Product/Service concept
The main idea behind HeartSmart is health consciousness and service delivery. To achieve this in the food and restaurant industry, HeartSmart will offer healthy food items that are low in calories and fat with the capabilities of a quick service restaurant. This has come about due to the increase in number of health related cases as a result of poor food quality. Many restaurants serve genetically modified food that trigger health adverse health conditions to individuals in the short run and in the long run. With the realization of this factor, many individuals have changed their feeding patterns. They now prefer eating in full service restaurant. However, these restaurants take a long time to serve food to their customers, a factor that reduces their total revenue in terms of sales.
HeartSmart aims to merge the efficiency of fast food restaurants in offering quick, low-priced and convenient meals with the quality and health benefits of the full service restaurants. The restaurant will have a diversified menu that accommodates vegans, seafood and meat lovers (red meat and white meat). Among the items included in the menu will be lean meat and poultry products such as turkey, chicken and choice cut meats free from fat trimmings. To ensure the quality and high nutritional value, the restaurant will only source raw materials from organic suppliers allowing the consumers to enjoy food that is free from chemicals, hormones and antibiotics. Furthermore, fish and salads will also be offered, made from choice ingredients in order to cater to the vegan market and those who prefer seafood to meat products. Vegan food will be cooked to the standards and perfection that is required by vegans.
There are many companies in the fast food industry that aim to capitalize on the growing consciousness in health but rarely change their business. They often add a few items in order to have the perception that they have become a healthy alternative. Only a few companies have dedicated themselves to offering a wide range of healthy and nutritious food items. Others offer healthy beverages, some with sandwiches, but few have entered the market that offers a complete array of food items that allow for a one-stop, convenient and healthy establishment. To stand at a competitive advantage, HeartSmart will offer an array of products, ensure that its services are of high standards and ensure that its prices are affordable to all individuals.
Target Market Analysis
City of Naperville, Illinois
Naperville is one of the most beautiful and desirable cities in the world. Due to its location, reputation and nature, many individuals from the United States and indeed the entire world would prefer to live in this city and raise their families. This is due to the fact that the city has a collection of facilities such as gardens, schools, hospitals, libraries and other recreational facilities that make life within the city to be comfortable. With this reputation and the potential that the city has, it has been projected that Naperville growth rate will increase tremendously in the coming years. This will provide a favorable environment for the establishment and growth of many business ventures, HeartSmart being one of them. This is due to the favorable socio-economic characteristics of the market that would be able to support a business that would cater to its needs.
Demographics
The City of Naperville has a population of 141,664 (Census.gov, 2005 – 09). This is an ideal market size for a fast food company that is starting out with a single outlet. Moreover, the city has a large adult population. Residents of the city who are within the 20 to 49 age bracket constitute 41.9 percent of the population (see Table 1). Research indicates that healthy food options are more accepted by this age group as compared to any other age group in the market with the ability to purchase or have influence in the spending habit of households (Dettmann, 2008, p 5). From studies that have been conducted, the members of older age brackets, especially those above 50 are not that conscious when it comes to their food intake. This goes against the expected outcome considering that they would be the most beneficial in limiting the calorie and fat intake (Dettmann, 2008, p 5). On the other hand, younger age groups are more hesitant to try healthier food options since they are less appealing unless otherwise forced upon by their parents.
Moreover, the city of Naperville is composed primarily of Caucasians. They comprise of 113,203 of the 141,664 individuals present in the city (See Table 5). One advantage of having a relatively homogeneous market is that it can be more predictable than dealing with a market that is diverse. Consumers from different cultural background can have a wide range of preferences when it comes to food. Having a huge homogenous market makes it easier for the restaurant to manage their food selection. This does not only translate to more efficient management but also provides several advantages in terms of inventory as well as managing the supply chain for the restaurant.
Socio-Economic Factors
One advantage that the city of Naperville provides is the socio-economic characteristic of the population. The city has a relatively high mean of annual income of $129,093. Income is an essential factor in determining the purchasing power if an individual and consumer behavior. With this in mind, individuals will be willing to pay a little bit more to get healthier food. This gives HeartSmart a serine opportunity to thrive into the market. In fact, studies indicate that typical low-priced but unhealthy fast food chains would often thrive in low-income neighborhoods as opposed to more affluent communities (Block, Scribner, DeSalvo, 2004, 215).
More importantly, income often dictates the frequency of households dining outside as opposed to preparing a home-cooked meal that is relatively cheaper. In house cooking is relatively cheaper as compared to outside dining. With this in mind, residents of Naperville stand a higher chance of dining outside as a result of their high incomes. Low-income families on the other hand would prefer to either eat substandard food in cheap restaurants or eat homemade meals. In fact, a survey indicates that 64 percent of the consumers are willing to pay more if they are given the opportunity to have access to healthier food options or given options for a healthier version of their usual groceries (Prasad, Strijnev, Zhang, 2008, p 3).
Furthermore, close to 80 percent of the residents of the city generate an annual income of over $50,000. This implies that a higher percentage of individuals who live in Naperville have a high purchasing power. With increased income comes the need for consuming healthy food, luxury and class. Fast food restaurants do not provide any of these requirements. This market is capable if paying a premium price for quality food and services. Provision of these requirements would result to frequent visits, an indicator of consumer satisfaction and loyalty.
The employment rate of Naperville is high (See Table 4). This not only provides a market that is ready to pay for more for healthy food and quality services but also guarantees the presence of an ideal market for the establishment of a restaurant (Schlosser, 2000). The continued entry and high participation of women in the workforce has essentially changed many households. Traditional chores done by women such as cooking have been placed on hold since women have become part of the labor force (Schlosser, 2000). This has resulted to the increased dependency of fast food restaurants for cheap and convenient means of nourishment.
Finally, one of the significant characteristic that favors the restaurant is the educational characteristic of the population of Naperville. The residents of the city are highly educated. 66.44 percent of individuals who are above the age of 25 years posses a university degree (See Table 3). In various studies, educational attainment plays an influential factor in food consumption behavior of the market (Dettmann, 2008, p 4; Prasad, et al, 2008, p 22). Education creates awareness on healthy living and eating. Educated individuals therefore stand a higher chance of consuming healthy food as compared to individuals who are not educated (Prasad, et al, 2008, p 22). This makes it possible for the restaurant to have a viable market that would openly accept their concept of healthy food options outside the traditional items offered in fast food restaurants.
Political Factors
The local government of Naperville is currently implementing initiatives to increase the economic development in the city (Naperville.il.us, 2011). There are two current economic development plans that aim to increase the business opportunities in the city as well as increase its attractiveness to businesses (Naperville.il.us, 2011). This would be beneficial for the restaurant as it would be able to gain some incentives particularly on taxes.
More importantly, economic development plans would allow the residents of the city to increase their living standards. As mentioned above, the more affluent the community is, the more favorable it is for an establishment that offers healthy food items. By entering the market during the initial phase of the development project, it can potentially enjoy the benefits of the current residents and the limited competition as well as the economic improvements that the plan would bring to the city.
Evidence of Market Need
Despite the negative connotations associated with fast food restaurants, quick service restaurants continue to be an integral part of the American culture. The appeal of fast food goes beyond socio-economic borders. At some point, every individual has tried fast food items during their lifetime. To have a comprehensive understanding of the market and to determine whether HeartSmart would actually thrive at Naperville, a primary research was conducted. The main aim of this step was to identify and determine the attitudes and perceptions of consumers towards the consumption of healthy food and the relationship of consumer priority of choosing a particular place to eat (either at home or a fast food restaurant) with their income. The primary data that was required for the study was:
- Socioeconomic characteristics and the number of consumers
- The mental characteristics and social behavior of the consumers
- Attitudes and perceptions of the consumers
- The relationship between consumer purchasing power and consumption of healthy food
- Consumer behavior
- Relationship between home cooking and restaurant dining
To collect this data a survey was conducted at Naperville. Questionnaires were administered to the target groups using the following procedure:
- Two interview sessions were conducted each day
- The interviews were conducted in the morning and evening
- The number of participants in each session was fixed to five individuals.
- The age of the participants will range between 18-65 years. This ensured that the attitudes of members of all age groups were tested.
- Each session will last for a duration of around 60-90 minutes.
- To avoid biasness, individuals were selected on a random basis. However, there were age and gender considerations during the study to ensure that the point of view all individuals of the target group are collected.
The results of the study indicated that home cooking was a luxury to many households at Naperville (.Jekanowski, Binkley, Eales, 2001, p 59). Most of the families preferred to eat either in fast food restaurants or full service restaurants. This was mainly so if both spouses were involved in the labor market. Most of the individuals who were interviewed were employed. Due to the long distances they have to travel to and from work coupled with the minimal amount of free, these individuals preferred eating at restaurants rather cooking at home (Naperville.il.us, 2011). In addition, they were earning good income, a factor that boosted their purchasing power. The statistics that were collected tallied with those found during the literature review in that most of the individuals who are above 25 years possessed a university degree. This increased their awareness of healthy eating. This thus increased their chances of consuming healthy food.
From the results, it can be concluded that the establishment of HeartSmart at Naperville will likely to be successful. This is because it offers a combination products and services that meet the needs and requirements of the target market. In addition, studies indicate that consumers are now starting to become more health conscious. Health conscious consumers are said to be 18 percent of the market, 74 percent have changed eating habits due to health issues and 87 percent considers nutrition as an important factor in purchasing food (Prasad, et al, 2008, p 2–3). All these factors provide an opportunity for the restaurant to fill in the gap and fulfill the demands of the market. This does not only conform to the convenience and affordability factor that the market is looking for but, more importantly, addresses the need in providing healthier alternatives to the conventional fast food restaurants (Martin, 2011).
Competitive Analysis
The Naperville food and industry is dominated by several restaurants. Among the restaurants that are likely to offer stiff competition to HeartSmart include: Wendys, Zeppes Italian Market, Papa Johns Pizza and Five Guys Burgers &Fries. The main strengths of these restaurants are the large market share that they enjoy due to their long existence in the market and their central location within the city. This makes them to be highly accessible to customers especially during peak hours. Their main weakness is their inability to provide a combination of healthy foods with the services of a fast food restaurant. These restaurants are either fast food restaurants or full service restaurants. This therefore makes it difficult for them to meet the needs of their consumers. This thus gives Heartsmart an opportunity to easily enter into the market. With its capability of offering a mix of fast food and full service restaurants, HearSmart is expected to pick up in the market. Its high quality food and services will be its main strategy to attract and retain customers. To ensure its survival in the long run, the restaurant will maintain its quality, standards and culture of fulfilling the needs of its customers. To fight the stiff competition, rivals are likely to reduce the prices at their restaurants. To counter this effect, HearSmart will continue to offer high quality food but at affordable prices. However, HearSmart will face indirect competition from grocery stores, including easy- to-prepare and microwavable meals. The farmer’s market in Naperville can also provide the market with healthy and fresh ingredients that can potentially reduce the clients of the restaurant.
References
Block, J., Scribner, R. & DeSalvo, K. (2004). Fast Food, Race/Ethnicity, and Income: A Geographic Analysis. American Journal of Preventive Medicine.27, (3) p. 1-22.
census.gov. ( 2009). Age and Sex : Naperville city, Illinois. S0101.Factfinder. Web.
census.gov. (2009). Educational Attainment : Naperville city, Illinois. S1501. Factfinder. Web.
census.gov. (2009). Income in the Past 12 Months: Naperville, Illinois S1901. Factfinder. Web.
census.gov. (2005 – 2009). Employment Status: Naperville city, Illinois. S2301. Factfinder. Web.
Dettmann, R. (2008). Organic Produce: Who’s Eating it: A Demographic Profile of Organic Produce Consumers.American Agricultural Economics. Web.
Jekanowski, M., Binkley, J., & Eales, J. (2001). Convenience, Accessibility, and the Demand for Fast Food.Journal ofAgricultural and Resource Economics.26, (1).p 58-74.
Martin, M. (2011). This Old City. Naperville Magazine. Web.
Naperville.il.us ( 2011). Completed Studies. Naperville Magazine. Web.
Naperville.il.us (2011). Overview. Naperville.US. Web.
Prasad, A., Strijnev, A., & Zhang, Q. (2008). What Can Grocery Basket Data Tell Us about Health Consciousness? International Journal of Research in Marketing, 2 (1), p. 12-18.
Schlosser, E. (2000). Fast Food Nation: The Dark Side of the All-American Meal. New York Times. Web.
Appendix I
Sample Questionnaire
- What is your sex?
-
- Male
- Female
- What is your marital status
-
- Single
- Married
- What is the highest educational level attained?
-
- High School
- Diploma
- Bachelors
- Masters/Ph
- What is your occupation
- Distance of work from place of residence
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- 1-4 Miles
- 5- 19 Miles
- ≥ 20 Miles
- Annual salary (in US dollars)
-
- 0-10,000
- 10, 000-50,000
- ≥ 50, 000
- Preferred eating place
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- Home
- Fast Food Restaurant
- Full Restaurant
- Preferred diet
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- Vegan
- Meat
- Sea Food
- What is your attitude towards the food quality offered in:
-
- Fast Food Restaurants
- Full Service Restaurants
- Homes
- In your own opinion, healthy food plays a critical role in the maintance of good health?