The Introdution To Food Industry Marketing Essay

Food is a basic need and food service industry will always continue in demand. This industry includes restaurants, fast foods, and cafeterias, catering opportunities, food carts, food trunks and the like.

Filipinos love to eat. This love for food and eating is the major reason why the food industry has flourished well in the Philippines and why you will see a lot of restaurants and fast foods scattered all over the country. These fast foods and restaurants can be local or international.

Filipino food is considered as a unique mixture of Eastern and Western cuisines that mirrors the history of the country. It includes plates and cooking procedures from countries like China, Spain, Mexico and the United States. Even although Filipino food has been influenced by Eastern and Western countries, what makes it unique is the history, the society that introduced and adapted it and the people who accepted it into their homes and restaurants.

Filipinos are not just into good food but the total dining experience, good food is just a part of it. It is the way we feel when we are within a fast food or restaurant. How it feels to dinner out with family or friends or even when you’re by yourself. When choosing a restaurant or a fast food, customers usually check for the cleanliness of the place, freshness of the food, watched over premises, enough parking area, the mood, design and land of the place, and for some restaurants, even the music. The physical and emotional response is a result of all these factors. These can make the whole dining experience level better.

A recent study shows that due to economic crisis, customers or consumers think that when it comes to food shopping, preparing and dining. They are not for weight loss or just eating out at fancy restaurants but they choose what they eat for wellness. They want more nutrition for their money and are more conscious of it.

INTRODUCTION OF FAST FOOD

Fast food is food, which is ready and served quickly at outlets called fast-food restaurants. A restaurant is an organization that serves ready food and beverages on tables set for individuals, pair or bigger groups, to be consumed primarily on the location. Restaurants serve a wide variety of food at a particular cost given on its menu card for on or off the place consumption. These include eating establishments where consumers are served at walkup or make away ordering counters for either on or off building consumption.

However, most good restaurant serve food at tables to their consumers for on-premises consumption. Many of the restaurant chains, have improved their annual sales many times over, well away from the limits of the tables they can served each day, by contribution hot well packed meals through free home delivery service on orders placed through a telephone call. It is multi-billion peso businesses that continue to grow up quickly in many countries.

A fast-food restaurant is a restaurant characterized both by food which is supplied quickly after ordering, and by smallest service. The food in these restaurants is often cooked in mass in advance and reserved hot, or reheated to order. Many fast-food restaurants are part of restaurant chains or license operations, and standardized food are shipped to each restaurant from central locations. In today’s world, going to a restaurant has more to do with socialize then to just having a snack.

Only a few decades reverse restaurants were specially target families, which situation does not hold true today. Nowadays, even children; regularly eat out with their friends, on their own. Therefore, restaurants are not just about food of ambience. On a worldwide level, they are an important supplier to the economy while on personal levels it provides us with a place to easily connect with others.

OBJECTIVES

To set up an existence as a successful local fast food outlets and get a market share in Philippines’s fast food industry.

To make FRHANP Fries a destination spot for malls.

To expand into a number of outlets by near years, and sell the franchise to neighboring metropolitan cities.

Mission :

Our main goal is to be one of the most successful fast food outlets in Philippines, starting with one retail outlet located inside a major shopping mall as a “market tester”.

Our main focus will be serving high-quality food at a great value.

COMPANY SUMMARY

What is FRHANP Fries?

FRHANP Fries sells foodie fries in a cone with a choice of paste. We use the concept of Belgian Fries, where the fries are all made from fresh potatoes and fried twice. Our outlet also provides excellent and friendly customer service to support the ambience of fun, energetic and youthful lifestyle. 

Youthful and fresh surroundings

We will imitate successful establishments, such as Jamba Juice and Starbucks, which represent the majority of our core target market, between 18 to 35 years of age. Our store will feature display cooking of our featured Fries from cutting to frying. Our customers will also be able to read our in-house brochures in regards to all knowledge about Fries and our featured sauces as well as other products like burgers and shakes. Our store will be decorated with fast food setting, such as a bright counter and display menu on the wall.

Quality Food

Each store will offer nothing but freshly fried Belgian fries, sandwiches, Burgers, Shakes and variety of unique blend sauces, all served with old-fashioned home-style care.

Open Everyday

Our store is open everyday from 10 am to 9 pm.

Variety, variety, variety

A different selection of burgers and sandwiches will be featured every three months and we will also change our Indian soda flavors and shakes to accompany our fries.

Start-up Summary

The retail outlet will be rented at one of the target location shopping malls. Our preference is Space A, for the main reason of reaching larger traffic.

Startup requirements will be financed through owner investments. http://www.bplans.com/fast_food_restaurant_business_plan/images/3ea7e45235fa4bd5ad6f924765b00e74.png

Start-up Requirements

Start-up Expenses

Rs.

Kitchen and Fixtures

1144800

Furniture and Interior

874500

Legal

159000

Rent

795000

Packaging and Stationary

450500

Contingencies

222600

Total Start-up Expenses

3646400

Start-up Assets

0

Cash Required

2650000

Other Current Assets

0

Long-term Assets

0

Total Assets

2650000

Total Requirements

6296400

Products

We want to focus only on selling fries. Alcoholic drinks will not be sold in our outlet, as FRHANP Fries promotes a healthy and positive Philippino lifestyle. Instead, we will offer Idian Soda and Sandwiches to complement the fries.

The dips for Belgian style fries can also be served with sandwiches, they are available in more than 20 flavors:

Pesto Mayo Traditional Sambal

Satay pulp Korean BBQ

Teriyaki pulp Hot Chili pulp

Thai Chili Ketchup Garlic Dip

Creamy Wasabi Mayo

Roasted Pepper Mayo

Lava Cheese

Black Pepper pulp

Curry Ketchup

Barbecue

Jalapeno Ketchup

Caribbean Islands

Competitive Comparison

FARHANP Fries has several advantages over its leading competitors:

We expect a high degree of enthusiasm and offer a fun store with friendly staff that reflects the company’s youthful and energetic culture.

Supporting merchandise items that support the company’s brand building.

Our fried potato is made 100% fresh, compared to most fast food outlets that use frozen fries.

Our dipping pulp is also made fresh without preservatives.

Our innovative packaging will be more entertaining than our competitors.

Company

Clean

Value

Merchandising

Hang Out

Simple

Fresh

Cool

Pop Culture

FAHANP

yes

yes

yes

yes

yes

Yes

yes

yes

McDonald’s

Yes

Yes

Yes

Yes

Yes

No

Yes

Yes

KFC

Yes

Yes

No

Yes

No

No

Yes

No

SubWay

Yes

Yes

Yes

No

Yes

Yes

No

No

Sales Literature

FARHANP Fries will use advertising and sales programs to get the word out to customers.

1500 color brochures to be distributed throughout destination shopping mall and facilities: in-store, cinemas, area eateries, information during the grand opening.

Half page magazine reviews in Philippines’s lifestyle magazines that advertise the presence of the outlet.

Sourcing

Fresh potatoes will be delivered weekly by our distributor directly from the India . We also have an agreement with Company to exclusively manufacture our Shakes and signature sauces.

Future Products

For now, we will focus on selling fries and signature shakes, burgers and sauces. However, as we grow further, we will add new categories to our menu, such as Belgian Sandwiches and Buffalo wings.

In the future, our growth strategy will be offering the franchise of our brand to food entrepreneurs in the Philippine region.

Value Meal

Sales of FRHANP Fries will not only generated from the selling of its famous Belgian Fries, but also will be generated by the conception of an innovative package menu called the “value meal.” It primarily consists of a combination of our featured Belgian Fries, sandwiches and Indian soda at greater value than selling at individual items. Further customization could be done by selling a bigger size of fries called “Uber FRHANP” to attract price sensitive customers.

Market Analysis Summary

Consumer expenditures for fast food in Philippines rise during the end of the year 2012, followed by the recovery of Philippines’s economy. The increasing number of new establishments such as fast food franchises, fancy restaurants and foodie bakeries around Philippines has shown a significant growth in this sector. Food spending is around 56% of total consumer expenditures in Philippines, and consumer spending on leisure and recreation made up of 13% of total consumer spending.

A much broader appeal exists for weekend slots because those are the days when most of our core target market enjoys the mall going activities.

Age – Youngsters, single, currently enrolled in college and high school.

Family unit – We will also appeal to families (young families) with children.

Gender – We will target both sexes, with a slight skew for males due to their lower attention to dietary concerns.

Income – We will appeal to the medium income individuals and to all in the lower medium income bracket.

According to a recent public survey of people 15 – 45 years old, 80% of those interviewed like fast food. 90% of them like fast food on a regular basis, and 10% of them claimed that they like fast food “very much,” or “love” fast food. The survey also provided the following particular reasons for the increasing popularity of fast food:

People have 52 weekends and three long holidays a year. Most of Philipino love to window shop, and when they do strolling around the shopping district, they need a quick bite to accommodate their activities.

White-collar workers in offices have stopped bring lunch, and enjoy chicken, hamburger, pizza or other fast food joints in the vicinity.

Parents give more money to kids and students to buy lunch. Fast food is naturally their first choice, because of the brand building effort that heavily targets their age group.

Eating out still remains as Philippino’s common habit of life. They do not perceive fast food is a luxury, and they enjoy it by bringing their family, especially if they have smaller kids, in the environment of the western-style fast food outlets.

Marketing Strategy

Our strategy is based on serving our markets well. We will start our first outlet as a “market tester” that could become a model of the expanding number of outlets in the future. Concentration will be on maintaining quality and establishing a strong identity in the local market.

A combination of local media and local store marketing programs will be utilized at each location. Local store marketing is most effective, followed by print advertising. As soon as a concentration of stores is established in a market, then broader media will be explored. By providing a fun and energetic environment, with unbeatable quality at an acceptable price in a clean and friendly outlet, we will be the talk of the town. Therefore, the execution of our concept is the most critical element of our plan.

Pricing Strategy

Our pricing strategy is positioned as “generic”, meaning that 200 INR is the average consumer spending for a snack or light lunch in Philippines. Leveraging the volume of fries, Indian Soda, Sandwiches, Burgers and signature style sauces to be sold, we are serving the majority of Philippino.

Management Summary

The initial management team depends on the founders, with little back-up. As we grow, we will take on additional help in certain key areas. Part of our basic philosophy will be able to run our executive management as a “knowledge sharing” fellowship. We will not add additional overhead until absolutely necessary. This will mean that the initial staff support team will have to work extra. By doing this, we will keep our overhead as low as possible, allowing us to adequately staff our outlets. This will also allow us and future business partners to recoup investments as quickly as possible and enjoy a higher return.

At present time, FRHANP Fries is being owned by its 6 founders.

Management Team

FRHANP Fries is currently the creative idea of its six founders. As the company is small in nature, it only requires a simple organizational structure. Implementation of this organization form calls for all four individuals to make all major management decisions in addition to monitoring all other business activities.

As we expand into multiple locations, each location will have a primary site manager.

Organizational Structure

Future organizational structure will include a director of store operations when the store locations exceed four units. We hope that this individual will come out of the ranks of our stores’ management. This will provide a supervisory level between the executive level and the store management level. Possible positions might be added at a later date include marketing manager, purchasing manager, controller, human resources, R&D and administrative support team.

Personnel Plan

Our initial employees will include two cashiers, two cooks and two bike boys per location, with one of each on the premises during open hours. This is considered an ideal personnel number for a food outlet the size of our own. Each employee will work for 38-40 hours per week.

Personnel Plan (Approx.)

Personnel plan

Year-1

Site manager

0

cashiers

1,90,800

Cook

1,52,640

Bus boy

1,24,020

Total people

12

Total payroll

4,67,460

Start-up Funding

Currently, the company is owned by the original 6 founders, who each will contribute Rs.30,60,000 for the same amount of share, 25%. This will more than cover start-up requirements, and provide the business with a cash pillow to use for expansion over the first year.

Start-up Funding

Start-up Expenses to Fund

36,46,400 Rs.

Start-up Assets to Fund

26,50,000

Total Funding Required

62,96,400

Assets

Non-cash Assets from Start-up

15,90,000

Cash Requirements from Start-up

26,50,000

Cash Balance on Starting Date

37,53,600

Total Assets

79,93,600

Liabilities and Capital

Liabilities

Current Borrowing

0

Long-term Liabilities

0

Accounts Payable (Outstanding Bills)

0

Other Current Liabilities (interest-free)

0

Total Liabilities

0

Capital

Total Planned Investment

42,40,000

Loss at Start-up (Start-up Expenses)

(36,56,400)

Total Capital

1,83,60,000

Total Capital and Liabilities

37,53,600

Total Funding

44,00,000

Projected Profit and Loss

As the Profit and Loss shows, FRHANP Fries will run at a profit or loss for the first year, using up some of the cash reserves initially invested by the founders. As sales increase, we will expand into new locations to aggressively spread brand recognition. This increase in visibility will allow us to take up less expensive locations off of Orchard Road, while maintaining our flagship operation, the first store, in a prime spot.

http://www.bplans.com/fast_food_restaurant_business_plan/images/ae0e382ef4e34aa6b836c9db8ae7becb.png

We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan.

Year-1 (Rs.)

Sales

1,47,95,639

Direct Cost of Sales

32,83,721

Other Costs of Sales

0

Total Cost of Sales

32,83,721

Gross Margin

1,15,11,971

Gross Margin %

77.81%

Expenses

Payroll

46,74,600

Marketing/Promotion

5,30,000

Depreciation

0

Rent

92,22,000

Utilities

1,35,150

New location setup

13,25,000

Total Operating Expenses

1,58,86,750

Expenses

Profit Before Interest and Taxes

(4374779)

EBITDA

(4374779)

Taxes Incurred

0

Net Profit

(4374779)

Net Profit/Sales

-29.57%

Projected Cash Flow

The following chart and table show the Projected Cash Flow for FRHANP Fries.

http://www.bplans.com/fast_food_restaurant_business_plan/images/bb9ce2d1db1244898fee2612c6fa41d6.png

Year-1 (Rs.)

Cash Received

Cash from Operations

Cash Sales

14,795,639

Subtotal Cash from Operations

14,795,639

Additional Cash Received

Sales Tax, VAT, HST/GST Received

0

New Current Borrowing

0

New Other Liabilities (interest-free)

0

New Long-term Liabilities

0

Sales of Other Current Assets

0

Sales of Long-term Assets

0

New Investment Received

Subtotal Cash Received

14,795,639

Expenditures

Year-1

Expenditures from Operations

Cash Spending

4,674,600

Bill Payments

12,946,045

Subtotal Spent on Operations

17,620,645

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

0

Principal Repayment of Current Borrowing

0

Other Liabilities Principal Repayment

0

Long-term Liabilities Principal Repayment

0

Purchase Other Current Assets

0

Purchase Long-term Assets

0

Dividends

0

Subtotal Cash Spent

17,620,645

Net Cash Flow

(2,824,953)

Cash Balance

35,928,647

Projected Balance Sheet

FRHANP’s projected company balance sheet follows.

Assets

Year 1 (Rs.)

Current Assets

Cash

35,928,647

Other Current Assets

0

Total Current Assets

35,928,647

Long-term Assets

Long-term Assets

0

Accumulated Depreciation

0

Total Long-term Assets

0

Total Assets

35,928,647

Liabilities and Capital

Current Liabilities

Accounts Payable

1,549,826

Current Borrowing

0

Other Current Liabilities

Subtotal Current Liabilities

1,549,826

Long-term Liabilities

0

Total Liabilities

1,549,826

Paid-in Capital

42,400,00

Retained Earnings

(36,46,400)

Earnings

(4,374,779)

Total Capital

34,378,821

Total Liabilities and Capital

35,928,647

Net Worth

34,378,821