so important to our customer, because we distribute
and deliver the product to our customers.
Distribution Channel:
How G-IT will sell - products and services?
We are wholesale distributors and deliver the food with recycled package to
our customers, and the customer will sell it in their retail store, like Whole
Foods and Trader Joes. As owners, we will visit potential customers who fit
our target market acting as a direct sales force.

Sales Forecast
G-IT will strive for at least $1 million in sale for the first five years, than
will evaluate the market in the fifth year to be current with the market
standards and the changes in the company due to growth. We strive to
increase sales by 3% on previous years sales.
We will use a quantitative method of forecasting called exponential
smoothing in which well use a weighted average based on a previous
forecast plus a percentage of the forecast error.
G-IT sales forecast: Ft = Ft-1 + error (actual sales previous forecast)

Footnote Error is minimal, not applied in formula

Error - .0000000001 (added back into forecast)
Period 1 1 million sales
Year 1

Forecast 1 mil
Actual 1 mil

Year 2

Forecast 1 mil (.03)

1 mil + 30,000 increase

in sales

Year 3

Forecast

= $1,060,900 in sales

1,030,000(.03)
Year 4

Forecast

= 1,092,727

1,060,900(.03)
Year 5

Forecast
1,092,727(.03)

=1,125,508