TABLE OF CONTENTS

PROBLEM STATEMENT.....................................................................................................3

SEGMENTATION...................................................................................................................6

TARGET MARKET................................................................................................................8

POTENTIAL MARKET.......................................................................................................10

MARKETING PLAN............................................................................................................13

PROMOTIONAL COSTS.....................................................................................................16

PRICING STRATEGIES......................................................................................................17

POTENTIAL THREATS......................................................................................................18

CONCLUSION.......................................................................................................................19

REFERENCES.......................................................................................................................20
PROBLEM STATEMENT

Over the course of any given day, week, or year, individuals consume foods and

beverages in combination—an eating pattern. An eating pattern is more than the sum of its

parts; it represents the totality of what individuals habitually eat and drink, and these dietary

components act synergistically in relation to health. As a result, the eating pattern may be

more predictive of overall health status and disease risk than individual foods or nutrients.

The U.S. population, across almost every age and sex group, consumes eating patterns that

are low in vegetables, fruits, whole grains, dairy, seafood, and oil and high in refined grains,

added sugars, saturated fats, sodium, and for some age-sex groups, high in the meats, poultry,

and eggs subgroup.

The typical eating patterns currently consumed by many in the United States bring out the

following:

 Three-fourths of the population has an eating pattern that is low in vegetables, fruits,

dairy.

 Most Americans exceed the recommendation for added sugars, saturated fats, and

sodium.

In addition, the eating patterns of many are too high in calories. Calorie intake over time, in

comparison to calorie needs, is best evaluated by measuring body weight status. The high

percentage of the population that is overweight or obese suggests that many in the United

States overconsume calories. Current eating patterns can be moved toward healthier eating

patterns by making shifts in food choices over time. Making these shifts can help support a

healthy body weight, meet nutrient needs, and lessen the risk for chronic disease.
 Figure I: Food Habits

Fat Straws a mid-sized company based out of Dallas, that makes and sells playful ad tasty

drinks with chewy, bouncy balls of tapioca that swim and swirl in your cup called as the

Bubble Tea. This unique milk tea and tapioca combination is a worldwide sensation that

began in Taiwan in the 1980s, spread to LA and NY, and found its way to the DFW area with

the creation of Fat Straws. Originally satisfying the customers need with healthy fruit drinks

flavored with Mango, Strawberry, Coffee, Pineapple, Green Apple, Lychee, Grass and many

more they targeted the market to lure people towards healthy drinks. They gathered love from

people consistently and increased 15-20% each year since 2002. The company’s focus on

quality control, outstanding service, community-based marketing and an emphasis on strong

relationships–with customers and employees is leading to its success.

To expand its offerings the company came up with a new menu item the Mochi Donut, called

“Chewy Puff”. Fat Straws co-owner, Terry Pham shared in a press release, “Over the last 16
years we’ve really tried to stay focused on what we do: make great bubble tea. We’ve been

searching for something to complement our product, but nothing has stood out. That all

changed last year when I had my first Mochi Donut. And like all of the amazing experiences

in my life, we had to share it”. Fat Straws’ new Mochi Donuts were made with a Japanese

rice flour. The Donuts contained fresh sourced ingredients, including organic strawberries,

organic blueberries and ceremonial grade matcha. No food colorings or artificial dyes were

used in the making of the Mochi Donuts and they serve as an excellent breakfast alternative

with great health benefits.

They were a huge source of nutrients and a healthy snack alongside the drinks, just like the

Americans would want. But unfortunately, the donut was not projected as a “Healthy

Breakfast” and did not see much success. It was launched only in one store in Richardson and

was not rolled out anywhere else. As explained earlier, the American food lifestyle seeks a

healthy alternative to keep a track of calories and the associated diseases. As per statistics

from Figure I, we identify that people need to cut down hugely on added sugars consumption

and increase consumption of fruits and nutrients. With this product of theirs, Fat Straws has a

huge scope to meet this requirement of the American population by providing a side snack or

a breakfast option, filled with nutrition and fruitiness and yet satisfy the quench of dessert

like a donut. A healthy breakfast with minimum calories and high nutrient content, but just as

tasty as a sweet donut, full of calories could have been their positioning statement but, the

product was not positioned and marketed in the right direction. We aim at suggesting better

ways to position and market the “Chewy Puffs” – mochi donut by Fat Straws to increase its

scope to further stores and enhance Fat Straws’ business.

SEGMENTATION

Breakfast foods include doughnuts, cereals, toast, fruit, pop tarts, breakfast bars, hot

foods (bacon and eggs, pancakes), coffee, juice, milk, energy drinks, and so on. This is a

competitive market where consumers will either eat breakfast at home, on-the-run (that is,

while traveling), or at a coffee shop, diner, or at a fast food outlet or even acquire food

through a vending machine.

As you can see, the breakfast food market, if broadly defined, consists of array of

direct and indirect competitors all trying to meet a similar consumer need. This market

situation highlights the need for effective market segmentation and differentiating between

different consumers and their underlying needs and motivations.

On the basis of product-type

 Dairy-based breakfast: Adding dairy to your breakfast, can help you from

becoming hungry before your next meal. Kids who eat a nutritious

breakfast may learn better and even do better in school, because they are less

likely to have hunger pains, such as -being tired, getting headaches or even

become cranky. The first step to making sure your kids eat a nutritious breakfast,

is to set a good example, by making healthy food choices. Thus, our mochi donut

falls perfectly into this category.

 Cereal-based breakfast: Cereal is healthy only if you choose wisely. Readily

available breakfast cereal for a convenient, healthy and balanced breakfast,

especially if it’s made with whole grains, is low in sugar and is served with fresh

fruits.
On the basis of distribution channel

 Local Food Chain: This is the primary channel of distribution that would be used

to sell the product. For example, the Mochi Donut by Fat Straws would be

primarily available at their retail outlet.

 Convenience Stores: A convenience store, convenience shop, or corner store is a

small retail business that stocks a range of everyday items such as groceries, snack

food, confectionery, soft drink etc. This channel can be very efficient to distribute

a product since they are easily accessible to consumers. K marts, Circle K etc. are

few examples of such stores.

 Supermarket: Another useful distribution channel can be a supermarket.

A supermarket is self-service shop offering a wide variety of food, beverages and

household products, organized into sections. It is larger and has a wider selection

than earlier grocery stores, but is smaller and more limited in the range of

merchandise than a hypermarket or big-box market. Some examples are Walmart,

Target, Sam’s Club etc.

 E-Commerce: This type of distribution chain deals with selling products over the

internet

On the basis of consumer type

 Consumer Age: Consumers of various age groups have different

requirements/choices with respect to their breakfast.

 Consumer Behavior: Not everyone is the same, every customer we deal with has

different personality and behavior which tend to affect their choices.

 Consumer Needs: Every consumer has different needs like dietary, taste wise,

economical etc. which influence the choices they make.

TARGET MARKET

There are wide range of customers available to Fat Straws Bubble Tea Co., but our

target customers are not limited to few groups of people, as we are inclined towards all those

who love donuts and are health-conscious and those who want to satisfy their palate. In

respect to that, market research has been conducted to know how our target market looks like.

Demographically, rather than targeting specific age groups, it would be more feasible to

market the Mochi donut to the following groups of people:

Consumer type

 Health Conscious people

This market segment has a diverse range of needs but can be clustered together

because they are purchasing breakfast foods for specific health or dietary reasons. This is a

growing market segment as more consumers become aware of certain health issues, such as

gluten-free, low carb, nut free, and so on.

 Kids/Teenagers

The term Chew it out that goes along with the product name Mochi Donut is

appealing to the teens and that way we can have a good base of customers. If the parents

know that this is something which is tasty yet healthy, they won’t mind buying it for their

children often.

Working population

This segment includes consumers who eat breakfast out-of-home. They are more

likely to purchase food at a cafe, diner or a fast food outlet. They typically have either busy or

unorganized lives and will often rush off to work or study and just grab some food or drink

along the way.

POSITIONING

We have come up with a positioning statement for our Mochi Donut which goes as follows:

“Among breakfast consumers, our Mochi Donut by FAT Straws is a breakfast item,

that is tasty yet is very rich in nutrition value, satiating and is healthier than other items in

the market”

We are positioning our Mochi Donut as the dairy and cereal based breakfast

which is a type of a breakfast item that is appealing to people of all age groups and choices. It

is a healthier and easy on the go breakfast option. Along with being high in nutrition it is

tasty and stomach filling which makes the doughnut a package for the consumers. Thereby

satisfying the needs of large base of customers.

SWOT ANALYSIS

Figure II: Situation Analysis

POTENTIAL MARKET

Breakfast is considered as one of the most important meals of the day. Breakfast

replenishes the stores of energy and nutrients in the body. Studies have shown that people

who eat breakfast generally have more healthy diets overall, have better eating habits and are

less likely to be hungry for snacks during the day than people who skip breakfast. Children

who eat an inadequate breakfast are more likely to make poor food choices not only for the

rest of the day, but also over the longer term. Americans have many things for breakfast like

cereals, English muffins, pancakes, waffles, doughnuts, bagels, eggs, chicken sandwich etc.

The places which are famous for their breakfast are IHOP, Waffle House, Denny’s Chick-fil-

A. A poll has shown that the popular breakfast items consumed in the US tend to be sweet,

fried and are filled with high calorie.

In last few years there has been a change in the kind of food people are consuming.

People have started to shift their diet towards healthy and organic food. This is dramatically

changing the breakfast industry in the US. Many restaurants and food chains have started

serving healthy and organic in their menu in order to attract wide range of customers. One

breakfast survey found that most consumers are willing to pay more at restaurants that serve

organic and locally grown food. In total, 65% of consumers noted that they would be willing

to pay 10% more to dine at a green restaurant. In the same survey, a full one-fifth said they'd

pay more than 10% more in order to eat green.

Doughnuts is one of the most consumed items for breakfast in the US. Dunkin-Donuts

is one of the biggest players in the US doughnuts market. The size of the bubble tea market

was $5.37 Billion in 2019 and it is expected to reach $8.46 Billion in 2024.

The size of the doughnuts market is $47.26 Billion, and it is expected to reach $63.3

Billion in 2025 worldwide. The size of doughnuts market in United States was $15.89 Billion
in 2019. The Doughnuts Market is continuously growing across the world over the coming

years. A doughnut or donut is a type of fried dough confectionery or breakfast food. The

doughnut is prepared in various forms as a sweet snack that can be homemade or purchased

in bakeries, supermarkets, food stalls, and franchised specialty vendors.

Figure III: Donut Competitors in America

Doughnuts are usually deep fried from a flour dough, and typically either ring-shaped

or several shapes without a hole, and often filled, but can also be ball shaped. Other types of

batters can also be used, and various toppings and flavourings are used for different types,

such as sugar, chocolate, or maple glazing. Doughnuts may also include water, leavening,

eggs, milk, sugar, oil, shortening, and natural or artificial flavours. The market growth is
primarily driven by changing lifestyle of people in urban areas, increasing number of shops

and outlets and growing popularity of low-calorie snacks.

Adding doughnuts in the menu, Fat Straws will attract a new segment of customers. By

adding a low-calorie doughnut which is made by using organic and fresh ingredients will

attract consumers to Fat Straws due to rising focus towards health along with increasing

awareness about healthy diet that is rich in vitamins, proteins & fibre. Fat Straws is offering

organic and healthy doughnuts which will attract consumers who are;

1. Focused on health

2. Having special diets

3. Conscious about their weight

Economic Evaluations

The table below shows the manufacturing costs and projected sales for 3 years.

Year 1 2 3
Avg. Cost of Manufacturing per half dozen
$7.50 $7.85 $8.10
(A)
Expected Sales (half dozen) (B) 50,000 60,000 72,000
Manufacturing cost (C) = (A)*(B) $375,000 $471,000 $583,200
Average Selling Price per half dozen (D) $7.50 $8.50 $9.50
Total Revenue (E) = (D)*(B) $375,000 $510,000 $684,000
Marketing Budget (F) $16,000 $16,000 $16,000
Profit [ E – (C + F)] ($16,000) $23,000 $84,800

Table I: Projected Sales

Mochi Donut is made from mochi flour which is also called as Japanese sweet rice

flour and then it is dipped glaze of various flavours. Fat Straws has planned to launch Mochi

Donut as a healthy and nutritious alternative to doughnuts which have artificial sugars, high
calorie content and very less nutritional value. In order to gain consumer loyalty and

retention, we are selling the Mochi donuts at a cost which is equal to the manufacturing cost

in the first year. We have predicted that for the first year we are expecting no profit. Once our

new donut is effective in grabbing the attention of the customers, we are anticipating higher

sales. We will increase the production of the doughnuts and we will increase the selling price

of Mochi Donuts to earn profits.

MARKETING PLAN

Product

Fat Straws Bubble Tea Co. is a bubble tea shop which serves up a wide selection of colorful

drinks, blends and infusions at locations around DFW. Creativity is driving the donut

industry forward. Consumers can eat sweet or savoury, old-fashioned or gourmet, yeast or

gluten-free donuts. All these offerings have not only increased sales but also broadened the

time of day in which the sweet good is purchased. FAT straws decided to expand its product

line with a new product called Mochi donuts. These donuts are made with rice flour and

tapioca flour, with Matcha on top of the glaze. Mochi doughnuts add some bounce to your

bite. Since these donuts are not the regular Grandma’s donut but a healthier version. Mochi

donuts are available in different flavors like Strawberry, Blueberry, Passionfruit, etc.

depending upon the season.

These Key Ingredients in the mochi donut enhance our brand value:
 Rice Eggs Flour Dairy

Fat straws through Mochi Donuts will be competing with major giants in the donut industry

like Dunkin Donuts and Krispy Kreme who have in the industry for long time and have a

loyal customer base. Mochi donuts will be displayed as a healthier alternative to these brands

by highlighting the nutrient value that brings with it. Since these donuts will be placed in the

breakfast segment it will also be competing with other breakfast items.

Product Name

During the product’s initial launch, they called these donuts as Mochi Donuts while

promotions and Chewy Puffs on the company website which was confusing if those were

same products or different. To target the Donut audience and the audience of Fat straws, we

considered it naming “Mochi donuts by Fat Straws”. This will eliminate the confusion over

the product name. With this, people will be interested in trying a new type of donut which has

a healthy component to it.

Packaging

Packaging for donuts made in such a way that the donuts are kept safely inside the box. The

packaging provides a firm base for the donuts and does not bend. The packaging has more of
an accessible look to it in which the consumers should not find it hard to access the food

inside. Boxes are reusable and eco-friendly, sustainable and oven proof. FAT Straws Drink

can provide complementing packaging of the donuts with on-the-go packaging.

Promotion

“Chew it out” with Mochi Donuts by FAT Straws is the tagline that we will be using to

promote the product. Since the product is healthy alternative for breakfast, we are planning to

target health, diet conscious consumers and donut lovers who are likely to switch for healthy

donut. Consumer purchase intent for healthy foods is four to five times higher than for

indulgent foods, and over 60 percent of consumers seek healthier snack options, according to

research from Nielsen and Packaged Facts. We can market this product as a healthy snack

which one can have on the go.

Promotion Strategies:

 A website makes the first impression of the company currently the website, does not

have much details about the product. The website will cover all the aspects of the

product including its price, offers available, varieties and the nutrition details which

will be the highlight of the product.

 Brochures are the most informative marketing tool which can be used very

inexpensive yet successful way of promoting the product. Brochures will be

distributed in busy places like shopping malls, parks, educational institutions, etc.

 Reach out to Health Care Centre- Nutrition and workout stores to tie up and promote

our healthy product.

 We have planned to start a “Make you Mochi” competition on every Saturday for the

first month of promotions. In this competition, customers can dine in and customize

their own mochi donuts with new flavours and toppings in planned time.
  Loyalty programs are becoming more prevalent throughout the fast-food industry and

coffee and donut franchises will also follow the trend in an attempt to retain loyal

customers and draw in new ones.

 Social Median Campaigns – Influencing community with #hashtag marketing. Also

use events and festivities to promote the product.

Place / Distribution

 Product can be purchased in store

 In store pickup after ordering online will be available.

 Online order and delivery of the product.

 Orders via catering will also be one option.

PROMOTIONAL COSTS

Digital promotions

 Fat Straws is going to target online as well as offline medium for Donut promotions.

They have set estimated budget for promotions around 16000$ which will include

online and offline promotions.

 They are considering Google Ads for digital promotion, the average cost-per-click on

Google Ads is 1$ to 2$ for the google search network and less than 1$ for the google

display network. Generally small sized companies spend $6000 to $9000 per month

on google ads.

 Fat Straws is also considering promoting their donut on social media ad campaigns

with Facebook, What’s app, Instagram business account, which will roughly costs

around 450$ for a month.

  Fat Straws is investing around $6000 on google ad and around $1200 on social media

campaign.

Source of Ads Costs incurred

Online ads
Digital ads $6000
Social media campaigns $1200
Offline ads
Billboards $4800
Flyers $2000
Miscellaneous $2000
Total $16000

Table II: Distribution for Promotional Costs

Offline promotions

 The cost of billboard advertising depends on format, circulation and demographics

and impressions. Physical billboard costs from 1200$ per month.

 Fat Straws has considered to put the billboards initially in the vicinity as and

gradually expanding the reach.

PRICING STRATEGIES

 As Fat Straws are launching new product, they have decided to serve donuts as a

complementary along with bubble tea for the initial period of 2 months. Post the

promotional period it will be sold at the cost of 7.50 per half dozen.

 Observing the sale graph for a year, the profit margin of 75 cents per half dozen will

be introduced.

 To enhance the sale of the donut, Fat Straws will make donuts available on food

delivery apps with the attractive discounts and offers.

  Through this Fat Straws can expect the increase in the number of approaching

customers, the pricing will be revised by raising the profit margin by $1.45 per half

dozen.

Rollouts

 Serving the donuts as a complementary along with the bubble tea will allow them to

understand their product reach in the span of 2 months.

 During this period Fat Straws can introduce the donut in public events, conferences,

Universities and cooperate events.

 Through such events Fat Straws can improve their customer base for the donuts. This

strategy will also help them understand the market based on free distribution and

promotion. Gradually expanding product coverage nationally.

 The strategy will help Fat Straws in creating new addons and enhance the quality

before the national rollouts.

POTENTIAL THREATS

 The biggest threat Fat Straws might face is that some other brand copying their

product to avoid such situation they must legally protect their idea. Fat Straws can

also use non-disclosure agreements when discussing details of product with

employees.

 Confront and challenge copycats - When seeing a copycat, confront that person or

company immediately and directly. Call the copycat company and speak with the

people in charge. Letting them know that we will pursue whatever legal means

necessary to shut them down.

 Offering superior service – Fat Straws must always be in a pursuit to offer the best

service in the market. Getting everyone involved, training staff to listen and

independently understand the customer’s need is best start. Going beyond the call of
 duty, never allowing the newness to wear off, tailoring the mission statement to

customer. Finding out what your customers’ needs are and ensuring that all these

needs are fulfilled daily to secure clientele.

 Building brand loyalty – Fat straw must actively consider engaging with the customer.

Connecting with the customer will help to create a sense of belonging and

community. Making sure that brand is consistent, as consistency is a vital factor in

building loyalty. Focusing on what brand does best will make the customers come

back

CONCLUSION

We see a huge potential in the ‘Mochi Donuts’ by Fat Straws and hence we propose

the said marketing plan and sales estimations for the product. Realizing the fact that the

product was poorly launched, which failed to reach to the appropriate customer we believe

that the product can be relaunched by identifying the appropriate target market, implementing

a better marketing plan and re-positioning the product to reach the target audience. We expect

our plan to get the hold of the market, increase sales and eventually benefit the Fat Straws

stores to grow and increase their hold in the local and late the national market.
REFERENCES

 Dietary Guidelines 2015-2020

https://health.gov/our-work/food-nutrition/2015-2020-dietary-

guidelines/guidelines/

www.healthypeople.gov

 Health finder Consumer Resources

health.gov/myhealthfinder

 Fat Straws

https://www.fatstraws.co/

 Donut Competitors in America

https://www.1843magazine.com/features/how-donuts-fuelled-the-american-dream