Marketing Final Paper- Week 8

Food Management Service

Kashish Vyas, UF Id- 553766
Marketing Management and Planning- MBA 630-52 FA 2016
University Of Findlay
Table of Contents

1.1 Summary 3
1.2 Situational Analysis 4
Strengths 6
Weakness 6
Opportunities 7
Threats 8
1.3 Marketing Strategies 9
Mission Statement 9
Analysis 9
Marketing Objectives 9
Financial Objectives 10
Target Market 12
Marketing Mix 14
Brand Equity Analysis 15
1.4 Financial Projections 16
Break-Even Analysis 17
Funding Forecast 18
Expense Forecast 19
1.5 Implementation Controls 21
Contingency Planning 22

References 23
 1.1 Summary

Food waste is a staggering global problem: Roughly a third of the food produced for human

consumption every year approximately 1.3 billion tons is lost or wasted, according to the

United Nations Environmental Program. Meanwhile, 805 million people around the world are

estimated to be chronically undernourished. Leftovers from a dinner out get tossed into the trash.

Bruised or past due supermarket produce winds up in dumpsters and ultimately in our landfills.

Theres a growing movement to give organics a second life. The Zero Waste movement has

taken on food waste and businesses and organizations are embracing this sustainability trend.

My idea of a food management service- FEED ME WASTE, INC. (FMW) is a notion following

this trend- managing the food, groceries that is to be discarded or thrown away in a landfill.

FMWs idea will endeavor to provide an alternative to discarding surplus, edible food from local

restaurants, grocery stores, supermarkets to the needy or the local hunger relief agencies through

my non-profit organization. This paper I shall attempt to highlight and discuss my marketing

strategy and its implications on the market and also the environment. I will also attempt to

prepare a thorough analysis of the service regarding its strengths, weaknesses, opportunities and

its threats.
 1.2 Situational Analysis

We have become a throwaway society. Leftovers from a dinner get tossed into the trash. Bruised

or past due supermarket produce winds up in dumpsters and ultimately in our landfills. Leftover

or extra food produced at a restaurant/food service etc. which is still edible is thrown away as

trash which again ends up in a landfill. The idea of Zero Waste has picked up pace recently due

to the recent trend of people taking a notice of climate change. Issues like world hunger has

gorged up millions of dollars in trying to solve it but to little or no avail.

Zero waste goes beyond recycling, although thats an integral component. The underlying

premise is for businesses to produce less waste by changing employees and suppliers habits.

This includes purchasing less, dramatically reducing or eliminating plastic, creating more

sustainable packaging and embracing the 3 Rs Reduce, Reuse, and Recycle. The necessity for

business leadership is to have an awareness of trash on our natural environment and trashs

toxins on our human environment. This requires getting businesses to redesign their business

model. My consumer market will pertain to buyers or in the service that I provide- non-profit

organizations, restaurants, interested government programs that include waste management, and

food programs who would take the food from FMW and put it for consumption rather than

resale.
My aim shall be to follow and communicate the idea provided by the US Environmental

Protection Agency (EPA) which is expertly described in the following diagram-

The following SWOT analysis refers to the service I shall provide- food waste management,

which will aim to address the goal to reduce the wastage of food and in turn trying to overturn

the negative impact humanity has on the planet.

The primary aim shall be-

Strengths:
 - With the popularity of going green, FMW will have a suitable climate for investments

from NGOs, and even companies who want to raise their green profile.
- FMW shall not only collect surplus food from the restaurants/grocery stores but also offer

to collect other organic waste from their business. This shall provide an additional means

of income. The waste can be composted locally, and be sold as compost for the local

farms/nurseries- thus producing a useful product to be used. It has the ability to manage

100% of the Municipal Solid Waste (MSW)-the organic fraction

- It will reduce hunger amongst the below poverty line and homeless populace.
- It shall result in new and permanent jobs along with gaining a social consensus.
- FMW will contribute to reducing the Greenhouse Gas Emissions- primarily methane.
- It shall also help increase a landfills life span which is typically 30-50 years for a Class 3

landfill accepting MSW, thus reducing costs and energy for logistics, maintenance,

amongst other avenues.

Weakness:

- Constant information and sensitization campaigns for quality and quantity assurance

amongst the general population, organizations- since it will be a new avenue for the local

area where the notion of food waste management is not popular.

- Cooperation with and training of the surplus and waste collection personnel of

municipality and the FMWs employees.

- Problems related to the establishment of the facility (area selection, permits, and social

reactions).
- Requirement of an efficient logistic division as there is competition from other private

actors.
- FMW shall require integrated planning and operation control. The margin for error is

narrow as the thought of the business (a relatively new) not functioning well will bode ill

for the business in the social and business circle.

Opportunities:

- Opportunity to reduce landfill costs and increase income and job creation- Creates the

opportunity for green job creation (directly and indirectly).

- An immense opportunity in creating a positive environmental profile of the municipality

that can lead to privileged access to environmental funding, increased tourism etc.
- Positive political profile with increased acceptance levels from citizens.
- Contribute towards resolving hunger. In 2013, 14.3 percent of U.S. households were

food insecure at some time during the year. That is 48 million Americans, of which 16

million are children, living in food insecure households. Wholesome, nutritious food

should feed people, not landfills. (US Environmental Protection Agency)

- Active participation of citizens that can become more active in other waste management

related issues.
- Opportunity to reduce production, transportation and energy costs. A Food Waste

Reduction Alliance (FWRA) report in 2014 published the following facts- "Agriculture

consumes over half the land area in the United States and about 80% of the water. It takes

the same amount of water to produce a hamburger as it does to take a 90-minute shower.

So when that food goes to waste, so do all of the resources it took to produce, pack, cool,

and transport it, making the environmental implications of wasted food quite remarkable.

In addition to the resources that go into wasted food in production, nearly all of the food

waste ends up in landfills where it decomposes and releases methane, a potent

greenhouse gas. In fact, food is now the single largest contributor to landfills today." Also

it released a chilling set of points relating to the issue- "The resources dedicated to food

that never gets eaten in the United States: 25%of all freshwater used in U.S. 4% of

total U.S. oil consumption $750 million per year in disposal fees 33 million tons of

landfill waste."
Threats:

- Can work only if it is accepted by the citizens or another major threat could be a low

participation levels from citizens.

- Negative reactions from waste collection personnel of municipality/ other organizations.
- There are initial expenses related to this project (e.g. public and corporate awareness).
- Existing waste management companies at times perceives initiating these programs as a

threat to their positions, thus making incorporation into the market difficult.

In summary, after carefully assessing the internal and external characteristics of the business

model- FMW can be put to practice with maximum social and environmental gain. Once the

initial financial capital can be procured, it would initially run below expectations as the

management and setting up of the network ascends, but as soon as the awareness of the project

and the social and environmental incentives related to it increases the service can run efficiently

and start turning a profit.

1.3 Marketing Strategies

Mission Statement:

FMWs mission will be to give the thrown away food a second life. The service shall strive to

match values to the customers purchase behaviors, adopt environmentally sound practices and

drive impactful social and environmental changes. No single agency has either the resources or

the capacity to deal with all the problems of hunger and climate change. FMW shall continue to

forge effective partnerships of action with regional bodies and institutions, bilateral donors and

NGOs in support of environmental, economic and social development. FMW is here to deliver a
mix of targeted content and eco-conscious products that influence positive environmental actions

so that you can live a happier, healthier, sustainable lifestyle while contributing towards food aid

with the ultimate aim of eliminating the need for it.

Analysis:

Marketing Objectives:

- Maintain a constant revenue stream.

- Improve local public perception about food waste and its management through the

companys resources and facilities.

- Reduce the amount of food discarded by a minimum of 2% in the first quarter-in the local

community.

Financial Objectives:

- Generate new revenue sources.

- Holding spending as a percentage of sales at a specific level.
- Increase profits by 1% every 6 months after the first year.

Based on the five product levels mentioned in the textbook, my proposed service of food waste

management would fit in as follows:

i. The Core Benefit: The primary goal of my service is to reduce the amount of food waste

that is generated. Reducing waste and improving yield of already grown crops and

animals through more effective and efficient processing, packaging, storage,

transportation and distribution will also be key to solving the issue of food access for the

future. This shall be my services core mission/value.

 ii. The Basic Product: My services basic goal would be to feed the hungry or those in need.

Most of the food that is discarded in the US is primarily due to the concern of the use

buy/sell by date. But most of the food is still fit for consumption under certain conditions.

My service shall accept this food and instead of being termed as waste and meeting its

ultimate fate of going into a landfill, that food shall be used to feed the needy or those

who are in dire need of it, especially the homeless and the poor.
iii. The Expected Product: My services goal shall be to provide my customers with quality

service. Customers who want their food to be given away need not come to a particular

location to drop off their food. It shall be taken care of by my service. Also, the customers

or organizations receiving the food shall benefit from the thorough examination process

the food will go through in order for it to be deemed fit for consumption. As my service

shall be as ecofriendly as possible and to set an example, my service shall use all possible

means for reducing its carbon footprint in the logistics and diagnostic processes. For

example my service shall incorporate the use of sustainable and environment friendly

food containers/plastic bottles/paper and compostable plates and cups.

iv. The Augmented Product: The service will allow users/customers to know where and

which food bank/ organization has received its food and how many people have been fed

by it. Also, the service will allow users to use and share their accomplishments via social

media websites like Twitter and Facebook. It will also allow users to know how much

percentage of their food donated has been recycled and how much, if necessary has been

let into a landfill. This service shall also hold various fortnightly competitions where the

users who have donated the most food get rewarded with coupons or discounts at various

outlets which use sustainable means of operations. The items can range from clothing,

foods and beverages, accessories, household items etc.

 v. The Potential Product: This section can come into practice if my service is received well

and has managed to procure sizeable contributions from charities and other donations. If

feasible, my service shall switch to 100% renewable and sustainable sources for its

operations, without any alterations in its services provided. This move will be in line of

the fact that my services goal is to reduce the carbon footprint left by the wasted foods,

and in turn feed the thousands who go hungry or are malnourished. It can also run in

tandem with other 100% sustainable companies and contribute in trying to reverse

climate change and reducing its impact on the earth.

Target Market:

The marketing strategy will seek to first create customer awareness regarding the services

offered, develop the customer base, and work toward building solid, long-term relationships with

the customers. Not all consumers shall be alike in their tastes, perspectives, preferences and

buying habits due to different characteristics that distinguish certain consumers from others.

These particular consumer characteristics would include various demographic, psychographic,

behaviorialistic and geographic traits.

The primary demographic characteristics of the consumer market of my service would relate to

differences in gender, age, ethnic background, income, occupation, education, household size,

religion, generation, nationality and even social class. Here my service would target the market
of higher education, upper middle to high class individuals/ families, households with a secure

occupation/business. I can even market to the religion and generation characteristics.

The behavioral characteristics of my market would be focused on the busier restaurants, grocery

stores and hypermarkets. The busier they are, higher the chances of excess food being made thus

in turn wasted. I can even market to individuals who visit a particular restaurant, grocery store or

hypermarket often as it would increase the chances of my service earning identification and

knowledge about my service.

The geographic characteristics would include local and micromarketing as my service is in its

infancy. Foods that are made locally shall be promoted. Even seasonal and foods wasted the most

during occasions like Halloween, Thanksgiving and Christmas would be marketed.

My main target market would be in the psychographic group. Psychographic characteristics of

consumers would include interests, activities, opinions, values and attitudes. My main focus

would be educating the community about food waste management through ad campaigns, local

radio broadcasts and via social media- with social media being the primary source. FMW would

focus more on the organizations and individuals who have a background or who are troubled by

climate change. These shall include the educated class and the upper middle to higher class

individuals/families. I shall also try to gain an audience with some charitable organizations with

whom I can collaborate and reach out to influential agencies to try and bring a change to the

current situation. I would explain how food waste impacts the environment and the climate on

my services website and also through a description in local restaurants, grocery stores. FMW

will also try to link up with the local government authorities to promote management and

donations of food at various social gatherings and also during holidays like Christmas,

Thanksgiving and Halloween. My main target shall also include high-end restaurants who pride
on providing quality food and service. By marketing to them I shall even pitch the idea of their

restaurant becoming socially responsible and gaining further acclaim.

FMW will focus on Public-Private Partnerships for Service Delivery (PPPSD) which is one of

the proven approaches to resource management planning. The main objective of this program is

to promote sustainable, self-supporting partnerships between businesses and local governments

to support the formation and operation of new enterprise-municipal co-operation in food waste

management and recycling systems. The main goal of the program is to stimulate improved co-

operation between public, private and citizen stakeholders that: contributes to sustainable

improvement of recycling and solid waste management; minimizes negative effects of waste in

poor communities; and improves the lives and livelihoods of people and enterprises in cities and

rural communities.

Marketing Mix:

FMW shall include the following characteristics of the marketing mix, viz.

1. Product: FMW will allow customers to choose between different types of food available.

It shall offer to collect from all the local organizations, so that the buyers get to choose

from different options. The packaging of products (food), if needed shall be in eco-

friendly/sustainable packaging. If food is to be discarded beyond reclamation, then it will

be discarded to a recycling facility which shall turn it into compost as FMW shall only

collect biodegradable materials. This compost then produced, shall be sold to farmers,

households.
2. Price: The pricing shall be different for the various services FMW will offer. FMW will

enter with the regular market price for food delivery from point A to point B. The price
 shall increase for packaging, which shall be per pound of food packed. The charges for

composting will be per pound of compost sold. There will be provisions for discounts and

payment period for established/regular customers or those establishments which offer to

further publicize our service.

3. Promotion: FMW will use local ad campaigns, radio broadcasts and social media as their

prime promotion mediums. Social media will be the focused priority. FMWs app which

will be compatible with different platforms will also render useful in its promotion. The

app will be available to individuals and organizations as separate entities, with the option

of ordering to collect food via the app and sharing it on social media.
4. Place: FMW shall operate through a single facility in the local region. Most of the

transactions & dealings will occur online. The facility will be operational primarily for

housing inventory and for assortment. Transport will be via trucks & vans (for small

orders) from one facility to another.

Brand-Equity Analysis:

Building a successful brand requires using creative marketing and branding strategies to create

strong brand equity. In todays cut-throat market, a brand can only achieve success if it can

connect with consumers and effectively communicate its unique qualities in a way in which they

create a positive impression in the minds of consumers. I believe I have some thoughts on how

my service can be unique and produce better results.

It won't be long before green initiatives are no longer voluntary in an average business. By

implementing certain future compliances ahead of time, FMW shall save a lot on the transition

cost and risk management in the future. FMWs volunteers/employees will also have more time

to adapt to these regulations and help in better functioning of the service. Due to this, I'm hopeful

FMW shall retain its employees in the long run too. FMWs service of preferring to offer locally
made/grown food shall also help retain customers who are increasingly becoming aware about

local produces and thus shall help in retaining and maintaining customer loyalty. The service

shall employ and follow an iterative, continuous improvement approach when designing

programs, thus staying loyal to our purpose of reducing food waste. The service shall also offer

and conduct surveys and feedback through various social media channels regularly, thus

maintaining a brand consistency and at the same time making people aware about the service's

cause.

Food waste has serious economic, social, and environmental implications for the society. These

include commercial costs associated with food waste, environmental impacts created by waste

such as the greenhouse gases carbon dioxide and methane and unnecessary investment of finite

resources in the production of agricultural products, food, and beverages that are never

consumed. With this service, I plan to address the main goal of reduction of food waste with

maximum efficiency and leaving a minimalistic carbon footprint on the world.

1.4 Financial Projections

FMW is committed to balancing its operating budget and operating on a solid financial

foundation. These efforts are based on a mixture of fund-raising, charitable gifting and fees. Just

as revenues are tracked, internal expenses are closely monitored. The goal is to continue to

provide a quality experience at an affordable cost. This is a tremendous challenge, due to the size

of the program, unpredictable costs in areas such as facilities, and uncertainties in participant

revenues.
FMW will intentionally emphasize the need to reduce reliance on fee-based revenues and look

toward contributions from other sources, particularly businesses, to support the program. This

approach will enable the program to realize the objective of keeping fees affordable while

continuing to offer a quality program for all participants.

Break-Even Analysis:

FMW would need to sell 567 units in order to cover the fixed costs. If it sells the anticipated 500
units then your profit/loss would be $-1,000. Fixed costs including the building lease, payroll,
utilities, and marketing costs are an estimated $8,500. This number level is due to our
dependence on volunteers to run our program.

Summary of Input:

Total fixed costs Variable cost per unit Sales price per unit Anticipated unit

$8,500 $20 $35 sales 500

(The above summary includes delivery of food costs and the cost of leftover organic waste meant

for compost. This does not include any packaging with sustainable materials.)

As FMW will focus more on fundraising, donations and other forms of charity it shall include an

expense forecast and a funding forecast for its investors/donors.

Funding Forecast:

The foundation will establish relationships with key individuals and organizations that desire to

provide significant financial support to FMW on an ongoing basis. The long-term objective is to

provide financial stability to support program quality and expansion and reduce dependence on

program fees. Costs associated with facilities are just one example of the need for these resources

in addition to the other revenue sources for the program. Another avenue for FMW is donations-

Donations from private and corporate sources are one of the most stable and predictable sources

of income. Our objective is to increase corporate contributions. Gifts-in-kind offset program

costs, such as when equipment is donated, and goods are also supplied for the various auction

events held. FMW will also seek support from households and fundraising events-organized by

the local authorities/FMW/participating organizations.

In the initial stage FMW shall seek donations from any or all sources willing to contribute. Its

aim will be to achieve a target of $5,000 for the first month. Moving upwards FMW-through its

work will look to receive at least $5,000 every month. FMWs aim in the first 6 months will be

to maintain a liquid cash flow while expanding its reach and operations. The more donations

FMW receives, the more it can expand its operations. FMW will propose tentative ideas and

notions for further expansion to its investors-private/corporate/household.

 Funding Forecast
$16,000

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0
1st month 2nd month 3rd month 4th month 5th month 6th month

Corporate Private Individual/Household

Expense Forecast:

Our expense budget is based on maximizing the return from our marketing and promotion

efforts. We must closely monitor this return to determine what events are generating the most

revenue based on the actual dollar investment. FMW has a starting capital of $55,000 which

should be sufficient for the 1st month of operation. Another resource we consider is the number of

volunteer hours required, based on a "ceiling" of hours that we have access to each year from our

volunteer base. Administrative expenses are based on supporting our staff, along with temporary

volunteers that are brought on to meet seasonal demands. Another area of expense is the

packaging of foods. FMW prides in using of sustainable materials to its packaging. Other areas

of expense would be logistics, stocking and management of inventory, and utilities etc.
Expenses are expected to increase from $10,000 in the 1st month to an average increase of $2,000

every month after that, owing to the expansion of the organization.

Expenses
$25,000

$20,000

$15,000

$10,000

$5,000

$0
Category 1 Category 2 Category 3 Category 4 5th month 6th month

Expenses

The purpose of FMW's marketing plan is to serve as a guide for the organization. The purpose of

the marketing plan is to serve as a guide to the staff, and the volunteers to continue to improve

the organization and its ability to serve the local community. The following areas will be

monitored to gauge performance.

- Revenue: monthly and annual.

- Expenses: monthly and annual.
- Customer satisfaction.
 1.5 Implementation Controls

We will track plan-vs.-actual results for each of the programs and evaluate them at our quarterly

meetings. If necessary, the programs will be revised if we discover they are not accomplishing

the intended goal. The following milestones indicate the key marketing programs for FMW:

Advertising
Type Start Date End Date Budget
Live Events 01/01/2017 01/31/2017 $1,100
Radio Broadcasts 01/01/2017 01/31/2017 $500
Flyers 01/01/2017 01/31/2017 $200
Web Marketing 01/01/2017 01/31/2017 $700
App Development 01/01/2017 01/31/2017 $500
Total $3,000

Prime importance will be allotted to handling customer feedback and complaints. Customers can

do so via surveys and contacting through the app and social media. Any faulty service shall be

corrected or if possible, compensated to the customers. Special incentives will also be in place

for customers who provide or volunteer for surveys and feedback. The goal will be to ensure the

customer has a direct channel of communication with the company and the responses/actions are

swift and personalized.

Contingency Planning:

The following lists, in order of probability beginning with the highest potential for change that

will impact this marketing plan, the future of Feed Me Waste, Inc.

- Major philosophy shift among the general population regarding climate change,

ignorance towards world hunger.

- Determining that the business cannot support itself
- Having to liquidate equipment or property to cover liabilities.
- The rapid growth of one of the alternative programs that significantly reduces our market

share and our ability to operate one or more of our programs.

- Overly aggressive and debilitating actions by competitors, if any in the future.
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