Manchester Fruit-Themed Restaurant - Essay Example

Manchester Fruit-Themed Restaurant Name Institution Course Date Executive Summary Manchester Fruit Themed Restaurant is a food and beverage café that serves fruits as its main offering. The business is a leisure joint integrated with restaurant business model and will serve organically sourced fresh fruits products that include juices, orange egg, ice cream, steamed meat load and egg York pear among other products. The business will be located along Oxford Road in Manchester City and will target people of all ages, families and children, students, and both the low and high income earners, as well as the health conscious population. Although market analysis shows that Britons have been eating small quantities of fruits in the past, this is changing as diet-related health problems increases and Britons increasingly seeing the needs to adopt a healthier lifestyle and this coupled with the UK government efforts in promoting fruit eating habit creates a favorable business opportunity for Manchester Fruit Themed Restaurant. The business will be financed through venture capital while part of the business will be financed through equity and debt financing. The financial projections indicate that the business will break even after two years of operation which indicates that the business will be a great success. Table of Contents Executive Summary……………………………………………………………………….2 1.0 Business Overview 4 1.1 Company Profile 4 1.2 Company Name 4 1.3 Company Business Model 4 2.0 Market Feasibility Analysis 5 3.0 Competitive Analysis 6 4.0 SWOT Analysis 6 4.1 Strengths 6 4.2 Weaknesses 7 4.3 Opportunities 7 4.4 Threats 7 5.0 Segmentation, Targeting and Proposition (STP) 7 5.1 Segmentation 7 5.2 Targeting 7 5.3 Positioning 8 6.0 Marketing Strategy 8 6.1 Product 8 6.2 Pricing 9 6.3 Place/Distribution 9 6.4 Promotion 9 6.5 Process 11 6.6 People 11 6.7 Physical Evidence 11 7.0 Financial Plan 12 7.1 Capital Structure 12 7.2 Operating Plan 12 7.3 Financial Statements 13 7.4 Break Even Analysis 14 8.0 References 15 Euromonitor International. (2017). Fresh food in the United Kingdom. Retrieved from http://www.euromonitor.com/fresh-food-in-the-united-kingdom/report 15 McGrory, R. (2017). UK social media statistics for 2017. Retrieved from http://www.rosemcgrory.co.uk/2017/01/03/uk-social-media-statistics-for-2017/ 15 Richter, T. (2012). International marketing mix management: Theoretical framework, contingency factors and empirical findings from world-markets. Berlin: Logos Verlag Berlin GmbH. 15 1.0 Business Overview 1.1 Company Profile Manchester Fruit-Themed Restaurant is a family-owned café that will serve fruits as its main offering. The restaurant will provide leisure integrated with restaurant business model that offers customers with fresh fruits products that include juices, Orange Egg, ice crème alongside other products, including steamed meat load and egg York pear. The restaurant will serve fresh fruits to customers on the move as well as provide students and professionals with a dining environment where they can engage in conversation and recreation as they enjoy their meals. 1.2 Company Name The company will be called Manchester Fruit-Themed Restaurant. The company will serve its customers organically grown fresh fruits obtained directly from farmers to ensure that customers’ health is not compromised. 1.3 Company Business Model The business model of the firm can be described using three-legged stool namely owners-staff-suppliers. As the owners, we are convinced that striking a balance among the three is critical to the success of the business as this business model will enable the company to deliver consistently high quality services and products to guests, thus helping build loyalty and making them become part and parcel of the business community that we intends to serve. This business model is also appropriate for Manchester Fruit-Themed Restaurant as it would enable the company to be able to come up with innovative products and services, thus ensuring that the changing needs, tastes and preferences of customers are met all the time. Nonetheless, the company will endeavor to expand the business by opening up more branches regionally and internationally through wholly-owned subsidiaries and franchising in some cases. 2.0 Market Feasibility Analysis Globally, there has been unprecedented increase in diet-related health problems and this has become a concern to governments, health professionals and the society as a whole (Hungry for News, 2014). At present, most of the developed nations are struggling with the rising cases of obesity and related health complications, such as diabetes, hypertension, and cancer among others (Cancer Research UK, 2015). Britain ranks among the countries that are worst affected with diet-related diseases, such as obesity. Currently, about 25% of British adult population is obese and the same high percentage is recorded among children. Obesity also cost the UK government in the excess of £3 billion annually (HSCICC, 2016). Fortunately, fruits are among the healthier foods that are being recommended by health professionals for a longer healthier living. This is attributed to the fact that fruits have a lot of nutrients, such as vitamin C that the body needs for a healthier living (NiDirect, 2014; Daily Mail, 2010). Although fruit consumption has been relatively low in the UK as the majority of the population have a junk food eating culture, a lot of Britons are increasingly becoming more health conscious and are looking for healthier offerings and this has seen the demand for fruits slowly picking up in the UK (Euromonitor International, 2017). At the same time, the UK government, through the Department of Health has been running a campaign that is focused on educating and encouraging Britons to eat more fruits and vegetables as part of the government’s strategy to address obesity and other diet-related health complications (Hungry for News, 2014). The efforts are part of the Public Health Deal that encourages food industry to assist in increasing the amount of vegetables and fruits. Accordingly, the government efforts coupled with fact that Britons are increasingly becoming health conscious is expected to cause a surge in the demand for fruits, thus creating an attractive business opportunity for Manchester Fruit Themed Restaurant (Daily Mail, 2010). Besides, as part of a strategy to increase fruit and vegetables consumption, the UK government is providing investment and tax incentives for businesses that promote sustainable business process, and this creates a good business climate for Manchester Fruit Themed Restaurant (Hungry for News, 2014). Therefore, based on the market feasibility analysis, we are convinced that the business venture we intend to start in Manchester City will be socially, economically and financially viable as we predict that the business will pick very fast due to the projected high demand for fruits that we intend to serve the locals. 3.0 Competitive Analysis Competition is a major threat faced by most businesses. In today’s globalized business environment, no business is immune to competition, which can be direct or indirect. Because of globalization and digitization, domestic businesses no longer competes only among themselves, but also with but also with foreign companies that are looking for opportunities abroad. The UK’s fruit industry is among the industries characterized by strong competition (Euromonitor International, 2017). Accordingly, this implies that, to succeed in Britain, our business will have to adopt effective marketing strategies that are capable of giving the company a competitive edge over competitors in the market. Analysis shows that our business will face strong competition from fruit groceries and supermarkets which are based around where our business will be situated. Among the supermarkets and grocers that will mount a strong challenge to our business include Tesco, Subway, and Morrison. These supermarkets sell fruits and vegetables to shoppers and are expected to mount a significant challenge to our business. Second, there are many restaurants in the UK that have introduced fruits as part of their product offerings and they are also expected to be strong challengers to our business. Examples of these competitors will include McDonald’s UK, CH & Co. Catering, and Brakes and Iceland among others (Euromonitor International, 2017). Additionally, we expect the business to face competition from open air vendors who sell fruits and vegetables around where our business will be located. Our market research has found that there are many large open airs stalls near our business location that sell fruits relatively cheaply because stall prices are cheaper compared to renting a house and this makes it possible for open air vendors to charge cheaper prices for fruits. Accordingly, our business will have to ensure that it adopts effective marketing strategies in order to mount a good challenge to these competitors in the market. 4.0 SWOT Analysis 4.1 Strengths Our business has strengths that will ensure its success in Manchester City. The strengths include strategic location, quite and serene environment, strong leadership and the fact that the business is based on strong innovation. The business will also be accompanied with soothing music and entertainment, which is strength. 4.2 Weaknesses There are certain weaknesses that will have to be addressed or overcome to ensure business success. The main notable weaknesses include newness of the business, small financial muscle and low brand awareness. 4.3 Opportunities The business is presented with a number of opportunities for exploitation. The opportunities include the growing number of health conscious people in Britain (Daily Mail, 2010), thus high demand for fruits, growing fruit-themed market in Manchester, and business to be surrounded by universities and colleges. 4.4 Threats The business will encounter a number of threats that might affect its growth and success. The notable threats include high competition, changing climatic conditions which affect fruit supply, overdependence on fruit from overseas and recession. 5.0 Segmentation, Targeting and Proposition (STP) 5.1 Segmentation Market segmentation is an important marketing activity that involves identifying the market to serve. Based on the characteristics of the market that we intend to venture in, well intend to used geographic, demographic, behavioral and psychographic bases to segment our market. The use of these bases will enable us to identify the precise market that we intend to serve and their needs. 5.2 Targeting Our first target market will be the residents of Manchester City, where the business will be located. Manchester is a vibrant city that is full of life and receives visitors from all parts of the world. Accordingly, targeting residents and visitors of this city with our products is likely to translate to good business. Demographically, we intend to target people from all age groups including children, teenagers, young adults, adults and the elderly. This is because fruits which will form our main product offering are eaten by people of all age groups. Similarly, we will target people of all income groups, including the low and high-income earners. This is informed by the fact that our offerings will be pocket friendly to everyone, regardless of their income level. Demographically, our offerings will also target more on the students because our business will be located in an area with many learning institutions. Although students are known to be highly price sensitive because the majority depends on money from parents and guardians, the fact that we will charge affordable prices means that they would find our restaurant an ideal place to drink and eat and indulge in conversation and recreation. Behaviorally, our business will target the health conscious consumers in Manchester and its surrounding. The advantage of targeting this market is based on the fact that the population of health conscious consumers is increasing in the UK and the fact that these consumers are willing to spend more on healthier products (Daily Mail, 2010). 5.3 Positioning The business will position as ‘organic, fresh, healthy, affordable fruit juice provider.’ Positioning this way will help not only differentiate us from competitors in the market, but will also enable the business attract the growing health conscious Britons and price sensitive consumers. 6.0 Marketing Strategy 6.1 Product As a business that values the health of its customers, we intend to source high-quality fresh fruits direct from farmers. The fruits to be sourced will consist only of those that have been grown organically as part of our mission to serve our customers with healthy fruits and juices. The organically sourced fruits and juices will be served fresh. Although fruit juices will be our main product offering, we intend to ensure that the needs of all customers are catered for by introducing other meals that will include orange egg, ice cream, steamed meat load and egg York pear among others. Offering these products alongside fresh fruit juices will ensure that customers have a variety of meals to choose depending on their tastes and preferences. We will also play cool music at the background to keep our esteemed and valued customers entertained even as they enjoy dining at the restaurant. Occasionally, especially on weekends, there will be a live band to keep our loyal guests entertained. Because the majority of our customers are expected to be health conscious consumers, we will seek the services of a professional nutritionist who will be responsible for educating customers on the best fruits and meals to take depending on their health needs. 6.2 Pricing The pricing strategy that a company adopts has a huge impact on product success (Richter, 2012). Considering the existing fierce competition expected in the market, we plan to adopt a competitive pricing strategy. Our competitive pricing strategy will see us charge relatively lower prices for products. This is important for the success of our business as it will enable the business to attract price sensitive customers, such as students to our business instead of the competitors, thus promoting growth and success of the business. However, the price of a glass of juice will vary depending on the fruit ordered for because we expect that the cost of fruits from the farmers will also keep varying depending on seasons. 6.3 Place/Distribution We understand that merely providing quality products and services will not be enough for our business to win the market. Instead, we will go beyond providing quality fresh fruit juice and other meals by ensuring that customers have easy access to our products. In this respect, we intend to locate our business along Oxford Road, which is a strategic location for city residents and the fact that there are many colleges and universities around who will form our main customers of target. As the business grows, we intend to open up more restaurants in Manchester and other UK cities to bring the restaurant closer to its targeted customers. Today, a significant number of customers prefer to shop online and this has been the trend in the UK. For this reason, our products will also be available for customers on our website, where customers from any part of the country can order a fruit juice of their choice and other offerings online and have them delivered to their doorsteps over the next 48 hours depending on their location in the country. Besides selling our products on the company’s official website, we will also consider partnering with big e-commerce companies to have our products sold on their online platform as this would promote faster growth and success of the business. 6.4 Promotion Promotion is a critical marketing mix element as it helps create product awareness and persuade customers to buy a product or a service. In other words, promotion is a way of reaching out to the targeted customers in a market (Richter, 2012). In this light, our business intends to use integrated marketing communication (IMC) that will involve the use of a variety of promotional approaches to reach the targeted audience. First, to attract the attention of students, we plan to adopt direct sales promotion that will involve sending our sales representatives to the nearby colleges to promote the restaurant. Besides talking directly to the students and lecturers in the colleges, our sales team will provide targeted customers with brochures detailing the meals that we offer and why they need to visit our restaurant. At the same time, our sales team with provides samples of our products to the students and lecturers and other members of the staff to have a taste of what to expect whenever they visit our restaurant. Second, the business will use advertising to promote its products. In particular, we intend to use social media as a platform for promoting our products in the UK. According to the latest statistics by Rose McGrory, the majority of Britons have at least one social media account. According to McGrory (2017), Facebook at about 32 million users, twitter 19 million, Instagram 18 million, LinkedIn 20 million and Pinterest 10 million users (figure 1). Accordingly, this makes social media a good platform for promoting the company products. The good thing with social media is that it is cheaper compared to other forms of advertising. Social media will allow the company to have a one-on-one interaction with customers, explain to them in detail the benefits of eating at our restaurant and why they need to chose us instead of competitors in the market. Source: McGrory (2017). Additionally, study indicates that UK people love watching television with almost all households owning a TV. For this reason, we plan to advertise our products on television as this would enable up to create awareness of our existence in Manchester to mass audience. We intend to advertise on popular channels, such as the BBC, BT, UKTV, Fox Network, and Sky plc among others. However, the main challenge that we expect to face with TV advertising is the high cost of running an advert. The other promotional approaches that we plan to engage include billboards, running road shows, sponsoring cultural and sporting events, and website promotion. 6.5 Process Process defines the activities that the business will undertake to deliver services to guests (Richter, 2012). First, we plan to adopt a just-in-time process in which fruit juices will be blended upon demand. Customers will be given the opportunity to select the fruits they want blended and will be engaged in the blending process as this would made them feel part of our business community. The just-in-time will be advantageous for the company as it would minimize wastage of products. Customers will also be attended to as soon as they arrive and will be provided with the option of take-away or eat and drink in the restaurant. 6.6 People People are an important marketing mix element that is important for organizational success (Richter, 2012). To deliver quality products and services, we plan to engage the services of highly trained and skilled chefs and nutritionists. Because the quality of services that customers get is dependent on employee satisfaction, we will endeavor to keep our staff highly motivated and by offering attractive remuneration and other benefits. 6.7 Physical Evidence We consider physical evidence, such as appearance and ambience important for our business success. To attract customers to our restaurant, we intend to bring the best ambience by creating attractive, beatifically painted comfortable, lively and fun loving environment. We will also ensure that the restaurant has neatly arranged tables and chairs that provide ultimate comfort to the guests. Additionally, customers will have self-service straws and will be provided with hot and treated napkins for hand cleaning. 7.0 Financial Plan 7.1 Capital Structure To finance the business, we project a budget of £150,000. The owners of the company will contribute 40% of the total capital. The remaining balance will be financed using debt and equity financing. We plan to raise £45,000 from private investors and £45,000 by from financial institution loan. We believe that the fact that our business is viable and promises good performance based on market analysis, many investors will be willing to invest their money in this business. The same applies to getting a loan from financial institutions, which we believe would not be a big problem considering the viability of this business that promises good performance. As such, financial institutions would not find it risky to put their money in our business. Sources of Funds Venture Capital Equity Debt Total Money (£) 60,000 45,000 45,000 150,000 Proportion (%) 40 30 30 100 7.2 Operating Plan The capital raised will be used to acquire the business premises, the equipment to be used, and products and to finance other expenses as listed in the budget estimate below. Costs £ Business Premises 30,000 Business License 2,000 Uniforms 3,000 Equipment 15,000 Advertising & Promotion 10,000 Brochures 500 Insurance 2000 Wages 10,000 Inventory 30,000 Furniture 20,000 Furnishing 10,000 Logo 1000 Working capital 10,000 Contingency (Cash) 2,000 Total 150,000 7.3 Financial Statements Income Statement Pro-Forma Income Statement Year1 Year2 Year3 Year4 Year5   £ £ £ £ £ Revenue           Fruits 50,000 60000 72,000 86,400 103,680 Other Meals 40,000 48000 57600 69120 82944 Total Revenue 90,000 108,000 129,600 155,500 186,624 Cost of Sales           Fruits & other Meals 80,000 90000 100000 120000 120000 Total Cost of Goods Sold 80,000 90000 100000 120000 120000 Gross Profit 10,000 18,000 29,600 35,500 66,624 Operating Expenses           Salaries & Wages 10,000 10000 12000 12000 12000 Business License 2,000 2000 2000 2000 2000 Uniforms 3,000 3000 3000 2000 2000 Advertising & Promotion 10,000 2000 2000 3000 2000 Brochures 500 1000 500 500 1000 Insurance 2000 1000 1000 1000 1000 Wages - - - - - Logo 1000 0 0 0 0 Total Operating expenses 31,500 19,000 20,500 20,500 20,000 Net Profit/Loss -21,500 -1,000 9,100 15,000 46,624 Balance Sheet   Pro-forma Balance Sheet       Year1 Year2 Year3 Year4 Year5 Fixed Assets £ £ £ £ £ Premises plus Furnishing 40,000 40000 40000 40000 40000 Equipment 25000 20000 20000 20000 20000 Furniture 10000 10000 10000 10000 10000 Total Fixed assets 75,000 70,000 70,000 70,000 70,000 Current assets           Cash 17500 20000 28000 35000 60000 Inventory 30000 30000 40000 35000 40000 Total Current assets 37500 50000 68000 70000 100000 Total Assets 122,500 120,000 138,000 140,000 170,000 Current Liabilities           Creditors 24,000 7000 13500 15,000 17640 Capital (Owners) 60,000 60,000 60,000 60,000 60,000 Equity 45000 40000 40000 40000 40000 Loan 45000 20000 15000 10000 5000 Income/Loss -21,500 -1000 9,100 12300 47360 Total Liability & Capital 122,500 120,000 138,000 140,000 170,000 7.4 Break Even Analysis From the income statement analysis, it emerges that the business will break even on the third year with the first two years characterized by loss making. The fact that the business will not take many years to break even shows that the business is viable and would be a success, thus worth investing in. 8.0 References Cancer Research UK. (2015). Britons aware of links between lifestyle and cancer, but action is lacking. Retrieved from http://www.cruk.cam.ac.uk/news/latest-news/britons-aware-links-between-lifestyle-and-cancer-action-lacking Daily Mail. (2010, Nov. 5). Can a fruit juice cure your health problems as scientists discover beetroot juice can protect against dementia? Daily Mail, p. 1. Euromonitor International. (2017). Fresh food in the United Kingdom. Retrieved from http://www.euromonitor.com/fresh-food-in-the-united-kingdom/report HSCIC. (2017). Statistics on obesity, physical activity and diet. Retrieved from http://content.digital.nhs.uk/catalogue/PUB20562/obes-phys-acti-diet-eng-2016-rep.pdf Hungry for News. (2014). UK government urges public to eat 7 portions of fruit and vegetables. Retrieved from http://www.hungryfornews.com/health-environment/uk-government-urges-public-to-eat-7-portions-of-fruit-and-vegetables/ NiDirect. (2014). What to eat and drink as you get older. Retrieved from http://www.nidirect.gov.uk/what-to-eat-and-drink-as-you-get-older McGrory, R. (2017). UK social media statistics for 2017. Retrieved from http://www.rosemcgrory.co.uk/2017/01/03/uk-social-media-statistics-for-2017/ Richter, T. (2012). International marketing mix management: Theoretical framework, contingency factors and empirical findings from world-markets. Berlin: Logos Verlag Berlin GmbH. Read More