Business Idea Proposal "PlastyFree"

Table of contents

List of figures

List of tables

1 Executive summary

2 Introduction
2.1 Structure of the project thesis

3 Description of the product
3.1 Problem statement
3.2 Location

4 Application of Osterwalder’s business model canvas
4.1 Customer segments
4.2 Value proposition
4.2.1 The value proposition canvas
4.3 Channels
4.4 Customer relationship
4.5 Revenue streams
4.6 Key resources
4.7 Key activities
4.8 Key partnerships
4.9 Cost structure

5 Unique selling proposition

6 Environmental analysis

7 Marketing

8 Legal form

9 Financial plan for five years

10 Risk analysis

11 Resume

12 References

13 Appendix

List of figures:

- Figure 1: Value Proposition, Customer Profile Requested from: https://www.b2binternational.com/research/methods/faq/what- is-the-value-proposition-canvas/

- Figure 2: Business Model canvas Requested from: https://canvanizer.com/downloads/business_model_canvas_poster.pdf

List of tables

- Table 1: Target Customer Segmentation Requested from: own

- Table 2: Cash flow statement Requested from: own

- Table 3: Finance plan for five years Requested from: own

1 Executive summary

Facing the issue of plastic pollution that is increasing exponentially as the world’s population continues to grow, a forward-thinking solution has been created. The concept behind PlastyFree offers a new method for consumers to purchase their food and beverages. Research emphasized the fact that consumers are seeking ways to minimize their personal waste, make a meaningful contribution towards environmental causes, and act as role models for their friends, families and future generations. Therefore, PlastyFree solution creates a grocery shopping experience involving the least amount of packaging, which will reduce pollution overall and individuals’ carbon footprints.

PlasytFree grocery store operates with a minimal waste supply chain, where products from the supplier are delivered and stocked in reusable boxes and displayed in silos to reduce packaging. The most important aspect of this model is that customers are able to purchase products with their own containers. The business model is extremely convenient for customers in terms of portion sizes; they can buy products in whatever quantity they choose. In addition, products are supplied from mostly local and organic farmers and food producers. PlastyFree is inspired by the German trailblazer, “Original Unverpackt”, which is located in Berlin. This store, founded by young entrepreneur Milena Glimbovski and her team in 2012, envisioned a world of plastic-free grocery shopping. “Original Unverpackt” has been successful since its doors opened, and in addition to its brick and mortar location, an online store operates as well (Original Unverpackt, n.d.). PlastyFree aims to be a store in heart of Cologne which provides distance to its competitors, yet it is still surrounded by cafés, malls and leisure offers.

2 Introduction

PlastyFree is an innovative solution for conscious consumers seeking a way to reduce their carbon footprint. The solution is a grocery store that will operate with a minimal packaging supply chain which is environmentally friendly. By discussing problems that are encountered on a day-to-day basis, the idea of PlastyFree was invented. Humans have produced more plastic during the last 10 years, than during the whole of the last century. There are billions of pounds of plastic in the oceans which makes about up to 40 percent of the world’s oceans surfaces ( D’Alessandro, 2014). Especially in the grocery industry there is an extensive use of plastic packaging, resulting in a large portion of plastic pollution. The most common food packaging includes plastic bags, plastic bottles, styrofoam and wrappers. While consumption of plastic packaging in 1991 was 1.64 million tons, in 2013 it was already 2.76 million tons (Verbraucherzentrale Hamburg, 2018).

2.1 Structure of the project thesis

This project thesis starts with a description of the product and problem statement to give a brief overview. The next paragraph deals with Osterwalder’s business model canvas and it’s nine segments based on the business. A unique selling proposition is given in the next chapter which gives information about the product in comparison to other products on the market. In the further course of this thesis, an environmental analysis is given with comparison to two relevant competitors.

The next paragraph deals with a marketing plan which gives insight on how to gain attention to the business. Furthermore, the legal form of the business is presented. Following this, there is a financial plan for the next five years to give an overview over the costs and calculations. To conclude, there is a risk analysis and a resume.

3 Description of the product

PlastyFree is a grocery store operating with reusable boxes which are maintained in silos to reduce packaging. Products are delivered directly from suppliers. All products are supplied from local and organic farmers and food producers. In terms of portions and sizes, the customer can purchase products in whatever quantity they choose. This solution will reduce pollution and carbon footprints, whilst creating a new and innovative shopping experience.

3.1 Problem statement

“Plastic Pollution”, the general issue addressed by PlastyFree’s solution, is a term describing the situation when plastic that has gathered in an area and harms the natural environment and becomes dangerous to plants, wildlife and even humans (Conserve Energy Future, n.d.) The extensive use of plastic packaging in the grocery industry accounts for a large portion of plastic pollution ( D’Alessandro, 2014). Through field research, it can be discovered that this a dominating concern for families, working professionals as well as students. Different approaches can be made that can help to create an innovative solution. First, by substituting regular plastic with biodegradable plastic, plastic waste will become less harmful to the environment. Second, educating people about the implications of their wasteful behaviour could decrease the amount of waste produced. Minimizing packaging when shopping will reduce plastic waste overall (Change.org, n.d.). PlastyFree is a solution that targets the third approach- a solution that would minimize packaging to reduce overall waste more significantly than the former two approaches.

3.2 Location

In the process of selecting a target market for PlastyFree, the focus was on an area where the population would be attracted to the stores’ environmentally conscious brand. A fairly wealthy area with some gratification would be able to support the store. Based on these criteria, downtown Cologne’s “Ehrenstraße”, was chosen as the location for the store. The real estate prices are still high, yet customers with higher incomes are mainly on this street which are considered as potential customers.

4 Application of Osterwalder’s business model canvas

The Business Model canvas by Osterwalder describes how an organization creates, delivers and captures value. It offers a proven and widespread form to present business models. Furthermore, it is divided into nine building blocks which contain customer segments, value proposition, channels, customer relationship, revenue streams, key resources, key activities, key partnerships and a cost structure (Alexander Osterwalder & Yves Pigneur, 2010).

4.1 Customer segments

Once the location was successfully determined for the store, the next step contained a customer segmentation. The first building block focusses on costumers, different groups of people or organizations. It defines which customers are intended to be reached and served. Customer segmentation means dividing a broad group of potential customers and dividing them into more specific groups (Alexander Osterwalder & Yves Pigneur, 2010). Smaller groups are then focused on their unique needs and preferences. By dividing the groups using several criteria such as age, income, occupation and reasons for shopping at PlastyFree, there are three groups of customers identified: the young PlastyFree shopper, the Mom shopper and the Professional shopper. Each of these groups have different motives for shopping at PlastyFree. By identifying these groups, it makes it easier to create a suitable marketing plan. The young PlastyFree shopper is a person between the age of 20 and 30. This person is someone who goes to university and supports an environmentally friendly lifestyle. In terms of a marketing strategy, it is important to note that this group uses technology on a daily basis. On the other hand, this group probably spends the lowest amount of money due to their smaller income. The next group is the Mom shopper, which mostly stays at home taking care of the children. They are very concerned about the health of their family. As a result, the Mom shopper tends to buy high quality and environmentally friendly products and therefore spends the most money out of the three groups. The Professional shopper is firmly integrated into the professional life and is well educated. This group is aware of environmental problems and wants to contribute toward decreasing personal waste. Due to the upper income of this group, they are a target market for prepared food which is more expensive.

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Table 1: Target Customer Segmentation

4.2 Value proposition

The value proposition building block describes all products and services that create value for a specific customer segment. Especially the strengths of a value increase the number of customers (Alexander Osterwalder & Yves Pigneur, 2010). The value proposition of PlastyFree is the possibility to create a new and innovative grocery shopping experience which is conducive for the environment. It offers customers the ability to buy high quality products and on the other hand promote an environmentally friendly lifestyle.

4.2.1 The value proposition canvas

Customer jobs

The (job-to-be-done) is that during the last ten years, humans have produced more plastic than during the whole last century. Increasing pollution is the result of extensive use of plastic (D’Alessandro, 2014). Customers have the opportunity to turn their shopping experience into an environmentally friendly action.

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Figure 1: Value proposition Profile

Pains

Families, working professionals, as well as students are customer groups of PlastyFree. However, most students for example are aware of the fact that plastic is damaging the environment but are not willing to spend more money for food in grocery stores like PlastyFree.

Gains

People are seeking an alternative to plastic and a new shopping experience. They are willing to contribute towards the elimination of plastic waste.

Product

PlastyFree is a grocery store that operates without any plastic and is located in the heart of Cologne. The goal behind this business idea is a plastic free shopping experience and draw attention to the growing problem of harmful waste. A minimal supply chain is implemented by obtaining the product from local farmers or organic food producers. Customers can purchase reusable boxes and containers which they can fill individually.

4.3 Channels

This building block describes how a company interacts and communicates with customer segments, in order to deliver their value proposition (Alexander Osterwalder & Yves Pigneur, 2010). In terms of reaching the target market and maintaining consumer interest, channels must be identified.

To maintain customer interest for PlastyFree, brand awareness must be established. The main focus lies on creating this awareness through online and offline media. This includes YouTube videos, press releases, ads on Instagram and Facebook, as well as traditional advertisement on community billboards. The objective is to win over the customer, which is done by enhancing the shop’s credibility and dependability as a business. To do this, PlastyFree encourages honest reviews and testimonials from social media icons, as well as offer discounts, special offers and free samples of spotlighted products. The main goal is to provide potential customers with easy access to information on the brand and offer full transparency. PlastyFree intends to have reliable customer service, so that any issue that arises while shopping can be easily resolved. In addition, an in-store event will be created for customers, to get to know the brand and learn about grocery shopping at PlastyFree. Furthermore, PlastyFree has a satisfaction guarantee policy, enabling customers to return faulty items. The customer can do this within 24 hours and receives a refund or store credit in return. Due to the perishable nature of food, PlastyFree anticipates that there will be some issues that unfortunately cannot be prevented. However, with a customer orientated service, these situations can be minimized without any escalations. Faulty items are planned to be sold to farmers in order to increase sustainability.

4.4 Customer relationship

This part describes the types of relationships a company creates with each customer segment. Companies should know what type of relationship they want to build with each customer segment. Building a relationship with the customer and creating customer loyalty is essential (Alexander Osterwalder & Yves Pigneur, 2010). To achieve this, PlastyFree has a “bonus program”. Customers can collect bonus points with every purchase made. These bonus points can be exchanged for products at the store. Furthermore, customers are notified weekly on the online website about in-store sales and events. Customer service in the store has high priority. PlastyFree aims to build a loyal customer relationship by addressing each customer individually and therefore, build a personal relationship.

4.5 Revenue streams

A company must identify a way on how to generate its cash flow from each customer segment. Furthermore, revenue streams are the arteries of a company and play a major role (Alexander Osterwalder & Yves Pigneur, 2010). The revenue model is based on the following assumptions. Revenue streams will include sales from the online store and physical store. The revenue type is retail and revenue streams are assumed to be received on a daily basis.

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