Strategic Business Plan: Red Mango Inc.
Strategic Business Plan:
Red Mango Inc.
Bellevue, Nebraska
Leticia Galdamez
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Strategic Business Plan: Red Mango Inc.
COMPANY
People are always looking for new ways to find delicious desserts. Their biggest worry is
the fact that most desserts are not very healthy. So, what is a good dessert someone can enjoy
without feeling guilty about enjoying it? Yogurt!!! Red Mango offers real all-natural nonfat
frozen yogurt that will satisfy your guilty pleasures while still leading a healthy lifestyle. Red
Mango has been voted, by Zagat the “Best Smoothie/Frozen Yogurt” and “Top Healthy Options
within the Quick Refreshment Chains” beating out Pinkberry and Jamba Juice chains. Red
Mango was founded by Dan Kim and the first store opened in 2007. There are now more than
200 locations nationwide.
My plan is to open a Red Mango in the Bellevue area to provide healthy dessert options
for our military members stationed at Offutt Air Force Base, NE and in the surrounding area.
Being prior military, I know living a healthy lifestyle is required in the military. This is why I
want to provide a healthy choice to them and everyone else.
My goal is to establish this company at Twin Creek Plaza in Bellevue, just minutes away
from the base and in the center of Bellevue, NE. My goal is to open a traditional store that offers
self-serve yogurt in a variety of flavors with fruit, nuts and other toppings, yogurt-based drinks
and fruit smoothies and probiotic drinks. Traditional stores occupy about 1,400 to 2,000 square
feet of commercial space. This location will open at Twin Creek Plaza in Bellevue, NE close to
Twin Creek Cinema, Offutt AFB and Bellevue Trails. Traditional stores offer a sitting area for
guest to relax while enjoying their yogurt.
PRODUCTS AND SERVICES
My advantage in this company involves filling a void in the marketplace and offering a
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Strategic Business Plan: Red Mango Inc.
better product. The closest yogurt business is Orange Leaf in Papillion, NE and is located 6 miles
away from Twin Creek. People in Bellevue can enjoy all-natural yogurt in their neighborhood
instead of traveling to Papillion. After watching a movie at Twin Creek Cinema, customers can
come and enjoy our yogurt that is close by. There is also Scooter’s Coffee and yogurt but, both
lack what Red Mango offers which is all-natural yogurt which is a healthier choice not only
because of the yogurt put our variety of toppings as well.
With the winter months coming to an end, the spring and summer bring more people that
want to be outside. The spring brings warmer days which is where Red Mango Frozen yogurt
comes in. Families with small children normally take their kids out for Ice Cream but, we all
know that ice cream is not a healthy option. Red Mango offers them that healthy option. This
store will be located near the end of a bike path. Customers can come and enjoy a frozen treat
after their ride.
Red Mango will fill the void of not having a healthy dessert company around. Red
Mango offers non-fat frozen yogurt unlike other places that offer yogurt that contain artificial
ingredients or excessive calories from fat and sugar. Red Mango frozen yogurt is all-natural,
non-fat or low-fat, and certified gluten-free. Red Mango’s yogurt is fortified with breakthrough,
natural probiotics. Probiotics are natural supplements that support our digestive and immune
systems.
MARKET ANALYSIS
Since the company that I am trying to open serves frozen yogurt, we have competitors in
the immediate area that offer frozen yogurt treats as well. In the Bellevue area, there are two
other frozen yogurt companies but, they do not provide the same healthy choice in their yogurt
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Strategic Business Plan: Red Mango Inc.
the way Red Mango does. There frozen yogurt is made with artificial ingredients and contain
excessive calories from fat and sugar. Our greatest competitors are Scooters Coffee and Orange
Leaf. They are both set up in the Bellevue/Papillion area and both serve Frozen Yogurt. Below
you can see information about our competitors and what Red Mango offers in contrast to them:
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COMPETITOR # 1 – ORANGE LEAF
Orange Leaf Frozen yogurt has their store set in Shadow Lake Town Center in Papillion, NE.
They are a well-known frozen yogurt company that has been very successful. They offer a
variety of flavors that range from red velvet to watermelon flavor. They yogurt is self-serve and
they offer a variety of toppings for their frozen yogurt (Orange Leaf, 2014).
As other companies they have their strengths that make them who they are. One strength
that makes then a favorite to customers is how they introduce a new “Flavor of the Year”. This
year they introduced a pistachio flavor frozen yogurt, which seems to be very popular. A couple
of other things that make them successful is how they provide sugar-free option and dairy free
options in their frozen yogurt. They also provide other ways their frozen yogurt can be enjoyed.
To go containers allow you to take your favorite flavors home, which can be convenient for
people that don’t have time to sit at their store. They also offer frozen yogurt cookies (Orange
Leaf, 2014).
Besides their yogurt, they have other ways to get customers in their stores. Customers
have the option to purchase Orange Leaf t-shirt and other merchandise in their stores. One very
interesting item that really has customers enticed to enter their stores is their spoons. Their
spoons are not like regular spoons, they are shovel shaped and bright orange. They advertise how
their spoons are good for scooping up their frozen yogurt but, also good for other uses like:
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Strategic Business Plan: Red Mango Inc.
guitar, shovel, paddle, and catapult (Orange Leaf, 2013). This may not seem very interesting to
adults but, kids will eat this up. The one other thing they offer is a rewards program, the ounce
back card. For every dollar spend equals one point. Every ten points is one dollar added back to
your card. On your birthdays you get three dollars back on your card (Orange Leaf, 2014)
Orange Leaf has been ranked #3 in March of 2013, on its lift of top new franchise by
Entrepreneur’s Franchise 500 (Entrepreneur, 2013).
Their weaknesses are apparent right the moment you visit their website. On their website
they state how they are not all-natural and how their frozen yogurt contains artificial ingredients.
They state their yogurt contains dyes and is not gluten free. For customers who are trying to live
healthier lifestyles, free of things like artificial ingredients, dyes and gluten, Orange Leaf is
obviously not the right choice for them.
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COMPETITOR # 2 – SCOOTERS COFFEE & YOGURT
Scooter’s Coffee and Yogurt is located here in Bellevue, Nebraska just minutes away
from Offutt Air Force Base. They started the company by serving only coffee products and
pastries. Just in the last couple of years they have moved to serving frozen yogurt as well.
After doing some serious research on Scooters Coffee and Yogurt, I was a bit shocked to see
how their yogurt is not advertised on their website. They provide information about their coffee,
pastry products, and other drinks only. Their link to their site is named Scooters Coffee and
Yogurt but, there is no yogurt information when you are on their website. There is more
information about their yogurt in their Facebook page then on their actual website. In that case, I
went to their store to see what weaknesses and strengths I could see of this company.
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Strategic Business Plan: Red Mango Inc.
Their strengths are very obvious. They cater to people that like coffee. I would consider
Scooter’s a competitor because adults that love coffee bring their kids to enjoy the frozen yogurt
while they do the same or have a cup of coffee. It’s no doubt who the target customer is for
Scooter’s, families with small kids.
Their yogurt on the other hand may be their weakness. They offer almost the same
flavors all the time that include: chocolate ice cream, candy bar smash and velvet cake (Scooter’s
Coffee & Yogurt, 2014). They offer a few fruit flavors and one that is not dairy. They also have a
variety of toppings just like other places. The only problem is how it seems their main concern is
their coffee. Workers were extremely busy attending to quest that wanted coffee products. The
only ones interested in yogurt were the few kids in the store. The frozen yogurt section was
neglected and didn’t look very inviting.
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RED MANGO
In contrast to its two main competitors, Red Mango offers what the other two don’t, all-
natural non-fat or low-fat, and certified gluten free frozen yogurt. Their toppings include fresh
fruit and other healthier options for kids. Red Mango is also known for their smoothies, fruit and
yogurt parfaits, fruit chillers and seasonal artisan hot chocolate (Red Mango, 2011) Red Mango
also offers a rewards program called Club Mango which is free to join. You receive $2 dollars
just for signing up and you get a $5 dollar coupon every 500 point you earn. You will also
receive a $5.00 reward on your birthday.
Overall, we don’t need fancy spoons or coffee, the healthier option for dessert that Red Mango
offers will beat out competitors. Below are two tables showing the differences in Red Mango and
our competition for frozen yogurt and smoothies.
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Strategic Business Plan: Red Mango Inc.
Frozen Yogurt:
Red Mango
The other guys
100% all natural
Artificial ingredients
Ganeden BC 30 Probiotics for healthy
immune system
No artificial sweeteners
Generic “probiotics” with unproven benefits
Nonfat & around 100 calories
Calories from fat & sugar
Certified gluten-free
Modified food starch
High fructose corn syrup
(Red Mango, 2011)
Smoothies:
Red Mango
The other guys
Made with fresh fruit
Made with frozen fruit
Made with 100% all natural nonfat yogurt
Made with ice cream or sherbet
Ganeden BS 30 probiotics for healthy
immune system
Sweetened with all-natural zero-calorie stevia
No probiotics
Nothing artificial
High fructose corn syrup or lots of added
sugar
Artificial ingredients
(Red Mango, 2011)
TARGET MARKET
The target market for Red Mango is Offutt Air Force Base and the surrounding Bellevue
and Papillion area. The current population for Bellevue as of 2012 is 52,604 which includes
Offutt Air Force Base (U.S. Census, 2012). The current population for Papillion as of 2012 is
20,785 (U.S. Census, 2012). I see more of the Bellevue area visiting Red Mango especially
service members from Offutt Air Force Base. The reason I think Offutt Air Force Base will be
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Strategic Business Plan: Red Mango Inc.
our target marker is because military members have to live healthier lifestyles and this is a good
dessert options that allows them to maintain this lifestyle. Military members will be our target
customers as well as those that chose to live healthier lifestyles. There are a number of gyms in
the Bellevue/Papillion area whose members will want this options available to them.
Demographics (Bellevue, NE)
Marital Status:
Age:
Income:
Never married: 25.1%
Residents younger than 5: 7.3%
Income per capita: $25,665
Now married: 57.4%
Residents younger than 18: 26.4% Income per household: $58,053
Separated: 1.5%
Residents 65 or older: 11.5%
Income below poverty line: 9.8%
Widowed: 4.7%
Divorced: 11.4%
Business Demographics: (Bellevue)
Total Business: 3,302
Retail Sales: $573,063
Retail Sales per capita: $11,871
Retail Accommodation and Food Service Sales: $70,812
(Biggestuscities.com, 2014)
STRATEGY AND IMPLEMENTATION
The best way to market our company is using both methods that have shown to work,
social media and traditional marketing. Social media is the new trend and it’s the best way to get
your name out there. Traditional marketing, in this situation, means going to where the
customers are. The summer months are approaching and what better way to market out products
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Strategic Business Plan: Red Mango Inc.
than with the outdoor festivals in Omaha. Marketing your products directly with the customers
helps because they can make their opinion right there and then if they are going to be a customer
or not.
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SOCIAL MEDIA
What better way to introduce a new franchise to the city of Bellevue, than with social
media. This is one of my marketing strategies because I believe it will bring in the majority of
customers to the store. The way to do this is by reaching out to as many people as we can to
follow our Facebook page and Twitter account. The plan is to target the majority of the service
members on Offutt Air Force Base since they are the majority in Bellevue that live healthier
lifestyles. On our social media accounts we will advertise promotions, new products and any off
site events we plan be part of. Followers will be allowed to post comments on the things they
like about our yogurt, concerns they may have and ways we can improve. Our social networking
sites will advertise how healthy our frozen yogurt is compared to other frozen yogurt companies
in the area (Red Mango, 2011).
To create these social media will cost us nothing. It will be used only to advertise
to the people in the city of Bellevue and surrounding cities. I did keep in mind that now everyone
will follow us or how some people do not use social networking sites. For this reason, the
following two strategies are included to target those people.
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SUMMER ARTS FAIR/OFFUTT AIR SHOW
The summer’s arts fair in Omaha is a yearly festival that brings in different artist and
musicians. The festival is a three day event that normally takes place in the first week of June. I
think festivals like this will be a great marketing strategy. The cost to rent a space at the festivals
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Strategic Business Plan: Red Mango Inc.
like this ranges from $325.00 to $440.00 (Omaha Summer Arts Festival, 2014). This would be a
great opportunity to join the Omaha community and share with them what we have to offer.
Another big event happening in Omaha is the Offutt Air Show which is help on base and brings
in people not only from Nebraska but, surrounding states as well. The air show typically draws in
between 150,000 to 200,000 visitors each year (Omaha.com, 2014). This would be the most
profitable in my opinion and also a good marketing strategy because it’s hitting our target
customer, military members. The air show will event is on July 19-20, 2014. The only weakness
to the air shows is that they cater more to military organization fundraising. In this case, military
organization will have priority as vendors. This doesn’t mean that we couldn’t be one of the
vendors, it just means this may not be something we can do every year.
The products that I will be marketing in these events will be the new flavors introduced
for 2014. There will also be some of the top selling flavors in these events. The main focus is to
get people into our store and for that reason we will be sampling in all these events. Customers
can purchase our products as well. We will also advertise our free rewards program.
OPERATIONAL REQUIREMENTS/BUDGET
To run a Red Mango Frozen Yogurt franchise there are certain requirements that need to
be met even before the company is up and running. In order to get considered to open this
franchise you need $200,000 in liquid assets/$350,000 net worth and have operational experience
(Red Mango, 2011). This of course is only the start. Once you get approved there are fees that
need to be paid in order to start the franchise. Below is a list of the initial investment fees:
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Strategic Business Plan: Red Mango Inc.
Traditional Store:
Name of Fee
Initial Franchise Fee
Project Management Fee
Lease Deposits & Rent
Architect; Engineer; Drawings
Permits
$35,000
$9,600
$8,000
$10,000
$1,500
Interior Improvements: General Contractor; Lighting; Tile
$100,000
Exterior Signage
$5,000
Millwork; Small wares; Furniture; interior graphics, and POS System
$50,000
Soft Serve Machines; Chiller Unit
Inventory; Uniforms
Pre-opening training expenses
Grand Opening Advertising Promotion Fee
Additional Grand Opening expenses
$38,500
$2,000
$1,500
$10,000
$500
Insurance-Liability & Workers compensation (initial deposit)
$1,000
Legal Fees
Additional Funds (3 months)
Estimated Total
(Franchise Direct, 2014)
$1,500
$10,000
$284,100
When opening a franchise you have the option of having a traditional store or a nontraditional store. Non-traditional stores are kiosk like. My goal is to open a traditional store that
offers self-serve yogurt in a variety of flavors with fruit, nuts and other toppings, yogurt-based
drinks and fruit smoothies and probiotic drinks. Traditional stores occupy about 1,400 to 2,000
square feet of commercial space. This location will open at Twin Creek Plaza in Bellevue, NE
close to Twin Creek Cinema and Offutt AFB. Twin creek plaza has spaces available for lease.
The space that I am looking into is 2,225 square feet and is $14.00 a square foot/year (LoopNet,
2014). Overall, the estimated totals needed to open a Red Mango are $284,000.00.
Once the company is up and running, there are other fees that need to be paid throughout
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Strategic Business Plan: Red Mango Inc.
the year, including your lease, inventory, employee pay and other things as well. Below is a list
of those:
Budget and Ongoing Fees:
Type of Fee
Lease
Inventory
Employee Pay
POS System Maintenance
Fee
Yogurt Freezer Equipment
Maintenance Fee
Intranet maintenance fee
Private or Public Offer of
Securities
Days and Hours of Operation
Utilities
(Franchise Direct, 2014)
Amount
$2600.00 a month/$31,150.00 a year
$2,000 a month/24,000.00 a year
$3,000-$5,000 a month
Approximately $2,200 per year.
Approximately $1000 per year for a five machine store.
Approximately $400 per year.
The greater of (a) $5,000 or (b) Red Mango’s costs and expenses
associated with reviewing the proposed offering.
$150 per day.
$3000.00 per month (OPPD, 2014)(MUD, 2014)
Below are the qualifications to open a Red Mango franchise.
You should have:
 $200,000 liquid assets/$350,000 net worth
 Operational experience
Important Numbers
 10 Years – Franchise Term
 6% of gross revenues – Royalty Rate
 4% of gross revenues – Advertising Fund (Red Mango, 2011)
 Twin Creek Plaza Leasing Rate – 2,225 SF - $14.00/SF/Year (LoopNet, 2014)
SUPPLIERS
Since Red Mango used fresh fruit for their yogurt and topping, PRO*ACT is the
distributor that is used. PRO*ACT is America’s leading distributor of fresh fruits to the
foodservice industry (PRO*ACT, 2014). They are located in Monterey, California.
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Strategic Business Plan: Red Mango Inc.
The diary suppliers for our Red Mango here is Hiland Dairy Foods located here in
Omaha, Nebraska (Hiland Dairy Foods, 2014). The reason we picked a local vender for dairy is
because Hiland milk contains no artificial growth hormones. They are farmer-owned which
allows for production of high-quality products (Hiland Dairy Foods, 2014).
POTENTIAL RISK
There are a few risk that come with opening a Red Mango. Opening a franchise itself is a
big risk. Below are the risk with opening and operating a Red Mango in Bellevue, Nebraska:
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Buying a franchise
When you decide to purchase a franchise, this is a risk all on its own. Initial
franchise fees are normally really high, and some people don’t have the money to pay. To
open a Red Mango you need an initial franchise fee of $35,000 and this is only to the
starting point (Red Mango, 2011). You can still get rejected regardless if you have the
money or not. All the hard work you put into this can disappear if they feel you are not
prepared.
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Weather
Since the company will be located in Bellevue, Nebraska the winter months will
cause us to see less profit throughout the year. This is typically during the months of
December-February. The way this is being solved is by opening a traditional store
instead of a non-traditional store. A traditional store offers the option of an indoor
seating while the non-traditional store has more of a kiosk look.
Also during another way to solve the problem of not getting as money customers
in the winter months is to offer certain discounts during these months. Daily Deals
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Strategic Business Plan: Red Mango Inc.
Omaha is a great way to market these discounts (DailyDealsOmaha.com, 2014). On
this website, we offer customers the chance to purchase vouchers to Red Mango at a
discounted price. In other words, the customer pays $10.00 for a $20.00 voucher to
purchase at our store. There are only certain number of vouchers sold and only for a
certain period of time. The vouchers will be good for a couple of weeks at a time.
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Competitors
Another great risk is our competitors in the Bellevue area. The reason why this is
such a great risk is because other competitors offer frozen yogurt to their customers
that is already popular. Bringing in a Red Mango to the community is a good idea but,
it comes with a big risk because our prices are higher than our competitors. I does
seem like a bad idea to have our prices higher but, the reason for is because we offer
all natural products, with no preservatives and certified gluten free (Red Mango,
2011). Our solution to this risk is to market our product by showing the community
that we are the healthy options. Especially to young adults and military members at
Offutt Air Force Base that are choosing to live healthier lifestyles. One other thing
that will help market our product is that our building is located near a bike trail. There
are lots of people that use these bike trails during the summer months and it’s a
convenient stop for them to enjoy some frozen yogurt.
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Strategic Business Plan: Red Mango Inc.
REFERENCES
2013 New Franchise Rankings. (n.d.). Retrieved 2013, from Entrepreneur website:
http://www.entrepreneur.com/franchises/rankings/topnew-115520/2013,-1.html
Bellevue, Nebraska. (n.d.). Retrieved 2012, from U.S. Census Bureau website:
http://quickfacts.census.gov/qfd/states/31/3103950.html
Bellevue, Nebraska Demographics. (n.d.). Retrieved 2014, from Biggest U.S. Cities website:
http://www.biggestuscities.com/demographics/ne/bellevue-city
Hiland Dairy Foods. (n.d.). Retrieved 2014, from Hiland Dairy Foods website:
http://hilanddairy.com/our-mission
Leiwer, S. (n.d.). Offutt air show will return in 2014, with visit from Blue Angels. Retrieved
2014, from Omaha.com website:
http://www.omaha.com/apps/pbcs.dll/article?AID=/20131217/NEWS/131218852
Omaha Summer Art's Festival. (n.d.). Retrieved 2014, from Omaha Summer Art's Festival
website: http://www.summerarts.org/2013/facts.html
Orange Leaf Yogurt. (n.d.). Retrieved 2014, from Orange Leaf Yogurt website:
http://orangeleafyogurt.com/
Papillion, Nebraska. (n.d.). Retrieved 2012, from U.S Census Bureau website:
http://quickfacts.census.gov/qfd/states/31/3138295.html
Real All-Natural Yogurt. (n.d.). Retrieved 2011, from Red Mango Inc. website:
http://www.redmangousa.com/frozen-yogurt/
Red Mango. (n.d.). Retrieved 2014, from Daily Deals Omaha website:
http://www.dailydealomaha.com/engine/Splash.aspx?contestid=29932
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Strategic Business Plan: Red Mango Inc.
Red Mango Taps Pro*Act To Supply Fresh Fruit. (n.d.). Retrieved 2014, from PRO*ACT:
America's Produce Specialist website: http://www.proactusa.com/services.htm
Scooter's Coffee & Yogurt. (n.d.). Retrieved 2014, from Facebook website:
https://www.facebook.com/pages/Scooters-Coffee-Yogurt-156thMaple/208651569191595
Twin Creek Plaza Leasing. (n.d.). Retrieved 2014, from LoopNet website:
http://www.loopnet.com/Listing/13678219/3604-4102-Twin-Creek-Drive-Bellevue-NE/
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