This is a strategic marketing plan, which will provide a general overview of the Arabic coffee or Restaurant in USA. The restaurant industry is one of the key industries in USA economy. There are about 1 million restaurants in USA, which are contributing significantly in US economy. The Arabic restaurants introduced in USA are familiarizing the Middle Eastern foods in USA. Therefore, these Arabian restaurants are working as a cross-cultural practice centre. This report will take an Arabian restaurant as a symbol of all Arabian restaurants and prepare a marketing plan for it.
Globalization reduces the distances between the nations of the world. Thus, the culture of one nation is now affecting the culture of another nation. Though United States of America And the countries of Arab region are far away, these two cultures are also merging. For instance, different Arabian foods are quite familiar in United States of America now. This report is a marketing plan for such an Arabian restaurant in USA. In the first part, there is a brief introduction of the entire plan. Second part will focus the restaurant and its current external environmental analysis. The third part will show the current situation analysis of the restaurant. Fourth part will discuss the target market of the industry. The next four parts will provide the possible strategies of the four marketing mix; product, price, promotion and place. The rest part will give a five-year financial projection for the restaurant. The report will end with some recommendations and suitable conclusion
Al-Salam Middle Eastern restaurant is the selected restaurant to symbolize the entire Arabian food restaurants. It has established in 2001 in the Plantation crossroads shopping center’s centre of Fort Lauderdale in Florida. It has tried to respond to the high demand of the Arabian Halal foods in USA. It is a Middle Eastern family owned restaurant and operated by them. Any Arabian food lovers can find all types of traditional Middle Eastern food, beverages, and sweets. They are offering not only vegetarian foods but also Halal meat containing foods. They are providing a homely environment for having meals with friends and family (Al Salam Restaurant).
To serve the American community with delicious, healthy, and Halal vegetarian and non vegetarian Middle Eastern foods to ensure dining for everyone in a family like environment within an affordable price and also arrange any type of gatherings providing quality foods or collect orders to ensure the proper customer satisfaction (Al Salam Restaurant).
The primary objective of the restaurant is to provide Middle Eastern Halal food to the American community, which will include Arabian recipes with a combination of herbs, spices, sauces, and meat.
The secondary objectives are:
- Providing environment like home for dining of every type of people;
- Familiarize different Arabian foods in America and provide catering services;
- Introduce varieties in food menu for both vegetarian and non-vegetarians.
- Gives the quality food products and friendly services within an affordable price;
- Considering the Halal fact and the gourmet Middle Eastern cuisine;
SWOT Analysis of Al Salam Middle Eastern Restaurant
- Location: this Arabic restaurant is located in a suitable location of the N. University drive road where many other business entities, educational institutes and other entities are located. The location has the privilege of direct road communication with any other state.
- Technology: Use of technology ensures the appropriate customer satisfaction. For example, it has a well build web site from which anyone can get every types of information about it.
- Quality: It ensures quality Arabian foods, which have the essence of Arabian cocking culture.
- Service: It offers the best service possible. It can be the catering service, seat reservation, serving the meal and friendly manners of the service providers.
- Environment: It has a friendly environment offering the customers with homely feelings and encourages them to come with friends and family. It has the option to carry out order before coming to the restaurant.
- Brand Image: It has established as a quality service provider in Florida, which brings strong brand image.
- Diversification: It has no branches in anywhere. That is it has not diversified its services. Besides, it is only providing Arabian foods, which will not be able to attract the customers who prefer Chinese or American foods.
- Price: Though it claims that it has affordable price but the price must be affordable not for the high-income group but also for everyone.
- Market leadership: With certain type of diversification, it can be the leader in the restaurant industry in USA.
- Market share: It can get significant market share by attracting appropriate target segment along with diversification strategy.
- Cross cultural centre: Providing quality foods it can attract different people of different cultural origin and thus can become a centre of cross-cultural aspects sharing medium.
- Current recession: The current economic crisis can affect the restaurant, as it is a part of the economy. Now people have less money to spend and for which the number of customer is decreasing.
According to the SWOT analysis and the key objectives of the business, it can be said that, the restaurant has the possibility to become a successful one. Every business has risks and like the other businesses in USA, this restaurant has some risks. However, certain strategic approach like diversification can help to minimize the risks. Besides, the present condition of the restaurant industry is a matured business in the life cycle concern. Thus, this is the time to invest heavily and get high profit. That is there is a possibility of getting high profit margin but the customer orientation must be ensured.
Overview of the Industry
In USA the restaurant, business is one of the earliest businesses, which get the maturity recently. The industry is growing though it is on maturity stage as various restaurants have frequently opened here and there in United States. Thus, there is a dynamic competitive business environment existing in the restaurant industry. There are about 945,000 restaurants in all over the USA. Various types of restaurants, like American, Arabian, Chinese, European, Korean, employ more than 13 million people, which is about 9% of the total workforce, while every million dollar earned by the sales is creating about 33 jobs. Thus, the restaurant industry considered as one of the largest private sector employers of USA. The dynamic nature of the business thus have the less possibility to affected by the present recessionary crisis and a sales of about 566 billion USD is expected for the restaurant industry of USA in 2009. However, the economic impact is much larger which about 1.5 trillion USD. The restaurant industry sales are growing in every decade and it is now one of the most enlightened businesses in the USA concerning the sales. It has almost 4% of the gross domestic products of USA with an expected growth rate of 2.5% (National Restaurant Association 1).
The external environment or PEST analysis is important to analyze the overall industry
- Political factors: The restaurant industry is an important part of the economy. For this government and the political parties never influenced the industry negatively. All possible facilities would provide such as ease of franchising in case of restaurants, which allows the companies to reach from one state to another easily.
- Economic factors: The economy is depended significantly to this industry. It is enriching the GDP of the country and providing significant employment opportunity to the workforce. However, present recession can prevent the growth of the industry.
- Social factors: Restaurants are now acting as a social meeting place. In a community, a restaurant gives the opportunity to its dwellers to know each other. Besides the employment of workforce in the industry, prevent the unemployed to engage in harmful activities. On the other side, the restaurants are arranging a mechanism to exchange cultural norms through which culture of the one community is influenced by the other and the knowledge of them regarding different cultures are improved.
- Technological factors: Technological tools are providing extensive competitive advantages to many restaurants. Now many restaurants have its own web site through which it can communicate its offerings to the possible target market. Besides, technology will utilize to use computer in cash management, communication, employee training and cocking tactics.
Position of the Company in the Industry
It’s positioned as an emerging restaurant in the industry. Thus, it has only one Branch in Florida, the homely environment, pricing, quality of food; appropriately designed website, extensive customer orientation, and care to the competitive advantage bringing factors make the restaurant more attractive. It is also trying to attract its customer and build brand loyalty by offering membership, and place different discounts for the members in various occasions. However, the brand not recognized nationwide. It enjoyed and appreciated by the people of Florida or the people who traveled Florida but failed reach outside some certain boundary. Within Florida, it is a significant and familiar restaurant, which contributes considerably to the economy of Florida.
Target market analysis
Indirect Target Market
The indirect target market is all the people of the USA or the tourists who visit USA to spend some of their leisure time. In this case, the people who have the ability to purchase the products will consider. Thus, the indirect target market may be the middle and high-income group though the prices of the products are affordable by anybody but the consumption pattern of lower income group should consider (Kotler & Keller). Again, the indirect target market is the whole USA. Thus, both vegetarian and non-vegetarians along with all possible religious groups are also the indirect target market.
Direct Target Market
The direct target market is the people, who love Arabian foods and love the combination of different spices, herbs, spices, and meat. As the restaurant situated in Florida, the people of Florida and some neighboring states are the target market that has the purchasing ability of the products. That is in this case the middle and high-income group will target. Again, the tourists who visit to Florida or the neighboring states are also the direct target market. The families who love to gather in a restaurant for dining and the people who like to dine with friends frequently are the direct target market.
The positioning philosophy of the restaurant should be a customized marketing approach. In such an approach, the ultimate target of business will be to gain the customer satisfaction. That is this restaurant must become customer oriented. The positioning of this restaurant will be in a manner where the customer can get quality foods, superior service, and everything within an affordable price. Besides, the brand positioning of the restaurant must be as a leading Arabian food provider in a friendly manner. The customer satisfaction would be the resource of our profit and there must have communication system with the customers, as they can be able to give feedback.
Total Market Opportunity
The restaurant will have five-year long plan to place it as a branded restaurant within the USA as all the citizens of USA at least become familiar with the name and the offerings of the restaurants. In this, five years its operation will center in Florida but after that, there must be established some branches in different states of USA. In 2009, the restaurant is expecting to earn about 5 million USD sales, which is about 18.5% of the total restaurant sales in Florida.
- To attract the customers through the product features;
- To stimulate the sales and to get the customer satisfaction by product attributes.
Description of the Product
The product is actually the different types of dishes, which it serves to its customers. The dishes would differentiated in different groups such as appetizers, side orders, sandwiches and meals, platters/entrees, salads, soups, deserts and beverages. There exists significant number of Arabian foods along with some traditional in almost all categories. In appetizer category there is Hummos, Baba Ghannouge (Mutabal), Falafel, Musakkah, Kibbeh, Stuffed Grape leaves, Chicken wings, French fries, Spanakopita, Al Salam mixed appetizer, Foul Medames, Mesabha, Koddsieh, Swawema and many more. In Platters category, there exist some Kabobs, Kaliya, kofta and grilled items. In side order category, there are different types of rice available. All these products have specially served in an Arabian manner and Spices and herbs would used according to the Middle Eastern taste. Though the restaurant also has the traditional fast foods, its specialization will be the Middle Eastern foods only (Al Salam Restaurant).
Features and Benefits
The basic features of the products are the use of sauces, spices, and herbs. All the foods would cook with traditional Middle Eastern way. Some Arabian ingredients like Tahini sauce and grape leaves. As pig has banned for the Muslims, the meat of pig is not available here. In case of non-vegetarian foods, the company will use beef, chicken, shrimp, and other fishes. The well-trained chefs would order to use finest quality of any types of food ingredients and spices. The use of spices is a key feature of Middle Eastern foods, which is more extensive then American. This feature will be also present in the foods of this Arabic restaurant.
All the foods have some differentiated names and most of them are Arabic or Middle Eastern. In the menu list, along with the name the ingredients and the price of the food are present to facilitate the customers understanding. Thus, the Middle Eastern foods will become familiar to the Americans. Again, there are some Arabic names of existing fast foods like “Kunafa” and “Baklawa” are the Arabic names of Pastry. The serving and design of the foods will also follow the traditional Middle Eastern ways like use of Cucumber, Grape leaves, latus leaves and many more. Thus, it can conclude that the product identity will be Middle Eastern whether it is Arabic or American.
- To receive about $ 0.3 million per month as profit and to increase this amount every year.
Product Costs and Breakdowns
The demands of Arabian foods in the Florida and in the neighboring States are huge. Besides, the friendly and homely environment of the restaurant would consider in pricing. The pricing of the foods are mainly depended on the raw materials such as the vegetables, herbs, ingredients to make sauces and spices, raw meat of beef, chicken, sheep, and different types of salts. Other costs like administrative and maintenance costs will also affect the pricing. There are two kinds of costs one is fixed costs which includes labor costs, different sort of rents, purchasing of raw materials and advertisement and promotional expense (Kotler & Keller). All other costs are variable costs. The monthly cost estimation has shown bellow:
Table 1: Costs related to pricing
|Raw material cost||(30,000)|
|Advertising and promotion||(10,000)|
As the objective is to get the extensive market share, Arabic restaurant can take the target-return pricing strategy. That is the prices will yield against the targeted rate of return on investment. In this strategy, the price of the products will settled with the help of the unit cost, desired return on investment and the amount invested and finally the total unit sales. The desired return will have to be multiplying with the invested capital and the product of this will have to divide by the total unit sales. The result of this operation will add with the total unit cost. After that, we can get the price. As the products are different in this case, the price must be different for different products. However, an average price could calculate by using the formula bellow:
Target-return price= unit cost + Desired – return X invested capital/Unit sales
Here the desired return is supposed to be 20% and the investment is 0.1 million USD. The monthly unit sales can be 9000 monthly. In addition, the unit cost can be $2 on average. So,
Target-return price= $2 + .20 X 100000/9000= $4
Break even analysis is an operation to find out which amount of volume in cost is to be produces. The formula for calculating the break even is:
Break even volume = Fixed cost/(Price – variable cost)
As the products of the Arabic restaurant are different, we can estimate the average fixed cost and variable cost. Let the average variable cost is USD 10 per product. So,
Break even volume = 95,000/(4 – 2) = 47,500
- Promote the offerings of the restaurant with the intention to attain maximum customer attention and building strong brand awareness
There are different promotional strategies available for this restaurant. As a restaurant, it can use all types of communication mix. The target is to make aware the target customers about the products of the restaurant and it can achieve:
Mass advertising using all possible media
- Sales promotion: Sales promotion tools such as discounting, couponing, sweepstakes, contest, free provisions and other tools;
- Direct marketing: Direct marketing could do by communicating the product features or the service offerings of the restaurants directly to the customer for example it can contact by the website, email, and telephone;
- Publicity: For publicity purpose, the restaurant can organize some seminars, conferences or sponsor some public programs. The ultimate goal is to stimulate the public relation considering the social responsibility (Belch & Belch)
It can promote its offerings through many advertising media. It can use Television advertisement, which is the most common and most effective communication media in today’s world. Beside TV, there are other media like Radio, newspaper ad, magazine, leaflets, billboard in the interstate highways, and periodicals. But in case of advertising through all these communication media, the cost benefit analysis must be performed and only select those media which will bring high outcome costing low.
- To place the brand name strongly in the customer’s mind.
- Place the restaurant in a way, which is a unique one.
- Place the restaurant as a competitive entity within the industry
Placing is important, as it is an integrated part of the entire product and service offering. It has two major placement strategies. Firstly, it provides instantaneous services and secondly, it takes order previously and makes food while the customer reaches the restaurant. For this, the restaurant should charge some additional amount.
There are two financial statements, which based on assumption. First, one is the first year income statement and the second one is the combined five years income statement.
There are some recommendations for this Arabic restaurant
- It should open new branches in key cities after gaining certain profit margin.
- It must keep concentrating on the Arabic foods rather to introduce Fast food or Chinese. However, in all strategies it must do cost benefit analysis.
This Arabic restaurant is a local restaurant, which must be strived to become the market leader. As it has capability and appropriate resources, this is the right time for it to diversify its operations. It has little recognition, which confined within the Florida. However, it should consider establishment in national level as a quality restaurant brand. All these are possible if it can undertake appropriate product, price, place, and promotion strategies.
Al Salam Restaurant. Welcome to Al Salam Middle Eastern Restaurant. 2009. Web.
Al Salam Restaurant. Al-Salam Middle Eastern Restaurant Serving Fort Lauderdale, Miami and South Florida. 2009. Web.
Al Salam Restaurant. Not just food, its Traditional. 2009. Web.
Al Salam Restaurant. Menu, 2009. Web.
Belch, George E & Belch, Michael A. Advertising and Promotion. New York,2005. Print.
Hoffman. Sample Marketing Plan Sections. 2009. Web.
Kotler, Philip & Keller, Kevin Lane. Marketing management. New Jersey, 2006. Print.
National Restaurant Association. Restaurant Industry Facts at a Glance, 2009. Web.