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Final Business Plan

Sonrizo
Chewable Toothpaste Tabs

Team 3
Cat Hamm
Fanny Van Themsche
Madeline Miller
Renaud Brossard
University of Cincinnati | Universit du Qubec Montral
Constantine Polychroniou
Neil Choudhury
Jocelyn Desroches
Tobi Rodrigue

INTB 3094-001 Social Entrepreneurship


29 September 2016

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Table of Contents
Executive Summary.3
Action Plan.......4
Impact on Social Entrepreneurship......4
Benefits for Social Entrepreneurship...4
Ten Year Expansion.5
Product Development...6
Concept and Refinement......6
SWOT Analysis... 7
Product Feasibility... 7
Product Design.8
Packaging Ages Five to Twelve Images......8
Packaging Ages Twelve to Nineteen Images.......9
Marketing Plan.9
Target Market.......9
Distribution....10
Accessibility...11
Promotion...11
Promotional Materials............12
Price... 12
Projected Margins......13
Competition....13
Resources the Target Population Will Need.......14
Advertisement....14
Management Team.15
Sales and Education Cost Breakdown....15
Financial Plan.....16
Incipient Investment Required.......16
Cash Flow.......16
Pro Forma Income Statement (Projected) ..17
ROI Estimates.... 18
Plan for Success..19
Works Cited... 20

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Executive Summary
Dear Investors,
This document provides you with Sonrizos complete business plan. The company is dedicated to
improving dental health amongst lower income and lower middle income Ecuadorian children through
the sale of chewable toothpaste tabs. By doing so, the company hopes to alleviate the financial burden of
pain-relief dental treatments that poor pediatric dental care practices for children is currently exerting on
Ecuadorian families, while improving childrens self-confidence.
The product itself being a new and innovative product, not yet present in Ecuador, it will offer an
easier to use alternative to traditional toothbrush & toothpaste combos. It only requires chewing, swiping
the tongue over the teeth, and swallowing at the end of the treatment, without the need to use drinking
water. This product can both be used on the go, or at home, providing a substantial advantage over more
traditional dental care methods, and is made from natural ingredients.
Over the course of the next ten years, the company plans to expand greatly. It starts by
penetrating markets in Ecuadors two most populous urban centers, Quito and Guayaquil, and it will
progressively expand to reach out to other urban areas in Ecuador, then rural areas as well. While the
initial efforts will be targeted at improving oral healthcare for 5 19-year-olds only, the company will
seek to expand and reach 20+ year-olds in all its different target geographic areas. Further down the
road, the company will look to expand its reach to neighboring countries. It is estimated that, by 2026,
the company will be selling over 18,000,000 products annually to over 500,000 consumers, generating
more than $36,000,000 USD in annual revenues. Such sales are hoped to be achieved through massmedia marketing campaigns, as well as kid-targeted educational initiatives with local dentistry students,
promoting good oral health care practices, as well as our product.
To achieve such goals, the company is looking to raise $875,000 USD through the sale of
$200,000 USD worth of shares to its founders, as well as the sale of $675,000 USD worth of bonds to
interested investors with a 5.00% annual coupon and a 15-year maturity. By doing so, the company
estimates it will be able to operate while keeping a minimal $80,000 USD cushion. This will guarantee
an annual cash-flow of $33,750 USD per year to bond-holders, coming from a fast-growing company
expecting an average 5-year return on investment around 4.58%, net of bond coupons.
We hope you will find the information provided in this document to be satisfactory. We at
Sonrizo look forward to working together to brighten the worlds future, one smile at a time.

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Action Plan

Impact on Social Entrepreneurship


Benefits for Social Entrepreneurship
Sonrizo has many benefits for social entrepreneurship in areas of health and education. The most
effective benefit is that the product is cost saving for cash-strapped families. One effect of poor dental
hygiene in Ecuadorian children is that when their teeth rot, the family needs to spend upwards of
$1,000+ USD for implants. Sonrizo would prevent the rotting that would make implants necessary while
also saving the family a great deal of money. That same $1,000 would be enough to pay for Sonrizo for
one child for nearly eleven years.
In health, there are many specific benefits. Sonrizo would help children to avoid toothaches and
other pains. It helps increase health and hygiene levels and can even help prevent oral cancer. There is
also a boost in the childs self-esteem. They can avoid speech impediments and gain confidence from a
bright smile.
Sonrizo would also allow for oral hygiene education to be spread to children in schools. This
helps the students feel an urge to maintain dental health and form positive habits that can last throughout
their lifetime.

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Ten Year Expansion
Sonrizo will initially penetrate the market in 2017 and expand throughout the next ten years. The
initial target market will be five to nineteen year olds in Quito and Guayaquil, aiming for a 2.5%
penetration. Within two years, we plan to expand to 6.25% penetration in the Quito and Guayaquil areas
and begin moving into residual urban markets for five to nineteen year olds.
By 2023, Sonrizo will have increased to 10.50% market penetration in Quito and Guayaquil and
8.75% market penetration in residual urban markets. The company will also begin expanding into urban
adult markets at this time and advertising to age groups over nineteen. In 2025, we will enter rural
markets with a planned initial market penetration of 2.5%. This plan for expansion is based on the
segmentation of our market, which will be discussed in the Target Market section. We plan to expand at
the rate we have described so that we can spend time establishing ourselves in each market expansion
before we move on to the next.

Product Development
Concept and Refinement
After considering Ecuador and a personal connection one of our founders had with the country,
we discovered that there is a significant need for quality oral healthcare. Especially in fields relating to
children, effective and affordable pediatric dental care is almost absent, or non-existent. However, as our
founders were brainstorming, we wanted to develop a product that did not need water, as the tap water
and other water sources, especially in urban areas, can be unreliable at times and thus unusable. We also
wanted a product that was easy to use for all and required the least amount of steps possible. After
deciding to promote to and work with children, we wanted a chewable tablet, to make it even easier to
use and understand conceptually. While doing our research, we realized that there is already a supplier
in the near area, Frescoryl, who makes the tablets we were designing. Thus, we are now working with
them to refine and market their product towards children.

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SWOT Analysis
Strengths:
This is already an existing product.
It is simple and easy to use.
It is also environmentally friendly,
which supports Ecuadors Rights of
Nature.

Weaknesses:
This is more expensive than traditional dental
care.
It is missing the mechanical aspect of the
toothbrush.

Opportunities:
Ecuador has the 3rd highest rate of
pediatric tooth decay in Latin
America.
The population renewal rate is over
2.1% and increasing.
It is a upper-middle income country.

Threats:
There is a fair amount of indirect competition
within the market.
The cultural attitude towards dental hygiene
is that a toothbrush and toothpaste are best for
cleaning teeth.
The younger population in Ecuador is slowly
shrinking.

Product Feasibility
When we were considering locations for this product, we considered other countries, but
Ecuador was the strongest contender, especially for what we wanted to accomplish. Ecuador
demonstrates a strong need for improved pediatric healthcare. Ecuador has the third-highest rate of
pediatric tooth decay in Latin America. Not only that, but Ecuador also has the highest incidence of
severe tooth decay amongst Latin American adolescents. After researching, we have found that Ecuador
is a middle-income country. We have knowledge of the local market, due to one of founders working on
the ground in the area for months. We also found that Ecuador has a good transportation infrastructure,
which will help with distribution. Ecuador also has concentrated population areas, especially in the cities
of Quito and Guayaquil, where we plan to begin our distribution.
While we were pursuing this product/concept, we did encounter some challenges. One of our
main challenges was that potential distributors and companies we reached out to for information, did not
respond to our outreach. While this was a roadblock, it did inspire us to find creative ways to find the
information we were searching for. Another challenge we encountered, was the newness of the product
and market. Because this is a relatively new product, it is not widely distributed and in many markets.
Thus, we were unable to find the recipe if we wanted to make and distribute this product ourselves.
When we were looking at our market, Ecuador, we discovered a potential threat to our market,
Frescoryl. They already supply a similar product for adults in nearby Colombia. However, while
working with them we agreed to sign an agreement/contract, that would allow us to be the sole provider
and distributor of our product for children in the area.

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Product Design
The most important part of the product design is the logo. Once we decided to create a product
for child consumers, our team felt confident in moving forward with an animal mascot that would draw
kids toward the product. After doing research into common Ecuadorian animals, the most common
seemed to be monkeys, sloths, and lizards. The monkey appeared to be the most consumer-friendly
mascot available as well as the only one where the teeth could be emphasized in a way that made sense.
We believe that this mascot will be ideal for our initial target market between the ages of five and
twelve. For the older segment between twelve and nineteen, we have a logo of a simple smile that may
appeal more to the older consumers.
The size of the box containing Sonrizo is based on the box size of our supplier, Frescoryl. As
they will be our supplier, we would be working with them to create the new branding based on their
preexisting packaging that would be marketed in Ecuador. We created our packaging with both English
and Spanish labels. The Spanish packaging would be the marketed in Ecuador, while the packaging in
English is more useful to pitching our product to English speaking investors or distributors.

Packaging Ages Five to Twelve

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Packaging Ages Twelve to Nineteen

Marketing Plan
Target Market
We have segmented down to a target population by three qualifiers: geographical location, age,
and income group. These three factors come together to form our initial target market. We will begin in
the populated urban areas of Quito and Guayaquil with consumers between the ages of five and nineteen
years old who are part of households in the bottom 40% of income. Over time, we will expand our
market based on these qualifiers, moving to the rest of urban Ecuador, then rural Ecuador, and
expanding to include adults over the age of twenty.
In our case, our consumer and buyer are two different groups of people. For our consumer, we
are targeting urban youth aged five to nineteen years old in Quito and Guayaquil. However, our buyer
will be the parents of these children. Thus, we have marketing and promotional material that will appeal
to three groups: the children, the parents, and the children and parents together.

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Distribution
For distribution, we are looking at going through supermarkets. Through research, we have
found that for dental care products and peoples buying habits towards them, over 50% of those products
are bought in supermarkets. Thus, we know that a good proportion of the buyers we are trying to reach
will at some point, see our product or its promotion in a supermarket. We can reach our target market in
supermarkets such as SuperMaxi, MegaMaxi, Gran Aki, Aki and Super Aki, with all of these being
under the business colegate of Corporacin Favorita. Together. These supermarkets have over 110
locations in Ecuador, with 51 alone in Quito and Guayaquil. The other locations will be beneficial when
we look to expand after our initial market penetration.
Not only are we looking at going into supermarkets, but we also are looking at pharmacies as
well. Research has shown us that 15% of dental care products are bought in pharmacies. There are over
5,700 pharmacies located in Ecuador. For example, Sana Sana and Farmacias Economicas are two of the
biggest pharmacies in Ecuador. With a combined total of 755 pharmacies in Ecuador, there is sue to be
at least one of these pharmacies, if not both, in every province in Ecuador. Sana Sana has over 500
pharmacies with 115 pharmacies in Quito and 129 in Guayaquil and is present in all 24 provinces. This
pharmacy is extremely beneficial for our penetration into Quito and Guayaquil. Farmacias Economicas
has over 255 pharmacies with seven pharmacies in Quito and one in Guayaquil and is present in 18
provinces. This pharmacy is extremely beneficial for our penetration into our future markets, such as the
rural areas of Ecuador.

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Accessibility
As a company, we have worked hard to make our product as easily accessible as possible to our
target market. Geographically, we plan to make it readily available in the areas around our target market
so that they do not have to go far. In the initial urban market, this will be the supermarkets and
pharmacies available within the cities. We also do not want there to be an economic barrier in the
product affordability. We have made our product as cheap as possible so that it would total to $7.50 per
child per month. This is much more affordable than any dental treatment necessary due to poor oral
hygiene. We do not think there will be any social hindrance to the accessibility of our product as the
shopping malls that hold the grocery stores which will carry our product are frequented by people of all
socioeconomic statuses.
Promotion
A main component of the Sonrizo promotion strategy is through education and marketing
campaigns within local schools in Ecuador. Our team has designed posters to be displayed in schools
that outline the importance of oral hygiene and how to use our product. We are also planning on
bringing in local dental students to help us in this effort. They would be able to provide the children with
reliable and professional information while presenting our product in a trustworthy way.

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Promotional Materials

Price
We have done our best to make Sonrizo as affordable as possible, especially since our target
market is in the lower 40% of household incomes. The wholesale price of a box is $2.00 and based on
trends in Ecuador, we estimate that there will be a 25% markup, resulting in a total price per box of
$2.50 and adding to a total of about $7.50 per child per month.
We do believe this to be an affordable cost. Considering the income in Ecuador, we found that
the median monthly income back in 2011 was $478 per month per adult. Extrapolating this to 2017
when we would begin market penetration, this would realistically fall around $640 per month per adult
and pessimistically fall around $623 per month per adult.

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Projected Margins

From this data, our average net margin will be approximately 1.10%.

Competition
Our product faced both direct and indirect competition. The indirect competition came from
more normalized forms of dental care such as toothbrushes and toothpaste. Such indirect competition
comes from companies such as Colgate, OralB, Crest, Signal, Binaca, etc. These companies do pose a
serious threat as they are already previously established brands familiar to the area, and they have lower
prices. Also, much of the dental culture in Ecuador is centered around the traditional method of having a
toothpaste and toothbrush to brush your teeth, which our product challenges.
When we looked into direct competition, the only company we could find with a similar product
in the area was Frescoryl, who is already selling their product in nearby Columbia. We focused on
differentiating our product from theirs and then partnering with them to eliminate their brand as
competition. We plan to use them as our supplier and work with them to rebrand their product for
children. We also want to sign an exclusivity agreement so that our company will be the only way for
them to market their product in Ecuador.
Our product is different because we are entering a market with different cultural ideas about
dental care. As noted above, the traditional way of thinking about dental care, is by using a toothbrush
and toothpaste. Our product aims to challenge and improve dental care. Not only does our product still
have the benefits of a toothbrush and toothpaste, by cleaning your teeth and preventing oral disease, it is
also easier to use and safer, as it does not contain fluoride, for example. We aim to show people,
especially young children, how easy it can be to put a dental hygiene routine into place, and how that
can impact ones life. While in the future, one can incorporate both using a toothbrush and toothpaste
and a toothpaste tab a day, our product is simple and a fun way to ease children into taking care of their
oral health.

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Resources the Target Population Will Need to Acquire and Use Your Product
The brilliant thing about our product is that it does not require anything other than the actual
toothpaste tab. Sonrizo works without water and without a brush, making it incredibly easy for
consumers to use. Not requiring water is a key aspect of our product as people in Ecuador sometimes do
not have access to potable and/or safe water to brush their teeth. All a parent needs to do is simply go to
the supermarket, pick up a package of tabs, take them home, and give one to each child daily.
Advertisement
Our marketing budget will be divided two ways with 85% going towards Mass Media
Campaigning and the other 15% going to the promotional materials. Within the 85%, we plan to spend
60% of that budget on billboard campaigns in the cities, 30% on banner ads in shopping malls, and 10%
on social media advertising. We believe the banners in shopping malls will be incredibly effective
marketing tools. One of our distribution methods is through supermarkets, which are usually present in
shopping malls. The malls are also frequented by members of all socioeconomic statuses, so we would
be able to reach our target market within the place where they would purchase the product.

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Management Team

Renaud Brossard: Chief Financial Officer


o

Renaud is always ready to work, and his attention to research is impeccable. He has a
thorough understanding of financials, cash flow, and investments and is also responsible
for all financial research, data and future predictions. Head of finance department.

Madeline Miller: Chief Executive Officer


o

Madeline is extremely beneficial as the behind-the-scenes person. She is in charge of


making sure the PowerPoints and status reports are put together and also worked on
compiling information into a structured document. She is responsible for grammar,
timekeeping, and group cohesion.

Fanny Bianca Van Themsche: Chief Marketing Officer


o

Fanny is a great asset to the team as she has a great knowledge and understanding of our
market and culture. She also has a strong relationship with contacts in the area. She is
responsible for marketing research and development. Head of sales team.

Cat Hamm: Chief Technology Officer


o

Cat has the great ability to take ideas and descriptions and turn them into stunning
visuals. She possesses extensive knowledge of designs and layout and is also responsible
for enhanced product design and packaging design.

Sales & Education Cost Breakdown

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Financial Plan
Incipient Investment Required
To achieve our goals, the company is looking to raise $875,000 USD through two different
means. The first being through the sale of $200,000 USD worth of shares to its founders, and through
the sale of $675,000 USD worth of bonds to interested investors with a 5.00% annual coupon and a 15year maturity. Through these two means, our company estimates it will be able to operate while keeping
a minimal $80,000 USD cushion. This will guarantee an annual cash-flow of $33,750 USD per year to
bond-holders, coming from a fast-growing company expecting an average 5-year return on investment
around 4.58%, net of bond coupons.

Cash Flow

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Pro Forma Income Statement (Projected)

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ROI Estimates

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Plan for Success
Our company plans to succeed through our necessary product and unique marketing and
promotional campaigns. We also hope to have the chance to interact with NGOs, Advocacy Groups, or
Nonprofits in Ecuador as possible means of promotion or to give out samples of our product in the
future. As one of our founders worked at an NGO school in Ecuador for five months, we feel that we
can use this connection to network in the region for the benefit of our company and our mission.

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