TERM PAPER ON NEW BUSINESS MODEL ON CHEFS PLAN

Submitted to: -
Prof. Dr. Md. Faridul Islam
Adjunct Faculty
MKT 701 (Marketing Principles & Practices)
BRAC Business School
BRAC University

Submitted by: -
Md. Tarikul Islam Tomal (19174004)
Shariful Islam (19174027)
Layla Ishrat Banu ( 19174002)
Mohammad Shahadat Hossain (19174009)
Taslima Ferdause (19174008)
Bubli Khatun (19374030)
Snigdha Shaha (18374024)

EMBA Program
BRAC Business School
BRAC University

1
 Executive Summary

Bangladesh has a rapidly growing consumer market and due to a large population base and
rapid globalization, the demand for food products and to be more precise the demands for
catered food is always on the rise. Between 2004 and 2018, the food industry in Bangladesh
grew at an average 8.9%. The food industry employs 2.72 % of the country's total labor force
and its share in the GDP was 2.11%in 2016.

For this Term Paper, we have selected a Food Catering Business, as a startup. Our
main targeted customer’s base will be corporate executives and University students in some
specific areas like Gulshan-Banani, Tejgaon and Bashundhara Residential Area. Our main
competitors are Khan’s Kitchen (Market Leader) and Premier Catering (Market Challenger).

We will offer two different types of product, lunch and dinner service. The price model will be
Maximum Current Profit and we will go for markup pricing model. The price will be at least
10% (TK 100 per box) less than that of the competitors. Our main promotion will be digital
marketing, bulk SMS, and leaflet distribution. Our Brand value is low because of new
business, and our brand equity will be brand recognition. Our Brand Slogan is
WHERE HYGIENE MEETS GREAT TASTE.

We have included our current, future business plan along with a well – organized
SWOT analysis. We have also included our financial cost analysis, and the KPI for the desired
profit and smooth business operation is well explained.

2
1 Introduction

Bangladesh has a rapidly growing consumer market and due to a large population base, the
demand for food products is always on the rise. The market and the product range have
evolved significantly over the last decade and many companies have entered the food business,
which was otherwise not into this level of diversification in the past, Food industry being a
rapidly growing sector in Bangladesh, employing a significant portion of the labor force in the
country. Between
2004 and 2018, the industry in Bangladesh grew at an average 8.9%. The food industry employs
2.72 % of the country's total labor force and its share in the GDP was 2.11%in 2016. According
to some industry analysts, the food-processing sector in Bangladesh is a 4.5 billion US Dollar
industry.

1.1 Industry Overview

Virginia Woolf once famously quoted “One cannot think well, love well, and sleep well, if one
has not dined well.” The food service industry in Bangladesh has evolved dramatically. Over the
last several years, newer and newer restaurant businesses in Dhaka city have popped up. Going
out to eat with your friends and families is gradually becoming a culture amongst the people of
Bangladesh. However, as day progresses, people are becoming more and more busy due
to increased Globalization all over the world. With the increasing amount of hectic and busy life
along with the increasing women empowerment, people are moving towards more into catering
food service. The catering business in Bangladesh has always been around. However, this
segment of the food industry is gaining territory with services like Iqbal Hossain Catering
Service, Tony’s Kitchen, Alpha Catering service, Salam Catering Service and Fakhruddin Foods
Limited. They been changing the scene for the better but still Lunch Catering service is one
sector, which is yet to gain more attention than it should be. According to some food Bloggers a
total of around 250
Catering services exists in Dhaka, out of which only around 20 of them offers lunch Catering
services in Dhaka. Although the industry is still in the preliminary stage, it has the potential to
become a potential growth sector to the national economy.
1.2 Industry at a Glance

Market Size: Roughly around BDT 50-60 Million

Industry growing rate: 13% Annual

Potential Market Customer: 2 million

Market Leader: Tony’s Kitchen

Market Challenger: Spice Catering, Premier Catering

1.3 Product Overview

Chefs Plan Catering Service intends to share a deep sense of interpersonal relationship towards
people who loves good food and loves to eat more than anything else does. With the booming of
food industry and increased demand for processed food due to lack of time, Chefs Plan Catering
service anticipates to provide sophisticated preparing process and service and quality
maintenance of lunch Service which are beyond what we can imagine. We offers a dual sided
Catering services to the working class people of Dhaka city, initially in areas like
Gulshan- Banani, Tejgaon Industrial area and Bashundhara Residential Area. Dual Sided
service includes Catered lunch services and processed Dinner services for working women for
whom it becomes extremely tough to prepare dinner for the entire family after a tiring and hectic
day at office. Our targeted segment also includes students of Educational Institutes, mostly
Universities around the 3-targeted region. Our priorities to make sure the service is up to the
mark from a holistic point of view - customer interaction, after-sales service etc. We aim to make
sure the taste of our food is great, the orders are accurate and timely and that too at a much lower
cost than our rivals. Our products will be at least 10% less expensive than our competitors will
but within an intention of uncompromising food quality and taste.
2. Market Analysis

2.1 Market Status

Processed food or catering food services in one of the most booming industry in Dhaka city right
now. Competition as well as people’s demand for catered food at a cheaper rate is increasing at
an exponential rate as people have less time to cook or prepare the food for their own.
Considering the above scenario, we are planning to launch a lunch Catering service in Dhaka
known as Chefs Plan Catering. Initially we are going for geographical and Demographic
Segmentation to find the potential customers, mainly corporate executives and University
Students in the regions of Gulshan- Banani, Tejgaon Industrial Area and areas surrounding
Bashundhara Residential Area. Our launch time is expected to be in the first week of January
2020. We will go for rigorous promotions and marketing strategy for 1-2 months before we start
serving our customers in full- fledge from the beginning of April in 2020.Initially we plan to
target 1000 customers who will take service from our Catering service. We will first target some
executives of corporate sectors and will tend to do push marketing in order to promote our
product for future endorsement.

2.2 Types of Product Offering

We will start our business with two different products: Lunch and Dinner Service. For the lunch
service, our priority-segmented customers will be executives from Telecommunication sectors,
different Multinational and Local Banks, reputed Merchant and financial Institutes and students
from Top Private Universities in Bangladesh. For the dinner Catering Service, we will
target female executives from different organizations and the bachelor executives all around our
targeted geographical segment. The sole purpose to ease the difficulties the female
employees face in preparing meal for the family, after spending a tiring and hectic life at office,
thus making life a lot easier than before. Moreover, Bachelors also face tremendous problem for
having their dinner as most of them stay in a group with difficulties in preparing quality meal for
dinner.
 Chefs Plan Catering
.

Lunch Service Dinner Service

Initial Target Segmentation For lunch and Dinner Service

Lunch Service Dinner Service
Geographical Location Gulshan- Banani, Tejgaon, Area Gulshan-Banani and Tejgaon
surrounding Bashundhara Residential
Area
Targeted Customer  Corporate Executives (Male  Female Corporate
&Female) Executives
 University Students  Bachelor Executives

Targeted Age Group  25-50 Years ( for Executives) 25-50 years

 16-24 Years (For University
Students)
Income Range > BDT Tk 25000 BDT Tk 5000- 10000
(Mostly Pocket money)

1.3 Revenue Projection

Our Business will follow a Zero level Consumer Marketing Channels where there will no
wholesaler or retailer between the customers and Manufacturer. Hence, the Revenue of
our business will be directly dependent on the volume of sales. Our Targeted Revenue level is
around BDT 2.5 Million by serving 800 corporate customer (15000 times) and 200 University
students (5000 times). Around 80% of the revenue is expected to come from lunch service while
remaining
20 % is expected to be covered by Dinner service. We have our own delivery vehicles for
supplying
the food to the customers, which will be of free of cost for the first six months of business.

Lunch Service
Revenue Target Dinner
Corporate Level Educational Institutions
Daily BDT 17500 BDT 3500 BDT 3500
Weekly BDT 135000 BDT 15000 BDT 25000
Monthly BDT 650000 BDT 60000 BDT 100000
3. Competitive Analysis

3.1 Major Competitors

(A) Market Leader & Pioneer– Kh an ’s Kitch e n

Marketing Values Details

Brand Image High
Brand Positioning International standard tasty meals, prepared
hygienically
Strengths  state-of-the-art digital technology
 international standard mega industry-
size kitchen in the country
 Food designed by Chinese engineers
with German and Turkish equipment
 Largest mechanized food production
facility in Southern Asia
 Highly Trained Chef
 Raw Materials collected directly
from producers
 Food Delivery using 22 temperature-
controlled transports
 The food items are different every
day and there are special items on
the second week of every month

Promotional Method Digital Marketing, Leaflets, Advertisements

Price BDT 150 -200

(B) Market Challenger – Premier Catering

Marketing Values Details
Brand Image Medium
Brand Positioning Tasty Food
Strengths
 Certified and Trained Chef
 Integrity and commitment to excellence
 Good number of Clients

Promotional Method Digital Marketing, Leaflets, Advertisements

Price BDT 110 -150
3.2 SWOT ANALYSIS

Strengths:
 Fresh Food every day. We emphasis on uncompromising
Taste & Quality
 Faster Delivery time
 No minimum order with order time until 9am on same day.
 Flexibility to customize your order as you like.

Threats
Weakness
 Low Entry Barrier
 Lack of Investors
 Easy to copy POD
and Financial
and strategies
Support
 High Employee
 Weak Brand
turnover rate
Equity
 Difficult to protect SWOT ANALYSIS  Low geographical
secret recipes
segment
 Corporate
 Less Acceptance
Companies have
of new product
their own canteen
and Universities
have own cafeteria

Opportunities:
 Open market for Corporate Executives as well as for
the students
 Create example on Standard Hygiene Maintain (Hot
Pot).
 High emphasis on female empowerment and hence
more chance of taking dinner service; bachelor
executives are also high in number
 Creating employment for large number of people
through Catering business
 Ease availability of technology and hence more use
of Mobile Apps for food ordering.
3.3 Competitive Strategy

 Bypass attack: Bypassing the competitors altogether to attack easier markets like
offering product to University students through Food cart and also offering dinner service
to corporate executives
 Imitator Strategy: We will copy the food habit our Market Leaders are following
and will differentiate on packaging, advertising, pricing, or location

4. Marketing Mix: 4P

Marketing is simplistically defined as ‘putting the right product in the right place, at the right
price, at the right time.’ Though this sounds like an easy enough proposition, a lot of hard work
and research needs to go into setting this simple definition up. And if even one element is off the
mark, a promising product or service can fail completely and end up costing the company
substantially. A combination of 4P (Product, position, promotion and Price) combinedly known
as the Marketing Mix. A marketing mix is important in business because it maximizes a
company's chances of achieving steady, continual success in its operations. A marketing mix
also ensures that a company remains responsible to its customers by living up to its product
claims.

4.1 Product

Going through a rapid globalization era, people’s demand for catered food at a cheaper rate is
increasing at an exponential rate as people have less time to cook or prepare the food for their
own. At the same time catering food services in one of the most booming industry in Dhaka city
right now. Considering the above scenario, we are planning to launch a lunch Catering service in
Dhaka known as Chefs Plan Catering. Our launch time is expected to be in the first week of
January
2020. We will go for rigorous promotions and marketing strategy for 1-2 months before we start
serving our customers in full-fledge from the beginning of April in 2020.
4.1.1 Segmentation Process

 Geographical segment: Gulshan-Banani, Tejgaon and areas surrounding Bashundhara

Residential Area
 Income base: Income > BDT 25000 (Corporate Executives) & BDT 5000-10000
(Students)
 Targeted Segment: Corporate Executives, Bachelors and Females Executives
(Dinner), University Students
 Age: 18-24 (Students) & 25-50 (Executives)

4.1.2 Brand Elements

Brand Name: Chefs Plan Catering

Slogan: WHERE HYGIENE MEETS GREAT TASTE
URL: www.Chefs Plancatering.com.bd

Logo:

4.1.3 Initial and Future Brand Equity

Since we are new in the market, so our Brand image is low. Initially we will try to create brand
awareness within the market through vigorous marketing promotions and product offerings so
that customers can recognize our product as soon as they are exposed to. Once people get used to
our product awareness, we will try to design the product such that the product remains in
the knowledge of the people and ultimately starts liking it. Preference and conviction is the next
stage
and ultimately end up by becoming the customer’s ultimate purchase decision. Like this we will
try to grab the market by marketing policies with strong, favorable, and unique associations to
the brand in memory to make a strong Brand recall, thus leading to a High Value Brand. We will
have our product demand all throughout the year, hence promotions and sales increasing strategies
will remain all throughout the year.

4.1.4 Distinct features of Product

We will always try to become a customer-oriented product rather than profit- oriented. We will
make sure our food has the exact amount of taste and food quality is of high standard. Delivering
food in the right place at the right time is also our one of the top priorities. In our company, we
call them STAT- service, taste, accuracy, and timeliness. It is not always that you find
customers who look into the quality of the service and not just the price. Hence, we try to make
sure that the marketing and customer relationship management is up to the mark. Another
specialty about being a customer centric product is the refund policy. We will send a card
containing the NPS (Net promoter score) on a scale of 10 for each service regarding our service
(taste, food quality, hygiene and delivery time) every single time food is delivered to the
customers. If our NPS is below 8 or if there is ever a complain, we would give you immediate
refunds, we will replace the item, we will not ever try to justify our incompetence. If it is an error,
it is an error. The customer is always right to us. Our food menu and order type are also unique
from others. In the Below chart, customer can order any item at any day within 8am of each day.
After 1 or 2 months later we can easily identify, which food item customers order more or which
items are of high demand. Based on that
we will modify the product more.
DAY Lunch / Dinner
Sunday
 Plain Rice/ Khichuri/
Monday Polao/Fried Rice (Thursday)
Tuesday  Fish / Chicken / Beef /Mutton
Wednesday (Only one Thursday and
Thursday Sunday)
Saturday  Mixed Vegetable / Spinach
 Thick lentils
 Salad
4.1.5 Point of Parity

 Service
 Timely delivery
 Price
 Taste

4.1.6 Point of Difference

 Refund Policy
 Uncompromising Food Quality and Hygiene

4.2 Placement

Place or positioning has a lot to do with how the product will be delivered to the
customer. Distribution is a key element of placement. The placement strategy will help to
assess which channel is the most suited to a product. How a product is accessed by the end user
also needs to compliment the rest of the product strategy. For the first 6 month we will target in
the following area:
We are zero level consumer marketing channel and hence there will be no external levels
between customer and us. Obtaining information about end users and exercising control over the
business is therefore easier for us as we communicate directly with the end users and will be able
to take any corrective measures immediately if needed

4.3 Promotion

Now a days people are more concentrate or spend more time on Internet rather watching TV.
That’s why we will target Digital Marketing Sector for the promotional activities. Side by side
we will also use some manual work for our product promotions. The activities that we will use,
that are given below -
 Facebook: Create Facebook page & Boost –up, Show live video about our kitchen
Environment, post online banner with discount offers
 YouTube: Open a YouTube channel, using pop-up advertise while watching any
video, sponsor small amount of money for those YouTube channel who has 1Million
subscribers.
 Leaflet: We will distribute our leaflet in front of corporate office, School,
Colleges, Shopping Mall where people crowed more.
 Bulk SMS: Now a days it’s very difficult a person who doesn’t check their Mobile
SMS.
So, we will also expand our branding by doing bulk SMS.

4.4 Price

Pricing is most critical marketing mix element that produces revenue, which ultimately triggers
consumer to finalize purchase decision. Before setting up the price level, we will first be
determining the market demand of our product through survey. Since we are new in the business
and we are initiating our business as a small-scale business organization, initially we will go for
Maximum Current Profit objective by estimate the demand and costs associated with
 alternative prices and choose the price that produces maximum current profit, cash flow, or rate
of return on investment. Our pricing method will be markup pricing whereby our mark up price

will be BDT 8 per Box. our main target will be providing the less price than the competitors with
maintain the standard quality of hot food. Now a days, most of the catering business competitors
provide BDT 120 + per box with a specific item in a specific day. But we maintain the flexibility
of consumer to choose their food items at any day and at any time by BDT 100 only
DAY Lunch / Dinner Price
Sunday
Monday  Plain Rice/ Khichuri/
Tuesday Polao/Fried Rice (Thursday)
Wednesday  Fish / Chicken / Beef /Mutton BDT 100
Thursday (Only one Thursday and Sunday) Only
Saturday  Mixed Vegetable / Spinach
 Thick lentils
 Salad

For each Box the breakeven price average 92tk (Profit & expense equal) with markup, cost is
BDT 8 per B

5. Present and Future Business Plan

5.1 Current Market Position

So far, we have already discussed about our current market strategy and market position for our
catering business. For the first six months of our business, we will try to do mainly Geographical
Segmentation for our business covering areas like Gulshan, Tejgaon and Bashundhara Residential
Area. Our prime target is to reach around 1000 customers in the first two quarters of our business
(80% executives and 20% students) to reach the revenue projection of BDT 2.5 Million. Since we
are new in the business sector, our competitive strategy will be to act as a Market follower. We will
charge our product as a lower price than our competitors will in order to increase sales and creating
a buzz in food community. We assume that we will not make any profit for the first six months of
our operation due to our weak Brand image since we are in the beginning phase of our business.
We will try with all our efforts and business strategy including promotions, sales discount
for bulk amount order, and push marketing etc. so that we can introduce our brand towards our
targeted customers to create a positive customer based brand Equity.
 We will also work in order to make sure that customers do not react less favorably to marketing
activity for our brand under any circumstances. Brand-tracking studies will be piloted by
collecting information from consumers for every single meal provided to customers, usually
through quantitative measures of brand performance on a number of key dimensions like food
quality and taste. Brand Audit will be conducted per quarter, collecting valuable information
from the consumers about how to bring innovation in our product and taking corrective and
necessary changes to make it more user friendly and user readiness.

5.2 Future Business Goal

Moving forward in the business, we will try to improve our financial performance of our business
as well as to increase our company’s growth to create a strong brand equity by creating brand
recall. We will try to increase our business serving territory by following market-
penetrating theory and new market segmentation theory. For the second phase of our business
(next six month), our targeted customer base will be double than the current customer base i.e.
2000 customers. We will take demanding initiatives to increase our business scope so that we can
reach the breakeven point where our revenue will be same as that of expense, so that moving
forward we can have our profit in our business.

Some quick Snap of Future Business Plans

 Increasing business territory to more Corporate Houses/Financial Institutions and Universities

covering areas like Dhanmondi, Motijheel and Uttara apart from current targeted areas.
 Increasing more customers with the introduction of market penetrating strategy.
 Increasing usages of current users by providing price discounts, extra food menu (adding a
dessert item for free with the existing food menu) and also with token of appreciation (like
sending our Premium menus to the last Friday to our customers who placed highest number
or orders for the month.
 Introducing Food menus on the basis of the demand of the customers (once we can easily
afford our fixed cost)
 Strategic alliance with food ordering companies like Food Panda, Uber Eats for
quicker delivery to various number of areas at the same time
 Introducing our own Food ordering Mobile App through which users can easily place their
orders.
 Extending the barrier of providing lunch and Dinner service towards serving foods in
different corporate events, Seminar, wedding ceremony and different programs all over
Dhaka.
 Going for Geographical expansion strategy by starting our business in Chittagong and
targeting corporates clients in Chittagong Commercial Zones.

6. Financial Cost Analysis and KPI Monitoring

6.1 Increasing Company’s Profit and Growth

Profit being the prime target of any business, we will also focus and work accordingly to
increase our profit for future business expansion and growth. Being a food catering service
provider, we will mainly focus on increasing our sales revenue to maximize the profit. Increasing
sales revenue will be carried out in the following ways.

 Expanding total market demand by attracting more customers to our business. We can do
this by promoting our product to some potential customers who are not using our product
due to lack of awareness. We can also make some aware of our product to some
less potential users who might use our product if we can convince them. Usually for this,
we will send free samples to those customers with a slight reduction in price than usual.
 Expanding total market demand by making more usages of our existing customers. We
can offer more menus in a larger lunch box, which will increase the amount of product
that consumers use at one time. We will also reduce the price for the high frequency
using customers in order to encourage them to continue their journey with us, thus
making brand loyal customers. Brand loyal customers will act as a push marketing for us
to attract new customers.

As far as the expenses are concerned, we will try to control the operating expenses that incurs
during regular operational activities. Capital expenditure like delivery bikes, two vehicles for
food cart, and hot boxes for lunch carrying will be incurred once for a long period of time. We
will put more emphasize on reducing wastage so that we can minimize the cost that occurs due to
lack of negligence. Pre-launch business expenses will also be allocated beforehand and will be
closely monitored in order to bring effectiveness and efficiency.

List of Jan Feb Mar Apr May Jun Jul Aug Sep
Expenses 2020 2020 2020 2020 2020 2020 2020 2020 2020
50000
Trade License                
0
Delivery
80000
Motor Bikes                
0
(8)
Van for Food 200000
               
Cart (2) 0
Point of 51000
10000 10000 10000 10000 10000 10000 10000 10000
Distribution 0
15000 15000
Staff Salary       150000 150000 150000 150000
0 0
Raw 40000 40000
      400000 400000 400000 400000
Materials 0 0
Digital
    100000 100000 100000 50000 40000 35000 35000
Marketing
Miscellaneou
      15000 15000 15000 15000 15000 15000
s
Consumer 50000 50000
        500000 500000 500000
Promotion 0 0

6.2 KPI Monitoring

After business is set up, we intend to target 1000 customers with around 2500-lunch box and
500- dinner box to be sold in the first six months of our business. For the university students
we will set two food carts in front of two major universities in Dhaka, one in front of BRAC
University and another in between North South and IUB. There will intend to sell around 3000
lunch boxes in the first six months. We will have some sales executives to promote and carry
out the targeted sales volume. The sales executives will be handed over some KPI to fulfill and
will be awarded with extra commission apart from their regular salary if they can achieve the
targeted sales volume. Sales target will be reviewed per day for each sales executive. Any
necessary action needed to keep the sales volume on track will be taken in each week. The
Sales commission will be awarded to the executives per month.

Commission per box basis

Frequency
>10 Box >25 Box >50 Box >100 Box
1 day 5% 6% 8% 10%
7 days 3% 5% 6% 8%
15 days 1% 3% 5% 6%
1 month 0% 2% 4% 5%

We will run programs like “Best Sales Executive of the Month” whereby the sales executives
achieving highest sales volume (after fulfilling the target) will be awarded with both financial and
positional rewards as a token of appreciation for their hard work also to motivate them for the
future endeavor.
KPI at a Glance for First Six Month

 Reach 1000 customers for both dinner and lunch in first six months
 Monthly average sales volume: 3000 lunch &100 dinner (For executives), 3000 Lunch
box for university students.
 Product Promotion and Brand Awareness to 2000 customers in 3 major areas of operation
 Net loss of less than BDT 0.2 million per month (we don’t expect profit in the first six
month)
 Conclusion

Nothing Brings people Together like Good Food. Virginia Woolf once famously quoted “One
cannot think well, love well, and sleep well, if one has not dined well.” The food service
industry in Bangladesh has evolved dramatically With the booming of food industry and
increased demand for processed food due to lack of time, Chefs Plan Catering service
anticipates to provide sophisticated preparing process and service and quality
maintenance of lunch Service which are beyond what we can imagine. We intend to
provide hygienic and best quality food at a lower price with best customer experience. We
share a deep sense of interpersonal relationship towards people who loves good food and
loves to eat more than anything else does Considering all above factors, CHEFS PLAN
expects to grow large to become the best Catering Service One can ever imagine.