Chef Vending will achieve its sales targets through a combination of relationship building and aggressive pricing. Our initial targets will be medium-sized operators and distributors who have the capital to invest in our machines. We will continue to participate in industry trade shows and expand our advertising budget when the funds become available. Concurrent with this strategy, we will establish relationships with larger brand name companies to become a supplier of choice.
Chef Vending's customers will derive immediate and lasting value from our products. Our vending machines, as shown earlier, will both expand existing markets and create new ones. The ROI exceeds the industry norm of 12-18 months. The quality of the products, as well as the attractive and distinctive design features, will work to satisfy existing customers and to attract new ones.
Chef Vending will enjoy the traditional benefits of first to market. We will attempt to leverage this position to establish and solidify our brand in the market. As a small company looking to establish itself, we will be attentive and flexible in meeting our customer's demands.
For our other products we have design features that will make us very competitive. In addition to these design features, we will also be competing on price.
Our marketing strategy will emphasize the strengths of both our company and our products. We will position ourselves as an aggressive, innovative company that supplies the market with new, high-quality products. We will position ourselves in trade shows, within industry publications, and the Internet, to reinforce this marketing strategy. Our brochures, letterhead, and business correspondence will further reinforce these concepts.
We also recognize that it costs six times more to attract a customer than to retain one. To that end, we will operate under the principle that our best marketing is an exceedingly satisfied customer. While the industries we operate in are large, reputations play an important part.
Chef Vending will participate each year in two NAMA-sponsored trade shows. We will also attend a number of local and regional trade shows and distributor open houses to promote our product lines. During the year we will expand our advertising budget to allow us greater and higher quality exposure on the trade publications. We are also positioned on the Internet at www.chefvending.com to allow our company greater exposure and easier communication with our customers.
Chef Vending will pursue distribution agreements with large regional and national distributors. Until these agreements are in place, we will sell directly to the operator. We are also pursuing relationships with nationally-branded companies to supply them with machines for their products.
Chef Vending's most important marketing program is our participation at the NAMA trade show. We were able to introduce our machines to important end users and distributors. We followed up with the contacts through a mailing campaign and follow-up phone calls. We will measure how many of these contacts we are able to turn into accounts, and track the volume of each of these accounts.
Another key component of our marketing plan is the relationships we are able to build within our local marketplace. Everyone involved spends time each day developing and cultivating relationships with local companies. We will measure our success in two ways. First, we will track the number of contacts that we turn into customers and the volume of their business. Secondly, we will track these contacts into the number of machines we will be able to place into the marketplace and the volume that each location is able to produce.
Chef Vending will also expand its advertising budget, participate in regional and local shows and open houses, and seek out innovative creative ways in which to market our company.
Chef Vending will pursue two distinct pricing strategies. For our Sandwich Express and Fresh OJ machines, we will price these machines at the higher end of the market. For the other machines, we will compete aggressively in our pricing strategies in order to attract and retain new customers. Below is a table outlining the pricing strategy of Chef Vending.
We will identify large- and medium-sized regional and national operators, distributors, and manufacturers as our primary targets. We will focus our efforts on the key decision makers at each company. We will also look to our customers as important sources of industry information and create new leads from them.
The following table and chart reflect the forecasted sales for Chef Vending. We are forecasting sales growth of 20% a year for our vending and equipment sales, and 25% for the vending routes that we will establish and manage ourselves.
A leading objective of Chef Vending is the development of key strategic alliances. We will pursue alliances with branded, national sandwich makers such as Oscar Mayer, Pierre, and others to create a greater market potential for Sandwich Express. We will also seek out strategic alliances with national juice brands, such as Tropicana, Sunkist, and others to increase the market potential for our Fresh OJ machines.
Chef Vending views the relationship between ourselves and our distributors as a strategic alliance. We will work closely with each distributor to co-market and promote our products and will work, wherever possible, in partnership to achieve desired market penetration.