The Fudgery an analysis

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The company that I will be discussing is The Fudgery, The Fudgery is a performance arts fudge shop. Founded by A.C Marshall in 1980, the Fudgery started off as a humble fudge shop on the outer banks of North Carolina, Marshall came up with a very creative, innovative and original way to make and sell fudge that would make the competition scarce. (Competition, Ch. 4, pg. 60)A.C Marshall not only made making and selling fudge fun, but he made it entertaining. Marshall incorporated singing and comedy into the agenda of all of his “fudge makers” nationwide. This quaint, yet entertaining business has 32 locations in 20 states. To be a part of the fudge crew, you have to be quite the character; very outgoing, loud and at least somewhat of a comedian. Singing is also a requirement. You don’t necessarily have to be vocally talented but you must be willing to sing to work in this company as well as have a performance background. The performance background is important because as a crew member at the Fudgery you must perform “fudge shows” to customers. A fudge show is simply a fun way to show customers how the Fudgery makes their fudge. It includes singing, dancing and audience participation. Because most of the people that go to the Fudgery are tourists, the fudge shows give them an experience that they will never forget.

The fudgery appeals to all ages, they serve something for everyone. (Market segmentation, ch.3 pg.79) Most of the company’s customers are tourists (Europeans and Canadians) the sales associates do their best to convey to the customer that their products are the best and the competition is irrelevant. When the customers ask questions, the sales associates must be able to provide a confident answer (customer satisfaction, ch.3, pg. 78). To ensure a sale they must be able to perform transactions smoothly so that the customer doesn’t get discouraged. (Customer Services, Ch. 3, pg.79)

Fudgery specializes in Fudge but they also serve ice cream, smoothies, pralines, shakes, candied apples and sundaes. Competitors like Marble Slab Creamery, Cold Stone and Ben and Jerry’s gives the Fudgery a run for their money but they always come up short. The competition doesn’t have that performance factor, they just serve ice cream. According to a survey in 2012, The Fudgery has set the standard for their innovative way of selling fudge and their specialty products. Another positive aspect is that the fudgery doesn’t have to worry about on-line competition, in food service online competition is almost slim to none. However, the fudgery has an active Facebook page that prompts customers to try their products (E-tailing, ch.4, pg.135).

The Fudgery is quite intricate in its supply chain. Like any other food service company, The Fudgery has paper products such as napkins and cups with the company logo on them. Those paper products are provided by Solo, Inc. As I stated previously, the fudgery makes its own fudge, but the ingredients to make fudge are provided by Glazier food services. They supply the sugars, the cream, various nuts and flavorings. Blue bell supplies the company with their 24 flavors of ice cream, at least 3 of every flavor at a time. Pepsi provides the company with its fountain drinks and bottled waters. Fruit of the loom and Hanes combined, provides the staff with uniform t-shirts with the company’s logo on them. Glazier foods also provides this company with the apples for candied apples, and the lemons for the lemonade, as well as the bananas for the sundaes. When all of these materials are ordered, they go from the providing companies to either Fed-Ex or UPS directly to the various stores.(supply chain, ch.5, pg.179) A manager signs for these supplies and they are distributed as needed to the store for use by its employees. Little is wasted at the Fudgery, so bulk orders are usually made bi-annually. . The fudgery is very unique in terms of the products that they sell, the way they make fudge is completely innovative and it separates them from their competition which is an advantage. Blue bell promotes its ice cream using commercials, but very few restaurants serve that brand of ice cream. That also sets that product as well as the fudgery apart from the rest. (Promotion in the Supply Chain, ch.11, pg.395)

Despite the outside glamour of working in this company, The Fudgery has a long standing history of sexual assault in the work place. In 2012, a female employee in Nags Head was repeatedly, groped and touched for about a year and then stalked by her Manager. This went on for a little over a year until she reported her manager and she sued him and the company for 1.5 million dollars, and she won. Along the lines of this incident, the object of a job at the Fudgery is to be a comedian and tell sarcastic (corny) jokes. Most of the time they go over quite well with an audience but sometimes they don’t. They receive a lot of customer complaints as a result of these “corny” jokes. Of course the fudgery is a family place, so there is no cursing, nudity or smoking. Pricing is ethical as well, no one is participates in horizontal price fixing (horizontal prices, ch.6, 193) everything is true blue and fair and square. Some companies condone price discrimination but the Fudgery has been accused, but no evidence was proven. (Price discrimination, ch.6, pg.94)

The Fudgery is in the market of food service or confection distribution, as well as entertainment. Usually Fudgery locations are either in a mall or

in an outlet mall. Nevertheless, there is always either a cold stone or a Marble Slab in the vicinity. The fudgery does not supply fudge the demand density for the Fudgery’s products are also particularly. In the town or community that they are in, they are usually known for freshness and a lively atmosphere. (Demand density, ch.7, pg.233)

As I researched the financial data for the 2013 fiscal year for the Fudgery, Inc., I only found information for one particular location. It was the North Myrtle Beach, SC location. Their annual revenue was about 350,000 dollars. Their net profit was about 500,000 dollars, their gross profit was about 200,000 and their residual income was about 375,000 during the 2013 fiscal year. Their annual revenue, or turnover consists of the amount of fudge, ice cream etc, that this particular location sold not including refunds. The gross profit is the minus the amount of fudge, shakes, lemonade etc. was sold which was estimated at about 200,000 dollars. Their residual income after they paid off any debts was 270,000 dollars. I also found the annual average for the slotting fee for Myrtle Beach’s location was about 15,000 dollars. They carried pepsi products as well as blue bell products. (Slotting fee, ch.6, pg.2013)

Inventory is handled very diligently, in this company there is no room for error. Employees are not to use or consume any products unless paid for. They only use what they need at a time. Everything is accounted for, and inventory on the sales floor is kept neat so that none is wasted. Inventory is taken at least weekly, and orders are made as needed. As far as fudge goes, fudge inventory is taken at least hourly, to ensure freshness and to ensure that there is no employee theft. Any missing inventory is to be immediately reported to corporate and handled accordingly. The fudgery gets its paper products from Solo, Inc. once an order is made to Solo, Fed ex usually delivers it to the store, inventory is take at that point. Once the initial inventory is taken, the new materials are taken to the floor and used accordingly. The fudgery is very unique in terms of the products that they sell, the way they make fudge is completely innovative and it separates them from their competition which is an advantage. A certain level of inventory is available to be given out or distributed at all times to ensure that the location does not simply run out of supplies (BSM, Ch.9, pg.317)

As far as pricing goes, the fudgery prices by weight. Everything except for beverages and ice cream cones are placed on a scale and weighed. The fudge is sold by the half pound, it’s approximately $8.50 a pound and it may not be sold by the half slice only the half pound. And the more you buy, the more you get for free. The reason why the fudge is so expensive is because of the cost to make the fudge. It takes approximately $35.00 to make one loaf of

fudge that is why the slices are so expensive. The ice cream is about $60.00 a tub and the scoops depending on whether it’s a single or double scoop, is to be measured precisely due to product cost. Prices for products not weighed at the time of purchase, are set by corporate. Fountain drinks are usually averaged at about $1.49 each, fresh-squeezed lemonade is $2.60 and bottled water is around $1.99 each.

The fudgery promotes itself more commonly by using bold signage and billboards through the city, but they have a more original marketing strategy, a more innovative one, and that’s singing to draw in customers. Although, they don’t have traditional advertisements or much publicity, they excel in the area of personal selling. Personal selling is big at the fudgery, the sales associates must use charm and whit to sell as much product as they can.(Personal selling, ch.11, pg. 393) Most of the employees at the fudgery have the ability to sing, people like to hear good singing and as a result the workers use that talent to an advantage! They sing original fudge songs, they make up songs and they sing them very loudly and very proudly. Another way that they promote their business is to have their very best singer stand at the front of the store and sing fudge songs and announce to the bustling crowd “hot fudge free samples! Only on the inside, never on the outside!” this marketing pitch almost always works and brings in dozens of customers at a time and not to mention the smell of the fresh fudge. Usually located at a mall or outlet mall where coupon books are available. The company often advertises on a couple of pages of a coupon book and offers coupons as well.

The Fudgery is designed to look somewhat like a theatre or a stage. There is space allocated for every part of the Fudgery, such as the dining area, the performance area and preparation area. (Allocating Space, ch.13, pg.491) It has spot lights, microphones, curtains and wonderful acoustics. The area where the fudge is made is barricaded with a gate so that the audience can see how the fudge is made from a safe distance due to how hot it is. All 12 flavors of fudge are incased in a glass showcase that is kept very neat and clean. There is also a few tables set up for customers to sit down and enjoy their treats. Behind the safety gates are usually 4 Georgia marble tables used to mold the fudge. There are two ice cream refrigerators with 12 different flavors in each. There are two blenders and two waffle cone makers on the back counter along with a drink refrigerator and a glass case used to hold candied apples. There is also a fireplace that houses the gold cauldron that melts the fudge and cooks it as well. Last but not least there is the stock room, all extra product and inventory is stored there. Employee lockers and more ice cream freezers, extra stock and a sink as well as a larger refrigerator for the fruits and other dairy products. An employee restroom is also in the back. An office where all of the paper work is handled and a meeting area is adjacent to the manager’s office. The receiving dock is also in the stock room or “back room.” (Back room, ch.13 .pg.491)

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