CLARO M.

RECTO ACADEMY OF ADVANCED STUDIES

CASE ANALYSIS: GOURMET TO GO

A Case Analysis
Submitted to the Faculty
Claro M. Recto Academy of Advanced Studies
Lyceum of the Philippines University Cavite

In Partial Fulfillment
of the Requirements for the Degree
Master in Business Administration

GIZELLE ANTOINETTE T. DANEZ

July 11, 2021

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CASE 7
GOURMET TO GO

INTRODUCTION

Today, many households have two incomes. At the end of the day, the questions
arise, “Who will cook?” or “What do I cook?” Time is limited. After a long day at work,
few people want to face the lines at the grocery store. Often the choice is to eat out. But
the expense of dining out or the boredom of fast food soon becomes unappealing. Pizza
or fast-food delivery solves the problem of going out but does not always satisfy the need
for nutritious, high-quality meals. Some people prefer a home-cooked meal, especially
without the hassle of grocery shopping, menu planning, and time-consuming preparation.
Jan Jones is one of those people. She is a hardworking professional who would like to
come home to a home-cooked meal. She would not mind fixing it herself but, once at
home, making an extra trip to the store is a major hassle. Jones thought it would be great
to have the meal planned and all the ingredients at her fingertips.

She thought of other people in her situation and realized there might be a market
need for this kind of service. After thinking about the types of meals that could be
marketed, Jones discussed the plan with her colleagues at work. The enthusiastic response
led her to believe she had a good idea. After months of marketing research, menu planning,
and financial projections, Jones was ready to launch her new business. The following is
the business plan for Gourmet to Go.

EXECUTIVE SUMMARY

Gourmet to Go is a new concept in grocery marketing. The product is a

combination of menu planning and grocery delivery; a complete package of groceries and
recipes for a week’s meals is delivered to a customer’s door. The target market consists
of young urban professionals living in two income households in which individuals have
limited leisure time, high disposable income, and a willingness to pay for services. The
objective is to develop a customer base of 400 households by the end of the third year
after start-up. This level of operation will produce a new income of about $120,000 per
year and provide a solid base for market penetration in the future.

The objective will be achieved by creating an awareness of the product through an

intense promotional campaign at start-up and by providing customers with first-class
service and premium-quality goods. The capital required to achieve objectives is
$258,000. Jones will invest $183,000 and will manage and own the business. The
remainder of the capital will be financed through bank loans.

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PRODUCT

The product consists of meal-planning and grocery shopping services. It offers a

limited selection of preplanned five-dinner packages delivered directly to the customer.
The criteria for the meal packages will be balanced nutrition, easy preparation, and
premium quality. To ensure the nutritional requirements, Gourmet to Go will hire a
nutritionist as a consultant. Nutritional information will be included with each order. The
most efficient method for preparing the overall meal will be presented. Meals will be
limited to recipes requiring no more than 20 minutes to prepare. Premium-quality
ingredients will be a selling feature. The customer should feel that he or she is getting
better-quality ingredients than could be obtained from the grocery store.

MANUFACTURING AND PACKAGING

Since the customer will not be shopping on the premises, Gourmet to Go will
require only a warehouse-type space for the groceries. The store location or decor will be
unimportant in attracting business. There will be fewer inventory expenses since the
customer will not be choosing among various brands. Only premium brands will be
offered. It will be important to establish a reliable connection with a distributor for high-
quality produce and to maintain freshness for delivery to the customer.

As orders are processed, the dinners will be assembled. Meats will be wrapped and
ready for the home freezer. All ingredients will be labeled according to the dinner to which
they belong. The groceries will be sorted and bagged according to storage requirements:
freezer, refrigerator, and shelf. Everything possible will be done to minimize the
customer’s task. Included in the packaging will be the nutritional information and
preparation instructions. Customers will be given the option of selecting their own meals
from the monthly menu list or opting for a weekly selection from the company.

FUTURE GROWTH

Various options will be explored in order to expand the business. Some customers
may prefer a three- or four meal plan if they eat out more often or travel frequently.
Another possibility might be the “last-minute gourmet”; that is, they can call any evening
for one meal only. Increasing the customer base will increase future sales. Expansion of
Gourmet to Go can include branches in other locations or even future franchising in other
cities. With expansion and success, Gourmet to Go might be a prime target for a larger
food company to buy out.

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INDUSTRY

The Gourmet to Go concept is a new idea with its own market niche. The closest
competitors would be grocery stores and restaurants with delivery services. Of the 660
grocery stores in the Tulsa/Tulsa County region, only two offer delivery service. They are
higher- priced stores and will deliver for $4, regardless of order size. However, they offer
no assistance in meal planning. A number of pizza chains will deliver pizza as well as
fried chicken. There is also a new service that will pick up and deliver orders from various
restaurants. However, Gourmet to Go would not be in direct competition with these
services because the meals available from them are either of a fast-food type or far more
expensive than a Gourmet to Go meal.

SALES PREDICTION

The market segment will be households with an income of at least $65,000 per
year. In Tulsa/Tulsa County, this will cover an area including over 16,600 households that
meet the target requirements of income with an age range of 24 to 50 years. By the end of
the third year, a customer base of 400 households will be developed (2.3 percent of the
target market). At a growth rate of 2.73 percent a year, the target market of households
should increase over three years to 18,000.

FINANCIAL

Various financial statements are included in Exhibits 1 through 8.

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Marketing Distribution

The product will be delivered directly to the customer.

Sales Strategy

Advertising will include newspaper ads, radio spots, an Internet webpage, and
direct-mail brochures. All four will be used during normal operations, but an intense
campaign will precede start-up. A series of “teaser” newspaper ads will be run prior to
start-up, announcing a revolution in grocery shopping. At start-up, the newspaper ads will
have evolved into actually introducing the product, and radio spots will begin as well. A
heavy advertising schedule will be used during the first four weeks of business. After start-
up, a direct mailing will detail the description of the service and a menu plan. Newspaper
ads aimed at the target markets will be placed in entertainment and business sections.
Radio spots will be geared to stations most appealing to the target market. Since the
product is new, it may be possible to do interviews with newspapers and obtain free
publicity.

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Sales promotions will offer large discounts to first time customers. These
promotions will continue for the first six months of operations. The service will be priced
at $10 per week for delivery and planning, with the groceries priced at full retail level.
According to the phone survey, most people who were interested in the service would be
willing to pay the weekly service charge.

MANAGEMENT

The management will consist of the owner/ manager. Other employees will be
delivery clerks and order clerks. It is anticipated that after the business grows, an
operations manager might be added to supervise the employees.

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Case Summary: Gourmet to go

INTRODUCTION

 On 2017, Jan Jones thought of generating a fresh and innovative new idea that
would benefit households in terms of saving time and energy on preparation
of weekly nutritious meals.

 Gourmet To Go is a new concept on combination of menu planning and

grocery deliveries. This would provide a product and service on complete
package of groceries and recipes for a week’s meal and is delivered to a
customer’s door. The target of this market are young urban professionals who
have limited time for leisure and are willing to pay for services.

 Few people have the time to face the hassle of long lines on grocery stores or
even go to the market. Ordering from fast food chain and dining out is an
option, however, it does not provide you a high- quality meal where you can
get proper nutrition.

 Having this new idea, the customers would be more interested in availing the
products and services. Though groceries and restaurants with delivery
services would be some competitors. For the area, this service that we will be
providing is unique and costs much cheaper than what the competitors would
offer. Among the 660 grocery stores in the Tulsa County region, only two
offers delivery services which are higher priced stores and delivers for $4
regardless of order size.

 The capital required to achieve objectives is $258,000. Jones will invest

$183,000 and will manage and own the business. The remainder of the capital
will be financed through bank loans.

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BUSINESS CASE ANALYSIS

I. TIME CONTEXT

The time context of the case is during 2017.

II. VIEWPOINT

The owner, Jan Jones.

III. CENTRAL PROBLEM

 Competition with groceries and restaurants on the area.

IV. STATEMENT OF OBJECTIVES

a. Must Objectives

 To develop a customer base of 400 households by the end of the third

year after start-up.

b. Want Objectives
 To be able to increase sales of this starting company in-spite of having
groceries and restaurants (with delivery services) as competitors.
 To franchise and expand the business for future growth.

V. AREAS OF CONSIDERATION

Strengths
- Concept is new to people allowing them to become interested on the
service.
- Gourmet to go is convenient and more practical when it comes to meal
preparation. The meals to be served can be cooked in 20 minutes.
- The quality of ingredients and meals offered are better compared to those
on groceries since Nutritionist are hired to provide high quality meals.

Weakness

- Must gain the 75,000 dollars bank loan for capital.

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Opportunities
- Possibilities of Franchising and expanding on different cities.
- Gourmet to Go might be a prime target for a larger food company to buy
out.

Threats
- Possibility of other companies to copy the type of service provided which
leads to competition.
- Deliver ingredients which are not fresh which would lessen the meal’s
quality

VI. ALTERNATIVE COURSES OF ACTION

ACA no 1: Provide Product differentiation/ Service differences not done by

competitors

Advantages:
1. Customers will be more interested on availing the Product and
services due to its uniqueness.
2. Product differentiation/ Service differences will be able to
increase customer satisfaction leading them to promote it with
others.
Disadvantages:
1. There is no assurance that the customer will be availing the
new product or service.

ACA no. 2: Expand the business through franchising and establishing branches on
other cities.

Advantages:
1. Brand awareness.
2. Increase in profit and revenue.

Disadvantages:
1. Initial outflow of capital.

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 Promotion and Advertisement

In order to achieve a customer base of 400 households by the end of the third
year after the start up, we would be creating an awareness of the product through an
intense promotional campaign at start-up through providing customers with first-class
service and premium-quality goods.

Included on the budget for the start-up expenses are the use of Ad campaign,
Brochures, Radio spots, and Newspaper ads. Also, as stated on the Sales strategy, an
Internet webpage and direct mail brochures will be implemented.

As an Alternative course of action, social media platforms (Facebook, Twitter

and Instagram) will be utilized by creating pages where the target customers will be
able to be updated with the information and advertisements of our products and
services.

 Premium Quality Produce

To provide a nutritious quality meal and maintain freshness of the delivery for
households and young professionals, we would maintain a reliable connection with
distributors by issuing a contract stating their length of service, payment, and quality
of goods that they are going to provide. Investments such as food lockers or freezers
(shown on Exhibit 2 below) is also a factor to maintain the freshness of the delivery.

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 Delivery and Services

As stated on the budget for start-up, the use of vans is included for the delivery
and services. Another would be the software and networking budget to be utilized in
getting the orders of the customers. An alternative to be set for this is allotting the
budget by acquiring third party services through the use of existing applications (for
example: Grab) for taking orders.

 Sales Strategy

To be able to at least break even or increase the sales, we would be offering

large discounts on first time customers which would continue on the first six months
of operations.

 Business Expansion

For growth and once proven a success on the start-up, we would be allowing
franchising or establishing branches on different cities.

VII. RECOMMENDATION

I highly recommend ACA no. 1: Provide Product differentiation/ Service differences

not done by competitors.

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VIII. DETAILED PLAN OF ACTION

First Quarter

Item Activity Details Person-in- Time frame

charge/
involved
1 Develop a Create Owner and For Ad
Marketing Plan promotional Crews campaigns, set
campaigns up on the first
through Ad weeks
campaign,
Brochures, Radio For the
spots, Newspaper campaign
ads and social through social
media platforms. media platforms,
it should be done
continuously
2 Set up a regular Set up the Owner, Weekly
meeting with the schedule of Distributor,
core function team personnel and Crews, and
establish Delivery team
performance
standards and
adherence on
operation.
3 Set up a meeting on Gather Owner, Crews Weekly
meal preparation, information on (Food
supplier, and the set of meal to preparation
delivery team. be prepared. team),
Meals to be Nutritionist, and
added on the Delivery team
menu must have
a cooking
preparation time
of 20 minutes
and must be
approved by the
Nutritionist to
provide high-
quality meals.

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Orders may be
gathered through
the software/ app
developed for the
particular
ordering system.
This is managed
by the crews for
food preparation
and handed over
to the delivery
team.

Second Quarter

Item Activity Details Person-in- Time frame

charge
1 Continuously Gather Owner, Crews Continuous
Implement the testimonials from
Marketing plan customers/ fans
2 Monitor adherence From the Owner, Crews Weekly
to performance operation on the (Food
standards first quarter, the preparation
performance is team),
monitored and Nutritionist, and
the team will Delivery team
identify the
issues
encountered and
provide a
concrete solution.

Third Quarter

Item Activity Details Person-in- Time frame

charge
1 Continuously Gather Owner, Crews Continuous
Implement the testimonials from
Marketing plan as customers/ fans,
capacity for growth continue the
allows. promotion
through ads
campaigns and

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social media
platforms.
2 Hire new personnel Hire additional Owner, Crews Starts on the
as required by crews and first Week of
growth demands delivery services Third quarter
personnel

Fourth Quarter

Item Activity Person-in- Time frame

charge
1 Continuously Gather Owner, Crews Continuous
Implement the testimonials from
Marketing plan as customers/ fans,
capacity for growth continue the
allows. promotion
through ads
campaigns and
social media
platforms.
2 Continue to monitor Conduct this Owner, Crews Continuous
company growth regular meeting (Food
and operational for monitoring preparation
effectiveness the performance team),
through executive of operation and Nutritionist, and
meeting format. possible Delivery team
expansion of
business and
franchising on
other cities.

Set new goals for

growth and
profitability.

Develop a new
strategic plan.
3 Review annual Review the Owner, Crews Last week of
inventory performance and (Food the fourth
count for annual preparation quarter
inventory. team),
Nutritionist, and
Delivery team

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