CHINESE RESTAURANT

MARKETING PLAN
Bilal Hamid BBE / 537 9/12/2009

` TABLE OF CONTENTS Contents Page #

Executive Summary ……………………………………………………………………………………… 3 Market Needs ……………………………………………………………………………………… 4 Market Analysis ……………………………………………………………………………………… 4 Market Trends …………………………………………………………………………………….. 5 Market Growth …………………………………………………………………………………….. 5 Mission …………………………………………………………………………………….. 5 Service Offering …………………………………………………………………………………….. 6 Positioning …………………………………………………………………………………….. 6 SWOT Summary …………………………………………………………………………………….. 7 Objective & Strategy …………………………………………………………………………………….. 8 Branding & Messaging ……………………………………………………………………………………. 9 Strategy Pyramids …………………………………………………………………………………….. 10
Marketing Mix ……………………………………………………………………………………………. 11 Financial Analysis …………………………………………………………………………………………… 12 - 17

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Executive Summary:

Mr. Chen Leon Tang is a Chinese National an expert cook who is interested in opening a Chinese Restaurant in Karachi. He has the capital of Rs. 4,000,000. Mr. Tang has directly invested Rs. 2,600,000 in the business and hold back Rs. 1,400,000 for Working Capital Management. He rented a bungalow in PECHS, and paid Rs. 900,000 to land-lord as security deposit. His main investment was on fixtures. He hired 6 people to run the restaurant from which 2 are chefs. The location of the restaurant is surrounded by the residential bungalows, where he estimated 200,000 potential customers. Mr. Tang’s is following the long term financial objective therefore he carefully prices the menu because he understands that there is good market growth for his business in 5-6 years time. The Restaurant has a clear mission of treat customer on best possible levels for earning repeat business. Mr. Tang’s offering includes 100 + selected meals and desserts with the average item cost Rs. 283. Mr. Tang set his contribution margin for the 1st year is 15% which he has the plan to rise in the coming years in ration with the operating cost. Mr. Tang’s Marketing objectives include advertisement and events arrangements, but since he cannot afford to spare large marketing budget he is mainly he is relying on word of mouth.

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The estimated sales and income statements for the restaurant is attached, which predicts that it would take about 6.4 Years / 54,000 customers to Mr. Tang to break even with the total cost (investment).

Market Needs:

• • • • • •

The City of Karachi has great potential for cultural diversified foods. The Karachitees love food and they like to experience in it. There are almost 50+ Chinese Restaurants are operating in city, but small quantity of them are truly satisfying the taste and requirements of their customers. Most of the Chinese Restaurants operating in the City are run by the Locals, There is a need for a truly significant Chinese restaurant which is operating under native Chinese chefs. Mr. Chen Leon Tang is the Chinese National. He has experiences in Chinese cooking. It would give him a opportunity to fill the market need. The consumers will feel the difference and an exciting experience.

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Market Analysis Growt h Potential Customers Adults Teen age Office employees Total 5% 4% 2% 4.56% 100,00 0 65,000 3,000 168,0 00 105,00 0 67,600 3,060 175,6 60 110,25 0 70,304 3,121 183,6 75 2009 2010 2011

Market Trends:

• • • • •

There is a Market Trend rising that people try to choose healthy food rather than the junk food. This Market Trend is arising due to various diseases such as cardiac arrest, high cholesterol etc which occurs due to the high cholesterol fast foods. The media is vibrant on this issue also. On the other hand, Chinese food are world-wide renowned for their healthy ingredients which are not only good for stomach but also good for the health. The Trend of taking healthy food will continue to grow in the future.

Market Growth:

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• • • • •

There is an overall Market Growth seen in the restaurant segments. There are many international fast foods chains are successfully operating in the market. The growth in Target Market of Chinese Restaurants is also good. There is a segment of people who enjoy the calm environment for their eating out and gatherings. The Chinese Restaurant is the place where one can experience the eastern cultural values.

Mission:

• • •

Our mission is to delight the customer with our service and food. Provide customer the welcoming environment where they feel comfortable to experience new food And offer them the best value for their money, profitably!

Service Offering:

The Restaurant will offer Chinese dishes with variations menus in Chopsuey, Fish, Prawn, Wonton, Chicken, Beef, Noodle, Rice, Hot & Cold Drinks, Ice-cream and Various Soups.

Positioning:

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• •

The main positioning of the restaurant is focused on the family oriented peace full, healthy and quality dine out experience. The overall positioning is the value added customized service where customer is valued and respected.

SWOT Summary:

The expertise of Mr. Tang in Chinese cooking is the main strength of restaurant, where he is confident for the repeat business. The offering includes variety of Chinese dishes the area is suited for the restaurant but to initiate the business the larger operational expenses would be required to meet the quality as well as the economical crises. Strengths:
• • •

Mr. Chan Leon Tang has his true expertise in the area of Cooking Chinese Dishes. He is confident that his experience and expertise is better than anybody in this particular area. We offer home delivery in the 2 km surrounding area.

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Through our website, customers can learn more about the healthy food and take advantages of learning about the ingredients we use in our food.

Weaknesses:
• • •

Additional funds are needed to maintain the quality of the experiences offered and meet future program demands. We don't have large budget of marketing therefore we first rely on word of mouth. The training and orientation of new staff is required.

Opportunities:
• • •

The area of PECHS is strategically is on good location for Restaurant, as it is surrounded with bungalows, and the income level of people are very good. In general people like to dine out and caring out different events in restaurants, therefore the opportunities are obvious. There is no Chinese restaurant in that area who is offering home delivery.

Threats:
• • •

Economy: full recovery from current recession may take time. The BBQ spots: offering traditional BBQ food to people on fewer prices than ours. Load Shedding: cost more capital to maintain the Air conditioning environment hence disturbs price structure as well.

Financial Objectives:

• •

To always maintain a minimum cash balance of Rs. 100,000. To achieve sales of Rs. 15,000,000 in year one

Marketing Objectives:

The objective is to provide a experience of eating Chinese food in a relaxed environment to as many people as possible.
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• •

On average basis the objective is to gain business twice a month from a single customer, whether it's dined in or take away. The objective is to aware people about the benefits of healthy food through website and other media.

Target Market Strategy:

• • •

The first target market strategy is the families and couples to enjoy meal at restaurant. The second target market strategy to introduce meals to the teen age group who spend 200 to 500 on BBQ and on Fast food. Third Target market strategy is to introduce our menus in the surrounding companies head offices residing the neighborhood bungalows for their business lunch orders delivery.

Branding:

With our kind of offering, branding is a slow process of word of mouth and repeat business. We do however need to use the logo on our website and on promotional brochures which depicts the importance of healthy diet. We also need to always work towards establishing ourselves as the acknowledged experts in our field.

Messaging::

Adults: and relationship.

Taking healthy and balance food helps nurturing better family

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Teen age: Hygienic and low fat food is good for developing minds. Office employees: Develop better relationship with your customers by offering them healthy Business lunch.

Strategy Pyramids:

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Marketing Mix:

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` Product Marketing: Product: high quality and healthy food accompanied by personal service, differentiated from competition quality with the overall brand strategy has proven to be a successful approach generating high levels of repeat business. Pricing:
Our pricing needs to match our positioning, we cannot afford high end or cheap prices therefore we go for the economical pricing strategy: The average pricing of the most demanded items are as follows: • • • • • Average Soup Menu Price: Rs. 270 Average Choupsuey Menu Price: Rs. 283 Average Fish Menu Price: Rs. 357 Average Prawns Menu Price: Rs. 344 Average Chicken Menu Price: Rs. 295

Promotion:
• • Our Promotion Strategy focus on html based Emails about our meals, menu additions, update menu pricing and services to our customers. The email addresses will be obtained through the feedback forms which we bring with the bill to the customer.

Advertising: • • • We do not have a large advertising budget and will not be advertising in the print media. Instead we distribute our brochures in the target market through newspaper hawkers. We also focus on Social Responsibility Marketing by inviting hospitalized children for free lunch and offering single free lunch coupons to neighborhood school children so they bring their parents for lunch, etc. This campaign can help gaining the restaurant respect in the area, brand recognition and print media coverage as well as it will help attracting new families to visit the restaurant.

Implementation: We will manage implementation by having a weekly meeting with the staff to make sure that we are on track with our plan.

Financials:

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Total Budget Hold Money for Working Capital Management Safety Deposit (Land lord) Balance

4,000,000 1,400,000 900,000 1,700,000

Supplies & Purchases A/Cs 208,000 Gen-sets 700,000 Cutlery 150,000 Carpet & Decoration 20,000 Cooking Range 20,000 Deep freezer & Fridge 30,000 Furniture 200,000 Stationary & Printing 5,000 Computer & Communication 25,000 Misc 5,000 Section Total

1,363,000

Balance

337,000

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` Product Costing : (Raw Material + Carriage in)

Avg. Avg. Avg. Avg. Avg.

Soup Menu Cost ……………………………………. Choupsuey Menu Cost …………………………. Fish Menu Cost …………………………………….. Prawn Menu Cost…………………………………. Chicken Menu Cost……………………………….

229 241 303 292 251

Income Forecasts: Forecasted Income Statement 2009 Sales 1,01 1 7

` 7,105 88 Cogs Gross Profit Operational Expenses: Fix Cost Rent Utilities Salaries (x 6) Section Total Marketing & Promotional Expenses: Brochures Printing & Distribution Special Invitation & Free Coupons Banners & Signboard Section Total 150, 000 40 ,000 90 ,000 28 0,000 4,439 1 32,666

15 ,000 20 ,000 20 ,000 55,000 (20 2,334) (20 2,334)

EBIT EAT

Forecasted Income Statement 2010

2,90 Sales 1,550 1 7

` 2,52 Cogs Gross Profit Operational Expenses Fix Cost Rent Utilities Salaries (x 6) Section Total Marketing & Promotional Expenses Brochures Printing & Distribution Special Invitation & Free Coupons Banners & Signboard Section Total 160, 000 50 ,000 96 ,000 30 6,000 3,087 3 78,463

5 ,000 10 ,000 15,000

EBIT Income Tax 5% EAT

57,463 2,873 54,590

Forecasted Income Statement 2011 9,77 Sales 7,096 1 7

` 8,50 Cogs Gross Profit Operational Expenses Fix Cost Rent Utilities Salaries (x 6) Section Total Marketing & Promotional Expenses Brochures Printing & Distribution Special Invitation & Free Coupons Banners & Signboard Section Total 170, 000 60 ,000 102, 000 33 2,000 1,823 1,2 75,273

5 ,000 10 ,000 15,000 92

EBIT Income Tax 5% EAT

8,273 46,414 8 81,860

Contribution Margin:

If the restaurant sets higher price its sales will affect, and if restaurant sets the lower price so its profits. Therefore the restaurant should set moderate price and search ways to lower fixed and product cost to achieve the Target Profit. Contribution Margin 2009 15%

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` Contribution Margin 2010 Contribution Margin 2011 18% 21%

Break-even Analysis:

To Break-even with total investment of 4,000,000 the restaurant has to serve 54,000 customers.

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