The Pasta Tree

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Pasta Manufacturer Business Plan

Market Analysis Summary

The population in Springfield has grown by 5% over the past five years. The current population stands at over 250,000. It is projected that the population will continue its growth pattern for the next three years and will eventually reach over 280,000.

There are fifteen major supermarkets that operate in Springfield and over thirty-five smaller grocery stores that serve the metro and expanding suburban communities. Approximately 60% of these stores serve communities that are made up predominantly of urban professionals. The Pasta Tree has identified the upscale shopper as the target customer for the fresh pasta products.

4.1 Market Segmentation

The Pasta Tree has identified two store types where the products will reach the target customers:

  • Supermarkets: The volume of activity in these stores creates tremendous opportunity for The Pasta Tree. The supermarkets have been losing market share steadily to smaller stores that offer the customers products that the larger stores don't carry. Though the price of the products ($3.00 for a serving for two) is higher than dry pasta products, it is still affordable to most shoppers.
  • Smaller Grocery Stores: These stores serve customers in specific communities. These also include speciality stores like wine shops and fish markets where the product line would fit in nicely.
Market Analysis
2002 2003 2004 2005 2006
Potential Customers Growth CAGR
Supermarkets 5% 15 16 17 18 19 6.09%
Smaller Stores 5% 35 37 39 41 43 5.28%
Total 5.53% 50 53 56 59 62 5.53%

4.2 Target Market Segment Strategy

The Pasta Tree's marketing will focus on the urban professional segment, which has little time to prepare dinner and will be attracted to quality and freshness of The Pasta Tree products. The pasta products are ready to eat in half the time of dry pasta (one to three minutes) and are fresher than the competition. This gives The Pasta Tree products a decidedly better taste and consistency.

4.3 Service Business Analysis

Pasta is a staple in a supermarket with a number of products and brands to pick from. Most of the competition is in dry pasta. Fresh pasta has a much shorter shelf life (about 30 days) so there is less competition  in products. Currently, several large food companies offer a limited line of fresh pasta products. Though fresh, these products are only slightly better than dry pasta and really only offer reduced preparation time. As a local product, The Pasta Tree can offer better quality and better packaging of fresh pasta.

4.3.1 Competition and Buying Patterns

The Pasta Tree products will be displayed in the deli case of the supermarkets. The only competition in this section are two other product lines whose packaging is boxy and unattractive. To improve the ability to transport the product, these pasta products have been folded into a small container. The Pasta Tree products are not folded and are wrapped in an air-tight colorful plastic package. Their presentation is similar to the dry pasta packaging which is important to consumers. No one wants their fettuccine folded.