marketing budget
puinyna
e-industry_analysis.docx( iCHEF Team A ) ( DeVry Inc. | MGMT 600 | November 24, 2015 )
Industry Review
iCHEF is a convenient service presented to our customer through a mobile APP. We offer an array of Appetizers, Entrees and Desserts. The industry we are embarking on is the Food Service and Catering industry.Examining the food service/ catering industry, we’ve learned that this industry is on the rise. It is an industry that is expected to expand over the next five years. This industry will continue to grow and define its niche by being innovative, offering international cuisines and beverages, and using sustainable locally sourced produce. The industry has received a boost from an improving economy, as consumer spending is expected to rise at an annualized rate of 2.6% during the five years to 2020. Households, which account for over 50.0% of industry demand, are expected to bolster their demand for catering services as consumer conditions improve. Unemployment is forecast to decline over the next five years, while disposable income is expected to moderately grow. As consumer conditions improve, time-poor consumers are also expected to prefer to use catering services, rather than attempt to do it themselves.
Over the next five years, consumers will continue to demand higher-quality food, better food presentation and a wider menu selection with healthier alternatives. Many customers will also begin to seek out caterers that use organic and locally sourced foods. Menus will need to more thoroughly describe items, by methods such as listing ingredients, where they came from and how they were prepared. These new demands may force some operators to increase their purchase expenses, or choose to vertically integrate by owning and operating their own farms. Consumers will also demand more value-added services, such as decorations, floral arrangements and entertainment. Overall, the number of industry enterprises is anticipated to increase 1.2% per year on average to 11,320 households and businesses.
Industry profitability is expected to strengthen and stable over the next five years in line with rising demands of the consumers. However, profit growth will be limited by strong internal and external competition and forecast rising purchasing costs. As competition rises, it will become even more important for operators to define their niche and find a way to differentiate themselves from competitors, whether through services offered or quality of service. Food costs are forecast to increase due to strong emerging market demand and volatile weather conditions. The trend towards serving more innovative, exotic food and using locally sourced and sustainable produce will also increase purchasing costs for caterers. Wage costs are also expected to increase by 2.0% per year on average over the next five years to reach $3.0 billion, as higher-paid chefs and consultants are brought on to provide more complex fare.
Looking ahead the food service/caterers industry is in the mature stage of the industry life cycle. The industry's value added (IVA), which measures an industry's contribution to GDP, is expected to rise at an average annual rate of 2.2% during the 10 years to 2020; this compares with GDP growth of 2.5% during the same period. Generally, industries that grow at a similar or slower rate as the US gross domestic product are considered to be mature. Despite steady demand, the industry is in the midst of a rather significant change in consumer preferences. Demand for healthy foods has risen and consumers are increasingly rebuffing high-fat, high-salt and super-size meals as the US obesity epidemic grows. This presents an opportunity for enterprising caterers that adjust their menus and tout the health benefits of their food. Conversely, operators that fail to adjust to consumer preferences will see demand for their services decline.
Regulations Review & Legal
This section describes the legal and governmental regulations to be followed and adhered to before the start of operations of the food service and online catering business. We decided to enter into this market because of the lack of a diversity food in this particular area. Studies show that most customers would leave this community to go downtown, which is a 30 to 45 min drive or an hour-hour and half train ride for a fine dining healthy experience. Our service will offer healthy organic and locally grown menu options, a fine dining experience, and convenience and timely services to the customers.
The first legal concern is getting a permit from the local environmental health office of the Health Service Executive that allows the establishment of a food center with regards of meeting the hygiene and cleanliness of the premises. This will entail a thorough description of the premises layout, temperature control, transport, waste disposal, personal hygiene and training. We will acquire the ISO certification of which we want to be approved of the I.S. 340:2007 which deals with hygiene in the Catering Sector and I.S. 341:2007 dealing with hygiene in Food Retailing and Wholesaling (Buttle, 1997). The business will also be training the staff and chefs on the food safety issues so as to adhere to the FSAI training guides. In addition, adhering to the zoning regulations in this specific part of the town, regulations requirements state- no story form buildings in the area. We are building a large restaurant kitchen with only one floor but will have ample sampling space and office space for the Executives. Finally, we will obtain liquor permit and licensing from the city and state authorities.
Competitive Analysis
iCHEF is a unique company that offers service like no other. There are other companies in the market that display similar concepts but not exactly the same operations. The industry for online restaurants services is beginning to expand its market. With creating a user friendly website and a company website we want to make this service as easy as possible to consumers. Those who are not tech savvy can use our phone service as well. We are in the market to offer a convenient food delivery service to our consumers, presenting varieties of their favorite entrees and building our brand.
Our competitors would consist of companies like “Let's Eat Home! Personal Chef Service” and “Green Gourmet Chicago”. Both companies are online food services that offer a variety of meals to patrons. Let’s Eat Home is distinctive because it is ran by the personal chief; who thrives on offering the best possible services to her clients. She prepares a wide range of entrees from Mediterranean to European Cuisine, health diet plans and offer specials during each season.
The Green Gourmet is another competitor that offers more of a health selection for those who are looking to eat healthier, looking to lose weight or may have heath conditions and can only eat certain meals. They offer standard breakfast, lunch and dinner that are prepared by seasonal chiefs. They have a 3 step process that is very user friendly where the customer 1. Chooses the meal 2. Checks out and 3. Delivery. Their goal is to improve quality of life with food services.
See below a chart with our competitors Strengths and Weaknesses :
In Addition, we have indirect competitors that offer slightly different services, but target the same group of customers with a similar concept of the business. These competitors are: “Grub Hub” and “DoorDash”. Grub Hub is an online and mobile service that offers food delivery from different restaurants to customers and/or business. They don’t actually produce the product (food) but they offer their delivery services for those restaurants that don’t through an app or online connections. Grub Hub has develop rapidly and now service over 15 different states and still growing. DoorDash also connects customers with local restaurants; they offer High-End restaurant deliveries and will deliver with in 1 hour. DoorDash has also expand its brand further than Chicago and they offer their services in places like Denver, Atlanta, Manhattan, Dallas and more.
Furthermore, to increase our market shares we will be adding more variety to our menu options, higher quality foods, floral and entertainment options. This will build our Brand in this market. These subtle offerings will add a unique touch and will help differentiate us from our competitors. iCHEF plans include staying ahead of the new trends and introduce innovative ideas to stay ahead of the competitors. For example: Introducing new interactive features to the APP, which will help customer feel the iCHEF experience. We can also find ways to increase our customer satisfaction like applying some of our customer’s ideas about food or the services and/or creating a customer satisfaction day or week. The way we market our service is one of the most important factors on increasing our numbers. Researching our target audience and understand their needs and wants will help build iCHEF into the top online food services in Illinois.
SWOT Analysis
As a fresh start-up venture one of our best strengths is our product as a whole and the option to partner with local culinary schools. We want to afford future chefs the opportunity to perfect their craft while earning hands on experience in the field they are thriving to be successful. As a group the Executive staff decided to be hands on daily with the business and only receive a bonus if the business affords the option. We want to work closely with our staff to ensure all requirements are met and our mission, vision and values are respected and honored at all times. The opportunities for the business are essentially endless, we have so many paths in front of us; the plan is to take them on one at a time. Our first focus is to build a strong loyal customer base, we want to instill a trust in our customer that will grow our brand for years to come.
Like any new business we have threats and weaknesses that can make or break the business. One of the most important weaknesses we are facing is competitive pricing. As we search for the best products to serve to our clients we have to factor in cost over head and how much each meal is going to cost as a single or family meal. As we search for the best product we also want to make sure our advertising plan is not weak or threatened. A successful business requires a catchy and memorable launch and advertising. Word of mouth, social media and tasting events can help get the word out. Once the word is out we want to ensure it remains that way in the most positive way possible.
Page 1
