The Strategic Marketing Plan of Hepafa Fast Food - Case Study Example

 Table of Contents 1.0 Company Summary 4 1.1 Objectives: 4 1.2 Mission: 4 1.3 Keys to Success: 5 1.4 Operation Hours 6 2.0 Market Analysis 8 2.1 Competition Analysis 9 2.1.1 Threat of New Entrants 9 2.1.2 Threat of Substitutions 9 2.1 Market Segmentation 10 2.2 Market Trends 11 3.0 Marketing Plan 11 3.1 Awareness Creation 11 3.2 Target Market Segment Strategy 11 3.3 Market Growth 12 3.4 Competition and Buying Patterns 12 3.5 Pricing Strategy 12 3.6 Promotion Strategy 13 Executive Summary Hepafa Fast food is a fast food outlet that will be positioned at Siwaka estate along Ole Sangale Road in Madaraka – Nairobi. It will provide delicious fast food at value price in a clean, safe and welcoming atmosphere. Hepafa is the answer to growing demand for fast food around Siwaka. Hepafa Fast food will be owned and operated by Paula, Fatma, Hellena and a silent partner Gerald . Source of income will be 50% from the shareholders and 50% from external financing. Estimated capital required to start the business is USDs. 1,020,000. The owners will each contribute equally and the balance will be borrowed as a loan from the Youth Development Fund which is an initiative of the government to support the youth in setting up businesses. Our first plans are to start one outlet in Siwaka because there is no fast food currently in this location. Later, our effort will be geared towards opening another outlet at the Strathmore Student Centre. Operation hours of Hepafa fast food will be daily from 7.00 am to 10.00pm expect Sundays when the restaurant will be closed. This business plan offers financial institutions an opportunity to review Hepafa’s vision and tactical focus. It also provides a step-by-step plan for the business start-up; create positive sales numbers, gross margin, and profits. The estimated financial figures are as below in United States dollars. 7,000,000.00 6,000,000.00 5,000,000.00 Sales 4,000,000.00 3,000,000.00 Gross Margin Net Profit 2,000,000.00 1,000,000.00 - 1 2 3 4 5 1.0 Company Summary The name HEPAFA is derived from the names of 3 of the owners of the outlet He-Hellena PA-Paula and FA-Fatma. 1.1 Objectives: The main objectives of Hepafa fast food restaurant are as follows: To make Hepafa Fast Food a destination spot for students and residents in Madaraka. To establish a presence as a successful local fast food outlet and eventually gain a market shares in Kenyan's fast food industry. To break even in the shortest time possible. To establish more, and expand into a number of outlets in three by the fourth year in business. 1.2 Mission: Main goal is to be one of the most successful fast food outlets in Nairobi, starting with one outlet located in Siwaka estate. Hepafa Fast Food will strive to be a local fast food brand in the local marketplace. Customers will have the best experience when visiting our outlet. Our main focus will be serving high-quality food at a great value in a serene and clean environment. 1.3 Keys to Success: The keys to drive the business to success will be; 1. Product quality: Being a fast food restaurant, the products on sale will mainly be fast-food / junk food. Menu items will include; French fries, burgers and non-alcoholic drinks. They must be of the high quality, prepared under the cleanest environment possible (Cravens, 1982). 2. Service: Customers’ demand good service in all restaurants they visit. Their experience will suffer if service is not of the premier caliber. Every member of the staff will remain courteous, efficient, and attentive (Cravens, 1982). 3. Marketing: We will need to target our audience early. The commerce is located in a central position and accessible location for customers. People will have to be re- introduced to the neighborhood; Identity, awareness will be created through advertisement. 4. Management: There will be a need to have a firm grasp on food, beverage, and labor costs. The service must be delivered in a fashion that will not only inspire repeat business, at the sometime support word-of-mouth reference to others. Proper inventory, personnel administration as well as quality control is key (Parry, 2005). 1.4 Operation Hours It will be situated on a building that has several businesses in the locality. We will open Monday to Friday and during holidays from 7.00 am to 10.00pm and closed on Sundays. Company Ownership The Hepafa Fast Food is a privately held partnership corporation wholly owned by the 4 owners who have contributed the capital. Start-up Summary The start-up costs for The Hepafa Fast Foods can be found in the below charts. Since the business property is located approximately 3 Kilo meters from the centre business district of the capital city, the property taxes are subsided for the initial years covered by the business plan. According to Brady, Cravens, Maister, Peter, Thompson & Walker (2007) the owners will be responsible for maintaining insurance that will cover the loss of the building and all of its stuffing and the insurance cover on business disruption and death or injury to staff. Startup financial requirement Requirement USD ($): Start Up expenses Kitchen & fixtures 150,000 Furniture & interior 80,000 Legal requirements 30,000 Rent 80,000 Packaging & stationary 20,000 Contingencies 10,000 370,000 Start Up Asset Cash required 500,000 Other Current Asset Long-term Asset 150,000 Total Asset 650,000 Total Requirement 1,020,000 START UP SUMMARY 1200000 1000000 800000 600000 400000 200000 0 EXPENSES ASSET INVESTMENT LOANS 2.0 Market Analysis The fast food industry is well established in Kenya and in Nairobi to be precise, young people who enjoy eating fast foods. More and more people are choosing to eat out. Among the common reasons that are cited by restaurateurs and industry associations is that women have joined the workforce in record numbers. Because many people are busy working or studying, less people may have time to fix meals. This has made commercial food service sales to rise as more and more people find that eating away from home to suit their lifestyles (Anderson & Vincze, 2004). 2.1 Competition Analysis Hepafa’s closest competitors (relative to location) are Kenchic, Steers, Mc Frys, chicken inn which have established a name in the fast food industry. They sell similarly priced menus and they have been in the market for long, so they currently have a larger market share. There is little differentiation of the products sold in the fast food café s. so there is need to create a name for Hepafa for it to be recognized in the locality and even outside. In the locality where our outlet will be located, we have Kenchic and the cafeteria at Strathmore University Student center. So we need to offer good services so that we can retain our customers and even get more customers, so that we can open another outlet at Strathmore Student Centre in 3 years. 2.1.1 Threat of New Entrants The threat of new entrant in the fast food industry is extremely high since the barriers to entry are very few. It is relatively cheap to start a restaurant thus it becomes easy for people to get funds to start their own food restaurant (Mooradian, Matzler & Ring , 2012). 2.1.2 Threat of Substitutions Foods substitutes are readily accessible and people can opt to purchase real food or fast food in other restaurants (Mooradian, Matzler & Ring , 2012). People can also opt to cook at home instead of purchasing our fast food although it is not convenient since most are students and working bachelors’ who do not have the time to cook. We will reduce the threat of new substitutes by offering food that matches our customers’ preferences. 2.1 Market Segmentation According to Mooradian, Matzler & Ring (2012) segmentation is dividing a market into distinct groups with distinct needs, characteristics or behavior who might require separate products or marketing mixes. Hepafa is in proximity to Strathmore University, Siwaka Estate, Akila Estate, Madaraka Estate, including the affluent and immediately adjacent Highrise neighborhood; a fast food would be a destination space within the neighborhood. A fast food would provide one of the best fast foods and beverage opportunities for the many students at Strathmore University and the residents in the neighborhood. Target market audience is a mix of students, residents, in town residents, visitors and workers (Anderson & Vincze, 2004). Market Analysis Students Residents Workers 2.2 Market Trends There are more than 3000 students at Strathmore university who have hunger for fast food. The Kenchic that is available is 2km from the university, therefore not strategically placed. Hepafa will provide the market needed by the students to eat fast food. The market opportunity for fast food establishments has never been better in this area of Madaraka. The immediate area surrounding the business venue is upcoming with residential houses so there will be market for the fast food. 3.0 Marketing Plan 3.1 Awareness Creation In order create awareness of the opening of Hepafa fast food; the management will engage the services of casuals in the first month to distribute fliers within the environs of Siwaka estate. Advertising will be key in ensuring that potential customers are aware that Hepafa has opened its doors. We will also do door to door delivery of ordered products. 3.2 Target Market Segment Strategy Hepafa Fast Food will appeal to students studying in Strathmore University and the residents residing in the targeted neighborhood, the many visitors, and workers who desire a fast food eating experience. The business will also meet an under-served need for a pedestrian-friendly establishment for the numerous populaces in the area, specifically newcomer to the immediate area (Wilson & Gilligan, 2005). Members of this market segment dine out recurrently, three times or more for every week. The market segment hugely comprise of singles between the ages of 25 and 40. To an extend it include married couples in the same age group who have no children, the graduate as well as professional students attending area universities among other people in the neighborhood. 3.3 Market Growth Strathmore University is growing and there is an upcoming university along Mbagathi way so there will be many students and because of the housing estate in Madaraka, there will be many residents to be served. As the area's population increases people are opting for dining outside instead of cooking at home (Wilson & Gilligan, 2005). ` 3.4 Competition and Buying Patterns A busy population of urban professionals’ works hard they tent to have less time/ limited opportunities to cook at home. Many of this urban population eat out more often and do so with friends. Because this population tends to eat out far more than the typical population, they look for value (Proctor, 2000). While they might not regularly frequent a restaurant featuring entree prices of USDs.500 a meal and higher, they will repeat appearances at restaurants featuring entrees ranging between USDs. 100 and USDs.300 a meal. 3.5 Pricing Strategy Our food, drinks, and entertainment options are priced to give us an attractive margin while at the same time offering value to the consumer. Our objective targets repeat business, hence prices a affordable. In addition, we want to keep client’s experience remain fresh. 3.6 Promotion Strategy We will promote our company name and label almost more than the product itself, since in order for the business be successful we have to stand for brand-name honesty, excellent menu offerings at the same time have a first class service to our clientele. The business promotion strategy will include: 1. Giving students who come to our outlet discounts. 2. Offering delivery services 3. Advertising at the Strathmore student center, put a bill board at the Madaraka junction, have signboards showing directions to the outlet and distributing flyers at strategic locations. 4.0 Management Team: Hepafa Fast Food is owned by an equally shared partnership including Helena, Paula, Fatma and Mathew. Hellena will be in charge of the operations, Paula will be in charge of the finance and Fatma will be in charge of marketing. Mathew will be a silent partner who just finances and is not involved in the day to day running of the business (Proctor, 2000). Crucial employees include an additional manager who will assist in maintaining and reviewing operations of the café, and a chef who will manage kitchen operations. Additionally, a cashier, server/waiter, delivery person and a cleaner will perform their functions. Part-time personnel will be hired to handle distribution of flyers, serving, and dishwashing functions. 4.1 Organizational Structure 4.2 Management Profile The profile of the owners/management team is as follows: Hellena : Has A Degree in Commerce and currently working at Hilton Hotelas Inventory Manager and will be in charge of operations. Paula: Currently a practicing Accountant and Auditor with Price Water Coopers. She has a CPAK and a degree in Commerce and will be in charge of Finance. Fatma : Currently is a marketing manager at unilever. She has a degree inCommerce, and will be in charge of marketing. Mathew – Currently an entrepreneur References Brady, E., Cravens, D. W., Maister, D. A., Peter, J. P., Thompson, A. A., & Walker, O. C. (2007). Strategic marketing. North Ryde, NSW: McGraw-Hill Custom Publishing. Cravens, D. W. (1982). Strategic marketing. Homewood, Ill: R.D. Irwin. Mooradian, T. A., Matzler, K., & Ring, L. J. (2012). Strategic marketing. Boston, MA: Pearson Prentice Hall. Proctor, T. (2000). Strategic marketing: An introduction. London: Routledge. Strategic Marketing. (n.d.). (Business Source Complete.) Abington, Oxon: Taylor & Francis Ltd. / Books. Wilson, R. M. S., & Gilligan, C. (2005). Strategic marketing management: Planning, implementation and control. Amsterdam: Elsevier/Butterworth-Heinemann. Parry, M. E. (2005). Strategic marketing management: A means-end approach. New York, NY: McGraw-Hill. Anderson, C. H., & Vincze, J. W. (2004). Strategic marketing management. Boston: Houghton Mifflin. Chernev, A., & Kotler, P. (2011). Strategic marketing management. United States: Cerebellum Press. Read More