Strategic Marketing Plan:

October 2005

Prepared by: 1 Person M Person A Person

ID: 1222937 ID: 5262100 ID: 5261929

email: Person@gmail.com email: Person@gmail.com email: Person@gmail.com Page 1 of 29

Strategic Marketing Plan: Green Eggs - October 2005

Table of Contents
CONTENTS
Executive Summary

PAGE
2 4

1.0 Introduction 2.0 Business Definition & Scope

2.1 2.2 2.3 2.4 2.5 2.6 Corporate Overview Nature of the Market Products Nature of the Competition Customers 2.5.1 Business to Business Customers (B2B) 2.5.2 Business to Customer (B2C) Scope of the Strategic Marketing Plan

5 5 5 6 6 7 7 8 8 9 9 10 10 10 11 11 12 12 13 13 13 13 13 13 14 14 15 15 16 16 18 18

3.0 Macro Environment Analysis

3.1 3.2 3.3 3.4 3.5 3.6 Political Factors Economic Factors Socio-Cultural Factors Technological Factors Natural Environment Factors Summary of Macro Environment Analysis

4.0 Industry Analysis

4.1 4.2 Market Industry Review Competitive Review 4.2.1 Threats of New Entrants/Exits 4.2.2 Bargaining Power of Buyers 4.2.3 Pressure from Substitutes 4.2.4 Category Capacity 4.2.5 Current Category Rivalry 4.2.6 Distribution Channels Customers Business to Business (B2B) Customer Buying Behaviour Business to Customer (B2C) Buying Behaviour Summary Industry Analysis Sales Seasonality Profits

4.3 4.4 4.5 4.6 4.7 4.8 4.9

5.0 TOWS Analysis 6.0 Marketing-Related Critical Success Factors

6.1 6.2 Critical Success Factors Problems & Opportunities Statement

19

20 20 20 21 21 21 21 22 22 22 23 23 24 24 24 25 25 25 26

7.0 Marketing Objectives

7.1 7.2 7.3 Mission Statement Corporate Financial Objectives Marketing Objectives

8.0 Marketing Mix Strategies

8.1 8.2 8.3 Target Market Selection & Segments Product Strategy Pricing Strategy 8.3.1 B2C Pricing Strategy

8.4 8.5

8.3.2 B2B Pricing Strategy Distribution Strategy Integrated Marketing Communication (IMC) Strategy

9.0 Budget
9.1 9.2 9.3 Marketing Budget Gross Profit Margins Monthly Budget Break Down

9.4

Marketing & Advertising Schedule 2006

26
27

10.0 Implementation
10.1 10.2

Implementation Plan GANTT Chart Marketing Activities, 2006 Calendar Year

27 27
28

11.0 Evaluation & Control Bibliography & Reference List

29

Executive Summary

(i) Context Green Eggs is a niche free-range egg-producing business conceived by Shelley and Alan Green of Pine Ridge farm. They have been producing free range eggs for five years; however the Green Eggs brand has only been established for three years. The Greens purchased Pine Ridge, located at the foothills of the Grampians in Ararat, Victoria, in 1984. The Greens now wish to achieve their marketing goals of growing the business and adding value to their free range eggs. Their vision also entails managing an environmentally and economically sustainable farming enterprise on their property. (ii) Marketing Problem The purpose of this Strategic Marketing Plan is to assess both the internal organisational capabilities, as well as external environmental factors that are likely to impact on the Greens free range egg business currently, and in the future. Green Eggs marketing problem is essentially the ability to sell value-added eggs profitably. They also want to be able to provide a product offering that is unique, differentiated, and superior in the market, thus providing a competitive advantage for their business. Their problem at present is that their brand is relatively unknown in the market, and they dont have a wide-spread distribution network in place to grow their business. (iii) General Industry Information The broader Australian egg industry (comprising caged eggs, barn-laid eggs, and free range) is at a mature stage, with moderate profits, and virtually no growth has been experienced in the market in recent times. The Free range egg industry, however, is at a growth stage, and representative of 20% of the total industry. The authors have identified trends such as the increase in consumer popularity for Omega 3, vegetarian, and organic eggs. Free range eggs are proving to be increasingly popular with environmentally conscious and health-concerned consumers, and those who enjoy premium quality eggs. Price-sensitivity is not as prevalent within this industry compared to the caged-egg industry. Consequently the purchase decision appears to be less price related and more life-style related. (iv) Free Range Egg Industry This niche industry is becoming more concentrated with several large free-range egg producers occupying this segment. A substantial number of market players are located in regional Victoria, New South Wales and Queensland (Eastern seaboard states). Green Eggs are one of the largest in their industry, and their main competitors identified are Pace Farms and Country Range Farming. Two main customer categories have been identified: Business to Business (B2B) customers, and Business to Customer or end users (B2C). B2B consists of food manufacturers and wholesalers and distributors. B2C comprises direct farm-gate sales, farmers markets, and sales to local restaurants and cafs. (v) Strategic Marketing Objectives Measurable, realistic Marketing Objectives have been developed to provide Green Eggs with a direction forward. Some of these objectives include: Sustain and improve existing gross profit margins through the generation of new business in profitable markets, Add value through differentiation of existing product range and future products introduced, Increase sales by 25% for the 12 months 20052006 from $856,207 to $1,070,259 through employment of a sales manager. These objectives have been tied in with Green Eggs corporate level financial objectives.

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(vi) Marketing Strategies Based on the objectives defined, Marketing strategies have been devised for the two broader groups (B2B and B2C), with emphasis placed on the development of new markets, through establishing a network of distributors Australia-wide. Part of this strategy entails employing a sales manager to focus on creating, managing and controlling this network of distributors. Again with careful consideration of the corporate level objectives, the authors have ascertained a 25% sales increase will also increase profit margins for Green Eggs. It is important for Green Eggs to have an identity in their local community, so sales through the farmers markets and farm gate direct sales will be important for their profile. This below-the-line marketing increases brand identity with the end consumer, and is also quite a profitable segment for Green Eggs. However, a balance needs to be achieved through maintaining high profit levels, and also ensuring distributors within the territory are not disadvantaged. The Marketing Budget allocated is 2% of sales turnover, or $17,124 per annum. The promotional mix comprises the improvement of their website, participation in two trade shows, as well as direct marketing campaigns. (vii) Implementation, Evaluation & Control Responsibilities have been assigned to specific members of the Green Eggs business. These tasks need to be completed within the specified timelines to ensure a smooth, timely implementation process. Regular evaluation and monitoring of the components of the marketing plan will be important, to ensure effectiveness and efficiencies are gained within the business and the plan integrates into their business structure. Proceeding implementation, regular reviews will be an integral part of the evaluation, primarily to ensure the plan is still relevant and continues to fit into their business.

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1.0 Introduction
Green Eggs is a niche free-range egg-producing business conceived by Shelley and Alan Green of Pine Ridge farm. Free Range eggs have been produced on the farm for the last five years, and the Green Eggs trading name has been established for 3 years. The Greens purchased Pine Ridge, located at the foothills of the Grampians in Ararat, Victoria, in 1984. The company initially focused on sheep farming on the property. Considerable time and resources were poured into improving the run down, dilapidated condition of the farm, and after working to a Whole Farm Plan, the Greens managed to address some of the main problems with the farm and improve it considerably. Following significant evaluation, planning and capital improvement, the grazing and wool production of the business continued to increase whilst the quality of the land, plant and equipment was gradually improved to a high standard. The decision was made that further diversification was required to make the farm large enough for the owners to work full time on the property, which until now had not been possible. It was identified at this stage that an opportunity existed to enter the market for free-range egg production. Being very time-poor and of farming and midwifery backgrounds, the Greens require a strategic plan to help them achieve their marketing goals of growing the business and adding value to their free range eggs. Their vision also entails managing an environmentally and economically sustainable farming enterprise on their property. The purpose of this Strategic Marketing Plan is to assess both the internal organisational capabilities, as well as external environmental factors that are likely to impact on Greens free range egg business currently, and in the future. Based on these capabilities, the authors will then determine the degree of importance each identified factor bears, and present a functional, strategic assessment of the organisation in the context of the wider market and ascertain how Green Eggs can continue to grow profitably and add value to their product offerings in the marketplace. Limitations of the marketing plan include geographic restrictions, as the farm is located in regional Victoria, so the authors will be required to assess the farm based on direct feedback from the client, as well as secondary data sources.

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2.0 Business Definition & Scope

2.1 Corporate Overview

The Green Eggs niche product offering was a decision by the Greens to diversify their business, profitably, whilst contributing a substantial revenue stream toward sustaining their property. Free range eggs have been produced on the farm for the last five years. These eggs adhere to stringent regulatory standards, such as the Poultry Code of Practice on Animal Welfare, and the Poultry Industry Code of Practice on Egg production. They have also undertaken a National Egg Quality Assurance (QA) program which covers all aspects of animal welfare and egg production. Shelley and Alan Green are dedicated to humane and environmentally friendly methods of egg production, and focus on maintaining their Hazard Analysis Critical Control Point (HACCP) Plan. They now wish to develop a marketing-orientation for their Green Eggs business, and establish a way to value-add their eggs. Green Eggs catch-cry is: Green Eggs are graded and delivered to you within 48 hours of being laid you cant get fresher than that! 2.2 Nature of the Market

The Free Range egg market is a niche market segment, which seems to be growing at a steady rate. However, the broader egg-producing market is reportedly at a mature stage (IBIS World, 2005, p.7). IBIS Worlds poultry report released in 2005 indicates the egg industry as a whole accounted for $326.0 million in revenue during 2003-2004. Industry comprised around 455 establishments that employed a combined workforce numbering approximately 3,000 persons (IBIS World, 2005, p.5). A possible explanation for the slowing of growth in the egg industry is suggested by IBIS as follows:

1. Evidence of new product innovation. 2. Low or declining growth in value added. 3. Ongoing refinement in production technology.
The author places importance on point two above; herein is where the opportunity lies for free-range market nichers. The primarily goal of niche marketers should be to hold market share for its market niche (Reed (2003, p. 104). For Green Eggs, this entails becoming the leader in their free range market segment, and consequently first preference by wholesalers as well as end-users in this market. Demand for this type of egg is typically driven by consumers (end-users). With an increased emphasis on Quality Assurance, and discussions of new labeling laws for organic and free range eggs, there is an opportunity for free range egg producers to profitably service this niche segment and deliver high-quality free-range eggs to consumers. Exhibits 1 & 2 below indicate the market split between free range and other types of eggs produced, as well as consumption per capita.
Share

Product/Services Eggs produced by battery chickens Eggs produced by free range chickens Eggs produced by barn (deep litter) chickens TOTAL

70.00% 20.00% 10.00% 100%

Exhibit 1: Egg Products in the Market (Source: IBIS World Report, p.6 2005).

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Reported Consumption of Eggs & Egg Products

250

Units Consumed

200 150 100 50 0

19 95 -9 6 19 96 -9 7 19 97 -9 8 19 98 99 19 99 -2 00 0 20 00 -0 1 20 01 -0 2 20 02 -0 3 20 03 -0 4

UNITS UNITS /CAPITA

Exhibit 2: Reported Consumption of Egg Products in Australia (Source: Adapted from IBIS World Report, p.6 2005).

Year

2.3

Products

Green Eggs product range comprises: 1. Small, under-sized eggs (less than 50g) 2. Normal sized eggs (60g -80g) 3. Large, over-sized eggs (80g+) Their products can be classified as business products: A product used to manufacture other goods or services, to facilitate an organisations operations or to resell to other consumers., and consumer products: Product bought to satisfy an individuals personal wants (Reed, 2003, p.160). 2.4 Nature of the Competition

The authors note this niche market segment is becoming more concentrated with several large free-range egg producers occupying this segment. A substantial number of market players are located in regional Victoria, New South Wales and Queensland (Eastern seaboard states). Green Eggs are one of the largest in their industry, next to Pace Farms who are the largest and Country Range Farming. Country Range Farming are a proactive Free Range egg company, and frequently appear in industry-related news articles and stories; renowned for their excellence in maintaining happy hens. It would appear Country Range Farming (highlighted in purple below) would be Green Eggs main competition. Pace Farms are a multi-national company, producing barn-laid, caged eggs and free-range eggs. They would also be strong competitors to Green Eggs. Moore Brown Eggs and Country Style Egg producers are much smaller producers, but still are direct competitors to Green Eggs. Many of the farms listed below are also accredited by the Free Range Farmers Association, and consequently their packaging carries this endorsement label. Some are also certified organic. There are numerous players in the broader caged-egg market, and for the purpose of this marketing plan just the six major players who occupy the majority of this segment have been presented below in Exhibit 4. As market leaders in the broader egg industry, it is important to note these companies also.

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NATIONAL FREE-RANGE EGG COMPETITORS:

Moore Brown Eggs Country Range Farming Windy Hill F R Eggs Free As A Bird F R Eggs Ardmona Free Range Poultry Alumuna Certified Organic Free Country Style Egg Producers Free Ranger F R Eggs Colisa Farm F R Eggs Ardmona Free Range Poultry Hens in Clover Pace Farm

Marslyn F R Eggs

Dream of Eden

Donnybrook F R Eggs Golden Yolk F R Eggs

Modras Eggs

Rutherford Bros F R Eggs Free Range Egg Project

Exhibit 3: National Free Range Egg Competitors (Source: Free Range Farmers Association, 2005).

AUSTRALIAN MAJOR MARKET PLAYERS: CAGED EGG COMPETITORS

Inghams Enterprises Bartter Enterprises

Cordina Chicken Farms

Parkwood Eggs Pty Ltd

Nova Foods Limited

Pace Farm Pty Ltd

Exhibit 4: Caged-Egg Competitors (Source: IBIS World, 2005).

2.5

Customers

During her visit to Swinburne University, Shelley Green identified her customer base as falling into two distinct groups. These are: Business to Business (B2B) Business to Customer (B2C). 2.5.1 Business to Business Customers (B2B)

The wholesalers within their B2B segment, to whom Green Eggs sell their eggs unbranded, sell their eggs in the market under a name owned by the wholesaler rather than the Green Eggs name. This also includes any eggs sold to food manufacturers to be made into other types of food stuff i.e. packet cake or muffin mix.

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2.5.2

Business to Customer (B2C)

The B2C segment consists of three main customer types. These are: Direct Sales - Eggs purchased directly at the farm gate Direct sales to consumers at Farmers Markets (usually once a month) Direct sales to Local restaurants and Cafs are also part of the business to customer group. This segment represents approximately 12% of the sales and around 33% of the profit. As the product being sold in this market segment is branded with the Green Eggs name, it is an excellent brand building exercise. However, volume sales and concentrated market-penetration will be achieved through their B2B customers. Section 8.1 discusses the target market in detail. 2.6 Scope of the Strategic Marketing Plan

The Strategic Marketing Plan will predominantly focus on the next twelve months activities; however the plan will also address the marketing activities in the context of corporate level objectives, for the subsequent three years.

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3.0 Macro Environment Analysis

There are five major macro (external) environment forces that will impact on an organisation or strategic business unit (SBU). These are: Political/Legal, Economic, Socio-Cultural, Technological and the Natural Environment (Reed, 2003, pp. 57-68). These factors can be ranked according to the levels of significance each factor bears on the business, as well as a rating of probability of occurrence. Rating Scale of Significance
1 = Not very Significant 2 = Reasonably Significant 3 = Significant 4 = Quite to highly 5 = Extremely Significant Significant

Exhibit 6: 5-Point Rating Scale: Level of Significance (Source: Adapted from Reed, 2003, p 56).

Rating Scale of Probability of Occurrence

1 = Not likely to Occur 2 = Possibility of Occurrence 3 = Likely to Occur 4 = Highly likely to Occur 5 = Extremely likely to Occur

Exhibit 7: 5-Point Rating Scale: Probability of Occurrence (Source: Adapted from Reed, 2003, p 56).

3.1

Political Factors

There are a number of legislative regulations and process that will have a direct impact on Green Eggs business. There is a huge amount of movement in the area of Food Safety laws, with the media regularly reporting food poisonings, salmonella outbreaks, and exposing establishments who dont comply with Food Safety laws. Food Safety Traceability Standards: Victorian Food Safety laws are particularly tough on food service businesses, with the Government currently training new inspectors to visit food outlets including retail as well as production facilities. A recent outbreak of food poisonings, resulting in deaths, has gained momentum in the media and those operating in this sector must ensure their compliance to rigid HACCP (Hazard Analysis Critical Control Point) Food Safety standards. New South Wales Food Safety laws are also quite tough, but Victoria leads the way and laws passed in this state are being observed, with interest, by the other states. South Australia will be enforcing new Food Safety laws toward the end of 2006, where all premises classified as Class 1 will have to comply to HACCP laws like Victoria. (Class 1 refers to Hospital Food premises, Aged Care premises & Child Care establishments). Restaurants will also be classified under Class 1 in some states. Implications: Eggs that are not transported and stored at correct temperatures, can shorten the shelf-life of the goods, and consequently contaminated products may be consumed by the end-user. Suppliers of perishable goods, such as eggs, must be HACCP accredited and achieve 100% compliance during food safety inspections. Non-compliance and a serious food poisoning or salmonella outbreak could see legal action taken against the company. Level of Significance: 5 Probability of Occurrence: 3

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3.2

Economic Factors

Overall Egg Industry Decline: A year of growth is predicted for 2006, with experts holding that egg production will continue to grow over the next year. A substantial reduction in feed prices will also assist poultry farmers. However, in the incidence of drought and poor weather conditions, industry will slow and the overall industry growth will decline. Implications: If the industry overall does in fact decline, free range egg farmers will also experience this economical downfall. Particularly with free range hens exposed to weather conditions and more susceptible to disease, these factors could prove to be an enormous hindrance to the Green Eggs business. Level of Significance: 4 3.3 Socio-Cultural Factors Probability of Occurrence: 3

Socio-cultural factors such as changing social values and lifestyles of consumers may affect the demand for the Green Eggs product. Changes in Consumer Preferences IBIS World reports that changing lifestyles may have an impact on consumer preferences for eggs (whether free range or caged). As eggs were once a traditional part of Australian breakfast, these days people have busier lifestyles and have less time to prepare a cooked breakfast (IBIS World, 2005, p.6). However, on the flipside, people are eating out more often, and this can often encompass eating brunch, a combination of breakfast and lunch that often includes bacon and eggs. So the absence of cooked breakfasts at home can be possibly balanced out by the increase in people frequenting restaurants. Implications: The author doesnt rate this factor as being serious, and significance level has been rated as 1 = not very significant. Also there has been an increase in business travel, and most hotels commonly serve cooked breakfasts encompassing eggs, plus people are tending to buy more convenience-oriented foods, such as pastas and noodles, all of which contain eggs. Level of Significance: 1 3.4 Technological Factors Probability of Occurrence: 2

In todays turbulent external environment, technological developments and innovations can drastically improve an organisations operations, and bring enormous benefits to business in terms of creating new efficiencies and streamlined processes. Advancements in Production Equipment Green Eggs have a leading edge over other free range market nichers, with their implementation of the new Australian-designed Eco-Shelter, as well as the Free Range Harvester another Australian designed product. A government grant of $93,000 was received for this technology. Being the first in the industry to adopt these new technologies, Green Eggs are in an enviable position in the market. However, with any new technology, the product soon moves from being unique to becoming an industry standard, and new technology can quickly becomes obsolete. There is also an opportunity to bar-code

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the product, for food traceability purposes. This is being used in the beef industry, and it would be an opportunity to be first to embrace this technology in the egg industry. Implications: The threat to the business will be if other free range egg producers also adopt the new technology and hence introduce the same efficiencies within their businesses as Green Eggs. Then their point of difference will become an industry standard, and not unique to their business. Their challenge will to continue their improved levels of production, and sustain a competitive advantage (i.e. focus on taking away competitors market share). Level of Significance: 5 3.5 Natural Environment Factors Probability of Occurrence: 4

All primary producers are governed significantly by the environment. Factors such as extreme climate changes can have detrimental implications. Extreme climate changes: These changes range from drought and famine to floods and hurricanes. Areas affected vary in each occasion, and as such the implications for these primary producers vary. Implications: The repercussions of these can result in feed shortages, reduced chicken production and thus supply of chickens to Green Eggs. Consequently this will result in fewer eggs produced. The probability of occurrence is relatively high as climate fluctuations are becoming increasingly common, the impact of which can be diluted depending on the severity, location and range. Level of Significance: 2 3.6 Probability of Occurrence: 4

Summary of Macro Environment Analysis Level of Significance

5 4 1 5 2

Implication:
Political: Food Traceability Standards Economic: Overall Egg Industry Decline Socio-Cultural: Changes in Consumer Preferences Technological: Advancements in Production Equipment Natural Environment Factors: Extreme Climate Changes

Probability of Occurrence
3 3 2 4 4

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4.0 Industry Analysis

4.1 Market Industry Review

Looking at the Egg Industry Product Life Cycle (PLC) model below, the broader caged egg industry has reached a mature stage of the PLC, whereas the organic and free-range egg industries are young in comparative terms and can be classified as being in a growth phase. The authors note freerange eggs together with other niche egg segments, like vegetarian or omega 3 eggs are becoming increasingly popular with consumers. There is an opportunity for Green Eggs to extend the life of their egg product offering in future, with the introduction of certified organic eggs, hence the label in the lifecycle extension phase.

CAGED EGGS

CERTIFIED ORGANIC EGGS

Life-cycle extension

ORGANIC EGGS

FREE RANGE EGGS

Introduction

Growth

Maturity

Decline or extension
Exhibit 8: Egg Industry Product Life Cycle (PLC) (Source: Adapted from Reed, 2005, p.90).

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4.2

Competitive Review

Porters Five Forces Model depicts the forces that drive industry competition in a dynamic business environment. The factors contained in this model have been outlined below. 4.2.1 Threats Entrants/Exits of New

Exhibit 9: Porters Five The 70% of the market not Forces Model currently adhering to organic egg production could use their sizeable (Source: Reed, 2003, p.62). resources to make a significant impression on this category. Without even a legal definition of what actually constitutes free range, there is an enormous threat for existing genuine free range egg producers to profitably maintain their market share, with little or no regulation restricting the entrance of new players into the market.

4.2.2

Bargaining Power of Buyers

Producers operating within the Primary Industries sector are very much reliant on cost-effective supplies of raw materials. The livelihood of their business depends greatly on the costs of these materials (i.e. feed prices, packaging), in order to sell their product at a price that covers these costs and provides the necessary profit margins to survive long-term. Their ability to remain price-competitive in the market is governed by the prices they can obtain from their suppliers. 4.2.3 Pressure from Substitutes

Since de-regulation of the Australian egg industry in 1994, there has been hot debate of the contentious issue of egg labeling. As noted above in 4.2.1, at present there isnt actually a legal definition of what actually constitutes free range. Consequently, industry experts suggest the number of caged eggs being passed off as free range eggs could constitute as much as half of the eggs sold within the Australian marketplace (Thomas, H., 2005, p.7). 4.2.4 Category Capacity

According to IBIS World, (2005, p.6) the five year period preceding June 2004 saw the market remain fairly stagnant. However the free range egg industry is experiencing growth, and consequently there are many companies operating in this industry. With people enjoying eating out socially more and more, and consumers becoming health and lifestyle conscious, the category is likely to continue growing for some time. 4.2.5 Current Category Rivalry

The major caged egg competitors have been listed in section two. However, Green Eggs dont compete directly with these players. Their primary competition stems from rival free range and organic egg producers. These major players have also been highlighted in Section two, Exhibit 3.

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4.2.6

Distribution Channels

Green Eggs currently distribute direct to the customer, or through a distributor or food manufacturer. The distribution channels to market have been outlined below:
Green Eggs Customer

B2C

B2B

Green Eggs

Distributor

Customer

Food Manufacturer

Customer

Green Eggs must review their existing distribution intensity, and potential to increase this intensity as they have only lightly penetrated the market. Utilising their latest government grant for $93,000 for their eco-shelter, their capacity to house their poultry effectively, and automatically collect eggs with the new egg-collecting system, the Greens should certainly be in a position to provide large volumes of product to the market. An opportunity exists for Green Eggs to become more commercially-oriented within the free range egg industry, by setting up a network of distributors across Australia at key locations. This could prove to be a huge strategic step forward, and lead the business into a new growth stage. The authors suggest Green Eggs employ a Sales Manager to roll out this plan, and manage, evaluate and control these distributors. They may even consider exclusive distribution within key territories, and work closely with the distributor in each state to build their business. This has been discussed in more detail within the Distribution Strategy section. 4.3 Customers Green Eggs customer base has been classified under the two broad headings of B2B and B2C groups. Within the B2C analysis, buyer behaviour of the end consumer has been analysed, which will provide an insight into the reasoning behind the customers purchase decision. To become more marketoriented, it is important for Green Eggs to have sufficient knowledge of their end-user customer behaviours and attitudes, as well as an understanding of the motives behind their customers purchase decisions (Reed, 2003, p.65). A simple chart below has been supplied that essentially addresses the 5 Ws of customers, namely: Who, Where, What, When and Why within the context of the purchase decision.

4.4 Business to Business (B2B) Customer Buying Behaviour

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CRITERIA
Who is involved in the buying?

DISTRIBUTOR
Proprietor, Purchasing Officer

FOOD MANUFACTURER
Quality Assurance Manager, Business Development Manager, Purchasing Officer. Individually or collectively involved in the purchase decision. Place orders for egg products directly with Shelley and Alan Green at Green Eggs. They dont purchase through intermediaries. Undersized eggs Want to make the eggs into other food products Regular purchases also at least three times per week.

Where do they buy?

What do they buy?

Why do they buy? When do they buy?

Place orders for egg products directly with Shelley and Alan Green at Green Eggs. They dont purchase through intermediaries. Bulk eggs unbranded. Either packed in dozens (more for the distributor) or 15 dozen outers Want a quality branded free range egg product to take to market. Purchases are frequent as these customers are regularly turning stock. Purchases approximately 3 times week

4.5 Business to Customer (B2C) Buying Behaviour

CRITERIA:

FARM GATE SALES & FARMERS MARKETS

The person who does the shopping or the person who intends to offer the eggs for consumption to family and friends. The consumer will purchase the product either from the farmers market stalls, directly from the farm gate or via the local produce store, caf, supermarket or delicatessen. Purchase eggs branded with the Green Eggs label. Usually in smaller quantities. All the members of this channel buy in dozens or half dozens. The decision to purchase for this channel is usually attributed to a feeling or belief Purchase Decision based on criteria such as health rated issues. Consumers make the decision based on concerns for the treatment of the birds producing the eggs, and also what they are fed. Personal preference based on lifestyle and cultural upbringing is a key influencing factor in the decision process. The end consumer will purchase at least once a week.

LOCAL BUSINESSES CAFS & RESTAURANTS

Local business purchasing is usually conducted by the manager or owner of the outlet, or the Head Chef in the case of a caf or restaurant. The local business will purchase from Green Eggs direct.

Who is involved in the buying?

Where do they buy?

What do they buy?

Occasionally some local business cafes etc will bulk-buy in 15 dozen cartons.

Why do they buy?

Image of their restaurant and caf like to encourage lifestyle-conscious patrons, also premium image Like to support the community support for local producers of products

When do they buy?

Weekly

4.6 Summary Industry Analysis

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Market Industry Review

Organic Eggs trend

Omega 3 Eggs trend

Vegetarian Eggs trend

Main Competitors Customers

Country Range Farming Farmers Markets

Pace Farms Wholesalers

Distribution Channels

Direct to Customer

To Customer via Distributor

Country Style Egg Producers Local Businesses (Cafs & Restaurants To customer via Food Manufacturer

Overall industry reached mature stage. Free Range Eggs Growth stage Moore Brown Eggs Manufacturers

4.7 Sales Budgeted sales are estimated to occur with a reasonable amount of consistency over the course of the 2005-2006 year, based on current financial year sales. Anticipated peak sales occur in August with 44,816 dozen, October 43,153 dozen and December 42,896 dozen. June is projected to have the lowest sales with 19,326 dozen sold. For the purposes of this marketing plan, we are making the assumption that sales of free range eggs for the egg farming industry are reflective of the sales of the Green Eggs product. The following graphs below depicts the egg sales produced by the three sheds, then current egg sales (dollar sales) as well as projected egg sales. Please also refer to Appendix 1.

Egg Sales x Shed

25,000.00 20,000.00

$ Sales (Doz)

15,000.00 10,000.00 5,000.00 0.00 July A ugust Septem ber October N ovem ber D ecem ber January February March A pril May June Shed 1 Shed 2 Shed 3

Month
Exhibit 10: Unit Egg Sales x Shed Source: Adapted from financial data provided by S. Green

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Current Egg $ Sales x Month

100,000 90,000 80,000 70,000 60,000

$ Sales

50,000 40,000 30,000 20,000 10,000 0 July

140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 July August September October November December January February March April May June

August

September

October

Projected Egg Sales x Month (Year 2)

November

December

Month

January

February

March

Exhibit 11: Current Monthly Egg Sales Source: Adapted from financial data provided by S. Green

April

May

June

$ Sales

Month

Exhibit 12: Projected Monthly Egg Sales

4.8 Seasonality
Source: Adapted from financial data provided by S. Green Strategic Marketing Plan: Green Eggs - October 2005

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Egg sales do not seem to be a particularly seasonal market. Sales occur consistently during each of the four seasons. Peaks appear in sales charts throughout the year and the two lowest months for sales are January and June, which are 5 months apart. It therefore appears that no correlation exists between seasonality and product sales. January is often a quite month for sales across many industries, as it is an annual holiday period. June can also be quiet with firms preoccupied with end of financial year activities. 4.9 Profits Profits in the egg farming industry are moderate. Sales of eggs direct to market for businesses similar to Green Eggs can be very profitable although they do incur added costs like staffing and packaging; most eggs sold direct from the farm gate are packaged in dozens therefore lifting packaging costs. Without the middle man all of the profit from these sales go back directly to the farm. Whilst sales via a wholesaler are much more significant in size, they also provide economies of scale in terms of distribution, where packaging costs can be amortized, to a degree, by the higher volumes of stock produced utilising the same resources and overhead costs. As wholesalers generally take stock in 15 dozen outers and provide more efficient turnover of stock. The authors have calculated Green Eggs current profit margins (which appear to be at an acceptable level for their industry) based on their fixed and variable costs, as well as sales income. There is an opportunity to increase their Gross Profit through increasing sales by establishing new markets and creating a mix of business through different channels. (Please refer to Appendices 2 , 3 & 4).

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5.0 TOWS Analysis:

THREATS

Threats & Opportunities, Weaknesses & Strengths

OPPORTUNITIES

Free-Range Farmers who are also certified organic Disease, weather conditions Competition from traditional cage-egg producers Growth in barn-laid egg producing market segment Demand exceeding supply cash flow may become a hindrance, as well as keeping up with production levels. Administrative procedures as the business grows, systems and procedures must be firmly in place, or Green Eggs will be playing continual catch up. Working in the business, and no time to work on the business. Food poisoning Strict Victorian Food Safety standards dont allow any opportunity for negligence. Green Eggs must ensure accountability from other parties in the chain. i.e. transport companies, wholesalers, freight-forwarders etc. Food poisoning and outbreaks from the restaurant will always fall back on the weakest link (i.e. whoever doesnt have technology or systems in place to prove their part in the process was maintained in accordance to the standards will lose out). Drought Significant drop in prices from caged-eggs, would drive free-range prices down also Overseas Exporters of organic and free range eggs

Become certified organic Set up a distribution network of wholesale customers across Australia at key locations, thus channeling high volumes of eggs through centralized customer base Participate in more industry events to build and strengthen the brand image of Green Eggs i.e. a pull-through marketing approach, that is, instill a demand for the product in the end-users who will create a demand the product from further up the chain. Sub-category of large eggs and small eggs can be niche-marketed to specific customers Differentiate packaging for standard eggs, as well as unique packaging for the large and under-sized eggs to appeal to these niche segments Utilize technology temperature recording devices to prove the eggs are stored, carried and delivered to premium standards (as opposed to relying on traditional HACCP hand-written documents which can be disputed). Provide training and support to their distributor network an opportunity exists to out-service their competitors. Bar-code product for food traceability purposes. Currently being conducted in the beef and fish industries; opportunity to be the first in the market to adopt this new technology.

STRENGTHS

WEAKNESSES

Eggs delivered to customer within 48 Hours Adhere to Poultry Industry Code on Animal Welfare Adhere to Poultry Industry Code on Egg Production Undertaken a National Egg Quality Assurance program Eco Shelter - Australian product, Green Eggs the first to adopt this new technology and received $93K government grant. Free Range Harvester - Australian product, Green Eggs the first to adopt this new technology. Has increased production levels. Was given government grant of $93,000 for this technology. Production figures have reportedly exceeded those of caged birds, which would allow for greater price competitiveness

Lacking market presence Lacking network of wholesaler customers around Australia Customer base limited to Farmers Markets and one major wholesaler. (Shouldnt have all your eggs in one basket!!) Need to become listed with more industry associations to build the marketing communications Lack of differentiation in the marketplace packaging for free range eggs needs to be quite different from caged eggs

Exhibit 13: TOWS Analysis Table (Source: Adapted from Reed, 2003, p.25 Strategic Marketing Plan: Green Eggs - October 2005

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6.0 Marketing-Related Critical Success Factors

6.1 Critical Success Factors
CSF: 1. Differentiate Product Offering RATIONALE: Green Eggs brand has to be marketed as a unique offering, and not become a me too type product. SWOT analysis identified ways to achieve this may be to create unique packaging. Management of Green Eggs may want to investigate this more deeply Conduct a consumer feedback study locally - their farmers markets would be an ideal situation. Through utilising their state of the art technology and ensure its running close to full capacity. The more units produced, the more units that can be sold. Target new Market Segments to grow the business

2. Increase production capacity

3. Market share to be Increased

4. Profitability

5. Brand awareness

6. Economies of Scale 7. Quality Assurance

Maintain profitability levels through containing overheads (fixed costs) proportionate to sales growth. Very low levels exist within the industry. With the new sales manager to assist, and through the development of a targeted marketing strategy. Opportunities to contain or reduce production costs through maximizing their technology. Maintain their HACCP plan, ensure storage and delivery of goods by partners in their supply chain continues to adhere to their QA program.

6.2 Problems & Opportunities Statement

= Green Eggs have the capability to achieve the CSF = Green Eggs will require assistance to achieve the CSF CSF Capability Yes/No Green Eggs Organisational Capabilities
S.Green has identified their large and undersized eggs could have potential within niche market segments. Land resources are available. S. Green stated they have the land resources to build additional sheds The author suggests the assistance of an experienced Sales Manager will be required to move the business to the next stage. Currently profitable business have the capacity to maintain and increase with assistance. New sales manager will focus on driving distributors, and also be involved with marketing support activities. Will be achieved through overall growth. Currently have sound QA and HACCP system in place.

1. Differentiate Product Offering 2. Increase production capacity 3. Market share to be Increased

X X

* * *
X X

4. Profitability 5. Brand awareness 6. Economies of Scale 7. Quality Assurance

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7.0 Marketing Objectives

7.1 Mission Statement The authors suggest the following mission statement for Green Eggs succinctly defines their core business and underpins their corporate values: Dedicated, knowledgeable people committed to providing quality free-range eggs to the Australian market within 48 hours of production, whilst adhering to the highest possible standards in the industry. We are proud of our premium quality, free range eggs!! 7.2 Corporate Financial Objectives Objective: Revenue Objectives Gross profit margin $ Gross profit margin % Current $856,207 $227,557 26.6% Year 1 $1,070,259 $247,810 23.2% Year 2 $1,337,823 $360,622 27.0% Year 3 $1,672,279 $501,636 30.0%

Exhibit 14: Green Eggs Financial Objectives Table

7.3 Marketing Objectives

Source:

Adapted from financial data provided by S. Green

1. Sustain and improve existing gross profit margins through the generation of new business in profitable markets, whilst utilising existing resources and keeping overhead costs to a minimum. 2. Increase brand awareness in free range egg market through allocating 2% of annual sale resources into advertising and promotions. Develop the marketing mix to effectively promote the Green Eggs brand. 3. Add Value Through Differentiation of existing product range and future products introduced, create distinct packaging, and enhance overall Green Eggs brand image. Unique Larger carton system could be implemented for the large egg range.

4. Increase sales by 25% for the 12 months 2005-2006 from $856,207 to $1,070,259 through employment of sales manager. 5. Establish the position of Sales Manager in the next financial year and fill the position with a dynamic candidate who is capable of generating new sales, managing distribution channels and forward planning. 6. Change Consumer Egg Consumption Behaviour in regard to methods of consumption. Establish eggs as a preferred snack food, not just a commodity product. Add point of sale recipe cards into egg cartons.

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8.0 Marketing Mix Strategies

8.1 Target Market Selection & Segments

Green Eggs market segments have been classified into two major groups: B2B and B2C. The general B2C category can be broken down into four separate segments, and each market has been segmented according to lifestyle, demographic and socioeconomic characteristics. These customers have also been segmented based on benefits, such as health conscious (or lifestyle conscious), and quality seeking (Reed, 2003, p.128).
Lifestyle Conscious Working Professionals o o o o o o o o Environmentally Nature Lovers Concerned o o o Concerned for Animal Welfare o o o o Enjoy eating healthily Want to eat fresh, naturally produced foods Enjoy eggs as part of a Sunday all day relaxed breakfast. Yuppies who enjoy eating out and breakfast is a social occasion. Will pay premium for high quality, free range eggs. Eggs benedict and hollandaise eggs are popular meals with this group. Appears to be trendy to enjoy all day breakfasts with this group too. Frequent patrons of boutique and caf style outlets who serve free range eggs Concerned about the natural preservation of the environment Importance placed on best practice and sustainable environments. Quite often purchase free range eggs at markets as well as their local supermarket. Concerned for the welfare of the birds Dedicated to the humane treatment of all animals Careful about what products they purchase depending on the rearing and treatment of the animals. Buy eggs from farm gate or markets

There is also an opportunity to service the Medical/Pharmaceutical Research market segment, as this segment uses eggs to carry out laboratory testing and culture-growing. This could be an excellent outlet for Green Eggs undersized eggs. The B2B target market, including the wholesalers and distributors, are seeking a value for money product that is fresh, high quality, and will be delivered to them with as much shelf-life of the product preserved as possible as they are on-selling the product. Segmentation of this market will largely be based on geographic location, as the distributor network will on-sell the Green Eggs product and will require service and support in each location. Food manufacturers are generally concerned with the premium quality of the eggs, as these eggs go into other food stuff items and must adhere to their high standards. Complete QA validation and evidence of HACCP compliance throughout the supply chain is imperative. 8.2 Product Strategy

When a company is considering product strategies, they need to consider factors such as modifications that may be required to existing products, or what new products may need to be added to their portfolio (Reed, 2003, p.136).Throughout this marketing plan so far, the authors have discussed the lack of market presence and brand awareness of the Green Eggs brand. Within the TOWS analysis conducted, an opportunity exists to differentiate packaging for their standard eggs, as well as special packaging for their large and under-sized eggs to appeal to these niche segments.

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The authors suggest two simple, straight-forward strategies that tie in with the strategic marketing objectives (highlighted in yellow in the below matrix): 1. Market Penetration strategy: the aim is to increase market share for the Green Eggs existing products. 2. Market Development strategy: Develop new markets (with existing products). Expand through distributor network in each state.

PRODUCTS EXISTING EXISTING Market Penetration NEW New Product Development

MARKETS

NEW

Market Development

Diversification

Exhibit 15: Ansoff Product-Market Matrix (Source: Adapted from Reed, 2003, p.103)

8.3

Pricing Strategy

Pricing needs to be reviewed at least quarterly, as competitor activity and market trends are external variables that will impact upon their business. Decisions on whether to increase prices should be based on information obtained through a comprehensive market review. This review should: Analyse the market trends Assess competitors Review economic data Assess outside influences Review internal profits and capabilities Assess cost increases likely to be incurred throughout the supply chain 8.3.1 B2C Pricing Strategy

Current average price per dozen is $3.40. (Green Eggs brand). The authors suggest a 10 cent increase to assist bottom line profit margin. Also, consumers of free range eggs value the taste and freshness of the product highly and as such are willing to pay a premium for the high quality. Green Eggs have positioned their prices lower than their competitors, and research conducted by the authors revealed retail (supermarket) pricing for dozen packs of free range eggs selling for as much as $6.83 (Pace Farm organic EcoEggs 12pk Coles Box Hill. Appendix 6). Standard being Coles free range eggs at $4.69, so in fact by lifting the prices, this may assist in creating a high-quality, premium perception in the mind of the consumer.

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8.3.2

B2B Pricing Strategy

Sell to wholesalers for $2.00 per dozen (10c increase), sell to manufacturing industry for 60c/ kg (20c increase). To achieve the corporate financial objectives of 25% sales growth and increase in profit, the authors suggest an incentive scheme for their wholesale customers. This has been delineated in the table below. Incentive Scheme

Volume (doz) 0-150,000 150,001 - 250,000 2500,001 - 350,000 350,001+ by negotiation

Price ($ per doz) $2.10 $1.95 $1.80

8.4

Distribution Strategy

The distribution strategy comprises the use of distributors, who will on-sell the product to the market, which will quickly assist Green Eggs product to infiltrate the market. A more selective distribution strategy will be employed, where Green Eggs will work with key (perhaps exclusive) distributors in locations around Australia. Necessary customer service support will also need to be considered when setting up the national distributor network. The new sales manager would ultimately handle this, as well as focus on relationship development and support for the new distributors. As an integral part of the distribution strategy is the necessity to maximise their state-of the art resources, and increase production with their range harvester and eco-shelter. Bar-coding food traceability technology was identified in the TOWS analysis this is the way of the future for primary industry producers, where large multinational supermarkets and food manufacturers want to trace the food from the farm to the fork. 8.5 Integrated Marketing Communication (IMC) Strategy

It is important for Green Eggs to have an identity in their local community. Sales via the farmer markets and farm gate direct are not only very profitable, but build the Green Eggs brand and generate much-needed awareness. However, these sales should be developed with a very low key approach as the sales through this segment do not want to conflict with local business sales or retailers who stock the brand and have purchased from the distributor. This is more sales for tourists and passing trade, although they also help keep the Green Eggs company image strong within the local community, which is important in their industry. The IMC strategy will target the end user audiences (identified in 8.1), as well as participation in trade shows to support the intermediaries (B2B customers). These activities will ultimately be implemented to stimulate purchasing across all target audiences.

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9.0 Budget
9.1 Marketing Budget

The Marketing Budget for a larger organisation is usually allocated to marketing based on 3-4% of sales turnover. The authors have taken a more conservative approach to establishing a marketing budget for Green Eggs, due to the fact that little no marketing or advertising expenditure has taken place in the past (around $600 per annum). In order for these strategies to be successful, it will be important to have a combination of complimentary activities occurring simultaneously, to derive as much benefit as possible. For example, with the Melbourne 2006 Fine Food trade show event as a suggested marketing activity, customers will search the internet before and after the event to find out more about the exhibitors. Therefore the improvements to Green Eggs website will need to commence long before this deadline.

Green Eggs current sales for financial year 04/05: Year 1 Objective: Year 2 Objective: Year 3 Objective: 9.2 $1,070,259 $1,337,823 $1,672,279

$856,207

Gross Profit Margins $227,557

Gross profit margin for current year: Year 1 Objective: Year 2 Objective: Year 3 Objective: $247,810 $360,622 $501,636

Green Eggs Gross Profit $

$600,000

$501,636
$500,000

$360,622
$400,000

$Profit

$300,000 $200,000 $100,000 $0

$227,557

$247,810
Gross Profit

Current

Year 1

Year 2

Year 3

Exhibit 16: Green Eggs Gross Profit Source: Calculated from the financial data provided by S. Green

Year

* Refer to Appendix 5 for more information.

Strategic Marketing Plan: Green Eggs - October 2005

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9.3
JUL 75,073

Monthly Budget Break Down

AUG SEP OCT NOV DEC 90,253 JAN 54,629 FEB 66,456 MAR APR MAY 58,516 JUN TOTAL

94,265 74,093

90,790 70,937

70,690 69,514

40,991 856,207

Mktg Budget 1,501 1,885 1,482 1,816 1,419 1,805 1,093 1,329 1,414 1,390 1,170 820 17,124

Marketing Budget = 2% of sales, or $17,124 per annum (current year).

9.4

Marketing & Advertising Schedule 2006

Tool Website Development

Description Tidy up and enhance existing site, correct functionalities and errors, add extra information (e.g. media releases and articles, images of the property), improve search engine listings Mail out to wholesalers and restaurants across Australia The major hospitality and catering show in the Southern Hemisphere. Features multinationals as well as local producers. An excellent way to attract new customers and distributors An excellent way to attract customers and distributors

When Commenc e Jan-06 Ongoing

Cost of Production $ 4,000

Total Costs $4000

Direct Mail Campaign Trade Show: Melbourne Fine Food

Jan, April, Jul, Oct Sep-06

$400 per batch of 200 Stand $4500

$2000 $8,000 includin g display, samples $3,500

including

Trade Show: Regional Food and Produce Shows TOTAL

Feb-06

Stand $2500

display, samples $17,100

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10.0
10.1
What Website Development

Implementation
Implementation Plan
Description Tidy up and enhance existing site, correct functionalities and errors, add extra information (e.g. media releases and articles, images of the property), improve search engine listings Mail out to wholesalers and restaurants across Australia The major hospitality and catering show in the Southern Hemisphere. Features multinationals as well as local producers. An excellent way to attract new customers and distributors An excellent way to attract customers and distributors When Commence Jan-06 Ongoing Details S.G to find a web designer or web consultant

Direct Mail Campaign Trade Show: Melbourne Fine Food

Jan, April, Jul, Oct Sep-06

S.G/Sales Manager S.G./A.G/Sales Manager

Trade Show: Regional Food and Produce Shows

Feb-06

S.G./A.G/Sales Manager

10.2

GANTT Chart Marketing Activities, 2006 Calendar Year

Jan 2006 Dec 2006

TASK Website Development Direct Mail Campaign Trade Show: Melbourne Fine Food Trade Show: Regional Food & Produce JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

= Shelley/Alan Green and Green Eggs Employees

= External Consultant

Strategic Marketing Plan: Green Eggs - October 2005

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10.0

Evaluation & Control

The authors have supplied a marketing control system to assist Green Eggs with the Evaluation and Control of their Strategic Marketing Plan, following implementation of the actual plan:

Benchmarking identification of an appropriate standard

Comparative: Current marketshare Current and potential sales levels. Quality levels

Measurement of Performance

Measure market share ascertain why increases, or decreases, occur Profit Margins Sales Growth current versus potential Achievement of customer satisfaction Production capacity proportionate to sales turnover. i.e. supply meeting demand. Wastage minimal/avoided. Manage growth of overall business

Evaluation of Performance

Performance will be measured according to efficiencies and effectiveness gained within the organisation. Return on Investment (ROI) must be achieved, relative to marketing expenditure. Changes in the external environment, such as

Corrective Action

Adaptive Control System: Continuous monitoring of the external environment versus internal capabilities. i.e. review pricing, review staffing , production, administration, distribution channels. Essentially all areas outlined in the marketing plan.

Exhibit 17: Flow Chart The Process of Evaluation & Control (Source: Adapted from Reed, 2003 p.268).

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Bibliography & Reference List:

Books: 1. 2. Reed, P., 2003, Strategic Marketing Planning, Thomson, Victoria, Australia. Gilligan, 2003, Strategic Marketing Planning, Butterworth-Heinemann, Oxford, United Kingdom.

Online References: 3. IBIS World, 2005, Poultry Farming (Eggs) in Australia) Report No. A0142 Website reference: http://www.ibisworld.com.au Date Accessed: August 2005 Komis, N., 2002, Egg Labeling Requirements , Australian Egg Corporation Limited, North Sydney, Victoria, Australia. Website reference: http://www.aecl.org Date Accessed: August 2005 The Age, 2005, The Egg Files, taken from Australian Egg Corporation Limited, North Sydney, Victoria, Australia. Website reference: http://www.theage.com.au/news/Epicure/The-eggfiles/2005/05/16/1116095890873.html Date Accessed: August 2005 Free Range Farmers Association Incorporated, 2003, Egg Production, Labertouche, Victoria, Australia. Website reference: http://www.freerangefarmers.com.au Date Accessed: August 2005 Victorian Farmers Federation, 2005, Production Systems, Melbourne, Victoria, Australia. Website reference: http://www.vff.org.au Date Accessed: September 2005

4.

5.

6.

7.

Radio: 8. Thomas, H., 2005, The Free Range Fiddle, ABC Radio National transcript. (Website reference: http://www.abc.net.au/rn/talks/bbing/stories/s1397934 ) Date Accessed: September 2005

Strategic Marketing Plan: Green Eggs - October 2005

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APPENDIX 1

Green Eggs Sales

Unit Sales x Location- Current

Location
Shed 1 Shed 2 Shed 3 Sub total

JUL
4,649.00 13,664.00 17,320.00 35,633.00

AUG
7,217.00 16,359.00 21,240.00 44,816.00 5,846.00

SEP

OCT
7,260.00 14,693.00 21,200.00 43,153.00

NOV
5,603.00 11,123.00 16,928.00 33,654.00

DEC
5,832.00 15,616.00 21,448.00 42,896.00 7,155.00 0.00 18,696.00 25,851.00

JAN

FEB
5,360.00 12,054.00 14,096.00 31,510.00

MAR
5,119.00 14,889.00 13,528.00 33,536.00

APR
4,925.00 15,232.00 12,816.00 32,973.00

MAY
5,770.00 18,781.00 3,160.00 27,711.00

JUN
4,463.00 14,679.00 184.00 19,326.00

12,334.00 16,984.00 35,164.00

Projected Unit Increase (Year 1) New TTL incl Increase

83,038.80 191,308.80 213,120.00 487,467.60

Projected Unit Increase (Year 2) YR 2 TTL incl Increase

99,646.56 229,570.56 255,744.00 584,961.12

Increase Current Unit Sales 25% Shed 1 Shed 2 Shed 3 69,199.00 159,424.00 177,600.00 406,223.00 13,839.80 31,884.80 35,520.00 81,244.60

YR 2 Unit Sales Shed 1 Shed 2 Shed 3

Increase 25%

83,038.80 16,607.76 191,308.80 38,261.76 213,120.00 42,624.00

TOTAL SALES

TOTAL SAL 487,467.60 97,493.52

Dollar Sales x Month - Current Projected Sales Increase (Year 3) incl Increase YR 3 Unit SaIncrease 25%
Shed 1 Shed 2 Shed 3 99,646.56 229,570.56 255,744.00 19,929.31 45,914.11 51,148.80 119,575.87 275,484.67 306,892.80 701,953.34 July August September October November December January February March April May June TOTAL 25% CURRENT Increase 75,073 94,265 74,093 90,790 70,937 90,253 54,629 66,456 70,690 69,514 58,516 40,991 856,207 93,841 117,831 92,616 113,488 88,671 112,816 68,286 83,070 88,363 86,893 73,145 51,239 1,070,259 25% 25% Increase - Yr Increase 117,302 147,289 115,770 141,859 110,839 141,020 85,358 103,838 110,453 108,616 91,431 64,048 1,337,823 146,627 184,111 144,713 177,324 138,549 176,275 106,697 129,797 138,066 135,770 114,289 80,061 1,672,279

TOTAL SALES

584,961.12 116,992.22

APPENDIX 2
Year 1 July INCOME Opening Stock Shed 1 Dozens Shed 2 Dozens Shed 3 Dozens Total Dozens W/sale sales $$$$$$$$ Private Sales $$$$$$$ Meringues 17,500 4,649 13,664 17,320 35,633 34,733 72,592 900 2,835 600

Green Eggs Financials

August September October November December January

= new scenario YR 1

February March

April

May

June

TOTAL

17,500 7,217 16,359 21,240 44,816 43,916

17,500 5,846 12,334 16,984 35,164 34,264

17,500 7,260 14,693 21,200 43,153 42,253

17,500 5,603 11,123 16,928 33,654 32,754

17,500 5,832 15,616 21,448 42,896 41,996

17,500 7,155 0 18,696 25,851 24,951

17,500 5,360 12,054 14,096 31,510 30,610

17,500 5,119 14,889 13,528 33,536 32,636

17,500 4,925 15,232 12,816 32,973 32,073

17,500 5,770 18,781 3,160 27,711 26,811

17,500 4,463 14,679 184 19,326 18,426

210,000 69,199 159,424 177,600 406,223 395,423

900 2,835 600

900 2,835 600

900 2,835 600

900 2,835 600

900 2,835 600

900 2,835 600

900 2,835 600

900 2,835 600

900 2,835 600

900 2,835 600

900 2,835 600

10,800 34,020 7,200

Current Total Income Total Income with 25% Incr

COST OF SALES Birds Cost Feed Packaging Wages Freight TOTAL VARIABLE COSTS NEW VARIABLE COSTS - WITH 25% Incr

75,073 93,841

94,265 117,831

74,093 92,616

90,790 113,488

70,937 88,671

90,253 112,816

54,629 68,286

66,456 83,070

70,690 88,363

69,514 86,893

58,516 73,145

40,991 51,239

856,207 1,070,259

9,750 22,344 1,500 8,264 1,000 42,858 53,573

9,751 22,344 1,500 8,264 1,000 42,859 53,574

9,752 22,344 1,500 8,264 1,000 42,860 53,575

9,753 22,344 1,500 8,264 1,000 42,861 53,576

9,754 22,344 1,500 8,264 1,000 42,862 53,578

9,755 13,406 1,500 8,264 1,000 33,925 42,406

9,756 22,344 1,500 8,264 1,000 42,864 53,580

9,757 22,344 1,500 8,264 1,000 42,865 53,581

9,758 22,344 1,500 8,264 1,000 42,866 53,583

9,759 22,344 1,500 8,264 1,000 42,867 53,584

9,760 12,130 1,500 8,264 1,000 32,654 40,818

9,761 22,344 1,500 8,264 1,000 42,869 53,586

117,066 248,976 18,000 99,168 12,000 495,210 619,013

Accountant Advertising Bank Charges Contract Work Captial Works General Expenses Motor Vehicle MB Office Supplies Phone Power Rent to P.R.P R&M Training and Education Travel & Ent Interest

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

1,200 50 20

14,400 600 240

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

2,000 200 150 300 300 3,000 300 200 400 3,000

24,000 2,400 1,800 3,600 3,600 36,000 3,600 2,400 4,800 36,000

CURRENT TOTAL FIXED COSTS

New costs - (Sales Person) $50K +super+car New Fixed Costs TOTAL - WITH 25% Increase in cos CURRENT TOTAL : FIXED & VARIABLE COSTS

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

133,440
69,996 203,436 628,650

NEW TOTAL: FIXED & VARIABLE COSTS

70,526

70,527 Profit & Loss

70,528

70,529

70,531
Current

59,359

70,533

70,534

70,536

70,537
PROFIT:

57,771
$227,557

70,539
Gross Margin:

822,449
26.6%

Increase sales by 25% (variable costs guestimate to increase by approx 25% also)

PROFIT:

$247,810

Gross Margin:

23.2%

APPENDIX 3
Year 2

Green Eggs Financials

July August September October November December January February

= new scenario YR 2

March

April

May

June

TOTAL

INCOME Opening Stock Shed 1 Dozens Shed 2 Dozens Shed 3 Dozens Total Dozens W/sale sales $$$$$$$$ Private Sales $$$$$$$ Meringues 17,500 4,649 13,664 17,320 35,633 34,733 72,592 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 10,800 34,020 7,200 17,500 7,217 16,359 21,240 44,816 43,916 17,500 5,846 12,334 16,984 35,164 34,264 17,500 7,260 14,693 21,200 43,153 42,253 17,500 5,603 11,123 16,928 33,654 32,754 17,500 5,832 15,616 21,448 42,896 41,996 17,500 7,155 0 18,696 25,851 24,951 17,500 5,360 12,054 14,096 31,510 30,610 17,500 5,119 14,889 13,528 33,536 32,636 17,500 4,925 15,232 12,816 32,973 32,073 17,500 5,770 18,781 3,160 27,711 26,811 17,500 4,463 14,679 184 19,326 18,426 210,000 69,199 159,424 177,600 406,223 395,423

Current Total Income Total Income with 25% Incr Total Income YR 2with 25% Incr
COST OF SALES Birds Cost Feed Packaging Wages Freight TOTAL VARIABLE COSTS NEW VARIABLE COSTS - WITH 25% Incr NEW VARIABLE COSTS - YR 2 WITH 25% Incr Accountant Advertising Bank Charges Contract Work Captial Works General Expenses Motor Vehicle MB Office Supplies Phone Power Rent to P.R.P R&M Training and Education Travel & Ent

75,073 93,841 117,302

9,750 22,344 1,500 8,264 1,000 42,858 53,573 66,966 1,200 50 20

94,265 117,831 147,289

9,751 22,344 1,500 8,264 1,000 42,859 53,574 66,967 1,200 50 20

74,093 92,616 115,770

9,752 22,344 1,500 8,264 1,000 42,860 53,575 66,969 1,200 50 20

90,790 113,488 141,859

9,753 22,344 1,500 8,264 1,000 42,861 53,576 66,970 1,200 50 20

70,937 88,671 110,839

9,754 22,344 1,500 8,264 1,000 42,862 53,578 66,972 1,200 50 20

90,253 112,816 141,020

9,755 13,406 1,500 8,264 1,000 33,925 42,406 53,008 1,200 50 20

54,629 68,286 85,358

9,756 22,344 1,500 8,264 1,000 42,864 53,580 66,975 1,200 50 20

66,456 83,070 103,838

9,757 22,344 1,500 8,264 1,000 42,865 53,581 66,977 1,200 50 20

70,690 88,363 110,453

9,758 22,344 1,500 8,264 1,000 42,866 53,583 66,978 1,200 50 20

69,514 86,893 108,616

9,759 22,344 1,500 8,264 1,000 42,867 53,584 66,980 1,200 50 20

58,516 73,145 91,431

9,760 12,130 1,500 8,264 1,000 32,654 40,818 51,022 1,200 50 20

40,991 51,239 64,048

9,761 22,344 1,500 8,264 1,000 42,869 53,586 66,983 1,200 50 20

856,207 1,070,259 1,337,823

117,066 248,976 18,000 99,168 12,000 495,210 619,013 773,766 14,400 600 240

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

2,000 200 150 300 300 3,000 300 200 400

24,000 2,400 1,800 3,600 3,600 36,000 3,600 2,400 4,800

Interest

3,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

36,000

CURRENT TOTAL FIXED COSTS

New costs - (Sales Person) $50K +super+car New Fixed Costs TOTAL - WITH 25% Increase in cos CURRENT TOTAL : FIXED & VARIABLE COSTS

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

133,440
69,996 203,436 628,650

NEW TOTAL: FIXED & VARIABLE COSTS Profit & Loss

YR 2

83,919

83,920

83,922

83,923

83,925

69,961

83,928

83,930

83,931

83,933

67,975

83,936

977,202

PROFIT:

$360,622

Gross Margin:

27.0%

APPENDIX 5 Year Current Year 1 Year 2 Year 3

Green Eggs Gross Profit Gross Profit $ $227,557 $247,810 $360,622 $501,636 Year Current Year 1 Year 2 Year 3 Gross Profit % 26.6% 23.2% 27.0% 30.0%

Green Eggs Gross Profit $

$600,000

$501,636
$500,000

$360,622
$400,000

$Profit

$300,000 $200,000 $100,000 $0

$227,557

$247,810

Gross Profit

Current

Year 1

Year 2

Year 3

Year

Green Eggs Gross Profit %

35.0% 30.0% 25.0% 27.0% 26.6% 23.2% 30.0%

$Profit

20.0% 15.0% 10.0% 5.0% 0.0% Current Year 1 Year 2 Year 3 Gross Profit %

Year

APPENDIX 4
Year 3

Green Eggs Financials

July August September October November December January February

= new scenario YR 3

March

April

May

June

TOTAL

INCOME Opening Stock Shed 1 Dozens Shed 2 Dozens Shed 3 Dozens Total Dozens W/sale sales $$$$$$$$ Private Sales $$$$$$$ Meringues 17,500 4,649 13,664 17,320 35,633 34,733 72,592 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 900 2,835 600 10,800 34,020 7,200 17,500 7,217 16,359 21,240 44,816 43,916 17,500 5,846 12,334 16,984 35,164 34,264 17,500 7,260 14,693 21,200 43,153 42,253 17,500 5,603 11,123 16,928 33,654 32,754 17,500 5,832 15,616 21,448 42,896 41,996 17,500 7,155 0 18,696 25,851 24,951 17,500 5,360 12,054 14,096 31,510 30,610 17,500 5,119 14,889 13,528 33,536 32,636 17,500 4,925 15,232 12,816 32,973 32,073 17,500 5,770 18,781 3,160 27,711 26,811 17,500 4,463 14,679 184 19,326 18,426 210,000 69,199 159,424 177,600 406,223 395,423

Current Total Income Total Income with 25% Incr Total Income YR 2 with 25% Incr Total Income YR 3 with 25% Incr
COST OF SALES Birds Cost Feed Packaging Wages Freight TOTAL VARIABLE COSTS NEW VARIABLE COSTS - WITH 25% Incr NEW VARIABLE COSTS - YR 2 WITH 25% Incr NEW VARIABLE COSTS - YR 3 WITH 25% Incr Accountant Advertising Bank Charges Contract Work Captial Works General Expenses Motor Vehicle MB Office Supplies Phone Power Rent to P.R.P R&M

75,073 324,978 406,223 507,779

9,750 22,344 1,500 8,264 1,000 42,858 53,573 66,966 83,707 1,200 50 20

94,265 117,831 147,289 184,111

9,751 22,344 1,500 8,264 1,000 42,859 53,574 66,967 83,709 1,200 50 20

74,093 92,616 115,770 144,713

9,752 22,344 1,500 8,264 1,000 42,860 53,575 66,969 83,711 1,200 50 20

90,790 113,488 141,859 177,324

9,753 22,344 1,500 8,264 1,000 42,861 53,576 66,970 83,713 1,200 50 20

70,937 88,671 110,839 138,549

9,754 22,344 1,500 8,264 1,000 42,862 53,578 66,972 83,715 1,200 50 20

90,253 112,816 141,020 176,275

9,755 13,406 1,500 8,264 1,000 33,925 42,406 53,008 66,260 1,200 50 20

54,629 68,286 85,358 106,697

9,756 22,344 1,500 8,264 1,000 42,864 53,580 66,975 83,719 1,200 50 20

66,456 83,070 103,838 129,797

9,757 22,344 1,500 8,264 1,000 42,865 53,581 66,977 83,721 1,200 50 20

70,690 88,363 110,453 138,066

9,758 22,344 1,500 8,264 1,000 42,866 53,583 66,978 83,723 1,200 50 20

69,514 86,893 108,616 135,770

9,759 22,344 1,500 8,264 1,000 42,867 53,584 66,980 83,725 1,200 50 20

58,516 73,145 91,431 114,289

9,760 12,130 1,500 8,264 1,000 32,654 40,818 51,022 63,777 1,200 50 20

40,991 51,239 64,048 80,061

9,761 22,344 1,500 8,264 1,000 42,869 53,586 66,983 83,729 1,200 50 20

856,207 1,070,259 1,337,823 1,672,279

117,066 248,976 18,000 99,168 12,000 495,210 619,013 773,766 967,207 14,400 600 240

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

2,000 200 150 300 300 3,000 300

24,000 2,400 1,800 3,600 3,600 36,000 3,600

Training and Education Travel & Ent Interest

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

200 400 3,000

2,400 4,800 36,000

CURRENT TOTAL FIXED COSTS

New costs - (Sales Person) $50K +super+car New Fixed Costs TOTAL - WITH 25% Increase in cos CURRENT TOTAL : FIXED & VARIABLE COSTS

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

11,120
5,833 16,953

133,440
69,996 203,436 628,650

NEW TOTAL: FIXED & VARIABLE COSTS Profit & Loss

YR 3

100,660

100,662

100,664

100,666

100,668

83,213

100,672

100,674

100,676

100,678

80,730

100,682

1,170,643

PROFIT:

$501,636

Gross Margin:

30.0%

Appendix 6

Appendix 6 page 2