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Live Client Project BMKT460 | Internet Marketing Strategy

Company & Competitor Analysis

Marketing Campaign Strategy

Prepared by Evan Schuldenfrei

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TABLE OF CONTENTS

I. INTRODUCTION

II. PRODUCT ANALYSIS

III. AUDIENCE ANALYSIS

IV. COMPETITORS

V. COMPETITOR CASE STUDY

VI. APPLICATION OF COMPETITIVE DATA

VII. CAMPAIGN DEVELOPMENT

VIII. SUMMARY

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I. INTRODUCTION 16 HANDLES is a modern “fro-yo” brand that encourages guests to Flaunt Their Flavor™. Whether guests want a healthier snack, or an indulgent frozen dessert, 16 HANDLES offers something for everyone - as customers can decide their portion size and toppings. 16 HANDLES was founded in 2008 by foodservice industry expert Solomon Choi, and was the first frozen yogurt brand to pioneer the self-serve concept in New York City. Today the company has grown to 43 locations across Massachusetts, New York, New Jersey, Connecticut, Maryland, and Florida with more stores opening soon.1 The purpose of the following analyses and recommendations within this Plan is to increase sales and foot traffic during the winter months, as well as increase gift card sales – per project guidelines.

II. PRODUCT ANALYSIS After visiting both the East Greenbush location and company website, and speaking with Scott Noel, the East Greenbush 16 HANDLES franchisee, I have determined the following for the ‘Five S’s’:

1. Sell Upon entering the location, customers are greeted in a friendly manner, and, during purchase, are asked if they have a membership rewards card, with the option to sign up on the spot. This is significant because the rewards card encourages a long-term relationship, which, of course entails multiple purchases, rather than a one-time purchase. To check a rewards card balance, guests can simply enter their card information on the 16 HANDLES website. Additionally, the 16 HANDLES website allows guests to inquire about catering for private events such as weddings and birthdays. Exposing the 16 HANDLES brand to a mass audience (50 people at a birthday or 300 at a wedding) will ultimately help expand their customer base.

2. Serve 16 HANDLES offers an online experience analogous to that of its walk-in stores. In-store, the staff is friendly and inviting, all areas are spotless, and guests are welcome and encouraged to

1 https://www.facebook.com/16Handles/info?ref=page_internal

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sample flavors while choosing. Additionally, both in-store, and online, Guests can view nutritional facts for any product, which may be of interest to the given demographic.

3. Speak 16 HANDLES very effectively uses social media to engage its customers with conversation and promotions, alike, via several major social platforms, including that of Facebook, Instagram, Twitter, Snapchat, Tumblr, Pinterest, FourSquare, and YouTube. With a buyer demographic of 13 – 25 years old, effectively utilizing digital media to reach this group is crucial in growing their fan base, given that roughly one-quarter of all social media users are between the ages of 13 and 25,2 with this number inevitably rising in coming years.

4. Save As Mr. Noel had mentioned during his class lecture, 16 HANDLES focuses on saving costs by operating their store efficiently and effectively - keeping the machines clean, and all toppings and machines filled, as well as maximizing customer delight through enthusiasm, hospitality, and use of premium product ingredients. Even with the added expense of premium products, which would entail a decrease in savings (higher cost), customers are drawn in by this premium offering, and are converted, from one-time customers, to repeat customers. This is crucial, as studies have shown acquiring new customers costs 6-7 times as much as retaining existing ones.3 Additionally, the social nature of their advertising and promotions channels allows existing customers to spread the word about 16 HANDLES, effectively marketing to their friends and family at no cost to the company.

5. Sizzle In store, 16 HANDLES promotes a special line of seasonal flavors to ring in the fall and winter months, including that of apple pie, eggnog, and pumpkin spice. During the holiday season, online viewers are exposed to these special flavor advertisements in order to entice them to visit the store and sample them.

III. AUDIENCE ANALYSIS When 16 HANDLES CEO, Solomon Choi, was asked, “Who is today’s frozen yogurt consumer and how does geography play into the mix, he responded: 2 http://royal.pingdom.com/2010/02/16/study-ages-of-social-network-users/ 3 https://www.linkedin.com/pulse/20130604134550-284615-15-statistics-that-should-change-the-business-world-but-haven-t

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“It may go against marketing 101, but frozen yogurt really is a product with universal appeal. We attract everyone from children to seniors because we’re a better-for-you snack or dessert that offers positive nutrition. Frozen yogurt today is different than what it represented in the late 80′s. Children are drawn to the “fun” and great taste, while adults appreciate the portion control that self-serve offers. If you layer that with toppings that range from fresh fruits and nuts to syrups and candies, and flavors from Greek yogurt to Cake Batter, and frozen yogurt truly means something different to everyone. Geographically suburban towns tend to have higher late afternoon and early evening traffic as schools let out and people leave work. On the flip side metro stores experience stronger early day part and night traffic with less guest visits in the afternoon. Stores located in college towns, or that appeal to students, tend to become gathering spots as our later hours support the social aspects of nightlife.” 4

After speaking with Mr. Noel, the current target audience for 16 HANDLES appears to be individuals between 13 and 25. This is significant because the company attracts those old enough to drive, as well as children and teens that must rely on someone to bring them to the store. When these children and teens visit 16 HANDLES, their parent or guardian may also be enticed to try their product. After witnessing 16 HANDLES locations pop up in wealthier and upcoming areas of Long Island and New York City, I’ve decided to perform a geo-demographic analysis, measuring the average household income and Cost of Living index for each zip code in which there is a 16 HANDLES location. 16 HANDLES Locations - Geo-Demographic Data (as of 11/5/14):

Location Zip Code

Average Household

Income

Cost of Living (U.S. Avg. =100)

Notes

Astoria, Queens, NY 11103 $55,844 173 Trendy area

Avenue J, Brooklyn, NY 11230 $42,568 132 Trendy area

Bleecker Street, Manhattan, NY 10014 $105,144 270 Trendy area, >$100K, Cost of Living >200

Boca Raton, FL 33431 $68,287 124 Trendy area, Major tourism

4 http://www.restaurantnews.com/qa-solomon-choi-ceo-16-handles-frozen-yogurt-franchise/

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Brookline, MA 02445 $104,069 197 >$100K

Carroll Gardens, Brooklyn, NY 11231 $71,999 249 Cost of Living >200

Chelsea, Manhattan, NY 10011 $101,515 265 Trendy area, >$100K, Cost of Living >200

Clifton Park, NY 12065 $77,931 121

Rensselaer, NY 12144 $61,479 100

East Village, Manhattan, NY 10003 $91,767 247 Trendy area, Cost of Living >200

Elizabeth, NJ 07201 $41,761 111

Fairfield, CT 06824 $131,922 193 >$100K

Colts Neck, NJ 08822 $144,650 146 >$100K

Garden City, NY 11530 $126,354 215 >$100K, Cost of Living >200

Paramus, NJ 07652 $101,958 174 >$100K

Glenmont, NY 12077 $80,781 119

Great Neck, NY 11021 $97,757 269 Cost of Living >200

Hoboken, NJ 07030 $108,998 183 Trendy area, >$100K

Jericho, NY 11753 $152,862 215 >$100K, Cost of Living >200

Gaithersburg, MD 20878 $117,441 166 >$100K

Livingston, NJ 07039 $133,271 175 >$100K

Lynbrook, NY 11563 $86,804 151

Madison Square Garden, NY 10001 $76,138 314 Cost of Living >200

Marlboro, NJ 07746 $142,697 160 >$100K

Murray Hill, Manhattan, NY 10016 $101,979 225 Trendy area, >$100K, Cost of Living >200

New City, NY 10956 $119,022 160 >$100K

New Rochelle, NY 10804 $155,489 201 >$100K, Cost of Living >200

Plainview, NY 11803 $123,759 169 >$100K

Port Washington, NY 11050 $109,258 218 >$100K, Cost of Living >200

Queens Center Mall, Queens, NY 11373 $44,964 145

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Gaithersburg, MD 20878 $117,441 166 >$100K

Piscataway, NJ 08854 $90,493 134

SoHo, Manhattan, NY 10012 $77,853 365 Trendy area, Cost of Living >200

South Beach, Miami, FL 33139 $45,725 127 Trendy area, Major tourism

Stamford, CT 06901 $58,314 162

Summit, NJ 07901 $122,806 212 >$100K, Cost of Living >200

Upper East Side, Manhattan, NY (2) 10028 $107,976 266 Trendy area, >$100K, Cost of Living >200

Upper West Side, Manhattan, NY (2) 10023 $105,311 262 Trendy area, >$100K, Cost of Living >200

Warren, NJ 07059 $152,750 227 >$100K, Cost of Living >200

White Plains, NY 10605 $105,801 207 >$100K, Cost of Living >200

Williamsburg, Brooklyn, NY 11211 $44,173 210 Trendy area, Cost of Living >200

I have determined that the average household income for the zip codes in which 16 HANDLES are located, is $97,734 per year - nearly double that of the US average. Furthermore, the average Cost of Living index for zip codes in which 16 HANDLES are located, is 193 - almost twice that of the U.S. average. After reviewing this information, it is evident that 16 HANDLES caters to upper-middle class and very wealthy areas. There are several exceptions, mainly in New York City, however, some of these areas are still up-and-coming, and play off the “trendy” aspect which the 16 HANDLES brand fits into. The exceptionally high Cost of Living average associated with 16 HANDLES locations may indicate that residents of these areas are more accustom to, and have a higher propensity to purchase premium-priced goods, which 16 HANDLES’ products fall under. IV. COMPETITORS

Name Product Price Place Promotion

16 HANDLES Upscale $0.52 per oz. Trendy, wealthy areas, - Seasonal offerings

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Trendy Healthy

($6 avg.) Northeast & Florida, 43 locations

-Loyalty program -$5.00 reward for $50 spent

Pink Berry Upscale Trendy Healthy

($5.25-$7.25 avg.) Global, 200+ locations

-Seasonal offerings -Loyalty program

-Mobile app

TCBY Trendy Healthy

$0.49 per oz. ($6.32 avg.)

350+ locations, international

-Seasonal offerings -MyTCBY account -1 point per dollar

Red Mango Upscale Trendy Healthy

$0.49-$0.59 per oz. ($6-7

avg.)

190 locations, nationwide

-Seasonal offerings -Club Mango Rewards

-Mobile App

V. COMPETITOR CASE STUDY Since TCBY is located conveniently on Western Avenue by the SUNY Albany Uptown Campus, I’ve decided to utilize their store as a benchmark to compare 16 HANDLES.

A. General Comparison

Category 16 HANDLES TCBY

Year Founded 2008 1981

Number of Store Locations 43 470

International Presence None Americas, Eastern Asia, Middle East

Service Model Self-serve Self-serve

Calories per oz. of frozen yogurt 20-40 70-130

Average price per oz. $0.52 $0.49

Other products Smoothies Cakes

Hard scoop ice cream Smoothies & shakes

Cakes & pies Parfaits

Frozen coffee drinks

Franchise Costs $274,500 - $597,000 investment

$142,000 - $347,000 investment

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B. Communications Audit

Category 16 HANDLES TCBY

Website aesthetics (1-10 rating) 8/10 9/10

SEO (Alexa Rank) 713,070 Global 102,761 National

498,771 Global 128,197 National

Engagement

28.10% Bounce Rate 2.60 Daily pageviews per visitor

4:38 average time on site Mostly browsed at work

38.10% Bounce Rate 2.40 Daily pageviews per visitor

1:38 average time on site Mostly browsed at home

Online Pressroom? Yes, but small Yes

Facebook 49,663 Likes 178,856 Likes

Instagram 13,138 Followers 3,087 Followers

Twitter 17,200+ Followers

21,500+ Tweets 920 Favorites

10,100+ Followers 3,600+ Tweets 1,223 Favorites

YouTube 69 Subscribers 67 Subscribers

Collect data?

First Name Last Name Cell Phone

Email Birthday

Closest Location

First Name Last Name

Email Birthday

Favorite Location

Email response rating 10/10 - Six email addresses 9/10

Phone response rating 10/10 10/10

VI. APPLICATION OF COMPETITIVE DATA

A. Comparison Unlike TCBY, 16 HANDLES has only been in operation for around six years, while TCBY has been around for 33 years, which gives them an advantage vis-à-vis reputation. Additionally, TCBY has 470 stores, worldwide, while 16 HANDLES only has 43 locations, all of which are in the eastern US. A 16 HANDLES purchase, on average, is $1-2 more expensive than that of a single TCBY purchase, but the average calories in an oz. of 16 HANDLES frozen yogurt is three-to-four times

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less caloric than that of TCBY. To this upscale demographic, the $1-2 difference may well be worth saving a few hundred calories. An average 8 oz. cup of frozen yogurt (no toppings) at 16 HANDLES will run you 160-320 calories, while 8 oz. at TCBY accounts for 560-1040 calories. With regards to communications, 16 HANDLES shows their younger spirit and social media prowess. Although TCBY maintains nearly three times the amount of Facebook followers as 16 HANDLES, the latter has over four times as many Instagram followers, which correlates to their target demographic. Additionally, the average user visiting the 16 HANDLES website remains on the page for about three times longer than the average TCBY site visitor, which is known as stickiness. The stickiness of 16 HANDLES’ website shows that users greatly value their content, and want to know more about the company. Traffic data and global rankings analyzer, Alexa Rank, lists 16 HANDLES’ approximately 26,000 spots higher than TCBY, nationally, but over 200,000 spots lower, globally. This is expected, since TCBY maintains international locations. Data collection for both companies is relatively minimal; however, many customers still do not want to disclose this information, for privacy and spam purposes. The only difference in data collection is 16 HANDLES’ mandatory request for a cell phone number, as this is used as their loyalty card account number. Finally, regarding customer responses, both companies aced the email and telephone assessments. TCBY’s e-mail response rating was placed one point lower than that of 16 HANDLES given that the latter maintains and responds from six separate email addresses, for various inquiries.

B. SWOT Analysis

Strengths

- Uses finest ingredients - Products are significantly more

healthful than those of competitors - Continuously rotating selection of

products, 16 at a time

Weaknesses

- More expensive than most competitors - Physical locations are limited - Products are expensive - Frozen yogurt is seasonal (cyclical)

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Opportunities

- Regional, national, international expansion potential in market

- Mobile app development to drive brand

- Partnership potential with similar lifestyle brands

Threats

- Larger, more seasoned companies with greater influence

- Increases in prices for ingredients; could be passed on to guests

- Frozen yogurt trend could fade

C. Unique Selling Proposition (USP)

After speaking with Mr. Noel, it is clear that their unique selling proposition is their use of the finest ingredients available, as “taste always wins.” Conversely, competitors like TCBY are claimed to use lower quality ingredients in their products, and price it three cents less per oz. than 16 HANDLES.

D. Online Value Proposition (OVP) The products, and brand as a whole, are appropriately conveyed in their online value proposition, where viewers can find a background of the company, check their rewards card balance, view all 16 HANDLES locations, compare nutritional facts for all flavors and toppings, and follow/converse with the company on social media. The website is styled in a modern, parallax manner, which is popular for maintaining interest for this demographic. The amount of information is minimal – it gives you exactly what you need, and nothing more. The site is uncluttered and easy to navigate. Furthermore, a mobile app would bring 16 HANDLES OVP to a new level, as guests can easily manage their account right from their mobile device.

VII. CAMPAIGN DEVELOPMENT After gathering and analyzing the information provided to this point, taking into consideration the project guidelines, I have decided to develop three campaigns – one partnership-based, and two based on a mobile app. Current Situation: Gift cards are a popular gift for holiday months; however, frozen yogurt sales decline during this time.

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Assignment Objectives:

1. Increase sales and foot traffic during winter months. 2. Increase gift card sales, overall.

A. Campaign I

The #HANDLEtheHoliday campaign involves 16 HANDLES entering a partnership with several high-end stores that cater to a similar audience – including Charlotte Russe, Forever 21, H&M, and Hollister – and utilizing point-of-purchase stands for gift cards, as shoppers may be interested in purchasing a last minute gift for a friend or family member during this time period. To encourage cooperation from host stores and engagement from shoppers, 16% of gift card profits will benefit a charity of the host store’s choice, through January 16, 2015. The rationale behind this campaign is that retail stores generally receive a large portion of business this time of year, and people don’t always know what to purchase for family or friends. With a 16 HANDLES gift card, you’re giving a healthy treat to family and loved ones, and helping charitable organizations in the process. Goals for this campaign include increasing gift card sales 160% from the same time during the previous year; increasing foot traffic 160% from the same time during the previous year; and increasing both social media following, and total engagement, 160% on Twitter, Facebook, and Instagram.

B. Campaign II The #FreeHANDLES campaign entails a mobile app, integrated with the current rewards card program, and is modeled after Starbucks’ highly successful mobile app. Features include: ● Pay with digital gift card; refill with credit card ● View purchase history ● Track, redeem rewards points; special offers ● Send gift cards to friends via email ● Locate nearest stores, hours of operation

The campaign will be based around the app launch, where users will receive 50 rewards points ($5.00) for downloading the 16 HANDLES app and registering the account.

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Additionally, to drill down into finding the most dedicated fan base, when guests snap a picture of themselves with their #FreeHANDLE and post to Instagram, they will be entered in a monthly pool for one of 16 - $5 gift cards. This also gives dedicated fans a chance to win double with 16 HANDLES. Rationale behind the #FreeHANDLES campaign is to build a dedicated base of guests that encourage multiple purchases and word-of-mouth promotion to friends, family, and colleagues. The goal for #FreeHANDLES is to generate 1,600 mobile app downloads per month. The company will collect the guest’s full name, mobile number, e-mail address, and credit card number (optional) via signup.

C. Campaign III The #ShareaHANDLE campaign is modeled from Starbucks’ incredibly successful “Tweet-a-Coffee” campaign. 16 HANDLES guests will be able to send their friends and family an e-gift card of several denominations, instantly, and for any occasion during the year - whether it be Valentines Day, a birthday, Christmas, or just to say thank you. The reasoning behind this campaign is that Starbucks’ campaign was so successful, and 16 HANDLES also caters to an audience used to paying a premium price for their food and drinks. This campaign will hopefully increase the professional workforce fan base between 25 and 45, as this could prove a great gift idea for employees and colleagues. The goal is for 16 HANDLES to transact 1,600 e-gifts per month, which could bring in $192,000 annually, at an average card value of $10. The company will collect the sender and recipient’s full name, mobile number, and e-mail address.

VIII. SUMMARY 16 HANDLES is a great example of a company that understands social media, which provides a solid base for building social marketing campaigns. The company actively engages fans on social networks, and, furthermore, the branding and “feel” of the company is consistent across all platforms. My number one recommendation is to follow Starbucks’ model as a mobile app template and develop and launch this as soon as possible. Once the app is live, the possibilities are endless

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with promotion (see #FreeHANDLES and #ShareaHANDLE campaigns). Furthermore, The introduction of an e-gift card for 16 HANDLES will ultimately drive more sales, given that guests can send a gift at the click of a button. Thank you for considering the analyses and recommendations highlighted in this document. Please contact evanschuld@gmail.com with any questions!