Dream Inn Delivery Company Marketing Strategy - Assignment Example

? Dream Inn Dream Inn Executive Summary Dream Inn is a food delivery company that seeks to provide customers with a vast array of food products at their homes and offices and anywhere they require. The company is focused on its vision to provide superior services to customers through top notch delivery with an unmatched menu found in a single location or website. The company looks to increase market share to 25 percent by 2020 by aggressive promotion and advertising through billboards and television primarily with other promotion packages such as discount coupons to attract middle income professionals in particular. However, the company does not aim to restrict itself to this segment and shall provide its services to a broader market. The products offered shall include home delivery, office delivery, Food for a week and other new and upcoming products. The company shall be in a profitable position from 2013 and look to consolidate its position by increasing awareness and market share. Distribution networks will be setup that will help the company in gaining a competitive advantage. Company Profile Dream Inn is more than a restaurant serving top quality food to its customers. Dream Inn is a concept, an idea that originated earlier in the minds of its creators after observing the quality of food and service being provided by other vendors. The creators had the vision and foresight to identify various unfulfilled needs of customers in the Bahraini market. While these restaurants were providing top notch food to their customers, there are some areas of the food order and delivery value chain that left something to be desired. For instance, the creators recognize that customers are individuals and vary in all aspects such as ordering time and buying patterns. Dream Inn is open 24/7 to cater to customers at all hours, day and night. Secondly, the creators identified another need that remained untapped which was the requirement for customers to have home and office delivery at all times and fulfilled this need by decentralizing operations and creating multiple offices which allowed the company to cater to customers in a timely manner. Another need serviced by Dream Inn is through the use of technology – by the creation of a user friendly website which allows customers to view the products on offer and place orders easily and have their food delivered within the agreed time limits. This is particularly helpful for professionals who spend most of their time in front of the computer. Marketing Strategy Market Share The company will aim to gain a market share of 10 percent of food delivery services by 2015 and look to increase market share to 25 percent by 2020. Product Profile Dream Inn provides a vast array of services to its customers for their convenience. These services include: Provision of user friendly website for viewing the different products on offer and placing an order online for the convenience of the customer Provision of 24/7 door to door delivery services throughout the country Established outlets for convenience of customers to place orders on their way from home or office Creation of new value added services such as Food for a Week, which will allow customers to book a weekly menu in advance. This will be particularly helpful for those customers who are professionals and lack the time to order on a daily basis and can decide their weekly menu in one single attempt. This product will be equally beneficial for single bachelors who are immigrants and have moved here in order to make a living and do not have the time or knowledge to prepare their own meals and cannot afford to order on a daily basis from high priced restaurants. Menu includes items from various fast food restaurants, Italian, Asian and cuisine of various countries. Since the products are being purchased from other restaurants, and Dream Inn is aiding their sales revenues, Dream Inn shall be able to purchase these products at a substantial discount from suppliers and gain a suitable margin in between. Prices Prices vary according to the menu selected by the customer. In order to gain market share, the company makes its purchases from the restaurant owners in bulk to avail quantity discounts that can be partially transferred to the customer. This helps the company in besting its rivals and gaining a competitive advantage. Furthermore, discounts are provided to customers who opt for the weekly menu and all charges are collected upon completion of the order, or the week for this specific product. Payments are not requested in advance for any order. Place While the presence of actual stores for a delivery oriented firm might seem confusing and unnecessary, there have been numerous researches that show that although customers mindsets are changing towards technology, a significant percentage of customers still prefer an actual physical retail store to make their purchases. An example is the research conducted by Deloitte (2011) which shows that at least 28 per cent of customers want to see the actual products in their respective stores. This is why we have chosen to maintain outlets in order to maintain those customers who still prefer to purchase from physical brick and mortar outlets. We shall have multiple locations throughout the country for this specific type of customer. Promotion Sales promotion is a key tool used to increase awareness of the product and consequently, sales and market share. Since the company is looking to provide its services on a national basis, the company shall choose a medium of advertising that can reach the entire nation. The obvious choice is advertisement through television channels. Professional advertising agencies shall be hired to create an advertisement that is suited for the target demographics and is able to connect on a national scale. The ad shall focus on the company logo and brand and try and bring a brand association in the minds of the customers that top quality food service is Dream Inn. Target Market The market segments being targeted by Dream Inn include: Professional, office going people who require well cooked meals in office. This market includes males and females of the age group from 18-65 which is a very broad segment. This segment includes single, unmarried locals and foreigners who cannot cook and find daily dining out very expensive. Food for a week. This segment will be those people who purchase a weekly menu of items in advance. This service is catered to the needs of the above market and is suited to the needs of the customers. The customers do not have to pay in advance and they can cancel or change their order for any given day of the week by calling or visiting the website. External Analysis using Porter’s Five Forces Bargaining Power of Customers Customers hold medium level of power in bargaining and leveraging. This is due to availability of other companies that provide delivery services and customers can easily switch to rival firms if they are dissatisfied with the services offered by Dream Inn. The company looks to eliminate this threat by offering products at low prices with timely delivery. A vast range and multiple menu combinations will help ensuring that the customers receive premium satisfaction from the Dream Inn experience. In case of late delivery, the products shall be given free of charges to the customer to compensate for the dissatisfaction caused by late delivery. This will increase brand loyalty and switching costs for the customer. Bargaining Power of Suppliers As many suppliers are present in the food industry, the threat of suppliers is low. The company can purchase bulk quantities from suppliers at discounted prices and store them in their cold storages and reduce any threat posed by suppliers Threat of new entrants Presently, there are no barriers to entry in this lucrative market and other firms can pop up and capture market share. This is a huge threat which the company will seek to eliminate by gaining brand loyalty through low prices and advertisement. First-movers advantage shall be utilized and the company shall market itself as the first company in the country to provide delivery of such a vast amount of restaurants and through online purchasing too. Over time, the company will gain market share and look to drive out potential entrants by setting up technological and distribution barriers by entering into agreements with suppliers. Threat of substitutes Substitute to Dream Inn’s model of delivery is the traditional dining out experience which still prevails in the food market. Dream Inn has provided outlets for this very purpose to allow customers to dine out and enjoy the outdoors experience Rivalry among competitors Competitors include other food delivery providers such as Pizza Hut, Burger King, Subway and Starbucks (Agriculture and Agri-Food Canada, 2010). This is a high threat that shall be reduced by collaborating and partnering with these companies as the company will seek to sell the products of these companies to the customers. Eventually, the goal is to nullify this threat by becoming the choice of these companies for the purpose of delivery and convert these competitors into suppliers. Financials Forecast The company forecasts sales of an average of $1,000 per customer per year. The assumption made is that a customer spends around $10,000 for food per year and the company will seek to provide at least 10 percent or $1,000 of the customer’s food. A customer base of 1000, 1500 and 2,000 is projected for the three years 2013-15. Cost of sales is predicted to be 60% of sales, which will include the prices paid to restaurants for their food and other costs incurred in procuring the items. This is highly conservative as the company will look to seek further discounts from suppliers from bulk purchases in the future. Expenses include marketing and selling expenses, administrative expenses of head office, and rent expenses for outlets, labor and other miscellaneous expenses. A tax rate of 25% has been assumed. The company shall be profitable from 2013 and will look to increase profits by increasing sales and reducing cost of sales by gaining further discount from suppliers. Pro-forma statements of income, balance sheets and cash flow projections for the year 2013 are found below in the Appendix. Reference List Agriculture and Agri-Food Canada. (2010). Agriculture and Agri-Food Canada: Consumer Foodservice. Ottawa: Agriculture and Agri-Food Canada. Deloitte. (2011). The changing face of retail: The store of the future. Deloitte. Appendix Read More