Marketing Management of New York-Based Fast Food Restaurant - Essay Example

?Contents Executive summary 2 Evaluation and control 2 2. Company 3 3. Strategic focus and plan 3 a. Mission/vision ments 3 b. Goals3 Operational financial Objectives 4 c. Core Competency and Sustainable Competitive Advantage 4 4.0 Situational analyses 4 a. SWOT analysis 4 b. Industry analysis 5 c. Competitor Analysis – food and beverage industry 5 b. Company Analysis 6 5.0 Market-Product Focus 6 a.Marketing and Product Objectives 6 b.Target Markets 6 c.Points of Difference 7 d.Positioning 7 6. Marketing program 7 Pricing strategy 7 Break even analysis: 8 Promotion strategy 9 Place (Distribution) Strategy 9 7. Financial Data and Projections 9 Executive summary Our business will be situated in New York. It will focus on fast foods, with the unique selling point drawn from the offer of dazzling food products in a fulfilling atmosphere that will make customers enjoy their stay in our premises. Our business will target people doing shopping or students from schools, universities, and colleges from the neighborhood. Dizzy seeks to produce merchandise ranging from pre-packaged sauces and coffee to branded T-shirts (Armstrong & Kotler, 2011). The business will need a capital of $20,000 to start, whereby $15,000 will come from my personal savings and the remaining $5,000 will be obtained from a short-term loan. The business is expected to make revenues of $10,000 during the first year and $100,000 in the fifth year. The projected operating loss for the first year is -$1,500, while the projected operating profits for the fifth year is projected at $ 60,000. Evaluation and control If I will not achieve the marketing goals that I have set, I will increase the marketing budget so that I can include more aggressive strategies such as roadshow promotions. In addition, I will drastically lower my prices and give incentives to my staff to improve their service to customers. If after marketing efforts I do not achieve my goals, I will try to apply alternative marketing campaigns until I realize my goals. I will especially try to apply al the marketing startgeies that are used by our major competitors such as AFC and Mcdonad. 2. Company description My business will be a New York-based Fast food restaurant, which will go by the name Dizzy Restaurant. Dizzy will offer a recipe of outstanding foods products in a fulfilling ambiance that will offer customers value for their money. This idea was hatched in response to the growing demand for high quality snack-based Fast food, especially by people doing shopping or students from schools, universities, and colleges from the neighborhood. I will start the business as a sole proprietor, but with the intentions of expanding the business into a partnership from the second year and into a limited company from the third year. The business will need a capital of $20,000 to start, whereby $15,000 will come from my personal savings and the remaining $5,000 will be sources as a short-term loan. 3. Strategic focus and plan a. Mission/vision statements Mission Dizzy comprises of a dedicated group of professionals who have a powerful devotion and zeal of providing high quality fast-foods, as well as an aspiration to pull their efforts together to deliver a great value to the customers. Vision We strive for broad appeal. We aspire to be the restaurant of preference for everyone, including young and old, families and singles, as well as male or female (Armstrong & Kotler, 2011). b. Goals Company Objectives 1 To establish a first class restaurant that will attract Fast food lovers and gain a substantial market share in New York’s Fast food industry. 2 To make Dizzy an attractive destination for New York shoppers and students. 3 To open at-least 2 new outlets by the end of the third year. Operational financial Objectives 1. To generate up to $100,000 profits by the end of the third year 2. To generate up to $30,000 gross margin by the end of the first fiscal year c. Core Competency and Sustainable Competitive Advantage We shall rely on variety of marketing programs to promote our business. These include word of mouth/in-Store Marketing, table tents, wall posters, and V.I.P. party, in-store tour given to every new customer, grand opening celebration, outdoor marquee message changed weekly, and annual birthday parties. In addition, we shall have the local store marketing, which will include local charity, car wash site, school programs such as perfect attendance and honor roll, and free T-shirts to guests that line dance with us. The management team comprises of individuals who are vastly experienced in leadership and hotel industry in particular 4.0 Situational analyses a. SWOT analysis Strengths Good understanding of the local culture To be Located in high traffic area in New York Strong business skills learned in business class Availability of information from experienced friends Weaknesses Possible, lack of good flow of clients during low seasons Lack of enough experience Opportunities Incorporate pop culture to appeal to youngsters The Hotel and beverage industry in New York is expanding very fast Community ties present Advertisements with branded image Threats There are many ambitious restaurants projects across the world, that will offer potential face off with Dizzy Dizzy will be competing with big companies with huge capital base such as McDonald b. Industry analysis Food and drink industry in the U.S. has been successful in the recent past, and the projections are very optimistic. The sector has demonstrated resolve and resilience to adapt and grow. This success has come with many challenges, but the market players have struggled to attain efficiency by reducing costs and coping with different external factors such as intense volatility in commodity prices. With genuine partnership between the government and the industry, as well as the right entrepreneurial approach on the part of business, it believed that food and beverage industry can achieve 15% growth rate by 2020 (Armstrong, & Kotler, 2011). c. Competitor Analysis – food and beverage industry In 2011, McDonald was the leading brand in food and beverage industry in US, accounting for about 33 percent of chained value sales and 16 percent of overall value sales. A number of factors attributed to the success of McDonald in the US market, including an iconic brand, strong marketing support, and the fact that the company entered the market before all the other major competitors. McDonald also benefited from consumer opinion which shapes its strategic expansion. Other major competitors, who possess huge resources and market share, include Starbucks and KFC. Most of these competitors operate through franchises, a strategy that makes them very successful and dominating (Armstrong & Kotler, 2011). b. Company Analysis Dizzy restaurant will be opened in New York, busy streets. The business will be dealing with catering services and offering of wholesome, and fast foods. Specific food products will include cold sandwiches, combinations of salads and Pacific Northwest cuisine. The business will start as a sole proprietorship, but it may expand later to bring more owners on board. c. Customer Analysis The restaurant primarily targets youngsters and the working class working in the neighboring offices, who do not have much time to spend in restaurants, but who derive pressure in pleasant restaurant atmosphere. Other groups targeted include baby boomers, young married couples with children, and white-collar workers of all ages. Essentially, we have a very broad appeal as far as the target group is concerned. 5.0 Market-Product Focus a. Marketing and Product Objectives The marketing objective is to make use of unique marketing mix and attract as many customers as possible such that we shall have acquired a sizable market share by the third year. Although we shall deal with products that are mostly served in the leading fast foods restaurants, our aim is to offer special and tailor-made combinations that will ensure customer’s maximum satisfaction. b. Target Markets We are targeting customers from different backgrounds. While we primarily we target young peoples who are attending neighboring colleges, universities and schools, we shall also target people who are in their shopping mission, tourists, and the workers working in the neighboring offices and shops. The market leaders in our target markets take up to 80% of the market share, and our aim is to capture up to 2% of the mark share by the fifth year (The U.S. Food and Beverage, 2011). c. Points of Difference What will different our products and services is the manner in which the staff will be trained to offer very high products in a very quick manner. Also, we shall make sure that our restaurant’s atmosphere is very enjoyable with high quality music that appeals to a wide range of generations coupled with upcoming trends such as free Wi Fi, which will possibly attract the big population of youngsters who own smartphones. This will ensure establishment of a Nuevo-Chic atmosphere in our restaurant. d. Positioning Dizzy Restaurant will attempt to position itself as a stylish restaurant, coupled with high quality food admirable customer services. Our plan will focus on making the restaurant a local social and entertainment destination. We will attempt to portray an image in which the consumer is getting healthy quality food and beverages in a nice-looking atmosphere, a concept that will be used to develop the design and construction of the restaurant (Armstrong & Kotler, 2011). 6. Marketing program Pricing strategy Break will help us know how much sales we need to cover our expenses (Cespedes & Piercy, 1996). The break-even point can be estimated as follows. Break even analysis: B.E Point = = Variable costs Variable Cost per unit Coke and cup $0.85 Materials and electricity 2.99 Cream cheese and container 1.65 condiments 0.75 Direct labor costs (counter help & cook) 2.75 Total variable cost per unit $8.99 Selling Price to the Public per unit $10.50 Contribution margin per unit $1.51 Annual fixed costs Break-even point in amount of meals annually = $ 81,650/ $1.51 = 54,073 meals per year. Promotion strategy Dizzy Restaurant’s initial promotion philosophy will be one of “differentiation”. The restaurant will attempt to standout from the crowd by promoting its quality, and atmospheric. Failure to do so would be getting stuck with an image as “just another restaurant on along the New York Streets”. Implementation of this plan will focus on promoting the company’s philosophy in all our advertising material including the company’s name, logo and products. A simple example of this includes getting specially printed T-shirts, disposables and containers with the company name, logo and slogan. The competition has neglected this avenue probably because of fiscal concerns but we feel this is necessary in order to reach our stylish target market. Place (Distribution) Strategy Our products and services will be distribution directly from our New York outlet. There are also plans to open new branches from the second year to help reach more customers around New York and beyond. 7. Financial Data and Projections Year 1 Year 2 Year 3 Sales 139581.5 $279,163.50 $558,327 Direct Cost of Sales 30978.5 $61,957.00 $123,914 Other Costs of Sales 0 $0.00 $0 Total Cost of Sales 30978.5 $61,957.00 $123,914 Gross Margin 108603.5 $217,206.50 $434,413 Gross Margin % 0.38905 $0.39 $0 Expenses 0 $0.00 $0 Payroll 44100 $131,000.00 $224,800 Marketing/Promotion 5000 $5,000.00 $5,000 Depreciation 0 $0.00 $0 Rent 87000 $124,000.00 $149,000 Utilities 1275 $2,500.00 $4,000 New location setup 12500 $25,000.00 $25,000 Total Operating Expenses 123604 $287,500.00 $407,800 Profit Before Interest and Taxes -15,000.5 ($70,293.50) $26,613 EBITDA -15,000.5 ($70,293.50) $26,613 Interest Expense 0 $0.00 $0 Taxes Incurred 0 $0.00 $0 Net Profit -20,000 -18,000 100,000 References Armstrong, G., & Kotler, P., 2011. Marketing: An Introduction. Durban: Pearson Publishers. Cespedes, F., and Piercy, N. (1996). Implementing market strategy. Journal of Marketing Management, 12, 135-60. Mintel, J. (2009) Coffee Shops: Mintel marketing report. February 2009. London: Mintel International. The U.S. Food and Beverage, 2011. 2010 outlook for 2011 and 2012. Retrieved from: < http://www.iriworldwide.com/Portals/0/ArticlePdfs/The%20U.S.%20Food%20and%2 0B everage%20Market%20> Read More