Creating & Starting a New Business Venture - Princess Kalliore Italian Restaurant - Assignment Example

Princess Kalliore Italian Restaurant Section One: My business opportunity I. Background Princess Kalliore is a full service Italian restaurant offering lunch, dinner and snacks from 10:00 AM to 12:00 Midnight, seven days a week. It is located at the Covent Garden London, competing along the likes of Bella Italia and Bertorelli’s. The restaurant sits 140 guests, with its 30 table sets, which includes a function room for a small group of up to 50 people. The function room is designed for intimate gatherings and small parties. Kalliore has a designated non-smoking and smoking area, which are the restaurant interior and main hall, and the veranda area respectively. The company also accepts delivery service within London’s vicinity. Kalliore accepts delivery orders in two ways: one is through phone and the other, through their website. It implements a guaranteed 45-minute delivery time, and as a challenge, it offers 100% rebate for all those who waited for more than 45 minutes for the pizza and pasta deliveries. The food business offers cash and credit card payments. Food delivery is available from 10:00 in the morning, to 10:00 in the evening. All food products are guaranteed fresh and cooked only upon receipt of order. A startup company, it plans to invest in sophisticated and top of the line kitchen equipment that would make cooking meals easier and time-efficient for the kitchen crew. It will also focus on interior design, to create a homey, relaxing ambiance that is actually a mix of classic Italian and modern British. The walls will feature elaborate paintings that depict both old and new culture. The furniture will be simple, yet elegant, made mostly of wood, carved with elaborate details. As the customers enter the room, they will feel the best Italian dining experience – the kind of customer service that will be marked as uniquely as the Princess Kalliore experience. The company will hire senior kitchen crew, with one chief chef who will oversee both business development and kitchen operations. He will be the key in creating signature dishes that is also unique to the restaurant. The store boasts of its highly competitive kitchen crew, who are in charge of developing and introducing variations in the menu. On top of this, the management wants to highlight the “Princess Kalliore experience” – a premium type of customer service rendered by its staff, crew and delivery personnel to ensure utmost customer satisfaction. Their corporate campaign “54 minutes or you get it for free” reflects the company’s commitment to make a difference by being the only store that offers such kind of guaranteed service. With the presence of numerous restaurants in the area, offering similar repertoire, Kalliore seeks to find its own position in the food industry by providing a twist to its products and services. One of the target projects is the Kalliore Italian Buffet Grande, which is offered every Friday and Saturday night. For £ 30 per head, guests will be treated to a wide array of appetizers, pasta, and pizza and dessert entrees. Add £ 10 and customers get unlimited beverage, and £ 15 for their wine of choice. There is also entertainment every weekend nights that would include acoustic performances from local artists. This is to set the mood for fun, laughter and good food that would surely make the target market going back for more. II. Describe in detail your product(s) and/or service(s) Pasta dishes are considered to be Princess Kalliore’s specialty. It offers 30 variants of pasta dishes, ranging from traditional to the experimental/ exotic recipes that are considered signature dishes. On top of the pasta dishes, it will also offer pizza, appetizers, pork, chicken and lamb full meals and desserts. Cocktails, alcoholic and non alcoholic beverages will also be served as well. Princess Kalliore’s will be a full service restaurant where food will be served by waiters. Aside from dine in services, on site delivery will also be offered. The company will offer a guarantee whereby clients will get their orders for free if delivery service is delayed. However, terms and conditions apply, and the offer will depend on the proximity of the area from the restaurant, prevailing weather conditions and other substantial factors. III. Describe if your opportunity is a product, a service or both Princess Kalliore’s dishes and recipes, capped with the restaurant’s signature customer service and the unique product offerings are what makes up the company. This business opportunity is a mixture of a carefully developed product line up, which will be highlighted by the best customer service – the one that puts the satisfaction of the customer above everything else. The company’s keys to success are as follows: The products to be served are of the highest quality and unique. Combined with excellent customer service, superior interior decoration that matches the ambiance, the overall impact would that of an unforgettable dining experience, capped with menu items that would entice diverse age groups and food preferences. A well managed inventory of raw materials to ensure steady cash flow. Highly experienced kitchen and business development team, hired to provide only the best products in the market. Carefully planned marketing activities and campaign that solidify the mission statements of the company. Guaranteed service and frequent diner programs will be the perfect base to spark loyalty among the target market. IV. Describe your competitors in the market sector you are targeting London is a place with many food stores and restaurants that offer a variety of choices to the market. Competition is very stiff, with every other nook having specialty stores and restaurants. In Covent Garden alone, there are over 20 Italian Restaurant and over a hundred others offering American, Indian, Asian cuisine, among others. There is an endless string of food shops, restaurants, and bars in the area that makes it seemingly impossible for new entrants to establish another food business. Entrepreneurs venturing into the business must have something new to offer, or risk losing opportunities to those more established ones. The key is to be able to offer something unique to create switchers, and eventually, a healthy number of faithful customers that would make the business thrive and grow. Some of Kalliore’s direct competitors are Bistro Italiano and Rez’ Cucina Italia, both particularly leveraging on their customer service quality and reasonable prices. Both are also open for long hours, everyday, and cater to meals from before lunch to late night. Bistro Italliano offers lunch and dinner set meals at a packaged price. Highlight of the product line up is their pasta dishes, mixed and matched with Pizza and salad entrees. It also offers menu ala carte. This Bar and Restaurant offers entertainment as well. Rez Cucina Italia is a home grown restaurant which offers similar products as Bistro Italliano. Their outstanding feature is their complementary meals for children under 10 years old, who can have either spaghetti pomodoro or pizza mergherita (Rez’ Cucina Italiana Restaurant 2010). They also offer main courses under £ 10. Princess Kalliore, however, still has an edge for its more diverse service line up, which includes buffet and delivery. The company targets to get 50% of both competitors’ frequent patrons, and create its own loyal and returning followers. The strategy includes creating loyalty, frequent client programs that aim to reward customers every time they visit the restaurant. A membership club will also be created for loyal patrons of Restaurant. V. Describe the customers and customer benefits your product/service provides Princess Kalliore considers the mid to high earning individuals and families to be their primary target market. These people have the purchasing power, and would like to spend their money on fine dining and entertainment. The restaurant promises a good dining treat to its customers. The food choices being offered will surely captivate the discriminating tastes of the customers. Product research and development will be painstakingly done to ensure maximum satisfaction among the target market. Moreover, the full service concept will provide convenience among diners. The delivery service will also provide utmost convenience to the target market. People who have no time to prepare food will have the option to order good food and dine at the comforts of their home. ANALYSES PEST 1. Political Analysis London is generally a peaceful city. With the city council taking charge over the city’s politics and order, London remains friendly and enticing to start up businesses, not only for companies that sell IT and communication products, but to other business segments such as food and apparel. It attracts entrepreneurs, not only because of the political and social climate, but also due to the presence of a highly-qualified manpower pool produced by universities. 2. Economic Analysis The existence of various companies in the area, big and small alike, results to the city’s major contribution to all of the United Kingdom’s venture capital. The universities within the city play major roles in the development of these businesses, and the biggest foundation for these economic and technological advances is mainly the human resources, which are products of the city’s universities. 3. Social Analysis London is a major tourist destination, with admirable historical tourist spots, most of these are still influences of the universities in the city. Tourists still want to experience food and service within the city, as part of their tour plan. 4. Technological Analysis Restaurants are now equipped with gadgets and facilities to make store operations easier to manage. Technological advances in POS and computers systems, data storage, cameras and ordering system enable new restaurants to establish operations and maximize resources to achieve the highest profitability for the company. 5 Forces 1. Rivalry Competition and rivalry prove to be a challenge with the presence of more than 200 Italian Restaurants in the city, 60 to 70% catering to the same market group. Pricing will not really be a critical determinant for the success of the company; the target market is deemed to have the capacity to pay the price for a satisfying meal and service. Thus, the company will be innovative in its services, and compete in terms of product line up. 2. Supplier Power Equipment suppliers such as Lakeland and Dentons are highly visible in the city. Since this company will have to purchase kitchen equipment and tools, there is a chance that Princess Kalliore will partner with the store that provides the most reasonable price and arrange for payment terms. Raw materials are likewise highly available in the city, but some raw materials will be sourced from specialty stores, particularly materials such as herbs, spices, wine and specialty items. 3. Barriers to Entry Many other Italian Restaurants will come and go. It is basically easy to introduce a new brand, and come up with strategies that will catch the fancies of the target market. But the challenge is on sustainability. Promos and gimmicks may bring the customers to sample the brand and the products. But it is the experience that would make them come for more, and even bring their families, friends and acquaintances along. Word of mouth is essentially the best advertising tool for the company. Entry may not mean just introducing a similar product, but more of being able to penetrate the market, which is notably a challenge for food businesses, with customer loyalty as their primary tool for success. 4. Threat of Substitute Substitute may come in the form of Italian Fast Food chains, such as the likes of Pizza Hut, Domino and other relatively low cost restaurants. People may actually express preference for these stores due to pricing and the quick food service factors. 5. Buyer Power Perceived target market is deemed to have the purchasing power. Pricing is not exactly an issue, but more of the products and services being rendered, although the management will ensure that all costs are reasonable and worth every cent. SWOT 1. Strength Kalliore’s strength lies on the owners’ reputation for providing excellent service, having owned and operated a manufacturing company whose management is known for its efficiency and reliability. Princess Kalliore’ selling point besides its delicious and innovative product line is its accessibility and being customer-friendly. Princess Kalliore shall be positioned as the service provider of choice when it comes to fast but delicious food. It will carry a wide variety of pizza and pasta flavors, at a very reasonable price. Moreover, it is the only food delivery service that guarantees delivery time, or it promises to give back to the customer their money. 2. Weakness Princess Kalliore’s weakness could be that it is highly similar with other restaurants in the area, and so it would be a challenge to offer unique dishes. 3. Opportunity Despite the presence of hundred other pizza restaurants in the city, food businesses essentially thrive as it addresses the need of people to eat. People will always be interested to find food stores and product choices that would cater to their needs. 4. Threat There is fierce competition being provided by established food delivery services such as Pizza Hut. The strength of this brand and its loyal pool of customers would definitely serve as a challenge for local store Princess Kalliore. Another threat is the current demand for healthy food. The rise of restaurants that promote healthy and weight efficient foods serves a threat for Princess Kalliore and other similar restaurants. Section Two: Customer Analysis I. Prepare a profile(s) of your customers Princess Kalliore’s target markets are those belonging to the 16 to 45 age range. The product lines mostly suit adult preferences. Focus will be upper income level families who reside and frequent the area. The restaurant will tap on the income level of at least £ 40,000 and above, 70% of families who stay within the area and shop at Covent Garden. It also targets 40% of the tourists who visit Covent Garden for the theatre shows. Focus is specifically given to this group because they are the types of people who frequent Princess Kalliore’s direct competitors. They are willing to spend money on good food and great service. II. By what means will your idea reach your customers? Start up marketing efforts will include both above-the-line and below-the line advertising. With this, management is confident that the message is sent through the target market. Section Three: Resources Analysis I. Describe the type, level and amount of resources you will need for your business Princess Kalliore will need to rent a space for its store operations. To achieve its desired look, the store will also have to be renovated and with the help of an Interior Designer, will be arranged to achieve the desired look integrated with wooden fixtures and furniture. Other assets for acquisition include cooking and bar equipment, kitchen equipment, and dining equipment. Advertising expenses include design and production of merchandising materials; tie up fees, projected sponsorship and talent fee costs. Anticipated starts up costs are seen below: II. Describe where you will get such resources from Start up expenses will be secured through a bank loan, with a projected period of 5 years to pay off. Section Four: Marketing Strategies I. Describe a marketing strategy for you new business start-up. Include your target market and your interpretation of the Marketing Mix in context with your business idea. Promotional efforts will be essential in propelling the brand to success. On top of the advertising efforts, targeted marketing strategies will be implemented as well. Take for instance the plan to utilize and maximize the website in getting customers and interacting with them. The internet is the best way to interact directly with customers. The company intends to utilize search engines and search engine optimization, and it will also advertise in social networking sites. Rewards will be provided online for those who order or refer customers. Frequent customers will be given extra attention, and the company will create seasonal marketing programs from them. Section Five: Pricing Strategies and Financial Forecasting I. Describe how you will determine your pricing strategy for your product/service The company will not implement a price war with its competitors. As such, pricing will essentially cover cost of production, other marketing and operational expenses plus profit that would enable the business to run with a smooth cash flow, and allocate bank loan servicing. Targets would be proportional to expenses and any excess will serve as profit for the company. II. Explain/illustrate a break-even analysis for your business from your pricing strategy III. Prepare an outline cash – flow forecast for the first six months of your business: Dec. Jan. Feb. March April May Projected Gross Income Dine In £ 11,000 £ 12,000 £ 13,000 £ 14,000 £ 15,000 £ 16,000 Take Out and Delivery £ 35,000 £ 32,000 £ 34,000 £ 35,000 £ 36,000 £ 37,000 Total Projected Gross Income £ 46,000 £ 44,000 £ 47,000 £ 49,000 £ 51,000 £ 53,000 Projected Expenses Business Permit Costs £ 5,000 Brochures/ Flyers/ Business Cards £ 10,000 £ 10,000 £ 10,000 £ 10,000 £ 10,000 £ 10,000 Billboard Production/ Rentals £ 10,000 £ 5,000 £ 5,000 Construction Phone Line Connection/ Connectivity £ 1,000 £ 1,000 £ 1,000 £ 1,000 £ 1,000 £ 1,000 Personal Computers Manpower £ 18,000 £ 18,000 £ 18,000 £ 18,000 £ 18,000 £ 18,000 Office Furniture Website Creations and Hosting Others Total Production Costs Dine In £ 5,000 £ 5,500 £ 6,000 £ 6,500 £ 7,000 £ 7,500 Takeout and delivery – inclusive of gas/ toll fees other transportation costs £ 15,000 £ 13,000 £ 13,000 £ 15,000 £ 16,000 £ 17,000 Total Projected Expenses £ 39,000 £ 37,500 £ 38,000 £ 40,500 £ 42,000 £ 43,500 Net Income £ 7,000 £ 6,500 £ 9,000 £ 8,500 £ 9,000 £ 9,500 Section Six: Launching my new business start-up 1. Explain and describe how you would launch your new business Princess Kalliore targets to implement the following promotional plan to launch and introduce the service: a. Above the Line Advertising A successful launch is always accompanied by a tri-media campaign to ensure that the target market is reached. However, due to the limited advertising and promotions budget, it chooses to advertise mainly via radio plugs in local radio stations in London. Repeat exposure via radio advertisements would spark interest among listeners. Among the three mainstream media, radio is considered to be the most cost efficient as it requires the advertiser a fixed advertising cost, yet it allows the product to be continuously stimulating the consciousness of its listeners. b. Below the Line Advertising Merchandising Strategic merchandising is the key to promote the new business. Billboards and signage, announcements in key points within the city play a vital role in the company’s promotions plan. Princess Kalliore will ensure that the brand, the product lines, promotions as well as the service delivery details are displayed in two major billboard sites in two main entry points to the city. It will also display mini billboards and signage in public places such as shopping centers, supermarkets, subways, train stations and bus stations. Billboards should contain the brand name Princess Kalliore, as well as a short description of what is being offered. An enticing photo of two of the food store’s top products should be shown also, together with its contact details. The phone numbers, the website and the email addresses should be shown in the advertising materials as well. There will be leafleting activities in areas where applicable. Target areas are university vicinities, and places with high foot traffic. Princess Kalliore also aims to display posters in the universities, particularly in dormitories. Promotional Activities Princess Kalliore will partner with student organizations to support various school events and activities with the interest to plug and advertise the products and services. The management will allot appropriate funds for sponsorships of student projects that would enable them to advertise the restaurant among the target market. There will be discount and privilege offerings for frequent patrons, and a loyalty card to ensure repeat purchase among the market. Patrons who call in at least 5 times in one month gets the Princess Kalliore membership card which entitles them to special privileges and incentives on their next purchase. Internet Marketing Internet Marketing has become popular because Internet access is becoming more widely available and used. Well over one-third of consumers who have Internet access at home report to using the Internet to make purchases (What is Internet marketing 2004). Moreover, statistics show that internet users increase at a rapid rate that in five years’ time, it is predicted that 80% of United Kingdom’s population will have a computer with Internet access at home (Advertising 2007). With this, Princess Kalliore sees an opportunity thru Internet Marketing. Princess Kalliore finds the potential of offering their products and services through a company website which lists down the entire menu, and other pertinent details regarding the food service. Customers could even place orders online, and expect delivery within the specified time. Princess Kalliore will also tie up with other complementing brands such as book shops and magazine stands, and maximize co-branding and cross advertising in these companies’ websites. c. SCHEDULE OF ADVERTISING Management targets to launch the business in December 2010. Two weeks prior to store opening, management will start announcing this new business venture through leafleting in strategic areas such as flyer inserts in university papers and other similar publications. Simultaneous during the launch date, the billboard shall be placed in the two strategic spots within the city, and shall be displayed for the first three months of operations. The effort shall be sustained by mini billboard displays in approximately 20 other locations in the city. The Official Website shall be made available from the very first day of operations. Word of mouth via internet shall be utilized thru advertisements in some of the city’s local and tourist websites. Princess Kalliore will also post in social networking sites such as Facebook, Multiply among others to be able to make the rounds to target buyers online. d. ESTIMATED COSTS Flyer Inserts are at £ 700 per 10,000 pieces of flyers. Inserts will be done in three of the most popular broadsheets and/or local publication every Sunday starting two weeks prior to launch date until the sixth month of operations. After which, the management will gauge the effectiveness of this effort to determine whether to push through with the strategy or not. Flyers cost approximately £ 110 per 10,000 pieces, or a total of £ 8,580 production costs for flyer inserts alone and another £ 8,580 production cost for flyers to be used for other purposes. Design will be in house so it would not entail any extra cost. Billboard rentals are pegged at £ 5,000 per month or a total of £ 30,000 for the first three months, and additional £ 2,500 for the production costs. Website design and hosting is anywhere from £ 5,000 to £ 8,500 per month. Of course, there will be efforts to help lessen the advertising and promotional costs. One of these is to establish tie ups with advertising and publishing companies, to cross sell products and promotions, and provide partners with discounts and support for their own marketing efforts. Princess Kalliore restaurant will always be open to project tie ups, because mutually beneficial activities provide maximum profitability among partners. Section Seven: Feasibility Analysis I. Analyse and describe how realistic and feasible your idea and new business really is if you were intending to start in the next six months. Company’s anticipated income and profit are just conservative projections. Basing on real costs researched from the industry and similar engagements, company start up costs are also considered to be more realistic than predictive. The management did this to have leeway for emergency costs and for inflation/ other economic factors. Section Eight: My summary statement I. Discuss and write a reflective summary statement that addresses a. What you have learned from this module This marketing module allowed me to appreciate the art of preparing and planning for your own business, and to realize that there is more to a brand or product that meets the eye. I realized that it takes more than planning to come up with a successful business venture. There must also be a personal preference for the kind of business, and sincere interest to research and investigate circumstances relating to the plans. Passion for the craft will only arise if there is particular interest in the activities, or for the business as a whole. I also learned that running a business is no small feat. Keeping the business running, maintaining the interest of the target market and keeping employees happy are just some of the objectives that the management has to meet. Therefore, a successful business means having to keep up with the demands of the industry, in all aspects and facets of the business. b. How beneficial/useful it has been towards helping you apply your knowledge The exercises helped me outline my own plans. It provided a way for me to systematically list down the areas that I need to research and plan on. An outline is necessary in any plan, and so laying down the major aspects and being able to tackle each subject matter has helped me come up with a more comprehensive idea of what my planned business would be like. c. How relevant the module has been to your planning for ‘life and work after University My course itself is a reflection of who I want to be and what I want to do. I want to someday be able to establish my own business, and that is a goal that I have been nurturing since I entered the university. Now, I have a clearer vision of how to achieve my goals. The exercises have honed my planning and research skills, and have expanded my understanding, not only on business matters, but on life as a whole. Reference List Benefits of an online marketing approach. Nextsbd.com. Retrieved December 11, 2010 from http://www.nextsbd.com/imarketing/benefits-of-online-marketing.php Rez Cucina Italiana Restaurant. Retrieved December 10, 2010 from http://www.coventgardenlife.com/places.asp?PlaceID=245 United Kingdom Internet Usage and Broadband. Internet World Stats. Retrieved December 11, 2010 from http://www.internetworldstats.com/eu/uk.htm Read More