Dippin Dots Incorporated

By
Team Dots

Project Consultants
Martha Hubacher-mhubacher@radford.edu
Adrianne Kelly-makelly@radford.edu
Christina Pappas-cpappas@radford.edu
Nick Bernard-nbernard@radford.edu
Katie Wilson-kmwilson@radford.edu

Table of Contents
Executive Summary:

Pg.1

Franchisor background Information:

Pg.2

Product/Service Description:

Pg.3

Situation Analysis:

Pg.5

Target Market:

Pg.10

Site Location:

Pg.12

Marketing Strategy:

Pg.16

Recommendation:

Pg.18

References:

Pg.20

Appendices:

Attachment

Executive Summary:
Dippin Dots is known as the ice cream of the future, by offering frozen desert
items in the shape of tiny beads or dots that are extremely cold and filled with delicious
ice cream flavors. Dippin Dots Inc. is a franchise that is continuing to grow rapidly,
while experiencing a lot of national success. This is accomplished by maintaining high
quality standards, top notch customer service, and by offering new and exciting products.
Dippin Dots offers a very unique/innovative and fun product that none of its competitors
can match, thus allowing the franchise to distinguish itself and have an advantage over
the competition. The franchise offers a large variety of all their unique items ranging
from shakes to fat free and sugar free flavors. By offering a large variety the franchise
will be able to attract many different kinds of customers ranging from small children to
health conscious customers.
After careful examination of the New River Valley, it was determined that Dippin
Dots would become very successful in the Radford University area. Move over coffee
cafes and make room for the ice cream shops, they are becoming the new social gathering
spot for kids, families and college students. There are many advantages of this site
location, such as high visibility, high pedestrian traffic, and no direct competition.
Promoting Dippin Dots across campus will incorporate their brand image, by using
promotional techniques including mailing flyers to all college students attending Radford
University, as well as free samples and discounts on selected product items. With such a
distinct, futuristic and fun way to eat ice cream, Dippin Dots will not be thought of as a
fad, but leave a long lasting impression on customers in the Radford area.

Franchisor Background Information:

In 1988, Dippin Dots Inc. was established in Grand Chain, Illinois and quickly
became recognized as one of the fastest growing, privately held companies. Dippin Dots
Franchising, Inc., established in 1999, is also among the highest ranked franchise
companies in the USA today. In 2005, Entrepreneur Magazine included the company on
its Franchise 500 list for the fourth consecutive year. Dippin Dots has continued to be
successful because they offer fun-seeking consumers with a high quality product in new
and exciting flavors (dippindots.com).
In order to keep the unique appeal that Dippin Dots brings to its consumers, the
products are not sold in take-home outlets like your local supermarkets, but in
individual franchised outlets. The reason of this is because of the sub-zero storage
requirements, enabling Dippin Dots to stick together in the customers freezer
(dippindots.com).
The Dippin Dots network is an award-winning Franchise System with hundreds
of locations coast-to-coast. Dippin Dots generates good business through age groups that
frequently visits water parks, as well as amusement parks. According to James Dudlicek,
Today, Dippin Dots are sold in all Six Flags theme parks, as well as Universal Studios
in Orlando, Fla., and numerous water parks and sports venues across the country. Its also
become a staple at local and regional fairs, festivals, and carnivals, In addition,
franchisee-operated storefronts and kiosks are popping up at shopping malls and movie
theaters nationwide. Dippin Dots Franchising, Inc. maintains 622 U.S. locations, in 46
States, and one in Canada. The company provides its franchisees with, not only, a large

selection of retail opportunities, but also through training and excellent customer support
(dippindots.com)
Many hours of training and on-site instruction are included in the Dippin Dots
Franchise system. They help Franchisees establish their business by providing training
programs, videos, and operational manuals. Other services include a nationwide team of
Customer Service Representatives to resolve problems and offer support; marketing
materials such as Point of Sale signage, product photography and consultations on
advertising and marketing promotions; graphic design assistance for local ad campaigns;
and public relations services. Franchisees also get to enjoy the benefit of increased brand
awareness because of the companys presence in highly visited locations across the
country. In 2004 the Dippin Dots Global was formed, in order to meet the growing
demands of international customers, and to enable international business opportunities
(dippindots.com).
Dippin Dots charges an initial Franchise Fee to be $12,500. They also estimate
the initial investment to range from $69,539.00 to $214,750.00. Actual results will vary
from franchise to franchise and detailed financial requirements are only included in the
formal application package given to pre-qualified candidates (dippindots.com)
Product Description:
Dippin Dots, also known as the Ice Cream of The Future, offers frozen dessert
in the shape of tiny beads or dots that are super-cold, creamy and delicious.
Microbiologist and company founder, Curt Jones, experimented with an old family recipe
and cryogenic freezing methods to invent a surprisingly fresh and flavorful treat. Dippin
Dots is the worlds coldest ice cream and certainly the most unique frozen dessert. The

ice cream is packaged and shipped to the customers from Dippin Dots headquarters in
Paducah, KY (Special Edition).
In the U.S. today, ice cream is a $20 billion-plus industry, with 90 percent market
penetration (franchising.com). These days consumers are more health conscious now
than ever. No need to worry though, Dippin Dots accommodates all types of consumers
by offering fat free, low fat, sugar free ice cream, ice, sherbet, or yogurt. This allows
lovers of frozen treats to indulge their taste buds without jeopardizing either health or
appearance. Even with that being said, the popularity of ice cream is so strong, even the
anti-fat movement and national obsession with counting calories is not enough to deflate
it. Every now and then consumers go out looking for an indulgent. Its a very
affordable treat-people can take their families to an ice cream store and spend just $10 or
$12. They cant do that at a baseball game or a movie theater, say Utterback (publisher
of The National Dipper, a retail ice cream trade publication). Then they sit down at a
table and visit with each other, so its a family-oriented outing (entrepreneur.com).
The franchiser flavor line-up includes a number of fun and unique combinations,
as well as the traditional favorites such as vanilla, chocolate, or strawberry. Dippin Dots
products include twenty one flavors, with a wide variety of ice cream, yogurt, sherbet,
flavored ice, and even seasonal favorites such as Candy Cane and Chocolate Covered
Cherry (dippindots.com)
Other items Dippin Dots include are floats, shakes and sundaes. The Solar
Freeze is an example of adding Dippin Dots to the fruit smoothie product to form a
refreshing Solar Freeze Parfait. Dippin Dots product line continues to grow by also

offering soft drinks, gift certificates, logo merchandise and take-home party packs are the
complementary items sold at Dippin Dots franchised locations (Special Edition).
Dippin Dots future is to exceed in their new and innovating product lines. The
products newest sensations are the Dot Delicacies Desserts. Dippin Dots are adding a
new twist on customers old favorites, including ice cream cakes and ice cream
sandwiches, (Dotwich). Also a new item coming out this year is the Dippin Stix, which
is a tray of crisp cookies, chocolate sauce and any favorite flavor of Dippin Dots. New
products and flavors are a big part of growth in the franchise, as well as maintain high
quality standards, and delivery top-notch customer service to maintain their growing
business atmosphere (dippindots.com).
Situation Analysis
In order to address the current business conditions of Dippin Dots, it is necessary
to do an analysis of the situation. By looking at the internal strengths and weaknesses,
along with the external threats and opportunities, negative weaknesses and threats may be
minimized and the strengths and opportunities maximized. This information will be
critical in determining the outlook of success in the future for Dippin Dots.
Internal Factors
Strengths
The company has its roots in many markets. Since 1988 Dippin Dots has had a
prominent place among frozen dessert items at the best theme parks and
amusement parks throughout the world. The company has also sold its products
at some of the major fairs and festivals of the USA. Thus, it is likely that most
people will know and recognize the desert snack (dippindots.com).

Dippin Dots has the ability to expand product offering. By once only offering
basic ice cream choices, the company is able to continue to offer additional
products that will help them remain competitive and continue to bring in business.
Offering new products can create excitement and entice customers to visit and try
the items. As an example, Dippin Dots just recently the Dot Delicacies were
added involving ice cream cakes and ice cream sandwiches (dippindots.com).

They have a strong product differentiation. Their cryogenic and microbiologist

developed ice cream is one of a kind. The freshness and quality of the cryogenic
freezing is commendable and incomparable. The small, round shape of the
Dippin Dots makes the dessert fun to eat (dippindots.com).

The company is among the highest ranked franchise companies in the USA. The
financial strength, growth rate, and number of units make the company a strong
franchise for start-up. Dippin Dots has notable positions among the top franchise
list offered by Entrepreneur Magazine and Franchise Times (dippindots.com).

Dippin Dots maintains products that have the seal of approval of the USDA,
FDA, and HAACP. They also uphold Kosher certification (dippindots.com).

The company has had a strong presence in the media having appearances on
Oprah, The Food Network, and the Travel Channel. Articles frequently appear in
other newspapers, magazines, and trade publications, adding to the likelihood
consumers will know and recognize the Dippin Dots products (dippindots.com).

Strong support and training is offered to new franchise locations and employees to
aid in success. Hours of thorough training videos and operations manuals are

supplied to the individual franchise locations, as well as additional help from a

team of nationwide customer service representatives (dippindots.com).

Dippin Dots is represented by Snell & Wilmer, one of the most respected fullservice law firms in the franchise sector (dippindots.com). Attorneys with the firm
have extensive experience in assisting small, emerging business and
entrepreneurs, as well as large Fortune 500 companies. They are prepared to, and
currently handle, major assignments in counseling businesses through the process
of starting-up and promoting franchises (Special Edition).

Weaknesses

Dippin Dots is not currently making it a priority to target the intended area for the
franchise

Consumer reluctance to trying new and different products food products.

Limited brand awareness within the New River Valley.

Dippin Dots has been previously considered and looked upon as entertainment
rather than a typical food for consumption (dippindots.com).

External Factors
Opportunities
Currently, no other Dippin Dots locations exist in the NRV. The unique,
specialized nature of the product will be offered with no other desserts like it.

Utilizing a location in close proximity to other retailers ensures traffic is

generated by other retail establishments. Dippin Dots may use this to their
advantage.

Threats
Dippin Dots are not sold in grocery stores (dippindots.com). Consumers would
be required to physically visit their nearest Dippin Dots kiosk for products.
Consumers may chose to purchase ice cream and other frozen items more
conveniently at the supermarket during weekly grocery shopping.

Economic conditions of consumers in the surrounding area. Some consumers

may not find it as important to frequently purchase a special treat where as other
necessities are a priority.

Dippin Dots will face local competition from other well-known companies that
have similar offerings.

The structure of a kiosk format, as mainly used by Dippin Dots, outside of a mall,
sporting event, or amusement park may not be considered an attraction.

General Competition

CoolBrands International, Inc. produces products such as Godiva, Yoplait, and

Eskimo Pies are a top competitor for the Dippin Dots (dippindots.com). These
items are typically sold in stores, an option Dippin Dots is unable to utilize.
CoolBrands will continue to be competition to the Dippin Dots because there will
be consumers who chose to purchase dessert treats during their trip to the
supermarket. They may be bought in bulk and frozen for later use. Dippin Dots
is unable to be stored in typical home-use refrigerators (dippindots.com).

Dunkin Brands, Inc. products such as Dunkin Donuts, Baskin Robins, and
Togos are popular alternatives to Dippin Dots (dippindots.com). While this
company is a source of competition for Dippin Dots on a larger scale, they are

not located within a reasonable distance to Dippin Dots. Therefore, products

offered by these companies should not pose as a threat to a Dippin Dots located
in Blacksburg, VA.

Mrs. Fields is the leading snack provider and competitor for Dippin Dots. The
company is behind retail operations such as the Great American Cookie Company,
Pretzelmaker, and Mrs. Fields. Mrs. Fields' also manages TCBY, a leading frozen
yogurt chain (dippindots.com). Currently, a TCBY is located in the New River
Valley, a proposed Dippin Dots location. They would thus serve as a primary
source of competition to the kiosk.

Local Competition
Direct
The following retail establishments will serve as direct competition to the Dippin
Dots franchise if located in the New River Valley. These retailers are known for, and
offer, frozen ice-cream products similar to that of Dippin Dots.

Ben & Jerrys

TCBY

The Ice Cream Crank

Dairy Queen

Cold Stone

Pistachios

Indirect
Dippin Dots will also face competition indirectly from retail establishments that
offer products that may be substituted for frozen treats. The following retailers offer

these substitutes or also provide frozen ice-cream products in addition to other product
offerings. While some establishments may not be known for frozen ice-cream products,
consumers do have the option of purchases them at the locations.

The Coffee Mill

Starbucks

The Daily Grind

Sonic

McDonalds

Target Market:
The target markets in the New River Valley consist mostly of students and
families. In the New River Valley the families are mostly middle-aged which acquire
blue collar/white collar salaries. Their jobs mostly consist of owning a small business,
working as a manufacturer, milling and construction (Claritas.com). Families live a
standard country lifestyle where most of them will live in homes they own and a quarter
will be living in mobile homes. These households use most of their disposable income to
enjoy traveling, owning timeshares, purchase boats, campers, motorcycles and pickups
(Claritas.com). They live near and celebrate new arrivals of places such as Wal-mart,
Radio Shack, and Payless (Claritas.com). Most of the families in the New River Valley
lead a simple yet tranquil life where living in the country can lead to a grasp on nature.
The lifestyles that the families enjoy are a life that is very active and filled with nature
lovers. They like to go skiing, backpacking, boating, mountain climbing, read magazines
such as fishing/hunting, Hot Rod, Field and Stream (Claritas.com). Some other activities
consist of going to Cracker Barrel, watch country music, TV land, and NASCAR.

In the New River Valley our other segment of our target market are students. The
students are young, singles, adults, adults in transition and couples. Their jobs contain a
lower income; lead a more relaxed lifestyle and starting on a new career path
(Claritas.com). Students that stay in the heart of the New River Valley live in cheap-tiny
apartments either by themselves or with others that are in the same age group. Most of
the apartments or homes are not owned but rented. Most of the students will be using
their disposable income on places such as restaurants, cafes, bars, groceries and
Laundromats. These students that have lived or moved here are well aware of the
surroundings which will entice them to go outdoors. Their lifestyles are fast paced
centered on sports, cars and dating and having fun at night by going to nightclubs or bars
(Claritas.com). Some of their other interests are to read Rolling Stone, Motorcycle,
fitness and Star magazines. They also like to play video games, renting videos and
ordering pizza and just lead a simple life.
The needs of our target market in the New River Valley seem to be many
outdoorsy, sporty, and fun-filled, health awareness lifestyles with most not having an
upper moderate income. For the families needs we would need to cater to the children
and let the parents be aware of the incredible edible cryogenic dots that will leave many
children enjoying their ice cream more at their level. This would mean fewer messes,
many flavors which come with many different colored treats. What needs to be
approached to the students is that just because its different does not mean that we cannot
be a child at heart. For the health conscious Dippin Dots can encourage and let the
spectators know that we serve low calorie and nonfat yogurts, sherbets and ice creams
that can impress our target audience.

Looking in the census bureaus the most popular age groups were between the
ages of 21-35 (Factfinder.census.gov). The New River Valley has had a steady growth
rate of eight percent every ten years over the twenty-year period. (nrvalliance.org).
Throughout the years the New River Valley has been growing and predictions have been
growing steadily. With the ages of mostly young adults comes to a conclusion of more
young adults without the supervision of children. By looking at this it shows that
choosing the right location can increase sales within the franchise.
Site Location:
Dippin Dots Incorporated will need to consider many different viable retail
locations in order to discover the location that will give the company the best chances of
succeeding. Location is one of the most critical factors when starting a business and can
either lead to a success if a good location is chosen or immediate failure because the
wrong location was chosen. When customers choose a store to shop at, one of the major
considerations is the stores location. By having a good location Dippin Dots can get a
competitive advantage over the other leading competitors. Dippin Dots will need a
location that is highly visible, one that has high pedestrian traffic, and is easily accessible
to the customers. The location should also be carefully aligned around the companies
target market in order to generate a high degree of sales. After careful examination of the
New River Valley, three different location sites were chosen as possible alternatives for a
Dippin Dots franchise. The possible alternative sites are located in Blacksburg, Radford,
and Christiansburg Virginia.
The first alternative location for the Dippin Dots franchise is located in Radford,
Virginia. The store will be located at 212 Tyler Avenue next to the book store where

Yummys is currently located. According to the stores owner, The size of the location is
approximately 2600 square feet and the rent including insurance is about 900 dollars a
month. A major advantage of this location is the relatively cheap rent. The location will
be less than 100 feet from campus and located on Tyler Avenue, which is one of the
heaviest traveled roads in Radford. This location will be in a high traffic area that is
easily accessible and visible to customers. The only other competition that Radford has is
Pistachios, which is located on Main Street. Main Street is a long walk for students and
this is very inconvenient, so with this location it is closer and more students will visit
because of its convenient and close location to campus, which in turn will hurt and weed
out the competition.
Radford University has an enrollment just under 10,000 students and a residential
population of fewer than 16,000 residents (Easy Analytic Software). With less students
then the Blacksburg location, the Radford location will have to draw more from the
residential population. Another drawback for the Radford location is that during the
summer the town becomes pretty deserted of college students and this is the peak season
for the franchise. With the great location and few competitors this location seems very
viable.
The realistic trading area for Radford would range from 2 up to 4 miles. The
primary trading zone would be within 2 miles of the location and it will consist of 6936
people aged 18-24 and also consist of 2595 total families with a family population of
7446 people. The secondary zone would range from 2 to 4 miles from the location and
consists of 7560 people aged 18-24 and 4755 families with a family population of 13583

(Easy Analytic Software). The location in Radford aligns nicely with the target market of
the franchise.
The second alternative location would be located in Blacksburg at 109 College
Avenue in the heart of downtown. The location consists of 750 square feet of retail space
(Whitt). The location would be located just off campus and everyday hundreds and
hundreds of pedestrians most of which are college students walk by the location
everyday. Along with the high degree of pedestrian traffic, there is also a high degree of
vehicular traffic around the location. The location allows Dippin Dots access to a high
traffic area for potential customers. The location is located in the heart of downtown
Blacksburg and is surrounded by other businesses that will help draw other customers to
the location. Virginia tech is one of the largest public schools in the state and is host to
more than 25,000 full time students and that is a lot of potential customers (Virginia
Polytechnic Institute and University). One of the major drawbacks of this location is the
high degree of competition within the area. There is a TCBY yogurt shop about a mile up
Main Street from the location and there is another ice cream store called Ice Cream
Cranks, which is located off of Prices Fork over a mile away. There is also a Dairy
Queen located on 3760 S. Main Street, which is a considerable distance from potential
site for the Dippin Dots franchise, but could still affect sales. There is a brand new Ben
and Jerrys located on Roanoke Street less then a mile from the potential location of
Dippin Dots. With all of this direct intense competition and would be very difficult for
Dippin Dots to succeed at this location. There are more than 4 direct competitors each
offering their own unique product located within the same area which would make it very
difficult to attract and keep customers. Another drawback of this location is parking for

the customers. For most college students parking will not be much of a problem because
they can walk to the location easily, but for families parking will be a major concern. The
location has no direct parking lot for its customers and the parking spaces around the
location are very limited and this could hurt business as well.
The realistic trading area for Blacksburg would range from 4 all the way up to 6
miles. This would allow the franchise to include almost all of the college students and
about three fourths of the families in the area. The primary zone is gone to be within 4
miles of the location and that consists of 23,058 people between the ages of 18-24 and
5,925 families. The secondary zone of six miles consists of 23,910 people aged 18-24
and 9,305 total families with a family population of 27,070 (Easy Analytic Software).
Since our target market consists of families and college students the location aligns nicely
with the target market.
The third and final alternative location for the Dippin Dots franchise is located in
Christiansburg, Virginia. Christiansburg is located between Radford and Blacksburg and
just off of interstate 460. The exact location of the site is 782 New River Road,
Christiansburg, Virginia and is located within the New River Valley Mall. The Dippin
Dots franchise will replace New River Coffee in the mall. The location is directly in the
middle of the mall where it is highly visible, so it can attract customers easily. The
location consists of 150 square feet and in the mall and the cost of locating in the mall
can be as high as 36 dollars per square foot, which would cost the company around 5000
dollars per month (PREIT). With this location Dippin Dots will be able to gain access to
a large number of customers that the other stores in the mall attracted. Dippin Dots will
be able to prosper from the traffic that the mall anchors, such as Belk and J.C. Penney

generate. The New River Valley Mall consists of 428,155 square feet of shopping that
has a variety of stores that attract different kinds of customers (PREIT).
One of the major drawbacks of this location is that the mall may not bring in
enough traffic to keep the franchise profitable. The mall is not the highest traffic area for
college kids and this demonstrates that this location is not aligned with the franchises
target market. The franchise would solely have to rely on other stores in the mall to draw
in traffic because most people will not visit the mall just for Dippin Dots. Also, the cost
of leasing the location space within the mall is expensive and this will cut our profit
margin. Another drawback of this location is the competition because there is already a
Dairy Queen in the mall. The mall is not very large, so this close competition will have a
great impact on sales for the franchise.
After comparing the different locations it is apparent that Radford would be the
best location for the Dippin Dots franchise. The Radford location is in a very high traffic
area and is very visible and accessible to potential customers. The population around the
location aligns up nicely with the franchises target market and that will allow the
franchise to prosper at the Radford location. Radford might have less of a population
then the other locations, but with almost no direct competition in the area, the franchise
can corner the market and make a considerable profit (Easy Analytic Software).
Marketing Strategy:
Product- Dippin Dots offers a unique variety of ice cream, yogurts, sherbets,
ices, shakes, and seasonal items. All options are also offered in fat-free and sugar-free
flavors. By offering a large variety of different products the franchise will be able to
attract families and college students to the store. This is not your ordinary ice cream shop;

it offers a new and exciting experience that our competitors cant touch. Customer service
strategies will include having an up beat and friendly staff and exciting atmosphere that
will differentiate the company from the competition. Franchise will engage in the
training programs that the national franchise offers to ensure excellently trained
employees
Price- Retail prices are generally between $2.50 and $5 depending on the serving
size and location. For our location a 5 ounce serving would be just under $3. (Dudlicek)
Our prices will remain competitive when compared to other retailers in the Blacksburg
area.
Promotion- Since the bulk of our target market is college students free samples
will be handed out around campus during the first month of operation to develop brand
awareness and give students a chance to try the product. Also, free samples will be given
away outside the store in order to let local residents try the products. College students
will be hired to pass out around 10,000 flyers to other students by going door to door to
all the apartments and to the dorm rooms. We will use college students to hand out the
flyers because they are the target market and by using them word of mouth between the
students will spread quickly and this will allow awareness of the franchise and its
products to spread to our target market. In order to reach the other target market of local
families 5,000 flyers will handed out to each of the 4,755 families homes that are living
within 4 miles of the franchise. All flyers will be a bright color to attract attention and all
flyers will be 8.5 by 11 and according to EverydayPrint.com The cost of the flyers with
next day shipping is $ 2,750.

Place- The location of our store will be on Tyler Avenue in Radford. Its just a
step off campus and that will allow all students easy access to our store. This location is
more visible and convenient then our direct competitors location and this will allow us to
market our product better. Since we are located around other businesses, the stores
around us will attract customer traffic that Dippin Dots can feed off of. Our store hours
will be closely tied to the stores around us and will be from 11 AM to 9 PM on weekdays
and 11 AM to 10 PM on weekends.
Recommendation
Dippin Dots has been a high quality product where many of the consumers have
enjoyed the tasty experience. For the franchise our thought on this company would work
in the New River Valley because of the way its portrayed amongst consumers and how
they have a very different product that will draw there attention to this franchise. For it to
work Dippin Dots shows that it is the Highest Ranked Franchise Co in the USA so it will
probably be a strong franchise for start-up. Since it has been recognized by American
icons and Entrepreneurial, Fortune 500 magazines as a great futuristic ice cream it will
draw not only repetitive customers but new customers as well. This means it will bring
all sorts of business since it will be enjoyed and known by many age groups. It is so
different that everyone is going to at least try it which will leave us with loyal customers.
Dippin Dots is known for its remarkable and trained customer service which will also be
remembered by our customers. This product accommodates all types of customers
showing that they have a variety of ice creams, shakes, yogurts, parfaits, fat free, low fat,
sugar free, sherbets and seasonal selections. Since our location is in Radford there are
fewer competitors which would also draw our customers to try this enjoyable fun seeking
ice cream. Knowing that this ice cream is so different Dippin Dots will be a great

competitor because they always are creating innovative ways to pull a customer into their
business by producing new items that a regular ice cream shop wont have. So by
looking through all our accomplishments we believe that Dippin Dots will succeed.

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