Table of Contents

Proposal with completed dates……………….……2

Market Research ……………………………….….5

Survey Results………………………………….….6

Key Competitor Analysis……………………….…7

Potential Issues/Suggested Improvements…….…..9

Time and Lifestyle Concerns………………….…..9

Financial Concerns…………………………….....11

Conceptual Concerns……………………………..13

Conclusion………………………………………..16

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September 30, 2015

Ms. Jena MielkePresidentA-List Food Market690 Westfield WayPewaukee, WI

Dear Jena:

It was a pleasure to meet with you last week. Thank you for the opportunity to consult for A-List

Food Market. A-List Food Market is a unique grocery shopping experience. The goal of A-List

Food Market is to fulfill the huge gap in the grocery market between the traditional stores and

online grocery services. The company is interested in hiring Whitewater Small Business

Consultants (WSBC) to complete market research to figure out who its target market is, send out

a survey to the prospective customers, and assist in providing information that would help get the

business started successfully.

Objective:

To conduct market research, figure out a target market and increase awareness of A-List

Market’s services.

Responsibilities of the client:

● To provide us with a structured outline regarding how to tackle requested services

● To provide us with a list of services rendered

● To provide us with constructive criticism in a timely manner

● To be available for communication with consulting team

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Task Description Target Completion

Date

Completion Date

Phase 1 Market Research 9/30/2015Industry Research Gathering data to determine the

best target markets9/30/2015

Identify Identify potential competitors 9/30/2015

Phase 2 Market Analysis and Survey 10/14/2015Compilation and Analysis

Look at data retrieved from the market analysis

10/5/15

Determine biggest competitors 10/7/15

Determine how to be better than the competition

10/14/15

Survey Review and adjust survey client has proposed

10/28/15

Hand out survey to potential customers and/or those in the target market

11/11/15

Phase 3 Infographic, Survey ResultsSurvey Results Look at survey results to

determine what needs to be changed based on information received

10/21/2015

Infographic Create an infographic based on results from survey

11/18/2015

Recommendations Create a list of Recommendations for the client

11/30/2015

Create Presentation Create a visual accompaniment for the final submission

11/30/2015

Presentation Final meeting and Presentation to Urban Rescue Market

12/9/2015

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Project Phases:

The project is divided into three separate phases.

Phase 1:

Market Research - In this phase we will direct our efforts to finding the best target

audience for specific services rendered. We will also identify potential competitors.

Phase 2:

Market Analysis and Survey- In this phase we will compile and analyze the data from

phase 1 to review and edit. In addition, we will distribute the survey our client has for potential

customers.

Phase 3:

Infographic, Survey Results, - In this phase we will analyze survey data and complete an

infographic with that information. In addition, we will create a list of the concepts that the

competition is executing well.

Fees:

$9,000 includes: 120 work hours plus travel fees. To be paid in full upon completion. There will

be a 25 percent down payment required upon acceptance of A-List Market’s proposal. 25 percent

of the total bill will be paid upon completion of each phase.

Please let us know if modifications are needed. Thanks again for the opportunity to work with

you on this project.

Sincerely,

University of Wisconsin-Whitewater Student Consultants

Austin Finn

Amanda Rodgers

Jordan Wileman

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Market Research

Market research is a key element of putting together a successful business. In essence,

market research is discovering more about the potential customers you have as well as those who

are competing with you for those customers. Through our previous phone conversations with the

client, A-List Food Market, and our own market research we discovered that there are two target

markets. The first is young working professionals. This is a demographic that cares about eating

healthy, staying fit and doesn't have much free time to prepare healthy meals. The second would

be upper middle class who live in urban areas. This market most likely has disposable income,

children to feed and prefer a more personalized experience. Through this report we will discuss

the potential problems that we see this business model facing, the market research we have done

and the customer research we have completed.

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Survey Results

We took a look at our client’s survey and gave her some suggestions regarding specific

questions. The majority of changes we made, dealt with wording of questions, grammar, and

flow of the survey. We felt that the survey may have been too lengthy for the audience, because

we wanted to make sure we got accurate feedback and limit skipped questions. Based on

conversations we had and several online sources we found that most people are only engaged in

a survey for about five minutes. After this amount of time, questions begin to get skipped or

answered untruthfully. It is estimated that the best length for a survey is somewhere around 10

questions, because it shouldn’t take the audience more than five minutes to complete and a wide

variety of data can still be collected. Due to this research, we took nine questions from our

client’s original survey in which we thought summarized it best. We made sure that the survey

was conceptually the same as the original survey and we looked at the feedback that was

received. The major takeaways from the survey included that most consumers want a focus on

inexpensive and healthy groceries. A large portion of consumers also said they were at least

some level of likeliness to try this type of grocer. The main reason why consumers said they

weren’t willing to try was because they have no issues with the current way they shop. Lastly,

the majority of consumers were interested in pre-ordering recipes and picking them up at the

store or potentially getting them delivered. (Our results to specific questions can be found in our

slide presentation near the end of our report.)

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Competitive Analysis

Company Name

Strengths Weaknesses

Aldi

● Generic Product lines only● Budget friendly● More efficient shopping/

Easier to maneuver in store● Shorter lines closer parking● Employees are paid better

● Not a lot of brand names● Limited variety of products (30,000 items

traditionally vs 1,400 at Aldi)● No credit cards accepted● Smaller sized items at times compared to

regular brands● Many processed foods/ Not a huge selection

of fresh fruits and meats● Limited hours of operation

Pick N Save

● Huge variety● Pharmacy, Bakery, Deli, Alcohol

selection● Both high-quality and low price

items● Weekly specials, rewards

program● Health & Beauty products● Floral department

● Less customer service than smaller stores● Lines to check out● Recipes not openly promoted● Overwhelming variety

Meijer

● 213 Locations● Large variety through multiple

industries (food, automotive, sporting goods, electronics, gasoline, etc.)

● Buy in bulk options provided● Most locations open 24/7● Cleanliness/ Convenient

● Poor customer service reviews● Food not as fresh as other stores● More expensive than similar competitors● Very large stores to navigate

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Company Name Strengths Weaknesses

Sendik’s

● Known for higher end products● Now eco-friendly with

InSinkErators installed to reduce food waste

● Opened up a Fresh2GO store which focused on deli and fresh foods for health conscious consumers

● Awarded for outstanding independent produce,

● Large variety of specialty items● More personal service

● Can be quite pricey● Upscale grocer compared to competitors● Only 12 locations● Stores are all located in the greater Milwaukee

area making it inconvenient for some shoppers who may not live there

Trader Joe’s

● Market leader in organic and fresh food grocers in US

● High pay for employees● Average store size 8,000-12,000

square ft. and designed  to be modular

● High end supermarket feel● Customer friendly monthly

newsletter

● Less variety● Don’t have name brand products● Small package sizes● Stores can be small and crowded at peak

hours

Hello Fresh

● Deliver directly to your doorstep● Products are able to stay fresh in

delivery● Free shipping● Vegetarian-only membership

option (cheaper than regular membership)

● No brick and mortar stores● Only three recipe options per week

Potential Problems/ Suggested Improvements

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Time and Lifestyle

In an industry which has many competitors, customer needs, and a continual demand for

improvement, the grocery industry has a lot of potential for success, but also for failure as well.

The grocery industry has a market the size of most of the population, which creates many

different demands that each store must attempt to tailor too. Consumer demands can vary in

selection, quality, price, customer service, customizability, health awareness and countless

others. For these reasons it is very difficult to establish a successful business in this industry.

There are so many big players already and many varied customer demands in which must be

addressed.

The A-List Food Market falls in between a traditional grocery store and an online

delivery grocery service. Due to this, one of the biggest challenges might be the amount of time

that must be spent adjusting to this style of grocer. Many consumers value their time and do not

intend to spend a great deal of their time choosing and purchasing groceries. This could

potentially create an issue for A-List Food Market as consumers must choose from recipes which

change over time. This process may take more time for consumers from start to finish then a

traditional grocery store experience would. Because this is a unique shopping experience it

would take additional time for consumers to find out and adjust to how the process works. Once

consumers understand the process it may not take as much time, however, until then, the entire

process will be much more time consuming for most than the grocery store(s) they currently use.

This leads to the next potential issue of entering into the grocery industry, which is how

likely consumers are to switch from their current stores. Many consumers tend to shop at the

same one or two stores for whatever preferences they have which creates barriers for new

entrants to gain a portion of the market. In A-List Food Market’s case, the consumer must not

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only choose to switch from their store, they most likely would be choosing the experience as

well. This may appeal to some, however there will always be those consumers who won’t try

anything new because they don’t have any issues with their current experiences. Also, because

A-List Food Market is a unique experience, they will not have as many options/products

available so consumers will likely need to shop at other stores as well to get the products in

which A-List Food Market doesn’t provide. This may create more of a hassle for many

consumers which goes back to being a time issue for this type of experience.

With many different lifestyle trends becoming more popular, it is tough to provide

enough options for every different lifestyle demand. In order to tailor to specialized lifestyle

trends as well as the average consumer, stores must provide a large amount of products and carry

countless brand name options. A-List Food Market may have potential issues providing enough

recipe options for these different lifestyles. NutriFit is an example of a company that does a great

job with custom meals based upon the consumer’s lifestyle. Although A-List Food Market is a

slightly different concept, they must have more custom options if they do want to appeal too

many of those lifestyle trends.

Once A-List Food Market has set up a customer base they may need to provide more

recipe options in order for customers to order more than a few days of meals. Especially for

families, they will demand more of a selection so they won’t have to repeat the same meals

within the same week. If recipes change bi-weekly and families intend to buy enough meals for

the entire week, consumers may need more options or they may go somewhere else to buy

groceries. The pressure to provide more options may drive costs up, however, if it can be done, it

may be very beneficial for customer needs.

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In today’s day in age where trends are constantly changing and new ones are popping up,

it is extremely important to be aware and adjust to these trends. Being aware of the current trends

around can really help with business’s success if they find ways to appeal to those trends. For A-

List Food Market, which is a unique grocery experience, it may be important to keep an eye on

current trends, especially in the future as they change. Just as trends continue to change so will

consumer demands, which is why it will be extremely important for the A-List Food Market to

make sure they adjust to changes.

Financial

To implement the business model that A-List Food Market is. We feel that there are far

too many start-up and long-term costs than the revenue that can be expected. There are many

expensive long-term obligations, such as rent, and other start-up costs, like fridges and freezers

to store all of perishable items, that will put this business model so far into debt that A-List Food

Market will be forced to increase prices. This will in effect turn away potential customers, who

will just go to a competitor who won’t cost them as much. Starting out at such a disadvantage to

other competitors in the market, will not allow the A-List Food Market to grow at a sustainable

rate.

Suggestions:

● Don’t invest in a long term lease

● Keep large projects to a minimum at the beginning of the business. If the revenues

continue to grow, then you can invest in big ticket items

There are other expensive aspects to this business model as well, such as the constant

food samples that will further force the business to increase prices on customers. We are also not

convinced that there is a need for personal assistants to help customers put together grocery list.

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Don’t get us wrong, it is important that there be employees, such as cashiers and stockers, to

sustain the business. But we are concerned that a massive staff could make this business model

even more unsustainable.

At the outset of this new business, we are concerned that with so few customers it will be

hard to sell inventory before it expires. If the customer base continues to grow, this shouldn’t be

a problem, but in the very beginning of the company there is likely to be lots of waste and

inefficiency in inventory on hand.

Suggestions:

● Keep staff to a minimum and don’t hire staff to help customers develop grocery

lists

● Try to keep samples to a minimum, so to reduce waste

● Keep a low inventory, at least at the outset, so there isn’t huge waste

Another issue that we found is with the design of the company website. The way that we

understand it, the client would like to customers to be able to go to the website to create a

shopping cart, which can be used for the customer when they come into shop or to have the

groceries ready when the customer comes for pick up. We see a problem with the cost of this

website, because it becomes extremely more expensive with the increased content that the is

placed on the website.

The crux of our concern comes down to whether or not customers continue to come

through the door or if they come at all. It is important to come up with a plan to get the target

market to walk through the door. A-List Food Market then needs to develop a plan that will keep

those customers coming through the door. It is important to also keep the cost of doing business

to a minimum in the beginning, until you know how large the customer base is.

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Conceptual

While reviewing the business model, there were a few things we ran across that seemed

to be conceptual problems, or perhaps just misunderstandings in need of clearing up. To simplify

these problems would aid the potential consumer as he/she tries to understand the concept, as

well as give them motivation to make a change in the current grocery shopping system they have

implemented.

One problem we discovered with the store is that it only has limited grocery options. This

means that people need to make yet another stop to get all of their items. If you are trying to save

peoples’ time, how do you plan to promote that even though more stops are needed, this concept

and store saves time?

The A-List Food Market is pricier than Wal-Mart and other low cost stores. How will you

get people committed to spending money on groceries at a pricier place when they have to go to

another store anyways to pick up basics and will see the prices of the items they just bought

available at a lower price?

Suggestions:

● Stock more basics including paper products

● Keep costs down with having not all organic options; some people just don’t care

enough to spend that extra money

● Pick a specific target market and only market to them at first. People who have

substantial income don’t typically care about costs for certain items so long as it is

what they need

● By having a specific target market, it guarantees some income and dedicated

people not just people who will try it once or twice to say they did it

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The concept seems to not clarify whether people get the items themselves or if they have

to wait in the store (if they order in store) while other staff go get the items. Is the goal to have

them purchase juice and coffee while they wait for their items to be gathered? Typically, grocery

shopping is hassle and takes a lot of time. People will not be interested in sitting around watching

their items be gathered. In store ordering seems like a good idea, but it does not save much time,

which is what was mentioned frequently as a store goal.

Suggestions:

● Make online ordering as easy as possible

● Focus on getting people to order online so store pick up is easy and fast

● While it is good to offer options to customize the menu, having too many hoops to

jump through takes longer for the customer and causes frustration

● Pizza Hut has a good website for allowing customization

○ They have limited drop down options, but enough to satisfy the broad

ranges of consumers

What is the purpose of the juice/coffee bar? Juice spoils fast, as do the fresh fruit and

vegetables needed to make the juice. Is the juice made fresh when the customer orders it? People

can be exceptionally picky when it comes to juice. For example, in the orange juice section there

are many kinds: low pulp, some pulp, added vitamin C, no pulp, etc. Is it cost effective to have

the juice bar at all, especially in the beginning?

Coffee does not spoil as fast, but how many consumers will be purchasing coffee from

you? It is available literally everywhere with every store specializing in different types and

sources. Perhaps it is not cost effective.

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Suggestions:

● To keep costs down, making the investment at the beginning to purchase juicing

materials and coffee roasters, etc. may not be worth it

● See if there is enough interest first before diving into that market

● Make sure consumers will be okay with only a few varieties as that is all you will

be able to make to still be profitable

The model does not seem to clarify if the consumer will be required to cook the food

from scratch such as the Hello Fresh model, or simply reheat already prepared food. It is also

fuzzy on the concept of whether or not the ingredients are already portioned out or if they will

still be in their original packages needing to be measured by the consumer. Hello Fresh is

successful because the ingredients are already perfectly proportioned and there are detailed

instructions on what to do. Other companies that simply require the food to be reheated are

successful because it is a one step process for dinner and there is no measuring or portioning out

involved. How do you intend to blend the two concepts? There is a concern that ingredients that

are unused, if they are perfectly portioned out, will spoil fast, especially if they are chopped up or

removed from their original packaging. If a consumer is purchasing a week’s worth of meals,

how will you ensure that the ingredients stay fresh for the whole week?

Suggestions:

● Create a list of the order to eat the items in that leads the consumer to eat the

fastest spoiling meal first

● Determine if your market wants to cook the meal from scratch or simply reheat a

pre-cooked one

● For those consumers that will not often have time to cook from scratch, offering

pre-cooked meals can be a big hit

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Amazon Fresh, PeaPod, and many other services offer home delivery. While these

services do not offer a large variety of pre-packaged or prepared meals, they are a convenient

alternative with some selection. How do you plan to compete with such big names? Amazon

Fresh has not made it into the Midwest, but PeaPod is in Milwaukee and all around southeast

Wisconsin.

Suggestions:

● It is important to find key distinguishing characteristics to market to

people

● Focus on specialty products perhaps

● Look into offering delivery within a certain radius

Conclusion

In conclusion, with the aforementioned information, Jena Mielke is now able to make

better informed decisions that will guide that will guide A-List Food Market!  Through this

report, we have laid out our market research, the results from our survey, and the research that

we did on potential competitors. Further, we discussed some potential issues that we found with

this business model and some solutions that can be taken to correct them. While we are not the

final arbiters of A-List Food Market’s future, we suggest that Jena take a hard look at our

research, as well as areas of concern and solutions to decide whether or not it is worthwhile to

continue planning for A-List Food Market’s entrance into the grocery market.

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