Madison Underground Cookies

Customer Segmentation and Target:

Providing products and service that perfectly serve unique needs of our customers is the key success factor of our business. Therefore, market segmentation is very important to identify which group of customers are the most profitable in the market and which one are we serving. Our business, Madison Underground Cookies provided the most delicious cookie dough to satisfy needs of our customers. We use segmented strategy to distinguish between market segments with slightly different needs and problems. We can segment our customers in Madison based on their common ages, nationalities, behaviors, and needs.

We decided to serve College Students of UW Madison as our target group. There are three important rationales behind our decision. Firstly, in Madison, college students age between 18-25 comprises the largest portion of the market, with majority of the students are Americans. With this large market size, we can ensure that we could potentially generate mass revenues out of this group of customers. Secondly, the reach to these group of customers are easy for our company. One of our competitive advantage of our business is students connection that we have. We gain two advantages from this, firstly, is our more precise market research and understandings on this group of customers since we are close to this group of customers; and. secondly, is the convenient and efficient delivery. In addition, apart from generate sales through partnership or pull strategy, we could effectively generate sales through direct sales as well. Thirdly, most of these students also have common behavior relating to socializing; therefore, our cookie dough could potentially be a snacks that would perfectly suit activities of our customers. With all of these reasons, the College Students of UW Madison would be our most important group of our customers.

Value Proposition:

In order to generate sustainable sales and profitability, we need to create the products and services that provide value to our customers. The values of our product is what the customers are willing to pay for, not the product itself. Therefore, the idea is not to create by features the best product but to create products and services that exactly cater the customers’ needs. The market research reveals these groups of customers have work-hard-play-hard attributes; so daily activities are related with stressful activities such CANVAS

as doing group projects, studying, and reviewing for the final examinations. Therefore, there are strong needs for a stress reliever during stressful activities. On the other hand, their activities also relate to socializing events as well.

So our products and services are designed to relieve stress and share the happiness and smile to our customers with student-friendly price, this is our key value proposition. We serve perfectly sweet and delicious cookie dough to satisfy students’ after-class sweet-tooth with mouthwatering offerings. Our product is a small-serving cup of cookie dough containing three flavors of cookie dough, Chocolate Chip, M&M and Nutella Swirl. The sweetness and smooth texture of the cookie dough would be the greatest source of happiness while the rich chocolate and nutella inside would be a great stress reliever for our valued customers. Our servings are easily-portable (2oz container of sealed cup with a small spoon) and consumer friendly that our customers can carry it anywhere and eat it at anytime. Our product would perfectly suit work-hard-play-hard lifestyle of the students in UW Madison which involve in both stressful and socializing activities.
In addition, all of our profits will be donated to the children in need for a cleft-lip operation. So, by consuming our product, our customers does not only receive the value of smile and happiness; but they are sharing it to the children as well.

Channels:

Sales and communication channels are vital key components that links our customers with our value proposition. We have three main channels of sales and communication including through the organizations, through the class, and through direct sales. We do not promote and communicate ourselves through mass media since it is costly and also our project is a short-term project, so building a large mass customer base would be infeasible. We do not have retail store, all sales are provided through either B2B deals, events or salesperson.

For the strategy of selling through organizations, we positioned ourselves as a catering service company that would serve delicious cookies during the club’s meeting and socializing events. There are two forms of offer available regarding selling through these clubs, first, selling in bulk quantities with acceptable price, and secondly, selling directly to club’s members in the meeting and bear inventory risk. AIESEC is our main B2B customer. We also promote ourselves and deliver our value proposition through the club as well.
The other channel is through direct sales, we sell cookie dough and deliver its value through our friend’s connection. Our strategy is not to force the sales through them, but to deliver the value of consuming our products and let our customers purchase by their own decision. We carried our cookie dough and eat them when we have lunch with several friends, and we also eat them during our group revision for the examination. This raises strong interests and awareness from our friends to our products and most of them make a purchase afterwards.
Thirdly, we also sell through classes by promoting our products and hand out samples.
We also hand-out our contact and facebook page to them so that when they could contact us and make another purchase when they want.

Customer Relationship:

We use personal assistant as our strategy to develop customer relationship, each of our sales-person interact directly with customers during the sales process. We describe our product, as well as the idea of social-entrepreneurship of our business, as well as delivering joyful messages. We have three rationale behind this strategy. Firstly, we could communicate the right value of our products to our customers. Secondly, since our product is an innovative product, customers might be reluctant to buy given they are not so familiar with the product, therefore, significant efforts are needed to be spent to describe our product ingredients, features, tastes, how to consume and its values.

Revenue Stream:

Since students have relatively weak purchasing power, our product offers affordable cookie dough with the price of 1 dollar per one cup ,and a discounted price of 2 dollars for 3 cups to stimulate sales. Our revenues are purely from asset sales which cash payment is the only method of payment. However, to please our customers, the delay of payment is permitted up to one week. The price of the products is non-negotiable giving the reasons to our customers that all profits will be given away to charity organization.

Key resources:

Key Resources define a business’ valuable assets that generate Value Propositions and Revenues. They can be categorized in Physical, Human, Financial and Intellectual.

Madison Underground Cookies does not rely on physical assets. Although a kitchen is being used for production the making of the dough does not need any of the electronics and can be made in any room facility. The only physical equipments that is being used are kitchen utilities such as bowls and mixing spoons. Since finding and adjusting the recipe the business doe not rely on Human Resources either.

The key resources for Madison Underground Cookies are Intellectual. Due to the fact that we were not able to have a booth out in the public from which we can sell the product to strangers, our main distribution channel are a University club that we cater to and friends. This derives that our Business relies heavily on partnerships.

Key activities:

Firms focus on key activities which make their business model work and can be categorized in Production, Problem solving and Platform/Network.

Our Business Model is dominated by Production activity, which is mixing the ingredients that are needed for our product. These were pouring the dry ingredients together and followed by mixing in the liquid ingredients. Once the dough was finished it needed to be packaged.

The production is being split into three activities that are carried out by the the three members of the business. One focuses of mixing the ingredients together that form the plain cookie dough. Another member focuses on adding the different flavors of the cookie dough. Once the dough is sellable it needs to be packed. Packaging consists of putting it into small containers followed by placing a very small plastic spoon unto the package and finally being wrapped with ribbons.

Key Partnerships:

Key partnerships can be a highly valuable tool to make a business model successful. These may be formed between non-competitive firms, competitors, joint ventures or exclusive buyer-supplier relationships.

We tried to focus on a key partnership with University clubs. In this relationship our buyer would have not need to worry about providing a sweet treat for its members and furthermore get the product cheaper since we granted a bulk price. We as suppliers benefited in terms of reaching to a big number of end-customers by just approaching one club.

Cost structure:

Businesses rely on different cost structures which are critical in terms of creating and delivering value. Since our product is still the market entry stage our main focus in terms of costs is to focus on creating our product at the lowest cost possible in order to create large profit. The reason for this is because our product faces heavy competition in terms of portable sweet treats, since a great amount of vendor machines that carry a great variety of sweet products are found throughout the campus. After market introduction our product’s cost structure should be driven by value-added, since the Madison Underground Cookie’s dough is typically not being sold throughout the campus. The uniqueness of the product makes it able to charge customer a higher price.

We emphasize on obtaining variable costs rather than fixed costs. This is due to the fact that we are only short-term and start-up business. In this stage of business, reaching large pool of customer base is the biggest issue. This means therefore, variable costs model would be optimal because the break-even point is low and we don’t have to concern about selling in mass quantities to cover fixed costs because we have none.