Direct Distribution Strategy for New Venture

This assignment examines a new food delivery venture named 'Jolly's Java' that utilizes a direct distribution model. Students are tasked with analyzing the benefits of this approach, particularly focusing on customer satisfaction and cost reduction. The analysis should also consider the implementation aspects, including home delivery and feedback mechanisms for service improvement.

Business Essential:
Introduction
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TABLE OF CONTENTS
TASK 1............................................................................................................................................3
Part A ..........................................................................................................................................3
Part B...........................................................................................................................................3
TASK 2............................................................................................................................................4
TASK 3............................................................................................................................................5
Part A...........................................................................................................................................6
Part B...........................................................................................................................................7
TASK 4............................................................................................................................................9
TASK 5............................................................................................................................................9
TASK 6..........................................................................................................................................10
REFERENCES .............................................................................................................................12
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TASK 1
Part A
Jolly's Java food and delivery services Ltd. is regarded as start up firm that is laying
emphasis over offering higher quality but reasonable services of breakfast in London. The
organization is small scaled which has aim of offering greater level of satisfaction to the needs of
huge base of customers. For the present era the business is making introduction of new range of
breakfasts for the customers. The firm is desiring to make introduction of mew range of
breakfasts products for the customers. The new business have concern to increase its market
share by introduction of new product range. The firm is dedicated to provide new products and
services to the region where there is presence of requirements. The Jolly's Java has emerged to
provide breakfasts services within reasonable prices. The new ventures wishes to make
appropriate association with customers, suppliers and employees who can offer value to the
interests as well as aim of every party. The business is aiming to provide higher level of
satisfaction to customers that would assist in enhancing the awareness of business in the market.
The present business concept is developed for the purpose of serving the recent growing need of
the market in an effective manner (Marthinsen, Sundt, Kaysen and Kirkevaag, 2012). The major
aim is towards offering affordable prices and greater breakfast products at particular location.
The quality along with the convenience is being offered to customers. There is greater
competition in the market. The alternative means is comprised of getting breakfasts includes road
side vendors. But their quality as well as hygienic standards has remained questionable.
Part B
The major objective for the new business is as follows:
 To provide higher quality as well as affordable services of breakfast delivery
 To offer convenient and on time breakfast delivery
Jolly's Java food and delivery services Ltd is sole proprietorship business. The firm is
being owned and managed Jolly Java. Further the intention of the particular firm is towards
offering breakfast delivery services to several fields. This is comprised of The ownership
structure that is sole trader is suitable as the firm is small sized thus less people are required to be
managed.
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TASK 2
In order to assess the external environment of the firm there is greater necessity towards
carrying out PESTLE analysis for the sake of knowing range of factors affecting organizational
operations. Such tool takes into consideration important factors like political, economical, social,
technological as well as legal. Pestle analysis of Jolly's Java has been enumerated in the manner
stated as below: Political: Such factor is attached with the legal laws and regulations that needs to be
complied with by he firm in order to perform the operations within the market. Moreover
the market in which the firm would operate is regulated to greater extent in which varied
regulations exists which are required to be followed when carrying out operations of the
firm. Beside this laws relating to employment has to be followed wherein there is
necessity for the business to offer favorable environment to the personnel. The
regulations in relation with service quality has to be complied with. Under this
organization has to maintain suitable quality within the services that are provided to the
target market. At certain point of time political laws can also be considered as barrier and
because of such they needs to be followed in an effective manner. Economical: The economy is already developed one in case of London. In addition to this
such has greatly improved in comparison with the past. Moreover taking into account
overall economic condition it is highly beneficial for Jolly's Java food and delivery
services Ltd. to carry out operations within the market. Because of growth in the GDP
rate there is greater willingness among the customers to spend over the restaurant
services. This is fruitful for the firm within the market. Beside this rate of inflation is
lower because of which power to purchase is higher. Social: The particular factor is attached with changes in the requirements of the target
market based upon the services which are required to be provided to the customers.
Moreover there is need for Jolly's Java food services to develop understanding in relation
with social factors so that whole expectations related with target market can be attained
with effectiveness. Technological: The market wherein Java food would carry out operations is highly
advanced and because of such it is important for the firm to make utilization of the
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advanced techniques. Moreover it order to deliver fast food items advanced tools can be
utilized so that issues related with quality can be handled with effectiveness. There is no
doubt that here cost is involved in making adoption of new technology but overall
outcomes would be favorable for the business by means of such adoption. Legal: Such factor is associated with the laws that new restaurant is needed to comply
with. In general terms Jolly's Java food service has to follow it legal law attached with
paying off the duties as well as taxes. Moreover other kind of regulations needed to be
complied with like employment etc.
 Environmental: Overall the operations that are being conducted by firm negatively
influence the surroundings and because of this reason regulatory authority has developed
certain guidelines in order to prevent the environment. Thus Jolly's Java needs to take
corrective measures in order to save the environment where tool of recycling has been
applied in order to protect environment. With this negative influence on surrounding can
be handled by firm.
Thus there is presence of some key factors that influence business productivity and in
turn needs firm to take corrective actions so that performance can be affected as a result of
existence of several factors.
TASK 3
Introduction of media and market
The market analysis as well as key customers is regarded as the key towards the success
for every organization. In the present times There is huge presence of huge number of person
who have demand regarding hygienic and healthy food that has effectiveness in maintaining
healthy living. Urban areas that is London is considered as the initial target market for Jolly's
Java food and delivery services Ltd. These type of areas are concentrated to a greater extent with
firms that have various charters. The demand in relation with the quality and economical
breakfast is enhancing with few service offerer that are meeting the demand within the present
market. The alternative means of gaining the breakfast are the roadside vendors. However their
quality and hygienic standards remains questionable. Through analysis of the customers demand
within the present market there is increase in feasibility for the firm to start up the venture that
possess huge demand in the market. The aim of the business is to reach customers that would act
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as an aid in fulfilling the mission, vision, goals and targets to a greater extent. There is greater
significance for the firm in targeting the key customers as they are regarded greatest source of
income for new venture.
There is huge importance in the firm to analyze its target market as this would help the
new firm in survival within the market for longer course of time. For the established firm the
business is required to lay emphasis on the breakfast requirements. In case of the people who are
comprised of workers and road side users the firm would leverage on the word of mouth
recommendations that is depending upon the business customers. It is significant for the start up
business to make adoption of means that can be used in interacting with the target market. It is
another major sense of broadcasting that users who shows active presence within the market
wherein they need to make communication of the products and services that are being offered.
Part A
The business possess the potential towards offering larger volume of sales to the
organization during the peak hours of 7am to 10a.m. This involves both through street sales as
well as delivery orders to the workers as well as established businesses. Satisfaction of such
group would offer vital long term revenue stream. For the business that is being established
within the market the firm is planning to do marketing in relation with particular target market by
the means of flyers, business discounts, billboards and creation of record in relation with fast
delivery (Edwards, Delbridge and Munday, 2005). For the group of people seeking for breakfast
or take home meals it is important for the business in building suitable word of mouth marketing
strategy. The business would do it slowly, realizing that much of such develops from the
satisfaction that is gained by the customers within the market. The firm is planning and
undertaking number of joint marketing efforts as well as advertisers through production and
distribution of referral book to be offered to several individuals. Such in turns will assist in
deriving our word of mouth efforts.
Part B
Budget
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Year 1 Year 2 Year 3
Revenue 505,600 557,419 670,350
Cost of sales 151,192 158,752 169,335
-------------- -------------- --------------
354,408 398,667 501,015
Administrative expenses 84,930 88,899 168,578
Selling expenses 58,200 72,360 163,934
-------------- -------------- --------------
Operating profit 211,278 237,408 168,503
Corporate tax 52,820 59,352 42,126
-------------- -------------- --------------
Net income 158,459 178,056 126,378
Cash Flow
Year 1 Year 2 Year 3
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit before taxes 211,278 237,408 168,503
Depreciation 5,550 16,800 111,300
--------------- --------------- ---------------
216,828 254,208 279,803
Taxes paid - 52,820 59,352
--------------- --------------- ---------------
Net Cash Flows from Operating
Activities 519,250 531,406 459,601
--------------- --------------- ---------------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of PPE 45,000 700,000
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--------------- --------------- ---------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from share issue 10,000 - -
Dividends paid 39,615 44,514 31,594
--------------- --------------- ---------------
Net Cash Flows used in
Financing Activities 29,615 44,514 31,594
--------------- --------------- ---------------
Net increase/ (decrease) in Cash
and cash equivalents 489,636 441,892 271,993
Cash and cash equivalents at
beginning - 489,636 931,528
--------------- --------------- ---------------
Cash and cash equivalents at end 489,636 931,528 659,535
Statement of financial position
Year 1 Year 2 Year 3
Non-current assets
Property, plant and equipment 49,200 77,400
666,10
0
------------- ------------- -------------
Current assets
Cash and cash equivalents 489,636 931,528
659,53
5
------------- ------------- -------------
Total assets 538,836 1,008,928 1,325,635
========= ========= =========
Equity
Stated capital 107,750 107,750 107,75
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0
Retained earnings 131,504 265,046
359,82
9
------------- ------------- -------------
239,254 372,796
467,57
9
------------- ------------- -------------
Non-current assets
Deferred tax 182,716 405,176
578,64
5
------------- ------------- -------------
Current assets
Current tax liability 52,820 59,352
42,12
6
------------- ------------- -------------
Total equity and liabilities 474,790 837,324 1,088,350
TASK 4
Marketing objectives
The manager of Jolly Java Food company have to set the marketing objectives in such a
manner to target the customers. The marketing manager have to focus on the following
objectives to achieve their targets: Build Brand awareness – The manager have to create the awareness of the food company
and has to attract the large number of customers. They have to told customers that our
company is providing the breakfast and online services also. Targeting new customers – The manager have to target those customers who are busy in
their life schedule and not able to prepare the breakfast for themselves. Through this the
company will able to the attract the customers and retain them for a long period of time.
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 Enhance customer relationships – The manager have to maintain the strong relationship
with the customers while providing the high quality of food and online delivery. Through
this the customers will able to enjoy these services properly. Increase in the market share – The company have to provide the best quality of services
to customers to beat the competitors in market. Through this the it will be good for the
organisation to increase their market share. To become the market leader in food industry – The manager have to set the strategies in
such a way to attract the customers and to compete with competitors. The company will
provide the healthy foods who are worry about their health.
Target markets
The manager of Jolly Java Food company have to require to identify and creating the
advertisement which will speaks to target the audience. In following ways the managers will
target the market in order to fulfil their objectives.
Health-conscious people – The company will provide the food who are very health
conscious. It is a board one that company can easily target the market more effectively. For
example, health conscious people will prefer these products which are providing by the cited
food company.
Active people – the people who are doing the jobs and don't have the time to prepare the
breakfast for themselves then this company will provide online services for them in office also.
Many active people are lead with the healthy life so they will also prefer a healthy food.
Weight-conscious people – The company will offer a delicious meals at a reasonable
price. There are so many people who are very about conscious about their weight so the
company will provide the healthy and hygienic food to customers.
Assess the location – The location of the restaurants is very important to target the
customers. The restaurants will locates at main street which will be surrounded by the corporate
buildings, shopping malls to draw the attention of professionals and adults.
Marketing mix
This is a newly food supply chain company which offers the home delivery services to
their clients but only provide the breakfast not lunch and dinner. Its going to be the most
innovative idea because the food supply chains are not providing the breakfast facility to their
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clients. So these can be the terms through which they can raise their business as much as they
can:
Product: They will going to deal in food. Their idea is so innovative and they are giving
the best breakfast from any other in whole united kingdom. There are vast varieties of breakfast
such as Tom brown, Wheat porridge, Rice porridge, Millet porridge, Oat meal, Green tea, Fruit
meal which are deliver to the consumer. The goods are so different from others and they are not
deal in repeat ion of any product for 15 days.
Price: The prices of these products will reasonable so any one can easily buy the products
without any problem. The prices are set by taking the average group of people as a base and after
a long survey. The prices are not related with the quality. The quality is best and no compromise
with that.
Place: These are easily accessible to the consumers so they can come here and take the
breakfast. They also provide home delivery services so inconvenience is impossible. The place
is near to every consumer. The place is good and well managed.
Promotion: They can use different methods of promotion like pamphlets, advertisement
in newspapers or in magazines. So the large number of consumer can reach over there. The
managers will use social media for promotion by making a page of their own(Parks, Olson and
Bokor, 2015).
Marketing strategies for target market
The manager have to maintain the market strategy for the long term plan to achieve the
objectives of company. The marketing strategy of the company will involve all the goals of
organisation in a comprehensive plan. The following are the marketing strategies which will
help the company to target the customers and to make strong position in market.
 Partner will allies – The marketing partnership will help the company to get a number of
benefits in market campaign. The company have to collaborate their business with other
those organisation who are leading in the market. Through marketing partnership the
company will able to get success quickly and increase the brand awareness between the
customers.
 Help the customers to solve their problems – The manager will provide a online service
to customers if they are not satisfying with our services. The manager will take the
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feedbacks from customers from time to time through this they resolve their problems on
time.
 Get employees involved – The company should provide the positive working
environment to employees so that they will provide the quality of services to customers.
 Use a big data to target the customers – Using the big data will help the organisation to
target the customers. Through the company will also determine the purchasing power of
customers.
 Make a proper plan and clearly defines the business objectives – The marketing plan will
explain that how the marketing strategy will execute. The manager of Jolly Java Food
company have to make a proper plan for budgeting that how will organisation will target
the customers.
TASK 5
It is the section that is comprised of operational, tactical and strategic business decision
that firm is required to take. The operational decision are related with analysis of the location.
This includes whether the location is suitable in terms of attracting greater number of customers
towards the outlet. It has been assessed that new venture at initial level would rent the premises
in London. This is considered as the perfect location for the firm as it is the centre of the
organization (Doganova and Eyquem-Renault, 2009). Also it is being surrounded by the office
areas as well as corporate, retail shops as well as other. Moreover it is effective for all the forms
of organization to attain advantage through the breakfast that is present at reasonable prices. The
role of location is important and it act as an aid in making determination of whether the plan
possess potential in attracting larger mass or not.
Another kind of decision that is required to be taken involves tactical. It is comprised of
decision making in relation with what needs to be produced. Such plays effective role in
attracting larger customer base to a significant level. There is huge significance in carrying out
the market research so that demands of the customers can be gained in an effective way. Such
has importance in terms that effective products and services can be delivered to the target
market. In the present business plan it has been determined that hygienic and health
consciousness factors needs to be considered when making development of the product. Thus
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such aspect is significant in determination of the kind of products that are being desired by the
firm.
Strategic business decisions plays significant role as with the implementation of the
strategy the firm is able to attain desired targets within minimal span of time. In case of present
business the firm is required to make development of strategy in relation with marketing so that
it is able to create greater awareness among the target market. In this regard various strategies are
considered that includes word of mouth publicity, print media so that customers can be made
aware regarding the kind of services which the firm is offering. These decisions have greater
effectiveness in increasing the return of the firm to a greater extent.
TASK 6
The system of distribution is regarded as sequential flow of the procedure, systems and
activities which are developed and linked for facilitating and monitoring the movement of the
goods and services from the sources to the target market. The procedure of distribution is
considered as the tool of the business that act as an aid movement of the product from where it is
being produced to the customers or market or the point of sales. Within the marketing of the
goods the distribution is carried out by two type of channels (Cooper, 2009). This is comprised
of direct distribution and another one is indirect distribution channel. The kitchen would be
considered as the site that would offer the breakfast to the customers. The new venture would
make sale by means of direct selling technique. Here the delivery is made directly to customer
with no role of intermediaries. The Jolly's Java food and delivery services Ltd. Will open the
outlet at varied locations and also it provides service to the customers at their homes and offices
for the sake of fulfilling their requirements. This is effective in providing greater deal of
satisfaction which in turn increases the sales and profitability of new venture to a greater extent.
The business would have its own warehouse and it will make sales on direct basis. The
organization would take feedback from the customers so that enhancement can be done in
making delivery of the services. In addition to this other strategies will be implemented after
some years of operations when the organisation would gain the point of stability (Mount, 2012).
In the recent times there is greater role played in relation with channel of distribution as it
act as an aid in providing greater convenience to the customers. It is important that distribution
channel is as per the needs of the target market. As selling is being done on direct basis thus this
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would result in reducing the cost that is being incurred by the organization. The distribution
would be carried out through home delivery.
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