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Paradise Kitchen

In: Business and Management

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Paradise Kitchens, Inc. Executive Summary
Cortez Hampton
Dr. Charles Hurst, Professor
Due: November 28, 2012

Executive Summary
Description of Company
Paradise Kitchens, Inc. was created by Randall F. Peters, and wife, Leah E. Peters to develop a line of microwaveable Southwestern/Mexican style frozen chili products called Howlin' Coyote Chili. Before starting Paradise Kitchens, Inc., Randall spent 15 years working for General Foods and Pillsbury with many different responsibilities. Leah had expertise in food science and packaging from her past positions. Both had the necessary skills contribute to the startup (and success) of Paradise Kitchens. The line of frozen microwavable Chili products are sold in U.S. grocery stores and the company puts an emphasis on its high quality and good taste because it is the only authentic Southwestern/Mexican style microwavable Chili available in U.S. grocery stores. Paradise Kitchens prides itself on the high quality of their products and wants to extend their market exponentially in the near future.

Mission Statement
The mission of Paradise Kitchens, Inc. is to market lines of high-quality Southwestern/Mexican food products at premium prices that satisfy consumers in this fast-growing food segment while providing challenging career opportunities for employees and above-average returns to stockholders.

Management of Paradise Kitchens, Inc.
With Randall and Leah’s backgrounds, it was decided that Randall Peters serves as President and Chief Executive Officer (CEO) of Paradise Kitchens, Inc. Leah Peters will focus on corporate strategy for the company.

The Market and the Consumer
To the company’s knowledge, Howlin’ Coyote Chili is the only premium-quality, authentic Southwestern/Mexican style, frozen Chili sold in U.S. grocery stores. Because its high quality has gained fast, widespread acceptance in these markets, Paradise Kitchen, Inc. plans to market its product at high prices. You pay for quality! Mexican foods such as burritos and tacos are used in two-thirds of American households. These trends show people favor these types of food, including red chili peppers – perfect for Chili.
The chili market represents over 4500 million in annual sales. On average, consumers buy five six servings a year, according to the NPD Group (Kerin 54). This is an average of canned chili (75 percent of the sales) and dry chili, which accounts for the other 25 percent. The expected consumer to purchase these products are said to be households with one to three people, where often both adults work. Their income is $50,000 and higher. These people are said to be more experienced, adventurous consumers who want premium quality products.

Marketing and Sales Key promotion programs include in-store demonstration. These allow consumers to taste test the product and discover the qualities it has compared to other chili. It increases awareness and trial purchases. Recipes are also a part of the promotion. They will be on the back of packaging, through mail in rebates, etc. Finally, there will be cents-off coupons in newspapers, packaging, and through direct mail. These will help generate the repeat purchase of Howlin’ Coyote products.
Howlin’ Coyote Chili retails for $3.99 for an 11-ounce serving, and is available in five flavors – Green Chile, Red Chile, Beef and Black Bean, Chicken Chunk, and Mean Bean Chili (Kerin 58). This pricing above is higher than canned chili for the same amount. But the taste has significant advantages against those canned chili varieties. Howlin’ Coyote has had a steady increase in sales revenues since its introduction in 2003. In 2007, sales jumped greatly due to new promotion strategy.

The Competition The “chili market” represents over $500million in annual sales. On average, consumers buy five to six servings a year and those products fall into two groups: canned chili, which is 75 percent of sales, and dry chili, which covers the over 25 percent (Kerin 54). There are three characteristics that separate Howlin’ Coyote chilies from its competitors. They are:
1. Unique taste and convenience – no known competitor offers high quality authentic frozen chili in a range of flavors.

2. Taste trends – Howlin’ Coyote offers more “kick” than most other chilies; and

3. Premium packaging – Howlin’ Coyote’s packaging graphics convey a unique, high-quality product contained inside and the product’s nontraditional positioning.

Paradise Kitchen, Inc.’s Operations Howlin’ Coyote chilies are distributed in its present markets through a food distributor. The distributor buys the product, stores it in warehouses, and then resells and delivers it to grocery stores on a store by store basis (Kerin 59). The Paradise Kitchen Operations has four people reporting to the President. Board of Directors | President & CEO | | | | |
Director Vice President Director Finance Director
Operations Marketing & Admin Sales

Financial Projections and Plans Financial elements Units Actual
2011 Year 1
2012 Year 2
2013 Year 3
2014 Year 4
2015 Year 5
Cases sold 1,000 353 684 889 1249 1499 1799
Net sales 1,000 5,123 9913 12884 18111 21733 26080
Gross profit 1000 2545 4820 6527 8831 10597 12717
Operating profit (loss)

Howlin’ Coyote’s marketing plan is to capitalize on its brand potential while simultaneously exploring other avenues of products. In current markets they will grow and expand at the retail level. Paradise Kitchens intends to expand into new markets: 20 new metropolitan markets by Year 5. This expansion will reach “53 percent of the 38 major US metropolitan markets. This will represent 70 percent of US food store sales’ (Kerin 56). Food sales will be not only chili products, but supplementary sauces which are expected to help reach a $693,000 threshold by the end of the third year and $1.5 million level by the end of Year 5 (Kerin 56). Paradise Kitchens is an appealing product, to more educated, high income consumers. Their innovative taste, quality and packaging provide for a product unlike any other in the market currently. Paradise Kitchens, Inc. is a financial goldmine and winner

Works Cited

Kerin, Roger A., Steven William. Hartley, and William Rudelius. Marketing. New York, NY: McGraw-Hill/Irwin, 2013. Print.…...

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