Executive summary
Entrecote restaurant will be reasonably priced restaurant located in the Frankfurt Germany. The objective of the restaurant is to serve a range of just one dish from first course salad to main course fries. The restaurant’s location is extremely favorable because it offers high visibility and a vast flow of customers mostly male bankers. The Entrecote mission is to keep and enhance the level of customer satisfaction, as a powerful foundation for the future growth. The analysis of the market and customer will focus on on meeting customers' expectations and core competencies of the restaurant.
Executive summary 2
Entrecote Restaurant 5
Start-up summary 5
Legal form 5
Marketing strategy 6
Positioning 6
Low Price /low value 7
Low price 7
Hybrid 8
Differentiation 8
Focused differentiation 8
Increased price/ standard product 8
High price/low value 9
Low value/ standard price 9
Figure 1: Strategy Clock 9
Brand positioning 10
Points of differentiation 10
Products attribute 10
Customer segment 10
Consumer value attributes 11
The importance of the customer value attributes. 11
Price 11
Quality 12
Time 12
Service 12
Functionality 12
Strategy canvas 12
The customer value rating 12
Graph 1 13
Competitor’s ratings 13
Graph 2 14
Pricing strategy 14
Promotional mix 15
Advertising 15
Public relations 15
Sales process 15
Sales strategy 16
Distribution strategy 16
Distribution process 16
Receipt 17
Distribution 17
Timescales 17
Distribution confirmation 17
References Lists 18
Entrecote Restaurant
Entrecote restaurant is a new just one dish, which will be located in Frankfurt Germany. The just one dish will ensure customers do not have to see the menu because it will be extremely delicious. The dish will cost 20 Euro, which is affordable for all customer segments we intend to capture. The restaurant cannot competes based on price only. This is the reason it will focus on meeting customers' expectations and core competencies. The restaurant will serve a range of just one dish from first course salad to main course fries. It will focus on achieving the customer expectations for the excellent quality green salad served with fries. Therefore, Entrecote will be capable to keep and enhance the level of customer satisfaction, as a powerful foundation for the future growth.
Start-up summary
The cost of opening the Entrecote restaurant is estimated to be 300,000 Euros. The main cost is the equipment and furniture that will cost about 90,000 Euros. The location will need renovation and building which are estimated to be 40,000 Euros, and will require about one month to complete. The start up costs will be generated by the shareholders.
The restaurant’s location is extremely favorable because it offers high visibility and a vast flow of customers mostly male bankers. This is so because the restaurant will be located in the centre of Frankfurt, which is a banking district (Frankfurt's Best, 2010). It will be located in a comfortable environment with a lounge for pre drinks and after the dinner.
Legal form
Entrecote will be organized as a sole proprietorship, operated by the owner as Just one dish restaurant. Entrecote will be registered in the Frankfurt city and follow a code of ethics.
Marketing strategy
The marketing strategy will focus on delivering a powerful customer value proposition in a niche market (Business plan, 2012). The main points of Entrecote’s strategy are to focus on target segments that are aware and understand price and delivery and willing to pay an affordable price for them. Entrecote is looking to provide Frankfurt city and surrounding area a new choice of just one dish. It will offer quality meals, prepared with quality ingredients at a reasonable price of 20 Euro. Customers will enjoy the comfortable environment with lounge for pre drinks and after the dinner services. It focuses on meeting the needs of low-to middle class customers and institutions such as banks that are located at the centre and outside Frankfurt. The restaurant will offer a relaxed atmosphere and customers will feel at home.
The customers will enjoy the standard menu fare together with seasonal menus in order to take advantage of cost saving and maintain competition in the food industry. The restaurant will utilize various forms of marketing communication as an effective method to reach the target market and create awareness of just one dish in Frankfurt. Entrecote will offer job opportunities for both the entry-level applicant and part-time employees looking for flexible jobs at a competitive salary. Entrecote will remain informed of the current industry marketing trends in the use of all forms of communications.
The market research in Frankfurt
The restaurant industry in Frankfurt is a huge and diverse business. The Frankfurt restaurant industry had a total revenue of $ 38.5 in 2011 representing an increase of 3.5 percent over 2010. The restaurant sales are projected to total $ 705 billion in 2014. The overall economic impact of the Frankruft restaurants is expected to exceed $1.5 trillion in 2014.sales at the full service restaurant was about $194.2 billion in 2012. Similarly, the market is highly fragmented that will sustain the Entrecote restaurant.
Positioning
Positioning helps to understand the customer’s perceptions of the product (Positioning Definition, 2011). Frankfurt is a growing first, middle and lower class area, having more than one million residents. The restaurant will be located in the center of Frankfurt which is a banking district. The boom in the area is mainly response to new business and employment opportunities in the center of Frankfurt. The increased growth in the Frankfurt is an indication that opportunities to serve the residents will expand.
Strategic Clock
The role of the company in the market is to search for a competitive edge and achieves customer’s need than the competitor. Strategy tool is extremely vital model to assist the company understand how to compete in the market (Simister, 2011). By analyzing various combinations of price and perceived value, the Entrecote restaurant will be in a position to select a position of competitive advantage based on its core competencies. In order to achieve the competitive edge the Bowman’s eight diverse strategies that are recognized by varying levels of price and value are analyzed.
Low Price /low value
Many companies do not opt to compete under this section. However, since Entrecote restaurant is new company it will forced to compete in this category because its dish do not have differentiated value. The brand positioning will enable the restaurant to attract new customers and reduce the cost via sales volume (Start up sample business Plan, 2011). The restaurant will have constant growth because the price is reasonable to customers in the Frankfurt area.
Low price
The firms that chose to compete in this part are low cost takers, and use powerful strategic reasons for their position. Since Entrecote restaurant is located in a first and middle class, this positioning will be unsustainable because the cost of the dish is reasonable.
Hybrid
This category is very appealing for companies because they provide products at a low price, but at high value compared to low cost competitor. Entrecote restaurant can position itself in this category because it opts to create a reputation by providing reasonable prices for quality dish. Similarly, the restaurant is considering using discount strategy to create customer loyalty, an effective the strategy.
Differentiation
The firms that select this category provide high perceived value to the customer (Yamamoto, 2011). To be in a position to afford this strategy, Entrecote need to look for greater market share at low price. Similarly, it can opt to increase prices and capture market via higher margins. However, the brand positioning will be vital for Entrecote to adopt differentiation strategy.
Focused differentiation
In this category, companies adopt high prices and high perceived value strategies. The high perceived value tends to attract customers. Therefore, the Entrecote restaurant can use this strategy because the perception of value of just one dish is adequate to charge affordable premiums.
Increased price/ standard product
In this strategy, the company increases the price without considering the value of the product. Their motive is to enjoy high profit margins at the expense of customers. Thus, this strategy will not be viable to Entrecote because it values customers.
High price/low value
This category is common in the monopoly pricing, where only one firm provides the products. This is not viable for Entrecote restaurant because it will operate in a competitive industry.
Low value/ standard price
The company that employs this strategy end up losing the market share. Thus, this strategy is not viable for Entrecote restaurant because it values quality.
Figure 1: Strategy Clock
Source: http://www.mindtools.com/pages/article/newSTR_93.htm
Brand positioning
The Entrecote restaurant will position itself as the Just one dish in Frankfurt Germany. The restaurant will provide reasonably priced dish in a comfortable environment. It will have a large selection on the menu at affordable prices for all market niches. The Entrecote restaurant name says it all “Just one dish!” The restaurant will provide delicious first course salad and main course Entrecote with fries. Similarly, applying the competitive strategies analyzed in the strategy clock will differentiate the Entrecote products in the market.
Points of differentiation
Products attribute
These are qualities of the product that are offered by the company. The products with high perceived value tend to attract and create a customer experience (Strategic Learning, 2012). Products attributes Entrecote restaurant will provide first course salad and main course Entrecote with fries of high quality.
Customer segment
Entrecote restaurant will focus on the target customer of the first and middle class residents in the Frankfurt city, along with banking businesses that are located in the center of Frankfurt. The restaurant will target mostly male bankers who will have a need of lounge for pre drinks and after the dinner services. The restaurant opts to target customers who consider expensive and time consuming dinner. In additional, the restaurant will strive to create a reputable image that will facilitate customer loyalty and experience of the just one dish, by meeting their needs and expectations.
Consumer value attributes
The company should select the customer segment that weights customer attributes heavily. The product that attracts enough weight becomes a key customer attribute, and determines the competitiveness (Capon, 2009 pp. 67). In case the products have benefits that match their expectation, the customer will react with delight toward that product. Expected quality, performance quality and unexpected quality are also the attributes that customer search in the product.
The value of the product matters most for customer purchase decision and their continued use of the product. The customer will go for identifiable products that they know well and for which a clearly identifiable price exists (Dodds, 2003, pp. 121). Thus, it is vital to identify a key leverage point for value creation by identification of customer segments that attributes the highest value of a given set of attributes. The company should offer a unique product, a differentiation that customers will pay for despite the existence of low prices. Similarly, the company should develop competencies to improve its capabilities to deliver customer value which is the key attribute (SchröDer, 2003, pp.. 5).
The importance of the customer value attributes.
Customer value attributes determines the company’s ability to deliver customer products. The following are attributes in order of significance.
Price
It is dependent on the company’s capability to lower cost, hence lower prices for the customer. Since price is a key attribute of the customer, the company will have to lower cost via productivity improvements.
Quality
The customer is concerned about the product and service quality. These are obtained via innovations and constant improvement.
Time
It is vital in some market and certain customers. The company should develop business process and competence to deliver product at the right time.
Service
A company need develop competencies in responsiveness and customer relationship management (CRM).
Functionality
Its value depends on the company’s technical competence to meet demands of customers.
Brand and reputation of the company
This is important for customers in making purchase decisions.
Strategy canvas
This was developed by Chan Kim and Renee Mauborgne and focused on making the competition irrelevant. It offers a simple method of visualizing how the competitors customer and how customers select products.
The customer value rating
The main competitors of the just one dish are Entrecote and Le Relais Entrecote restaurants.
The pricing strategy will be competitive within the range of products. Entrecote restaurant will ensure price and service are perceived to be reasonable value to customers. For instance the dish will cost 20 Euros, which is a reasonable price. This is so because the customer is particularly sensitive to service value. The restaurant will determine price flexibility which is vital to its success. It will provide discounts and allowances, sales promotion prices and decrease price over a limited time during slow sales hours. This will increase operating capacity and get rid of idle capacity and unnecessary losses.
The Entrecote restaurant considers cost accounting vital because the profitability of customer dishes can differ significantly and will establish the cost of the menu items. The restaurant will monitor the prime cost report, which depends on the controllable expenses of the cost of goods sold. The restaurant will consider credit terms and a month vouchers for the customers who buy in bulk in order to build customer loyalty.
Projected Balance sheet
Projected balance sheet 2014
Asset
Current asset
Cash 500,000
Accounts receivable 20,000
Inventory 15000
Other current 10,000
Total current asset 545000
Long term assets
Long term assets 50,000
Accumulated deprecistion 40,000
Total long term assets 90,000
Total assets 635000
Liabilities and capital
Current liabilities
Accounts payable 60,000
Current borrowing 0
Other current liabilities 0
Total current liabilities 60,000
Long term liabilities 35,000
Total liabilities 95,000
Paid in capital 200,000
Retained earnings 150,000
Earning 190,000
Total capital 540,000
Total liabilities and capital 635000
Net worth 540,000
Promotional mix
This is the use of various promotion methods to create product awareness. The promotional mix will depend on the type of product and target market among others (Riley, 2011).
Advertising
Newspaper and social media advertising are effective in the Frankfurt city, and will be included in the core positioning strategy. This will raise customer awareness of the just one dish. It will use in house flyers that will adverse special events and sales promotion, which will explain a product’s comparative feature and benefits. The release of a new catalog and website will define the company message, which will create an association between the product and lifestyle.
Public relations
The restaurant will maintain the company’s image by sales promotions that will help in creating brand equity of the product. Others promotion activities will include marketing programs where loyalty and birthday club will be notified of special menu items.
Sales process
Since Entrecote restaurant is a new entity, it will require to prove of worth to Frankfurt consumers in order to acquire respect. The sales process will sell the restaurant and form positive word of mouth (The Sales Process, 2011). It will provide training programs that will train staff on customer perception and how to tackle complaints. It will carry out periodic staff meeting that will review policy, raise quest satisfaction and maintain a general line of communication in the company. The complaints from guests will be acknowledged by the staff and forwarded to management, and programs will be available for such complaints. Severe complaints will be documented and stored on file. Therefore, Customer feedback will be greatly encouraged and done by customer surveys and follow up. The restaurant will use social media such as Facebook and twitter and websites to communicate to potential customers. The customer can order directly from the restaurant of use the online to order.
Sales strategy
The sales strategy will be focused on the belief that there will be a constant flow of first time customers because of the strategic location (Francis, 2011).The real sales will depend on creation of first time customer to long-term customer relationship. It will ensure constant customer and referrals to experience the dish. The strategy will focus on making customers happy. Every staff will be employed to deal with customers' request.
Distribution strategy
Distribution process
Since Entrecote Restaurant is a new entity, developing distribution channel will require marketing campaign, pricing and sales process. This distribution process will deal with more than one partner, therefore the need of sale process (Distribution Process, 2011). It will require to generate promotions and programs to support the company and help in generating sales, thus marketing campaign will be required. The channel will require to reduce pricing conflicts, hence the pricing will be required.
Receipt
The distribution process will involve receipt. When suppliers bring the materials they will be allocated a unique number and weight counted.
Distribution
The batch of leaflets will be given to deliver together with a map indicating the delivery place and quantities. This will be estimated to take at least one week. In case of any problem the deliver will be informed. The undelivered product will be redistributed to reduce waste.
Timescales
A flexible time scales will be adopted to deal with takeaway service to avoid any flooding. This will require agency workers and flexible staff. The services should be booked before the start, Solus 2 weeks prior and value share plan one week before the agreement is scheduled for delivery.
Distribution confirmation
The restaurant will deal with mature delivers because they are accountable and reliable. Here, the process will monitor customer response, form of communication such as telephone back calls and evaluation of leaflets and numbers of distribution region.
References Lists
Bowman's Strategy Clock - Strategy Skills Training from MindTools.com. 2011. Retrieved from http://www.mindtools.com/pages/article/newSTR_93.htm
Business plan. 2012. Retrieved October 31, 2013, from http://www.fastbusinessplans.com/documents/Restaurant-Business-Plan.pdf
Capon, N. (2009). Capon's marketing framework. Bronxville, N.Y., Wessex.
Distribution Process. 2011. Retrieved October 2013, from http://www.pandaleafletdistribution.co.uk/?option=com_content&view=category&layout =blog&id=61&Itemid=77
Dodds, B. 2003. Managing customer value: essentials of product quality, customer service, and price decisions. Lanham, MD, University Press of America.
Francis, C. 2011. Engage Selling | Design Sales Strategies that Maximize Results. Retrieved October 31, 2013, from http://www.engageselling.com/strategy/sales-strategy- design.php
Positioning Definition | Small Business Encyclopedia | Entrepreneur.com. 2011. Retrieved from http://www.entrepreneur.com/encyclopedia/positioning
Restaurants | Frankfurt's Best. 2010. Retrieved from http://frankfurtsbest.com/restaurants/
Riley , J. 2011. Promotional Mix - Introduction. Retrieved October 31, 2013, from http://www.tutor2u.net/business/marketing/promotion_mix.asp
The Sales Process - Sales Cycle - Steps to Sell. 2011. Retrieved from http://sales.about.com/od/salesbasics/u/Sales-Process-Sales-Cycle.htm
Simister, P. 2011, . Strategy Canvas – Customer Matrix – Customer Value Attribute Map. Retrieved October 2013, from http://www.differentiateyourbusiness.co.uk/strategy- canvas-customer-matrix-customer-value-attribute-map.
SchröDer, M. J. A. 2003. Food quality and consumer value: delivering food that satisfies : with 36 tables. Berlin [u.a.], Springer.
Start up sample business Plan. 2011. Retrieved October 31, 2013, from http://continental- businessplan.com/Resources/Start-up_Sample_BP.pdf
Strategic Learning. 2012. Retrieved October 31, 2013, from http://strategiclearning.chriscfox.com/?source=StrategyCanvas
Yamamoto, T. 2011. Understanding Customer Value Concept: Key To Success. Retrieved from http://www.opf.slu.cz/vvr/akce/turecko/pdf/Yamamoto.pdf
