Project

Food Truck to Ethiopia

· Define what kind of food

· Coffee is a big deal

· https://theculturetrip.com/africa/articles/can-coffee-tourism-save-these-countries-coffee-species-from-extinction/

· Largely vegetarian

· Gluten Free / vegan friendly

· Maybe Breakfast food

· https://ethiopianfood.wordpress.com/2014/05/01/a-short-qurs-on-ethiopian-breakfast/

· Maybe our company can have an app so that people can order and pay on the app before picking up their food - this way we have more to cover under “technology environment”

· By around 9 or so each morning, the Fojol Bros.’ Twitter page announces Benethiopia’s location. They begin serving between 11:30 and noon, and they serve until they run out of food, usually by 2. A line begins to form soon after the truck arrives at its daily destination, and by noon it’s a dozen people long and stays that way until there’s nothing left to sell, at which time they tweet once more that they’re closed for the day. https://ethiopianfood.wordpress.com/2011/07/21/ethiopian-food-on-wheels/

Table of Contents

1. Introduction

a. Nestled in the center of the country, Ethiopia ‘s capital city, Addis Ababa, is quickly evolving and growing. Addis captures much of the diversity unique to the country, with over 80 distinctive languages and numerous dialects belonging to a variety of religious communities and peoples. The city takes pride in its diversity, which is perhaps best represented by the city’s food culture and lively restaurant scene

b.

2. About Company-Laura

Located in the bustling area of Addis Abada, Sishu is one of Ethiopia’s most popular and trendiest restaurants. While Sishu serves a variety of sandwiches, the restaurant has become known for the burgers. With homemade sweet buns, delectably seasoned ground meat, tangy homemade sauces, and crisp French fries, both locals and tourists palates go wild when tasting the food at Sishu. Drawn mostly from word of mouth, crowds flock to Sishu throughout the day.

Initially established by American expat Mathews Teshome and local Selamawit Deneke, the twosome was able to create a space with delicious food based on both American and Ethiopian cultures. Sourcing as many ingredients locally as possible, the restaurant focuses on food quality and taste. Since the demand for burger places in Addis is extremely high, customers would likely forgive a miss in quality. However, the two partners are very focused on constantly improving and keeping service standards high.

To maintain high service standards, the restaurant hires more staff than the minimum requirement and slowly training new employees to avoid mistakes. Moreover, new employees come by referrals, and are often a mix of Ethiopians and expats, so that cultural barriers and differences can be navigated through the different perspectives. Additionally, Sishu keeps productive high and employees happy by paying them double what they would make elsewhere maximizing its limited resources with the formation of revenue sharing.

Aiming to be one of the biggest companies in Ethiopia within 10 years, Sishu is currently in the mist of launching an expansion plan with take-out branches to sell burgers at more affordable prices to a larger population segment. To aid in Sishu expansion, our company will come in and form a joint venture with the company to open Sishu food trucks. In accordance with Sishu’s plans for expansion, we will offer ready to eat, affordable, and limited options on the food truck menu. Because of the restaurants reputation and positive name association, partnering with Sishu will be a smart way to branch into the food truck market in Ethiopia helping both us and Sishu with the restaurants plans for expansion.

3. Why the Ethiopia? -Taylor

a. Ethiopia, for starters, is Africa’s largest growing economy. The rise of Ethiopia’s GDP and GDP growth has been largely attributed to its large increase in industrial activity including billions of local and foreign investments, infrastructure, and manufacturing. This flood of funding and infrastructure has led to an increase in jobs and exports, creating the fast growing hub of Africa that it currently is. The investment pools are so large, in fact, that Ethiopia is coined the ‘New China,’ and unlike other African countries, Ethiopia has a stable administration that sees manufacturing as a central part of its growth strategy. Further, the increase of jobs has led to a higher valued currency and, in basic terms, more coin in people's pockets. This rise of gdp per capita has allowed for a higher budget for consumers. However, because it is still a third world economy, with a relatively high unemployment still an important factor businesses must have low prices. We chose Ethiopia for this factor. The increase in spending is very targetable at financially achievable numbers. That's why a Food Truck would be ideal in this location because the demand for cheap good cuisine that is quick and close (the truck would have a set route for the right target consumers).

b. https://www.weforum.org/agenda/2018/05/ethiopia-africa-fastest-growing-economy/

4. Estimated Size of Market - Taylor

a. The estimated size of the market targets the working middle class segment of Ethiopia. Unfortunately the estimated size of this class isnt documented nor is it possible to find exact numbers or even estimates at that point. The only size of the Market that we can estimate is the entire population itself.

b. need to research more on this)

5. Segmenting and Targeting Consumers -Shao

a. Segmenting:

i. Geographic :

1. Country: Ethiopia

2. Region: Addis Ababa (Capital) Dire Dawa(Autonomous Region)

3. Population density: Central business district (CBD), urban,

ii. Demographic

1. Age: all ages

2. Gender:Male, Female and other

3. Group: Students, workers, travelers and people in different industries

b. Targeting Consumers:

i. Our main customers will come from schools, hospitals, office areas, shopping malls and people around popular attractions.

Situational Analysis

6. Economic Environment - Laura

It is widely know that Ethiopia is currently one of the fastest growing economies in the World. With a strong strategic location, the country has strategic dominance when connecting to European and Middle Eastern markets.

Moreover, Ethiopia is land locked and has been using neighboring Djbouti’s port for the previous two decades, but now due to recent peace with Eritreea, Ethiopia will be able to access Eritean ports making international trade more accessible.

With slightly over 100 million people, Ethiopia is the second most populated country in Africa with the region’s fastest growing economy.

While the economy is growing, Ethiopia is also one of the poorest with an average per-capita income of around $783 aiming to reach lower-middle-income status by 2025.

In the last 10 years, Ethiopia encountered strong growth average 10.3%, compared to a 5.4% regional average. Currently, the countries GDP growth is around 7.7%. Most of this growth comes from construction with lower contributions coming from manufacturing and agriculture.

The recent higher economic growth created positive trends in the reduction of poverty in rural and urban areas with population living in poverty decreasing from 30% in 2011 to 24% in 2016. Currently, poverty levels continue declining.

To continue the reduction of poverty, a Growth and Transformation plan is in place to continuing expanding psychical infrastructure by means of public investments with the goal of transforming the country into a hub for manufacturing. Moreover, the plan is targeting an average GDP growth of 11% per year, and the industrial sector is planned to grow about 20% on average, which will create more jobs.

In all, the largest economic challenges in Ethiopia are increasing the speed of poverty reduction and maintaining its positive economic growth, which both require sizeable advancement in job creation as well as enhanced government administration. While the government is devoting a high percent of budget to investments and pro-poor programs, Ethiopia is still faces many challenges.

“Overview.” World Bank, www.worldbank.org/en/country/ethiopia/overview.

7. Cultural Environment -Laura

a. Ethiopian cuisine is served without cutlery, as the custom is to eat with one’s hands. https://theculturetrip.com/africa/ethiopia/articles/africaethiopiaarticlesaddis-ababa-s-top-10-restaurants-ethiopia-s-culinary-gems/

b. Cultural Environment

c. Communication style

i. Speak in soft tones, loud voices are seen as aggressive

ii. Honour and shame are very important. Going out of their way to make sure they are not embarrassing another.

d. Business style

i. Meeting start with extended social pleasantries since relationships are very important.

ii. Meetings rarely have an end time

iii. Performing favors indicate friendship. Since they generally only do business with those that they consider friends they rarely say no. However, this does not indicate that they will actually do what they’ve agreed to.

e. Food

i. Beef, chicken, and lamb is generally only eaten on special occasions.

ii. During Christian fasting periods, no animal products can be eaten and no food or drink can be consumed from midnight until 3pm.

f. Etiquette

g. Religion

h. Commisceo Global Consulting Ltd. Afghanistan - Language, Culture, Customs and Etiquette. www.commisceo-global.com. 1 Jan. 2019 https://commisceo-global.com/resources/country-guides/afghanistan-guide

8. Political and Legal Environment -Val

a. In Ethiopia, the rapidly increasing and largely the young population have further contributed to an increasing labor force. As a result, employment creation and poverty reductions remain one of the enduring development objectives (EEA, 2009). In response to such problems, the Ethiopian government has undertaken several reforms. The major reforms include the 2002/3-2004/05 Sustainable Development and Poverty Reduction Program, the 2005/6-2009/10 Plan for Accelerated and Sustained Development to End Poverty, and the five years- 2010/11-2014/15 Growth and Transformation Plan (MoFED, 2002; 2006; 2010). These documents reiterated the importance of microenterprise development as a means of reducing unemployment and poverty.

i. https://www.thereporterethiopia.com/article/alternative-serving-snack-and-drink-streets

ii. 2002/3-2004/05 Sustainable Development and Poverty Reduction Program

iii. 2005/6-2009/10 Plan for Accelerated and Sustained Development to End Poverty

b. The Informal Sector

i. 2.4.1.3.Government rules and regulations The cause of increment of informal sector is tax burden, as anybody knows neoclassical economic model if marginal tax increase, substitution effect that people choices leisure than work as same as people substitute informal sector by reducing working time from formal sector (Belev, 2013). The legalist school is also notion that the informal sector considered as the reaction of micro-entrepreneurs (Soto, 1989).

ii. Alebachew, Amsale. “Street Vending and Local Authorities in Addis Ababa City: Challenges and The Way Forward.” Research Gate, June 2017, www.researchgate.net/publication/232273779_Street_Vending_At_Meenagna_Ethiopia_Challenges_and_Prospects .

c. Addis Ababa City Administration gave plots of land to 7500 street vendors with a view to integrating informal businesspeople operating on the streets to the main stream small-scale legal businesses. According to Addis Ababa Deputy Mayor Takele Umma, 35,000 street vendors are registered with the administration including the 7500 vendors who are given plots of land. The Deputy Mayor said “We are settling street vendors in identified plots of land which are suitable for business and will work hard to also settle the remaining vendors.” Abdulfetah Yusuf, Head of Addis Ababa City Trade Bureau, said informal trade had been one of the challenges of the city. He said it contributed to robbery, disorder and unfair

i. “Ethiopia: City Administration Gives Street Vendors Plots of Land.” 2Merkato: The Biggest Ethiopian Business Portal, 6 Nov. 2018, www.2merkato.com/news/alerts/5527-ethiopia-city-administration-gives-street-vendors-plots-of-land .

ii. Brown, Alison, and Peter Mackie. “Politics and Street Trading in Africa: Developing a Comparative Frame.” Articulo - Journal of Urban Research, Journal of Urban Research, 1 Jan. 2018, journals.openedition.org/articulo/3612#tocto2n3.

d. The street vendors have to present an identification card from a kebele and have capital below 10,000 Br. A registration fee of 70 Br is also mandatory. The vendors then receive a taxpayer identification number (TIN) and a badge to wear at all times while working in the marketplaces.

e. Gashu, Tariku. “Ethiopia: More Street Vendors Receive Spots in the Marketplaces.” AllAfrica.com, 5 May 2018, allafrica.com/stories/201805080950.html.

9. Technology Environment - Shao

a. Faced with huge food safety issues and the associated challenges of foodborne disease outbreaks

b. The government offers a wide range of undergraduate and postgraduate courses in food science and technology at universities across the country to promote industrialization.

c. Ethiopia's food economy industrialization may promote changes in dietary patterns

d. Increased levels of unhealthy diets that lead to the prevalence of foodborne acute and chronic diseases

https://worldfoodscience.com/article/state-food-science-and-technology-ethiopia

10. Competitive Environment -Val

a. Street Vendors

b. Street Markets

c. Coffee Tours

d. Found a couple on Trip Advisor/Yelp

Marketing Plan

11. Market Entry Strategy

a. Joint Venture- https://www.selamtamagazine.com/stories/visionary-burger

i. We, as an American Food Truck company can have a joint venture with a restaurant in Ethiopia so that we provide the food truck, go through the legalities, and establish health policies, and the Ethiopian restaurant can provide the food, cooks, and workers and run it almost independently - we would get commission and provide new equipment as necessary

1. We can have a few food trucks with different restaurants / different cities

b. Licensing/Franchising

i. We could assume we have an established food truck business in the U.S. and franchise it to Ethiopia, but might need to go into our U.S. food truck business history in the paper and how we plan to find franchisors in Ethiopia

c. Ownership

i. We can fully own every aspect of it and hire workers from there to run it, taking into consideration that we do not want to worsen their unemployment by “us” working there but rather hire from there

12. Product Decisions

a. Product Design: Adaptation

i. Food Truck design: adapts to the culture but with a modern look to draw attention and customers, and also draw tourists looking for something familiar

ii. Menu: same thing, local and foreign food fusion made by local chefs, maybe we could do local options since it would be the most popular with a “special of the week” i.e. tacos, general tso chicken, veggie burgers

1. Vegan, veggie, and gluten free options for adaptation

iii. Environmentally friendly containers, silverware, etc

iv. Maybe a poster with health policies since it’s such a big issue

v. Seasonal coffee and maybe get involved in coffee tours

vi. Employ locals to consider their high unemployment

b. Production Decisions

i. Suppliers: how can we ensure continuity of supply?

1. Current big food/equipment suppliers?

2. Problems with existing suppliers?

3. Volumes required?

4. Frequency of shipment, best day and arrival time on market?

5. Transport arrangements, e.g. whose responsibility is it to arrange transport?

6. Storage arrangements, if any?

7. Potential and techniques for developing sales?

13. Pricing Decisions

a. Adaptation/simple pricing: depending on on the market entry strategy we choose:

i. Joint Venture: Prices of the joining restaurant

ii. Licensing Franchising: We do initial research/advisors for pricing, then if the franchisor sees a need to change prices based on inflation/food shortages, we can meet with them and come to decisions for ideal prices

iii. Ownership: we would need a local advisor or someone to inform us on market price fluctuations so that we can adapt to them in a timely manner

14. Distribution Decisions

a. Similar to pricing decisions

b. Also maybe do some research on popular food market areas/cities, areas/cities that do not have many street vendors but one could be established, and areas that are just not an option due to high poverty/low population

c. Need to consider location of supplier and government regulations for street vendors

d. Need to consider how we get the physical food trucks to ethiopia

15. Promotion Decisions

a. If joint venture, restaurant would promote as their mobile location

b. Maybe we can distribute the leftover perishables to a group in need (need to do research i.e. children in poverty, maybe older community doesn’t get retirement benefits and end up in need, don’t know about their homeless population, etc.)

i. Don’t have to advertise it, but word would get around

c. Budget for advertisement

i. Not sure the value of the coin but we might not be making a lot and still have to pay for physical food truck and the shipping costs of it from here to ethiopia or the cost of manufacturing/buying it in ethiopia, wages, supply, potential permissions from the government, etc

d. Message selection

i. Have to make sure it’s inline with adaptation

e. Get involved in local events

i. Market food festivals

ii. Food/coffee tours

iii. Find more

f. Give out coupons for first time commers

16. Conclusion

References

Appendix

Project Description

PROJECT (Group Effort) Students will prepare a marketing plan to introduce a domestic product or service or idea into a foreign market.

Papers should be approximately 15-20 double-spaced pages of text, exclusive of exhibits and/or illustrations. (These may be interspersed with the text or included as appendices but should not be counted in the text.)

Groups will be formed by the instructor on Wednesday of Week 1, following the gathering of pertinent information from all students. You will find the information I need in the syllabus below or in the Course Overview section of BBLearn. Groups will be able to collaborate online using tools available in Blackboard LEARN (a group discussion area, Bb Collaborate, etc.) or using other external tools that all members within the group select and agree upon.

Organization of the paper is left to the students. Two requirements are (1) that there is some mechanism for breaking the discussion into coherent sections (headings of some sort) and (2) that references are cited appropriately in footnotes or in a listing at the end of the written paper (endnotes are preferred by this professor). This includes proper citation of valid, reliable websites. Plagiarism will result in action consistent with University policy on academic dishonesty.

It is expected that the groups will incorporate material from class and the text into the written project. It is also expected that students will include information gleaned from other classes they have taken, integrating relevant strategies, skills, and tactics.

Neatness, grammar, spelling, presentation style, and organization will be important factors in grade determination. Additionally, effective prose will be rewarded in its own right; poor communication will hurt your grade.

DESCRIPTION:

To gain experience in organizing a complete international/global marketing program, each group will identify some subset of consumer or industrial wants or needs in a foreign market that are not currently being met or are not being met satisfactorily. Applying knowledge gained from class, students will research the chosen wants and needs and propose recommendations in the form of a new product or service or idea, or an improvement over an existing product or service or idea. Students will present this new idea in a preliminary marketing plan. Students should incorporate terminology and concepts from this class as well as quantitative and analytical techniques gleaned from other courses and personal experience.

The first part of the project is the situation analysis. It allows you to understand the economic, cultural, political/legal, competitive, technological, and financial environments in which your product or service exists. Students should provide specific data on environments that are relevant to your particular project. You must clearly identify the want or need your proposed product or service fulfills and for whom. This includes a specific estimate of the size of the market.

Not all of the following topics may apply to the product or service or idea you choose, and conversely this is not an exhaustive list. Discuss those that are pertinent:

1. How do buyers currently go about buying existing products to satisfy the basic need? This is the who, what, where, when, why and how of the purchase decision.

2. Can the market be meaningfully segmented? Who are you targeting? Why?

3. Nature of the competition. Who is already out there? Why will your firm's offering be better? How will your firm compete? Include differentiation and positioning issues.

4. Environmental climate (not just the weather, the other relevant environments!).Which environments have the greatest impact on your product?

5. What else will you need to know to plan?

The second part of the project uses the situation analysis to develop a marketing plan for the proposed product or service. Now that you are thoroughly familiar with the situation, you can more readily determine how to approach satisfying the want or need. You may be creative in deciding the size of your firm -- does it already exist or are you starting from scratch? The answer to this and related questions will determine how realistic the project is. If you define yourselves initially as part of a national or global firm, then the competition you can take on is obviously different than if you define yourselves as a student with a start-up company. No "right" or "wrong" answers are involved; either approach (or any intermediate one) should provide an appropriate learning experience.

Topics to address in this section include:

1. Market Entry Strategy

2. Product decisions -- features, positioning, brand and your obtainable market share. Cite sources of estimates given, and clearly state any assumptions that may have been made.

3. Pricing decisions -- strategies employed, etc. You will not have detailed cost information, so you do not need to go down to the level of a specific price. Remember, this is a preliminary plan.

4. Distribution decisions -- intensity of distribution, use of multiple channels, types of wholesalers and retailers, and others.

5. Promotion decisions -- message, media, mix of promotion types, and others.

Students should tie the data presented in the situation analysis to the recommendations provided. Your rationale should be thoroughly discussed and supported. Projects will be graded on the depth of analysis in reaching the decision presented.