Subscription boxes are a rising trend in the United States of America and the practice is quickly spreading into Canada. Subscription boxes are, in many ways, like other subscription-based goods such as newsletters and journals. The only difference is that instead of papers and articles, the subscription box supplies clients with several interesting goods, small items, and artifacts, depending on the customer’s wishes.
Subscription boxes typically share a particular theme – they could provide foods, collectibles, cosmetics, hygienic products, and many other things to clients. Several possible themes and combinations are nearly limitless. The appeal of this business format is that the receivers never know what they are going to get. This creates intrigue, a feeling of wonder, and surprise (Bischof, Bottger, & Rudolf, 2016). Modern businesses are expected to sell not only goods but experiences and emotions as well. This business plan proposes the establishment of a subscription box enterprise located in the Canadian city of Toronto.
Company and Product Description
ABox4You is a subscription box enterprise, which operates in Toronto, Canada. It provides food-based subscription boxes to its customers within the city and neighboring towns and villages. Customers are allowed to choose between three types of delivery options, including monthly, bi-monthly, and weekly deliveries. The products delivered to the subscription boxes include pastry, lollipops, chocolates, cookies, sauces, and much more. Customers are allowed to pick the goods they like and strike out products they do not want. Subscription boxes are delivered to clients via the company’s couriers and third-party delivery services.
Product SWOT and Needs Analysis
A SWOT analysis is a standard practice that is used in the creation of business plans. The acronym stands for Strengths, Weaknesses, Opportunities, and Threats, which need to be identified in the process of generating a business idea (Kulp, Eastwood, Turner, Goodman, & Ricketts, 2016).
Strengths
Subscription boxes are a new selling format that may attract the attention of potential customers. Lack of similar services within Toronto means that aBox4You will not have any competition. The relative ease of replenishing supplies by working with local producers and retailers.
Weaknesses
The enterprise will require plenty of producers to promote variety in its merchandise. Also, the company will need to establish its delivery service or rely on third parties to deliver goods to its customers.
Opportunities
If successful, aBox4You will establish a dominant role in the budding market before any competitors even arrive on the scene.
Threats
If the enterprise fails, the opportunity at claiming the market will be lost, as other competitors will emerge.
Needs analysis is important for any prospective enterprise, as it helps to outline the requirements and resources necessary for the creation, promotion, and distribution of a product (Craig & Bensoussan, 2015).
As it stands, aBox4You will need the following key components and services to facilitate its operations:
- Space for storing, sorting, and packing the boxes, before their delivery.
- An array of reliable suppliers of high-quality foods, preferably at a discount.
- A courier company that would deliver the goods to the customers.
- Ways of advertising the product to potential customers.
Business Environment Analysis
The city of Toronto is one of the most populous cities in Canada, with a population of over 2,500,000 people. It is the economic center of Ontario Province and a very wealthy and well-off city. It possesses an advanced and developed infrastructure. Market research shows that there are no enterprises within the city that deal with subscription boxes, which presents an opportunity for aBox4You. The levels of unemployment in Toronto are low, which means that the population will be able and willing to spend money on subscription boxes. Canadian government promotes low-interest loans and other benefits to small businesses (Chandler, 2012). Overall, the conditions for opening a subscription box enterprise in Toronto are deemed favorable.
Determining Primary and Secondary Markets
The primary market for aBox4You would be families with young children. Children are considered to be the main consumers of sweet foods and related products. However, their parents pay for these little luxuries. This is why our subscription boxes will be made to entertain the children and compel their parents to pay for them.
The secondary market for the subscription boxes involves anyone who would be willing to purchase them. Foods are a universal commodity – everyone likes foods no matter age, gender, or social status. Thus, aBox4You will not be limited to just one or several population segments – the entire market is potentially within the company’s grasp (Aghdae & Alimardani, 2015).
Analyzing Primary and Secondary Markets
For a deeper analysis of primary and secondary target markets, we are going to use the 4 Ps marketing mix, as it is the basis for all other analytical tools used in business planning. The 4 Ps stand for Product, Price, Place, and Promotion (Huang & Sarigollu, 2014). Using these four criteria, it will be possible to explain the connection between our business and potential customers.
Product: As it was mentioned before, aBox4You will provide subscription boxes with various foods (namely sweets) to its customers, using a subscription-based distribution model. Since the product is universal, it is likely to encompass the entirety of the market, not just primary and secondary target markets.
Price: The company will feature a flexible subscription plan ranging from the very small and basic packages with the price of 10 dollars a month, to very large ones with a great variety of goods, maximum price capping at 75 dollars. The wide pricing spread will ensure that nobody is excluded. Every client will be able to find an affordable subscription plan.
Place: Toronto is a large city with a working population and high standards of living. It was chosen as the starting market for aBox4You due to the majority of the populace being capable of becoming potential customers.
Promotion: The company will invest in an active promotional campaign to inform all and any potential customers about our enterprise and our services. In addition to standard and virtual media outlets, aBox4You will actively work with its producers and partners, for advertising purposes.
Short-Term and Long-Term Goals
Short-term goals for aBox4You include establishing a base of loyal customers that will be the source of our revenue flow. Other short-term goals include claiming the market within the city of Toronto, establishing a network of providers and partners to supply us with all the required goods, and conducting a successful promotional campaign to inform the population about our company and services. These goals are interconnected so that achieving one will serve as a benchmark for the others. Providers and partners could be found among the small local businesses and shops. Traditional and digital media outlets could be used during the promotion campaign. If these two steps are successful – the others will soon follow.
Long-term goals involve expanding the reach to other large cities within the immediate vicinity of Toronto, such as Vancouver and Montreal. Both of these cities are rich and populated, thus being promising potential markets. Other long-term goals involve establishing a personal company delivery service. It would allow the aBox4You to control its shipments more directly without having to rely on 3rd parties. The last long-term goal for the company involves retaining dominant positions in the market, improving the quality of service, and expanding its client base. These long-term goals assume our short-term goals were reached. With Toronto as a base, it will be possible to repeat the scenario in other large cities within our vicinity and open our offices there.
Conclusions
Subscription boxes have proven themselves to be an effective and innovative model of product distribution. It is being adopted across the USA and is making its way to Canada. Canada is a rich country with a favorable business climate and extensive governmental support for small businesses. These factors, combined, would allow aBox4You to seize a dominant position in the market before anyone else does. This business plan provides a wholesome and comprehensive model to follow, outlines the strengths and weaknesses of the project, specifies the materials and resources needed to start the business, and establishes the link between the target market and the product itself.
While there are several weaknesses in the proposed business idea, they are negligible at best and can be overcome with adequate management and planning. The company provides a lot of possible customizations regarding choices of goods and possible subscription plans. This flexibility will ensure maximum customer involvement and broaden the potential target market. Due to the universal nature of the goods provided by aBox4You, its subscription boxes are very likely to find success among customers of all ages and social statuses, which promises rapid growth and large profits.
References
Aghdae, M.H., & Alimardani, M. (2015) Target market selection based on market segment evaluation: a multiple attribute decision making approach. International Journal of Operational Research, 24(3), 22-31. Web.
Bischof, S.F., Bottger, T., & Rudolf, T. (2016). What’s in the box? Risk in surprise subscription models. Association for Consumer Research, 5(3), 1-15.
Chandler, W. (2012). The economic impact of the Canada small business financing program. Small Business Economics, 39(1), 253-264.
Craig, S.F., & Bensoussan, B.E. (2015). Business and competitive analysis. New Jersey, NJ: Pearson Education.
Huang, R., & Sarigollu, E. (2014). How brand awareness relates to market outcome, brand equity, and the marketing mix. International Series on Consumer Science, 13(1), 113-132.
Kulp, C., Eastwood, C., Turner, S., Goodman, M., & Ricketts, K.G. (2016). Using a SWOT analysis: Taking a look at your organization. UKnowledge, 4(1), 5-11.