Integrated Marketing Essay For A New Restaurant.

Prepare a Integrated marketing plan for a new restaurant which is 1 month old.

1) https://www.mplans.com/pasta_restaurant_marketing_plan/executive_summary_fc.php

2) https://www.bplans.com/fine_dining_restaurant_business_plan/appendix_fc.php

The above 2 links are for reference.

Keep in mind:

- budget is CAD $1500.
- objective is to increase sales. To get in more customers to the restaurant.
- must add a target audience. Primary, secondary and tertiary.
- swot analysis ( do analysis of the New Delhi Restaurant and then for this restaurant. http://rajakitchener.ca/
- budget
- digital strategy
- branding
- marketing mix, etc.

New Delhi aims at being a high end restaurant that will offer fast cold or hot foods such as drinks, salads and sandwiches plus the cuisine of Canada.

In order to attain this, the restaurant must adhere to a strategy of differentiation of the products that makes it difficult for the managers to make choices.⁸ This will efficiently aid them produce more products with higher profits yet they will be charging more for their foods. 

Some of the goals that the restaurant seeks to achieve include the following:

• Achieve sales over 600 Dollars by the end of the 1^st
• Achieve sales over 700 Dollars by the end of the 3^rd
• Provide enough income for the founders of the restaurants.
• Ensure adequate cash flow in the 1^st

The Kitchener community market can be subdivided into three categories

• Personal individuals: those people that come to the restaurant by themselves.
• Indian Families: this may include friends and relatives
• Take outs: people who take their food at homes or other places.¹⁶

This comprises the following approaches:

Pricing: The pricing scheme is 45.0% of the retail price.

Distribution: Customers will either call place their orders then come later to pick up, or come to the restaurant place their order and wait for it to be done, or come to dine in the restaurant.

Advertising: Banner ads, inserts in registration Guards will be the most effective method of technique. Public campaigns may also be held to increase sales.¹⁸

Customer service care: anything that will make the customers happy should be done even if it leads to low profits. After some time, this will pay off.

The focus of the strategy on pricing will be to offer healthy, high standard with unique taste foods. Because of that, our products will be slightly charged especially when the consumers of the products are agreeing that the food is of another standard.

New Delhi restaurant is its third month since commencing operations. Though it well received by people in Kitchener, there is still need to improve on marketing to ensure success and profitability in the future years.¹ The most fundamental marketing need will be to offer attractive, highly innovated Indian dishes, desserts and salads.

In this restaurant most services offered will depend on the aforementioned factors. This restaurant still serves tangible products and have various ways in production processes.⁴ It is most likened by customers since the food offered is of good quality. If the services are of low standard, then customers are likely not to frequent the restaurant.²⁴ In case the quality is so poor then no customer will come to the restaurant. Tangible foods are called so because they have to be sampled by the kitchen department first. There is always consistency in the quality of the foods if the set menu is well organized and properly trained waiters and chefs are put to use in the restaurant. This should be the case in fast food hotels.

MARKET ANALYSIS                                                                               YEAR
		1	2	3	4	5
Customers	Growth rate					CagR	CAGR
Local businesses	0.0%	501	501	501	501	501	0.00%
Local workers	2.0%	20,010	20,410	20,818	21,214	21,618	2.00%
Other downtown traffic	1.0%	15,010	15,160	15,312	15,465	15,600	1.00%
Total	1.550%	35,500	36,060	36,600	37,189	37,768	1.55%

Objectives

To ensure success then New Delhi restaurant must ensure that the growth rate is matched with the demand of the cuisine. There will be need to expand from one restaurant to three after 5 years.⁶ The restaurants will then be designed to accommodate more people.

As mentioned earlier, customers need food that is high quality and healthy which appeals to their aesthetic tastes with no effects and there is a conducive environment in the restaurants.¹² Additionally, they will need a good dining environment that make them relax during lunch hours. All the above requirements must be provided but with ease and less expenditure.¹⁶ Facilities such as take away cans; refrigerators must also be available to enable customers take some meals at home for cooking or eating.

A rise in the interest to eat healthy foods is one of the current trends in the market. Most people have adjusted to organic foods.²³ It has been noticed that a large number of people from Western Kitchener have adjusted to naturally produced, organic vegetables and meats and hence this is an opportunity that the restaurant is ready to grab and utilize.²¹ Tenders have been given to suppliers and growers of organic foods to ensure adequate consistent supply of the organic foods.

The following are some of the different adjustments the manager of the restaurant has to notice:

• The quality of the food: most customers in the market are preferring high standard ingredients since most of them have noticed the difference in the foods.¹⁹
• Appearance and food presentation:  Concurrently, most customers need a high standard appearance of the foods and well presentation from the employees.
• Health considerations: Since most of the people are now more careful about their health, since most of them exercise a lot and have joined health clubs hence managers must be well aware of the healthy options that they should adhere to.
• Selection: most of the people are now selective of the foods they need and thus there must be quite a number of foods in the menu.¹⁷

Strength

The restaurant has Indian Foods that are authentic, they are made with fresh ingredients from scratch and they have a mixture of dried spices and fresh ones.¹⁷

Menus that can be adjusted to the client’s preference.

Weaknesses

• There’s limited supply of authentic ingredients, additional source suppliers are required.²⁰
• The market targeted is narrow and thus there is low profits accumulated. Most of the customers targeted are either Indians, local food lovers and Chinese. Most of the people in the area do not have a taste for the foods offered and this leads to low profits.

Opportunities

• The number of Chinese and Indian people living in the area is quite high and thus the restaurant must utilize that advantage. Additionally, there are some other local people who are just in love with the foods offered at the restaurant and this creates more customers.¹⁰
• Increased globalization which has led to a lot of international tourists and travelers, increasing clients
• Other dishes have also been introduced and thus this will create a large market for the restaurant.

Threats

• Lack of skilled personnel affects the quality of the sector.
• Some of the people in Kitchener consider that the Indian food to be so much spicy. This is quite a huge risk since if the local people have a negative attitude then that means the attitude translates to the entire population. ²¹This could be combated by introducing consumer preference on the spices.
• There are low profits generated from the restaurants.¹⁹These makes the entire operations ineffective and of low performance.

Printing advertisements in magazines

TV advertisements: branding the restaurants image, idea and strategies

Making newspaper advertisements

Installing billboards

Holding events that promote the restaurant.

Marketing tools

Introduce a web presence in the marketing process by installing:

• Online newsletters and webinars
• Search engines
• Website links and Urls

New Delhi is facing adverse indirect and direct competition.¹³ The competition is from every hotel and restaurant in Canada. Some of the major competitors include the following: Aroma Fine Cuisine, Raja Fine Cuisine, The Guru Fine Indian Cuisine, Chutneys Fine Indian Cuisine and many other hotel establishments.⁸ Additionally, there is competition from the suppliers especially the grocery stores who offer meals and also high end restaurants like Ambrosia’s. From the competition posed it will be noticed that the products or services produced have to be unique as so thus the taste.

Smaller firms are never able to carry out operations efficiently due to the limited funds. This restaurant wants to increase on profits that will then increase on the marketing techniques.¹² Larger firms have advanced marketing techniques due to adequate funds and thus will attract huge number of customers.⁶ The most appropriate solution to this situation will be to promote and advertise on cuisine as well as the local flavor of the foods especially to those people who think that the food is low standard and unhealthy. The management believes that there is an opportunity to expand.

Growth and Share
Competitor restaurant	Pricing	Growth Rate	Share market value
Raja Fine Cuisine	$16.0	7.000%	15.000%
Chutneys Fine Indian	$12.0	6.000%	11.000%
The Guru Fine Indian Cuisine	$14.0	7.000%	13.000%
Average	$14.0	6.500%	13.000%
Total amount	$42.0	19.500%	39.000%

Breakfast menu	Lunch menu	Restaurant creations
Tea.	Watercress and Sesame Salad	Widbey Loganberry Tarts.
Coffee	Caesar Salad	Hood River Fresh Apple Cake
toast,	Greek Salad.	Coos Bay Hot Crab Sandwiches
Cereal	Italian Eggplant Salad	Anacortes Seafood Burgers
Omelets	Maury Island Cranberry Arctic Salad.	Smoked Salmon Sourdough Bread
Yoghurt	Homemade Potato Salad	Columbia Salmon Rolls.

Target market

Most of the efforts towards marketing are already mentioned above. The major focus is to create awareness that we actually do exist to all the people around Kitchener.⁷ We also need to spread out our powerful theme about the restaurant.

To focus on marketing especially to the local people then we will have to distribute flyers to people, hold a grand opening party again just to create awareness.

We must that every customer who arrives at our restaurant gets the best services that make him or her come back to our restaurant and even make recommendations about our services to other interested parties.

Marketing by word of mouth is also an essential strategy in ensuring success.⁴ 

The restaurant should also be strategically located closer enough to the market so that people will able to reach us.

Offering the best and right food is also another opportunity that we must prioritize on. 

The table below highlights the important milestones in the program, with the corresponding dates, managers and budgets. The schedule below also emphasizes on planning before implementation.

 Milestones

Milestone	Starting Date	closing Date	Budget allocated($)	Manager in charge	Department
Website planning	1st Jan 2018	3rd Jan 2018	1000	Design	website
Implementation of website	2nd  Jan 2018	5th Jan 2018	9000	Design	website
Recruitment	1st   Jan 2018	3rd Jan 2018	2000	Founder	Management
Sales	1st Jan 2018	4th Jan 2018	2000	Founder	Management
Market communication	3rd Jan 2018	6th Jan 2018	5000	Founder	Management
Bank loan	12th Jan 2017	1st Jan 2018	0	Founder	Management
1st seminar	1st Jan 2018	3rd Jan 2018	2000	Founder	Management
2nd seminar	3rd Jan 2018	5th Jan 2018	2000	Marketing	Marketing
3rd seminar	4th Jan 2018	5th Jan 2018	2000	Marketing	Marketing
Total Budget sum			25,000

There will be need to offer quick customer services especially during peak times.¹⁹ Here, the most important key will be managing the crowd, so that we always look not so busy and never full that we refuse offering services to other customers. Queues will have to go fast.  We will also need a wonderful selection on convenient products that customers do buy all the time.

The most important strategy that will enhance sales will be enabling a repeat business.²⁰ Such that, those customers who make it to our restaurant will always come back. Additionally, we will also offer discount cards, regular menu adjustments and special menu meals. By that we have to keep track of all those foods that sell very good by creating surveys and questionnaires to our customers to better understand our customers. With the information obtained from the surveys then we match our foods with the tastes of the people.

Lastly, we shall design a business or home delivery program where we will drop off food just after an order has been placed by a potential customer. This will improve on the eating patterns as well increase sales.

The table and charts below show the forecasts of sales. This forecast is manageable.

Sales Forecast

                                   Year

                                        1             2                 3

Marketing mix

Sales ($)

Breakfast queues        181,585.00  190,664.00 200,197.00

Lunch queues           140,605.00 147,635.00 155,017.00

Coffee queues           113,876.00 119,570.00 125,548.0

Take-away dishes 154,135.00 161,842.00 169,934.00

Others                            59,020.00 61,971.00 65,070.00

Sales                              649,221.00   681,682.00 715,766.00

Direct Cost of Sales            1              2            3

Breakfast queues         63,555.00 72,452.00 76,075.00

Lunch queues          49,212.00 56,101.00 58,906.00

Coffee queues                      39,857.00 45,437.00 47,708.00

Take-away dishes          53,947.00 61,500.00 64,575.00

Others                                   23,608.00 23,549.00 24,726.00

Direct Cost

of Sales                     230,178.00 259,039.00 271,991.00

The restaurant is relatively small and the employees can be categorized into busboys, kitchen helps, and clerks.²² In total we have nine workers, the owner, four clerks, two chef and two delivery boys.

The owner will come to the restaurant by 7 o’clock in the morning then leaves at 6 in the evening.¹⁷ Some employees, especially those appointed by the owner will play a role of supervising the other employees. 

The initial investment from the founder was $20000. He was also funded by the bank, a loan of $30,000 to pay within five years and also a 10,000 loan from a friend with no interest.⁸ The loan was to be secured by the owner of the business.

General assumptions

	1	2	3
Plan Month	1	2	3
Current Interest Rate	10.00%	10.00%	10.00%
Long-term Interest Rate	10.00%	10.00%	10.00%
Tax Rate	30.00%	30.00%	30.00%
Other	0	0	0

Some of the key financial indicators will include the adjustments in the sales, gross margin and the expenses.² The chart below explains those indicators

Monthly Revenue Break-even $39,158

Assumptions:

Average Percent Variable Cost 35%

Estimated Monthly Fixed Cost $25,275

Here we assume a slightly higher gross margin as compared to the industry standards for these restaurants, since we do not have the full meals. The kitchen staff, delivery boys are excluded from the cost of sales, to make simple conclusions.³

Since, our restaurant is new in the market, the profitability has been adjusted to normality by adding quite a huge amount on the expenses.¹⁰ This gives an overview of the expenses that we are anticipating. If this does not happen then our restaurant will be more profitable.

Pro Forma Profit and Loss
	1	2	3
Sales($)	649,221.0	681,682.0	715,766.0
Cost of  Sales	230,178.0	259,039.0	271,991.0
kitchen expenses	36,000.0	40,000.0	45,000.0
Total Co Sales	266,178.0	299,039.0	316,991.0
Gross Margin	383,043.0	382,643.0	398,775.0
Gross Margin percentage	59.000%	56.130%	55.710%
Expenses
Payroll	186,000	135,000	170,000
Sales and Marketing and Other Expenses	81,000	57,500	76,000
Depreciation	0	0	0
Utilities	2,400	2,400	2,400
Insurance	6,000	6,600	7,200
Payroll Taxes	27,900	20,250	25,500
Other	0	0	0
Total Operating Expenses	303,300.0	221,750.0	281,100.0
Profit Before Interest and Taxes	79,743.0	160,893.0	117,675.0
EBITDA	79,743.0	160,893.0	117,675.0
Interest Expense	3,678.0	1,257.0	0
Taxes Incurred	22,819.0	47,891.0	35,303.o
Net Profit	53,245.0	111,745.0	82,373.0
Net Profit/Sales	8.200%	16.390%	11.510%

These restaurants will remain with enough cash throughout the first three years.¹⁵ For the 1^st and 2^nd year the cash will be used to upgrade the equipment and facilities in the restaurant.

Pro Forma Cash Flow Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $649,221 $681,682 $715,766

Subtotal Cash from Operations $649,221 $681,682 $715,766

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $15,000 $0 $0

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $664,221 $681,682 $715,766

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $186,000 $135,000 $170,000

Bill Payments $400,625 $436,393 $462,602

Subtotal Spent on Operations $586,625 $571,393 $632,602

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current Borrowing $19,868 $25,132 $0

Other Liabilities Principal Repayment $10,000 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0

Purchase Other Current Assets $0 $40,000 $0

Purchase Long-term Assets $0 $50,000 $0

Dividends $25,000 $25,000 $60,000

Subtotal Cash Spent $641,493 $711,525 $692,602

Net Cash Flow $22,728 ($29,843) $23,164

Cash Balance $50,928 $21,086 $44,250 

Pro Forma Balance Sheet
	Year 1	Year 2	Year 3
Assets
Current Assets
Cash	$50,928	$21,086	$44,250
Inventory	$24,979	$28,111	$29,516
Other Current Assets	$2,000	$42,000	$42,000
Total Current Assets	$77,907	$91,197	$115,766
Long-term Assets
Long-term Assets	$24,000	$74,000	$74,000
Accumulated Depreciation	$0	$0	$0
Total Long-term Assets	$24,000	$74,000	$74,000
Total Assets	$101,907	$165,197	$189,766
Liabilities and Capital	Year 1	Year 2	Year 3
Current Liabilities
Accounts Payable	$34,330	$36,006	$38,203
Current Borrowing	$25,132	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$59,462	$36,006	$38,203
Long-term Liabilities	$0	$0	$0
Total Liabilities	$59,462	$36,006	$38,203
Paid-in Capital	$20,000	$20,000	$20,000
Retained Earnings	($30,800)	($2,555)	$49,191
Earnings	$53,245	$111,745	$82,373
Total Capital	$42,445	$129,191	$151,563
Total Liabilities and Capital	$101,907	$165,197	$189,766
Net Worth	$42,445	$129,191	$151,563

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	5.00%	5.00%	7.60%
Percent of Total Assets
Inventory	24.51%	17.02%	15.55%	3.60%
Other Current Assets	1.96%	25.42%	22.13%	35.60%
Total Current Assets	76.45%	55.20%	61.00%	43.70%
Long-term Assets	23.55%	44.80%	39.00%	56.30%
Total Assets	100.00%	100.00%	100.00%	100.00%
Current Liabilities	58.35%	21.80%	20.13%	32.70%
Long-term Liabilities	0.00%	0.00%	0.00%	28.50%
Total Liabilities	58.35%	21.80%	20.13%	61.20%
Net Worth	41.65%	78.20%	79.87%	38.80%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	59.00%	56.13%	55.71%	60.50%
Selling, General & Administrative Expenses	50.80%	39.74%	44.18%	39.80%
Advertising Expenses	5.08%	3.67%	5.59%	3.20%
Profit Before Interest and Taxes	12.28%	23.60%	16.44%	0.70%
Main Ratios
Current	1.31	2.53	3.03	0.98
Quick	0.89	1.75	2.26	0.65
Total Debt to Total Assets	58.35%	21.80%	20.13%	61.20%
Pre-tax Return on Net Worth	179.21%	123.57%	77.64%	1.70%
Pre-tax Return on Assets	74.64%	96.63%	62.01%	4.30%
Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	8.20%	16.39%	11.51%	n.a
Return on Equity	125.44%	86.50%	54.35%	n.a
Activity Ratios
Inventory Turnover	10.91	9.76	9.44	n.a
Accounts Payable Turnover	12.67	12.17	12.17	n.a
Payment Days	27	29	29	n.a
Total Asset Turnover	6.37	4.13	3.77	n.a
Debt Ratios
Debt to Net Worth	1.40	0.28	0.25	n.a
Current Liab. to Liab.	1.00	1.00	1.00	n.a
Liquidity Ratios
Net Working Capital	18,445	55,191	77,563	n.a
Interest Coverage	21.68	128.04	183,568,059.24	n.a
Additional Ratios
Assets to Sales	0.16	0.24	0.27	n.a
Current Debt/Total Assets	58%	22%	20%	n.a
Acid Test	0.89	1.75	2.26	n.a
Sales/Net Worth	15.30	5.28	4.72	n.a
Dividend Payout	0.47	0.22	0.73	n.a

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