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Business Development Proposal

The Oasis
Vegan & Whole Food Restaurant
Prepared by: AYKAZ Anous KHVAN Solivan GRIFFITH Alicia GAUCHER Mathias SENTINELLI Federico

Module: Future of Marketing & Agencies Module Leader: Janet Hull Course: MSc International Marketing Communications Strategy France Business School

Submission Date: 3 May, 2013

Table of Contents

1. Concept ........................................................................................................ 4! 2. Market Analysis ............................................................................................. 5! 2.1 The Natural Food Market ........................................................................ 5! 2.2 SWOT Analysis ....................................................................................... 6! 2.3 PEST Analysis ......................................................................................... 7! 2.4 Competitor Analysis & Positioning ........................................................... 8! 3. Target Audiences .......................................................................................... 9! 4. The Oasis Restaurant .................................................................................. 10! 4.1 Service Definition .................................................................................. 10! 4.2 Physical and Functional Description ...................................................... 10! 4.3 Distinctive Characteristics ..................................................................... 10! 5. Business Strategy ........................................................................................ 11! 5.1 Business Objectives .............................................................................. 11! 5.2 Key Performance Indicators .................................................................. 11! 6. Financial Evaluation ..................................................................................... 13! 6.1 Projected Profit & Loss.......................................................................... 13! 6.2 Projected Expenses .............................................................................. 14! 7. Resources ................................................................................................... 16! 8. Communications Strategy ........................................................................... 17! 8.1 Concept ................................................................................................ 17! 8.2 Key Messages ...................................................................................... 18! 8.3 Channels & Execution ........................................................................... 19! 9. Measurement & Evaluation .......................................................................... 20! Methodologies ............................................................................................ 20! Tracking studies over time .......................................................................... 20! Evaluation research tools ............................................................................ 20! 10. Risk Evaluation .......................................................................................... 21! References ...................................................................................................... 23! Appendix ......................................................................................................... 24!

Executive Summary
The Oasis is a concept restaurant which offers the most natural food possible as well as a high level of services in the UK. The keys to the concept are interaction with chefs and the fresh, market-style atmosphere. The success of The Oasis is highly probable as there is a niche on the Natural food market regarding an original eating experience associated with a high level of service and middle-range prices. In this proposal, objectives were identified and a strategic plan to achieve them was developed focusing on target audiences analysis, advertising and promotion but also indicators to assess our performances (past and future). This business is proposed to launch with one restaurant in London and will expand after reaching profitability, which is planned after the third year. The fifth year, The Oasis chain will have three restaurants in three different cities in the UK. The advertising & promotion campaigns will focus mainly in online communication (website, blog, social networks and new media) to limit the expenses. Therefore we count on word-of-mouth to relay our messages.

1. Concept
Local, fresh ingredients prepared to provide whole nutrition to the body

Interact with the chef to have Food personalized to your taste

Specialties for vegans and meatlovers

The Oasis is step out of the hustle, bustle and pollution of modern day living.
The full-service restaurant offers delicious and nutritional meals using only fresh ingredients from local organic farmers. Offering a wide variety of vegan meals as well as meat-lovers favourites, The Oasis is the one place that caters to everyones needs and taste buds. The market-style dining area seats guests around their personal chef for the night, who will prepare food completely to personal tastes. They will also be specialized in uncontaminated cooking, meaning vegans will not have to worry about what goes on behind the scene At Oasis, slowing down is seen as the corner point to re-energizing. It is not just having a meal, it is recharging your body. Recharge your wellness; Drink from the fountain of life Slowing down to re-energize.

2. Market Analysis
2.1 The Natural Food Market
The natural food market is a fast growing sector, especially regarding dining out. Also popularly known as sustainable food or organic food, the popularity of this market springs from recent growth trends in organic and sustainable food. A growing number of persons are embracing sustainable lifestyles, resulting in increasing demands for eco-friendly products and locally grown food. As consumers are increasingly becoming more interested in healthy lifestyles, this market shows great promise for any business prepared to enter. The UK Organic Restaurant Market Though retail sales of organic products fell by 3.7% in 2011 in the UK, organic restaurant and catering sales rose by 2.4%, bringing the value of the sector to 15.7 million. This notable increase was the only of its kind among the restaurant sector showing a growing market even at a time when people are eating out less. Sustainable and natural foods are more in demand now than they ever were. (Soil Association Organic Market Report, 2012) Looking Forward and New Trends The trend of sustainability and organic products is becoming a global trend. Overall growth of the market in Europe in 2011 was due in part to retailers/supermarkets like Abel&Cole, Riverford, Planet Organic, Ocado and As Nature Intended. These supermarkets showed continuing interest in the growing consumer knowledge and demand for organic products. They represent the potential for market development when retailers are prepared to invest, innovate and take organic consumer interests and needs into more serious consideration and care.

2.2 SWOT Analysis

Strengths
Unique in its concept High level of competition among sustainable food suppliers (reduces investment costs) Strong online focus Customer interaction with chef (personal wants and needs of customer are taken into account) Experiential entertainment Rising trend in sustainable/healthy lifestyle/whole food

Weaknesses
New concept (no brand image) Low target audience concentration Small variation in seasonal products Quality concerns due to franchise operation

Opportunities
Opportunity to franchise the concept Expanding in advertising in regards to being more socially responsible in the environment/sustainability High demand in sustainable products Worldwide market Governmental support in sustainable/healthy lifestyle Potential to build a strong online community

Threats
Threat of new competition High price of sustainable food Uncertainty of the market in the beginning People are bored of the trend in sustainability (lot of attention in media) Green Washing

2.3 PEST Analysis


Political Governmental regulations regarding hygiene, health regulations and food standards Standards of licenses and inspections by Health and Food Ministry department (Law Carbon Omission) Economic Inflation that determines the wages rate of employees which affect total business costs Fluctuation of sustainable food prices Social Growing trend of being sustainable, eco-friendly and environmental conscious develops in change of eating habits Positioning of the sustainable/whole food market Technological Better production procurement and distribution logistics of sustainable food High demand for natural food has led to new innovative production technology.

The Oasis is trying to expand its business, for this reason it is wise to deal directly with the proper authorities in the respective market. This way The Oasis can adopt a good way of establishing good relationship with the government. For this reason, The Oasis will accomplish all the prescribed acts and satisfy all the governmental conditions. The movement in the economic environment needs a constant research to gain know how in how to bear the increase of the inflation rate as well as the fluctuations in the sustainable food prices which affects the menu costs of The Oasis. The Oasis will obtain relevant information from the target market in addition to the customers of the business. Similarly, The Oasis will find out shifts in areas like consumer behaviour and trend towards sustainable and whole foods to design the best menus possible. Fundamentally, this is the key condition for customer relationship management.

2.4 Competitor Analysis & Positioning

Highly processed food restaurants (Fast food chains & Full service restaurants) represent a limited competition, as they are not on the natural restaurant market. Independent restaurants which offer menus at different range of prices. The service is ordinary. Eg. Vitao & Clarkes Sustainable food stores where customers can eat in specific areas (cafeteria style). E.g. Whole Food Market & The Natural Kitchen Insight: No competitor offers high quality food for vegan, vegetarian and customers aware to sustainable food issues with a high and original service quality. The Oasis restaurant offers to fill this gap in this growing niche market.

3. Target Audiences

Vegans

Eco-Eaters

Experience seekers

Demographic

Male & female 18 to 40 years old Reasonable disposable income Vegans Health and environmentally conscious

Male & female 18 to 40 years old Reasonably high disposable income Interested in special healthy diet Quite environmentally and healthy conscious Active

Male & female 18 to 55 years old High disposable income Health conscious Trendy Interested in experiential & innovative experience Highly social Strongly linked to online communities Heavy users of social medias Interested and curious about healthy lifestyle

Psychographic

Social

Social media users

Social medias users

Values

Truly believe in the benefits and well being of a healthy lifestyle

Believe on the benefits a healthy diet can have

4. The Oasis Restaurant


4.1 Service Definition
The Oasis is more than just a restaurant, it is a lifestyle centre. It offers fresh, clean, whole food in a service as personalized as it can get. Patrons will enter a bright, vibrant, nature-inspired atmosphere that resembles more of a farmers market than a typical restaurant. Colourful vegetables adorn the tables that encircle each groups personal chef for their meal. Once the chef begins, patrons will be able to point out which vegetables they want included, seasonings etc. Interaction is key. Chefs and waitstaff will be knowledgeable in the benefits of organic, natural foods and will be able to easily answer any questions patrons may have from, What exactly is organic food?, to Will you please explain to my son why he should eat his vegetables?, and even What foods can I eat to increase my energy levels?

4.2 Physical and Functional Description


The Oasis will be a cozy restaurant with clean, nature at as the key words to describe the atmosphere. It will contain all the amenities of a standard full service restaurant including: Bar Dining area (maximum capacity of 40) - four chef stations, with two groups of five places each forming half circles around the chef. Kitchen the bulk of the cooking Cashpoint

4.3 Distinctive Characteristics


All food with be organic/local/free range Three different hot plates for preparing meals, vegan, fish, meat and every utensil/pot will be marked to ensure separation as well. Juice bar Delicious fresh fruit, vegetable and herb smoothies and juices with information on health benefits of ingredients. Open kitchen concept where interaction with the chef encouraged so food is prepared exactly to each customers taste. Edible dcor: Vegetables will be used as decoration around the chef station and will be used for cooking as well e.g. bunches of tomatoes etc. 10

5. Business Strategy
5.1 Business Objectives
Controlling food costs Developing repeat and referral business (managing customer service) Product development (menu planning, to know the needs of the customers) To be profitable by the end of year 3 Promotion of the concept (awareness on franchise possibilities) Expand business from year 4 onwards (more restaurants)

5.2 Key Performance Indicators


Trends to measured monthly, quarterly and annually relative to the competitors. Success measurement (for our implemented actions):

Business Value: o Value market share (value) o Market shares (sales) o Restaurant filling ratio Customer Value o Average bill of customers o Ratio of new to existing to lapsed customers ! Loyal customers (once a month) / total customers % ! New customers/increase in spend per customer % Brand o Brand awareness study o Engagement level (social media) o Share of voice on social media

Predictors of success (for our future actions): Investment strategy o Spending amount comparisons o Share of voice relative to share of market o Share of voice / share of market Promotional mix o Online (-Offline) expenses / total expenses o Ratio of budget between price promotion and strategic brand building campaign o Ratio of winning to mediocre to unsuccessful campaigns Innovation intensity o New menu offers each season 11

Digital campaign success

Financial: ROMI & Payback o ROMI = Net profit / Cost of campaign x 100% o Marketing payback: each semester (only after the 3rd year)
(IPA, 2008)

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6. Financial Evaluation
6.1 Projected Profit & Loss
Estimated sales TOTAL EXPENSES PROFIT Year 1 619,320.00 920,700.00 -301,380.00 Year 2 844,662.00 1,023,798.05 -179,136.05 Year 3 1,070,784.00 1,139,463.03 -68,679.03 Year 4 1,927,411.20 1,759,610.46 167,800.74 Year 5 1,927,411.20 1,906,115.76 21,295.44

Graph showing projected profit and loss over a five-year period

6.2 Projected Expenses


Start-up costs Physical Restaurant Rent Renovation Year 1 5,000.00 Year 2 Year 3 Year 4 5,000.00 Year 5 5,000.00

420,000.00 7,500.00

420,000.00 2,000.00

420,000.00 1,500.00

420,000.00 1,500.00

420,000.00 1,500.00

Employee wages Marketing Capital Commercial Kitchen Equipment (leasing) Beginning Inventory Food supplies (50% of our estimated sales) Working Capital Property price TOTAL EXPENSES

98,540.00 5000

103,467.00 5000

106,571.01 5000

217,404.86 10000

322,910.16 10000

10000 5,000.00 309,660.00 50,000.00 10,000.00

10000 1,000.00 422,331.00 50,000.00 10,000.00

10000 1,000.00 535,392.00 50,000.00 10,000.00

20000 2,000.00 963,705.60 100,000.00 20,000.00

30000 3,000.00 963,705.60 150,000.00 30.000,00

920,700.00 1,023,798.05 1,139,463.03 1,759,610.46 1,906,115.76

Therefore, the total sum needed for start-up in the first year is 920,700.00
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6.3 Five year plan


YEAR 1 8 month pre-launch phase Development - Study the market; prepare to launch - Acquire resources: Location Furniture Equipment -Branding -Marketing -B2B relationships -Human resources Chefs Wait staff YEAR 2 YEAR 3 YEAR 4 Year 5

Introduction - Build concept/industry awareness - Build brand awareness - Establish online community using online activities to drive offline action - Build client-base, and customer loyalty - Develop the menu based on consumer preferences and feedback - Nurture strong B2B relationships

Introduction/Growth - Establish clientele - Thought leader among online community (go-to place to for advice of recipes, etc.) as well as a knowledge source for natural food

Growth - Be profitable - Set up an expansion plan/process (franchise process, way to apply, etc.)

Growth - Open 2nd restaurant - Grow local customer base for new area

Growth - Open 3rd restaurant

*Phases based on Product Life Cycle Model

7. Resources
Business resources that need to be acquired in order to start operating The Oasis:

Internal Resources

People

Chefs Waiters Hostess Accounts Social Media experts

External Resources

Physical

Interior designer Furniture supplier Equipment supplier Cleaning service

Systems

Payment system Audio system

Food Brand & Marketing Safety

Food supplier/Farmer market Design agency UK Health Board

A contract with all external parties will be draught to manage and motivate to deliver against expectations. The contract will specifically outline the following: Terms of payment Term of delivery Quality expectations

8. Communications Strategy
Objectives
To create brand awareness To create brand knowledge To create customer loyalty

Offline Online
To build and engage an online community To drive traffic into the store

8.1 Concept
The cross-media concept is Food for the body. Food for the mind. The messages will be in line with the holistic approach to health the restaurant exercises, physical, mental and emotional nutrition and maximum efficiency. Visual communication is important, and bright, vibrant colours will be used to translate the rich flavours of the food. Enlightening information will be shared to provide current natural food eaters with the confidence in their choice by offering them support, as well to persons interested in the lifestyle. The point is to make audience think about their bodies and performance as vital parts of our existence.

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8.2 Key Messages

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8.3 Channels & Execution


Audience Vegan, Eco-eater, Experience-seeker Information and interactive Main portal for the restaurant Q&A find out more about the restaurant Benefit Audience Purpose Drive traffic into the store Vegans, Eco-eater Interactive communication, main portal for the brand lifestyle - Provide recipes

Blog

Website

Purpose

- Community can submit recipes - Information resource - Support group Benefit Audience Purpose Build audience engagement and loyalty. Build brand community Vegan, Eco-eater, Experience-seeker Community management through -Facebook -Twitter -Pinterest - photographs of colourful, vibrant dishes -Foursquare Benefit Direct interaction with customers and audience. Few

Social media

communication costs Audience Purpose Vegan, Eco-eater Edutainment Youtube TV shorts - cooking shows - interviews with Chefs and health professionals Benefit Audience Purpose Build audience engagement and loyalty. Experience-seeker Informative Magazines Newspaper Benefit Target local audiences, to drive traffic

Print

New media

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9. Measurement & Evaluation


In order to evaluate the brand awareness, brand positioning and marketing campaign effectiveness, the following measurement techniques will be used on a regular basis:

Methodologies
Time-series analysis: effect on the brand when the communication support is adjusted over time Use a regional analysis: comparison of the brand performance in different regions based on communication support Competitive comparison: comparison of The Oasis sales performance compared to competitors based on the difference in communication support. !

Tracking studies over time


Continuous Tracking: to monitor and analyse how advertising spending are related to the changes in brand awareness Longitudinal studies: impact on specific behavioural and perceptual dimension of specific target audience. !

Evaluation research tools


Blogs/websites Share of Conversation Share of Voice: !

! Media Analysis: Social Media Social media analysis will be carried out using specialized software like Radian6 as a market research channel to stay in line with the attitudes of consumers. (Sentiment Analysis) Verbatim Quotes: Positive and negative comment about the restaurant throughout the 5 years Theme in Conversation: Topics being discussed around the brand.

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10. Risk Evaluation


Pre-Test Before the actual opening of the restaurant a pre-test will be held to identify any missing needs in facility, menu or physical elements of the restaurant Constant Marketing Customer Research Research concerned specifically on customers needs Study on parallel industry and markets Constant Performance Monitoring Constant comparison to the KPIs Constant Market Audit Research based on competitors in the market field Research on customer service as competitive advantages

References
BPplans (2013) Healthy Restaurant Business Plan Financial Plan [Online]. Available at: http://www.bplans.com/healthy_restaurant_business_plan/financial_plan_fc. php#.UYOpJ7WePzw (Accessed: 3 May 2013). BPplans (2013) Organic Restaurant Business Plan Company Summary [Online]. Available at: http://www.bplans.co.uk/organic_restaurant_business_plan/company_sum mary_fc.cfm(Accessed: 3 May 2013). Institute of Practioners in Advertising (IPA), KPIs for marketing reporting: A framework for effective marketing disclosure, London, April 2008. Web1: Organic Market Report 2011 Available at: http://www.soilassociation.org/LinkClick.aspx?fileticket=ZnJ54dF4kfw%3d&tabi d=116. Accessed: 1th May 2013 Food Service Warehouse (2011) Projection Sales For Your New Restaurant [Online]. Available at: http://www.foodservicewarehouse.com/restaurantequipment-supply-marketing-articles/how-to-start-a-restaurant/projectingsales-for-your-new-restaurant/c28288.aspx (Accessed: 1 May 2013)

Appendix
Five year Sales Forecast Per Person Average Lunch Dinner 13 20 13 20 13 20 13 20 13 20 13 20 15 20 Projected Daily Sales 1,520 1,520 1,520 1,620 1,850 1,980 1,900 11,910 619,320

YEAR 1 Monday Tuesday Wednesday Thursday Friday Saturday Sunday Projected Weekly Sales:

Number of Customers Lunch Dinner 40 50 40 50 40 50 40 55 50 60 60 60 60 50

Estimated yearly sales (year 1)

YEAR 2 Monday Tuesday Wednesday Thursday Friday Saturday Sunday Projected Weekly Sales:

Number of Customers + 30% Lunch Dinner 52 65 52 65 52 65 52 71.5 65 78 78 78 78 65

Per Person Average + 1 Lunch Dinner 14 21 14 21 14 21 14 21 14 21 14 21 14 21

Projected Daily Sales 2,093 2,093 2,093 2,230 2,548 2,730 2,457 16,244 844,662

Estimated yearly sales (year 2)

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YEAR 3 Monday Tuesday Wednesday Thursday Friday Saturday Sunday Projected Weekly Sales:

Number of Customers +20% Lunch Dinner 62.4 78 62.4 78 62.4 78 62.4 85.8 78 93.6 93.6 93.6 93.6 78

Per Person Average + 1 Lunch Dinner 15 22 15 22 15 22 15 22 15 22 15 22 15 22

Projected Daily Sales 2,652 2,652 2,652 2,824 3,229 3,463 3,120 20,592 1,070,784

Estimated yearly sales (year 3) Number of Customers +80% Lunch Dinner 112.32 140.4 112.32 140.4 112.32 140.4 112.32 154.44 140.4 168.48 168.48 168.48 168.48 140.4 Per Person Average Lunch Dinner 15 22 15 22 15 22 15 22 15 22 15 22 15 22

YEAR 4 Monday Tuesday Wednesday Thursday Friday Saturday Sunday Projected Weekly Sales:

Projected Daily Sales 4,774 4,774 4,774 5,082 5,813 6,234 5,616 37,066 1,927,411

Estimated yearly sales (year 4) Number of Customers +60% Lunch Dinner 179.712 224.64 179.712 224.64 179.712 224.64 179.712 247.104 224.64 269.568 269.568 269.568 269.568 224.64 Per Person Average Lunch Dinner 15 22 15 22 15 22 15 22 15 22 15 22 15 22

YEAR 5 Monday Tuesday Wednesday Thursday Friday Saturday Sunday Projected Weekly Sales:

Projected Daily Sales 7,638 7,638 7,638 8,132 9,300 9,974 8,986 59,305 3,083,858

Estimated yearly sales (year 5)

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