Marketing Plan PDF

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Mandatory Marketing plan on Eataly that was worth a large percentage of course grade...

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Professor Tucker Marketing Plan

Executive Summary: Eataly is preparing to enter a new industry in order to grow their business. Manufacturing food trucks and using them to market will help their brand image as a whole. Food trucks will help combat a lack of accessibility and to target a younger generation. Eataly can take advantage of the health conscious, adventure-seeking millennial generation and profit from this. Their organic, fresh, and delicious Italian food will be sure to attract anyone that walks by them at a food festival. This will increase engagement and recognition among customers which will result in increased consumer satisfaction, brand equity, and an overall increase in revenue for Eataly. By making the initial investment to manufacture and start up their brand on wheels, Eataly will reap the benefits.

Current marketing situation: Eataly opened its first store in 2007 and expanded to 27 locations within seven years. This is a huge accomplishment being that the grocery market constantly has competitors due to its low barrier to entry and is extremely competitive. Eataly, an Italian, high end, farm-to-table marketplace has much to offer. It is not just a grocery store, but an experience. It has fine dining, cheese and wine tasting, take out stands for quick items such as panini’s, gelato, and pastries, and also sit down restaurants for pasta and pizza. It has specialty, high quality ingredients for all cooking needs and is made fresh daily. Besides just getting food to eat, you can also take classes there to help you learn to cook, which is an aspect that can’t necessarily be found in a store such

as Wegmans or Whole Foods. Eataly has huge traffic daily, seeing around 10-15,000 visitors on any given day in their New York and Chicago locations. Based on their income statement, their net profit has steadily increased. In 2014 they had 13 stores in Japan, which shows that they are appealing to other cultures.

Objectives and issues: Eataly faces an issue by not being easily accessible to consumers. While they see a high amount of daily traffic, this could be greatly increased by the creation of a food truck. The objectives of this plan would be to increase brand recognition and customer retention rate. The first year objectives would be to successfully create and manufacture around 5-10 food trucks. Then it would be ideal for the company to plan out which items would best serve their customer’s wants and needs, based on their most popular selling items and portion sizes. They would then apply to be a part of Smorgasburg and other popular food festivals to increase brand recognition. The second year objectives would be to for Eataly to start travelling to suburban areas and college towns to increase accessibility and reach a wider variety of people. This could help market their brand while also increasing customer satisfaction and gaining life-long customers. Marketing strategy: A problem that Eataly suffers with is a lack of variation in regards to their location of stores. (See Appendix). If an Eataly has 27 locations but is located only in 5 different places. 10 of those stores are in Italy and 13 are in Japan. If a natural disaster or something of the sort were to happen in those locations, Eataly as a whole would suffer a major loss. Having multiple locations in one area is not a smart business move because of this. This also hurts their business

because if a consumer is not located near one of their locations, it will probably be difficult for them to shop there. For example, if you live in a suburb instead of New York City, it’s definitely hard to make Eataly a place that you go often. For me personally, going to Eataly would be a whole day affair. I would have to drive to a train station, park, take a train, and then walk or take a taxi to one of Eataly’s New York City locations, and then do that in reverse to get home. If I wanted to go there to pick up something quick to eat or even groceries for my family, this would not be an ideal situation. Eataly is losing a big part of their customer base due to this weakness. To combat this, I think Eataly should create a food truck. A big part of Eataly’s brand is about being interactive and immersive with its consumers, so I think that this idea fits in perfectly with their brand identity. This food truck would be a great way for Eataly to become more accessible for consumers and stay up to date with evolving trends. The target market that this would be directed towards would be adventurous millennials who are always on the go. Millennials are always looking for something new to try, not to mention something new to post on their Instagram. These millennials would be generally wealthier than the average consumer and more willing to spend money on luxury items and experiences. They prioritize going out with their friends and enjoying new experiences. They are usually from ages 18-25 and are unmarried. While the product is essentially the food in Eataly’s case, in this situation the “product” would be the food truck. It would have a design that reflects their brand: organic, fresh, sustainable, and aesthetically pleasing. The front would have chalkboard paint on it so that the menu would always be visible and allow for variety in what they offer. This allows the company to stay creative and constantly evolve. Eataly’s name would also be featured on the truck in large lettering, which will serve as a marketing tactic in itself. Consumers might even pose with the

truck after getting food and post it to their social media profiles, which would also help market the brand. I think that this food truck would exceed customer expectations and really show customers that Eataly is evolving with consumer preferences. The different foods that the food truck offered would be dependent on the time of year and previous best selling items. There would be around ten staple items that would be Eataly’s In regards to place, a big trend that has been occurring has been for millennials is to go to big food festivals. One in particular being Smorgasburg in New York City. This festival has hundreds of thousands restaurants apply to come, but only the best of the best get chosen. “Smorgasburg is the largest weekly open-air food market in America, attracting 20,000-30,000 people each weekend to eat from 100 local vendors,” (Smorgasburg, 2017). This could be a great way to market the brand while increasing revenue. People who might have come to the festival for the experience could see Eataly for the first time and fall in love with their food, and then decide to visit the restaurant for more. The food truck appeals to the millennial generation because its grab and go and it’s accessible. The placement of this would be convenient because it’s in different areas of places where Eataly already has restaurants, such as LA and NYC. Besides just attending big food festivals with the truck, it can also make stops around local towns and suburbs. This could occur maybe once a week or even biweekly. This can help make Eataly more accessible to consumers that wouldn’t normally be able to go to into the city and go to Eataly, or who might not have the time to do so. The truck could also make visits to local college campuses, which would definitely be loved by many students. In regards to promotion, the design of the food truck will be so tied to its brand that when people see it they will immediately know that it’s Eataly’s. The food festival experience is very immersive, so that would be a good time for personal selling. Personal customer interactions that

engage the consumer is what really drives the business. The customer will appreciate the personalized experience that the food truck provides and will help to build customer relationships. Short term promotions would be hard to do with the food truck because it would be constantly moving around each weekend, but the food truck could help drive promotions within the store. Upon visiting the food truck, customers will be given coupons for discounts when visiting Eataly’s marketplace. This will help drive consumers to the actual store and hopefully lead them to be a life-long customer. Some complaints with Eataly’s marketplace is that the price is expensive. This definitely reflects the quality; however, some consumers are not willing to pay the price. “Setting menu pricing for the products you sell from your food truck is one of the most crucial components to running it, because the prices you set directly affect your ability to sell, cover costs, and generate your desired level of profit,” (Pricing News, 2017). With this market strategy, Eataly should take up competition-based pricing. This pricing would be beneficial to the strategy because the truck will be in places with other similar competitors. If Eataly’s prices are significantly different than the trucks and stands without any perception of value, no one will be attracted to pick up something from it. However, if consumers think that Eataly’s offerings are notably better than the surrounding competitors and have a greater value, the company can charge a higher price. This definitely will take some trial and error based off what consumers are willing to pay for what they offer. The items sold on the truck can be a variety of Eataly’s most popular creations, such as different paninis, baked goods, and pizzas. The method that is usually used to price food truck menu items is called the factor method pricing method. This method divides 100 by the targetfood cost percentage to get the pricing factor, and then multiples the food cost by the pricing

factor to get the menu price. (Myrick, 2016). With the food truck, there won’t really be many discounts, but there could be some “buy one-get one” specials from time to time. Budgets: The costs of creating a food truck is around 50,000 dollars. To make 5-10 of them, that could be anywhere from 250,000 to 500,000 dollars. Although this seems like a lot of money, the amount of revenue that could be created from this investment is high. There’s also start-up expenses that cost around 10,000 dollars, which “include a business license, food handler certification, health certification, and fire certification,” (Mayyasi, 2013). Specialty food trucks in high traffic areas have been said to be able to earn anywhere from 200,000-500,000 per year in revenue. This also doesn’t account for the people who stop by the truck at some point and then end up falling in love and become customers of the actual marketplace thereafter. The direct costs of this operation are the cost of the truck, the workers needed to cook and drive the truck, the costs of food, including ingredients and any food that is wasted. The fixed costs would be the driver, costs of manufacturing and up keeping the truck, and the employees needed. The variable costs in this scenario would be the amount of food and ingredients to buy, based on customer demand and where the venue or festival is. It varies depending on how many expected people there are to be at the event, as well as how much consumers enjoy their food. This amount will be able to be more accurately calculated after they see how the consumer responses to their product. “The indirect costs are the aspects of the food truck’s service that add perceived value or quality, labor preparing menu items when items may require higher levels of effort, artistry, or talent,” (FastFoodTruck, 2012). Controls:

Marketing control is important to measure and evaluate results to make sure that the product or idea is doing well and achieving the goals that the company wants to achieve. I would do this by looking at customer-centered measures such as engagement, customer retention and customer equity. I could also gauge how well it was doing by the weekly sales, sales per customer, and look at the best and worst selling items on a monthly basis to see what the customers are liking and not liking. I could also have the option for customers to input their emails while making a transaction at the food truck. From obtaining the email, I could send out a survey which would have them rate their experience at the food stand and ask for any improvements or suggestions. I could also have an employee stand outside the truck getting customer’s first reactions of the food as they take their first bite. This could be a fun, immersive way for the brand to interact with the consumer, while also getting a personal feel of how their product is doing. Although costly, investments made in marketing can help increase customer engagement and satisfaction, which would lead to a greater development of customer retention rates and hopefully result in having life-time customers.

APPENDIX

THREATS AND OPPORTUNITIES ANALYISIS: LEGAL ENVIRONMENT: THREAT: FDA Regulations: Whenever the FDA creates new regulations, there could potentially be a shift in how products are created and certain companies might even have to rework recipes and ingredients depending on what they are putting into their products.

SOCIAL ENVIORNMENT: OPPORTUNITY: Health trends: This targets a huge market because of where a company sources their foods from and how they are made. Consumers are becoming increasingly concerned with what goes into the food that they are putting their bodies. When a consumer exactly how a product is made and where it comes from, they will be more comfortable with spending a higher amount for the product. Consumers choose clean and organic foods due to the proposed health benefits and so that they can confidently eat without having to worry about chemicals or artificial ingredients going into their foods. THREAT: Cultural implications: While it’s great to experience one specific culture, restaurants can often struggle with this because it can alienate people from other cultures. They might feel unwelcome in an environment that is so different from their own culture and this could deter them from visiting a restaurant with such strong ties to culture. ECONOMIC ENVIRONMENT: OPPORTUNITY:

Thriving Economy: If consumers have disposable income they will be more willing and able to spend money on luxury groceries and do more experiential things like spend the day at Eataly with their families and friends. There is also low unemployment while the economy thrives, which leads to an increase in consumer confidence which increases present buying power. THREAT: Strength of dollar abroad: The dollar is not as strong as the Euro, so when people buy items in the dollar as opposed to buying them with Euros, the company would not be making as much as a profit as they could be.

POLITICAL ENVIRONMENT: OPPORTUNITY: Decrease in taxes: The government could decrease taxes which would directly affect revenue and costs in a positive way. THREAT: Import Restrictions on quantity of product: The government might put restrictions on how much of a certain good can be imported at a certain time, which might hurt a business if you need more of something because of a specific demand. Lack of political stability: Companies that operate internationally can suffer if there is political instability and business operations get disrupted because of it.

PHYSICAL ENVIRONMENT: OPPORTUNITY:

Welcoming Atmosphere: Restaurants have the unique ability to bring people together and create a connection among consumers. By having a welcoming atmosphere in the marketplace or restaurant, it invites people to come and do more than just eat. It invites people to create memories in the establishment, which will leave them with a positive connotation of the physical environment. This helps to build lifelong customer relationships. THREAT: Not easily accessible: An important part of any consumer business is that it will be easily accessible for their customers. If the restaurant is in the middle of the city, its consumers that live in the suburbs may have trouble getting to it. Often getting to these restaurants includes taking several different modes of transportation, including taxis, trains, busses, and cars. This is inconvenient for the consumer and can deter them from visiting.

COMPETITIVE ENVIRONMENT: OPPORTUNITY: Merging with other competitors: If you can’t beat them, join them. It might be beneficial for a company to find ways to incorporate their products with a competitor. In the restaurant or marketplace industry, they could sell their products from their restaurant in other stores to gain brand recognition.

THREAT:

Low barrier to entry: Low barrier to entry leads to a high level of competition within the market. This will decrease profit for existing companies already in the industry. If a company has enough capital, there’s no reason that they couldn’t go ahead and do the same thing as a competitor.

OTHER EXTERNAL: OPPORTUNITY: Evolving technologies: With e-commerce evolving every day, more and more companies are moving parts of their business to the online marketplace. A company can benefit from joining in on this evolving technology by selling its brands of products on different channels in order get its name out in other places. If a store or a market that you like isn’t easily accessible to you, whether that be because of location or because of a lack of convenience, putting products online can help reach a larger amount of people and make it easier on consumers to get products that they love.

STRENGTH AND WEAKNESSES analysis: Financial Status and Capabilities: STRENGTH: Niche market: Eataly pertains to a specific market of people who are on average considered more wealthy. They have high prices, but this is in exchange only for the utmost of quality. This creates a certain specialized atmosphere and feeling for those consumers. Increase in sales: Eataly has experienced a steady growth of sales in the years from 2009-2013. This is most likely due to their dedication to improving customer experience and the value they place in their product.

Management Capability/Quality: STRENGTH: Superior quality: Eataly prides itself in using the best of the best ingredients and supplying their restaurants with ingredients solely from their marketplace. Eataly NYC makes 1,000 pounds of fresh mozzarella per week and has tons of different pastas, breads, cheeses, wines, and cooking ingredients. In the case study, it also states that 25% of their cheese is not available anywhere else in the United States. When people come to Eataly, they know they are going to get what they are paying for: high quality, organic foods that are sourced from farms and not being processed in factories like some of their competitors do. Social responsibility: Eataly’s values state that they are, “good, clean, and proper” and that they found their supplies by slowly building up a team of high-quality suppliers that would follow through on their message. Eataly places a big concern on small farms and mentions that they aren’t paid enough for the high quality ingredients that they produce. Eataly vows to pay them fairly in exchange for clean ingredients that they know that their consumers will love. Quality of employees: Eataly trains their employees extremely well. They value their employee as much as their customers, and really puts an emphasis on fueling the curiosity of their workers. They have staff classes that train them in all different types of things from experts, which helps them to learn and also be more knowledgeable about the product they have in stores.

Product Management Capabilities: STRENGTH:

Fresh ingredients: Eataly’s dedication to making sure it has only the freshest of ingredients shows customers that they really care about the product that they are offering. Consumers know when they shop at Eataly that they can be sure that they are getting ingredients of only the utmost quality. WEAKNESS: Product turnover: While it’s great that Eataly has such fresh products, that also means that there is constantly fresh product coming into the store and a lot of product might go to waste, which would lead to a loss of revenue.

Brand Strength: STRENGTH: Authenticity: Eataly has stores in New Yor...