This paper presents a business proposal for establishing Retail Grocery Business in Nelson City, New Zealand. The proposal critically analyzes the strengths and weaknesses that the business will face. All the legal procedures (both local and central government regulations) necessary for establishing retail business in New Zealand have been explored. The marketing strategies including promotion and distribution means have been examined too. The financial information of this retail business has also been explored by formulating balance sheet forecast, profit and loss forecast and break-even analysis. The risks that this business might face have been predicted based on the information obtained from various market researches that have been conducted.
Following the recession that took place over the last season, I was unfortunate to lose my job as a distributor at Canterbury of New Zealand. I had some little savings, and I opted to open up businesses. Since then I have conducted market researches and I realized that grocery business in New Zealand has been left for large companies. This has given me an opportunity to start a retail grocery business since very few people are engaging in retail grocery businesses.
Location - The business will be located in Nelson. This will expose the business to a large public mass hence the rate of flow of products is expected to be high.
Quality products at fair prices The business will be focused on meeting customers needs and satisfaction through provision of high-quality products at fair prices that are affordable to the group of targeted customers.
Relatively low recognition This business could experience the weakness of little recognition in comparison to its rival grocery sellers and distributors. Being a new investment, it might take more time to for the customers to develop trust with the business.
Heavily relying on grocery Since the business will rely heavily on selling and distributing grocery products, there is a risk of collapsing during economic times when groceries are performing poorly in the market.
Market expansion The market for this business will be expanding during summer when most of the students will be in college. Although the business is located in a well established public places, it targets college students and tourist restaurants who will contribute to most of its customers.
Increasing brands of products The business will have an opportunity of increasing it brands to include food and beverage products. This will help in minimizing the risks of collapsing for relying on grocery alone.
Competition This business is expecting tough competition from other food and grocery businesses and companies such as Goodman Fielder Limited, On the Spot Convenience and Raeward Fresh.
The increased cost of supply The success of a grocery business depend on the fresh supply of the products. This might mean that the suppliers might charge higher prices in order to get the best quality products from other parts of the country.
Type of marketing research
Quantitative type of marketing research will be used to collect information from the clients. This method will be used for purchasing points (Van, 2007). It will be important in this particular market research because it will facilitate one-to-one interaction hence the management can gauge the credibility of the information given.
Critical Success Factor identified includes:
- Being focused to clients satisfaction,
- Supplying fresh and high-quality grocery products,
- Conducting regular market researches so as to keep up with the rapidly changing purchasing trends
- Employing current technology by marketing the products online
This business aims at increasing the varieties of grocery products and also other brands of products. This will increase clients trust because current shopping trend shows that customers prefer one stop shopping. The enterprise will open up new branches across the country. This will be important in increasing the organizations recognition as it adopts online marketing.
Specialist services and support
The business will require a marketing expert to help in advertising the products. The marketing expert will help in designing of billboards to be placed along all the busy roads within Nelson and other areas where new branches will be set up. The marketing expert must be knowledgeable about online marketing so that he/she can design the strategies for online selling. Also, the marketing expert will strategize how this business will be advertised on the social media, TV, and newspapers. Such strategies will be vital in this business because they will increase its popularity across the country and it will increase the sales as will be selling the products even online with free delivery services to attract more customers.
External threats or opportunities
Expansion one of the business opportunities is expansion across the country. The marketing experts support will play a critical role in implementing this goal by making the business famous through advertisements.
Competition Competition from close rivals such as Goodman Fielder Limited, On the Spot Convenience and Raeward Fresh will be a hindrance to this new business because they are well established. The professional marketing advice will help this company to adopt the marketing technology that these businesses are using so that it can cope with the competition.
LEGALCentral government legalities related to retail Business in New Zealand
Consumer Guarantees Act (1993) According to this Act any retailer should deliver to customers the benefits promised failure to which the retailer will be penalized. This retail business will abide by this rule by providing truthful information to the client whatsoever. Also, closely connected to this rule is the Fair Trade Act (1985) that requires the retailers to provide the customers with genuine information failure to which they are fined up to $200,000 (Laws & Regulations, n.d.). Also, provision of truthful quantity, quality and other information will protect the enterprise from breaching Weights and Measuring Act (1987). A close observation of these retailers basic rules will keep the business safe from legal and government interference with the running of the business.
Internet Traders rules
Once this enterprise starts online marketing and selling of its products, it will comply with the government internet trading rules that incorporates consumers rules and provision of truthful contact and product information. Also, according to Unsolicited Electronic Messages Act 2007, spamming is prohibited (Laws & Regulations, n.d.). The business will ensure that they only send messages to their customers who agree to receive such messages to avoid a fine of up to $500,000.
Resource Management Act for business
This business will comply with the government laws of environment under the Resource Management Act (1991) (Laws & Regulations, n.d.) This law requires businesses to effectively manage New Zealands environment by promoting sustainable management of resources and also planning for the future of the environment. This business will be dealing with biodegradable waste that can have detrimental effects on environment such as greenhouse effects due to methane gas produced. It will therefore manage its waste by development of bio-digesters that will produce biogas and compost manure.
Employment Relation Act (2000) covers all the employees regardless of the terms of job agreement (Laws & Regulations, n.d.). Since this enterprise will be hiring staffs, it will fully comply with all the acts dealing with employer and the employee. Abiding by employees regulation rules will not only be beneficial to avoid fines but it will also produce highly committed labor force that is happy to do the work.
The Gambling Act (2003) will be an important act to abide with although in indirect manner to this business. As this retail business expects to expand its brands to include foods and beverages in future, care will be taken to avoid customers abusing alcoholic drinks since alcohol abuse has been shortlisted among the problems related with gambling (Internal Affairs, n.d). The business will ensure only credited alcoholic drinks will be sold after these brands are incorporated in the business.
The company will use direct marketing mode of distribution as it starts. This will be important because it the management will have a direct contact with the customers thus they will be able to win their trust. Direct interaction with the customers will also enable the company to conduct quick surveys that will provide important information regarding the establishment of other branches in different parts of the country. The company will also adopt online selling of its products whereby it will abide by all the central government rules regarding internet marketing in New Zealand. Abiding by the governments laws and regulations on online selling will create trust and confidence in customers hence it is a better channel of distribution for a growing company. On expansion, the company will set up retail stores in remote areas where it will be distributing its products to other parts of the country. Using retailers will enable the company to reach its customers even from the most remote areas in New Zealand.
E-commerce will be crucial in this business because it will enable the customers to pay for the Products online using services such as PayPal or Google Wallet from any part of the country. This will make it easier because all the transactions will be done online, and only good will be delivered to the client. Once the company decides to employ e-commerce in the promotion of its products, it will establish a website that will be fully registered and that will abide by the central government laws and regulations. This site will be vital because the company will provide useful contents describing all the products, payment procedures, and any other companys policies. This will minimize the costs of promotion of the products using other means of advertising. Furthermore, a website can be accessed by anyone from any part of the country. It is also more efficient in product promotion as compared to other means such as billboards that have geographical limitations. Another advantage of e-commerce in this company is that it will provide an easy way of collecting information from the customers through feedback on the website.
Building credibility while reducing risk for the customer
The management of this company will adopt a one-to-one interaction with the customers as the company starts. This strategy will contribute substantially to offsetting the potential customers apprehension (Fisk, Grove & John, 2008, p.93). During the interaction with the customers, the company will offer fair prices for high-quality goods, serve the clients politely and offer them high-quality services. The strategies will be significant in building trust with the clients and reduce their fear of the risks that come with change. More so, the company will es...
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