Quick Green Foods' marketing strategy for healthy fast food

Competitor Analysis

d) Collaborators

e) Climate

f) SWOT Analysis

Market Segmentation

Alternative Marketing Strategies

Selected Marketing Strategy

a) Product

b) Price

c) Distribution

d) Promotion

Short and Long-Term Projections

MARKETING PLAN

MARKETING PLAN

Consumers have increasingly become health conscious due to the increased prevalence of lifestyle diseases mainly caused by unhealthy dietary habits. They have become more concerned about what they eat and drink. Nonetheless, as they are primarily motivated by profit, most incumbent quick service restaurants (QSRs) have shown little or no concern for consumers\' shifting food choices. The foods they serve are still largely prepared from inorganically raised ingredients, known to raise the risk of non-communicable diseases such as obesity, diabetes, and cardiovascular complications. Quick Green Foods, an upcoming fast food restaurant, strongly believes that it is not just about profitability -- the health of the consumer matters as well. The restaurant seeks to fill the gap left by dominant fast food chains by offering healthy fast foods. It will be located in Chicago, Illinois, one of the largest cities in the U.S. in terms of population. The restaurant\'s primary target market will be working adults, as they constitute the leading consumers of fast foods. A mix of online and offline channels will be utilized to promote the new restaurant. Thus far, a detailed feasibility and market study has validated the feasibility of the opportunity. In the U.S., the culture of fast food consumption is not likely to stop any time soon. Accordingly, it is important for consumers to have access to healthier fast foods. Increased health consciousness on the part of consumers, therefore, presents a significant opportunity for the upcoming restaurant. Projections show that profitability will be achieved in the first three years of operation.

II. The Challenge

Quick Green Foods is a forthcoming fast food restaurant that aims to serve affordable healthy foods while maintaining the concept of quick service. The restaurant seeks to offer fast foods prepared from organic ingredients. Historically, fast food chains have served foods made using genetically modified agricultural produce and other inorganically raised ingredients. In the last few decades, reports have associated such foods with a greater risk of obesity, diabetes, and other lifestyle diseases in the long-term (Schlosser, 2000; Amidor, 2013; Laxy et al., 2015). Regrettably, Mcdonald\'s and other major fast food chains have not demonstrated genuine commitment to serving healthy fast foods.

By offering healthy fast foods at consumer-friendly prices, Quick Green Foods seeks to change the concept of quick service. With attention to consumer health, the restaurant wishes to instill into the mind of the consumer the belief that fast foods do not necessarily have to be unhealthy. Though a number of QSR chains such as Chipotle Mexican Grill have ventured into healthy fast foods, significant opportunity still exists in the upcoming sector. Conventional fast food chains still dominate the market, with the increasing population of health-conscious consumers having limited choices for healthy fast food outlets. Quick Green Foods seeks to fill this gap.

III. Situation Analysis

a) Company Analysis

Quick Green Foods will be established as a private company as per the U.S. Companies Act. The founder of the restaurant, who is set to be the CEO, has a background in culinary arts and hospitality. He has also served for ten years as a chief chef and manager in renowned restaurant and hotel chains in the U.S., thus bringing requisite and much-needed market connections, exposure, and strength to the company. The CEO brings extensive experience and a wealth of knowledge of the highly competitive restaurant industry. Nonetheless, as a new entrant in the industry, the restaurant faces challenges relating to market share, brand awareness, and funding. These weaknesses may hamper the organization\'s ability to keep up with competition and/or take advantage of opportunities in the market.

Even so, the company has ambitious plans in the next three years. The vision of the company is to be the greenest and healthiest QSR in the U.S. The company also aims to gain a 2% share of the market in the same period. In addition, the company aspires to increase its geographical presence by spreading to other cities across the U.S., notably New York, Los Angeles, Houston, Philadelphia, Dallas, Austin, Atlanta, and Denver. Achieving this will require strong partnerships with local farmers and suppliers of organic ingredients as well as commitment to affordability, customer service, cleanliness, and transparency.

b) Customer Analysis

Quick Green Foods will target working adults in the city of Chicago. According to the U.S. Census Bureau (2016), Chicago is the third most populous city in the U.S., with a population of 2.7 million people in 2015. Of this, two-thirds are aged between 18 and 65 years (U.S. Census Bureau, 2016). This provides a large customer base for the upcoming restaurant. In addition, Chicago is a major commercial and economic center in the U.S., with a gross metropolitan product of approximately $630 billion. The city is home to approximately 290,000 firms in diverse sectors and industries, including manufacturing, publishing, food processing, financial services, transportation, and pharmaceutical. Some of the major corporations with locations in Chicago include United Airlines, Boeing, Baxter International Abbott Laboratories, Sears Holdings Corporation, General Electric. The city, therefore, apparently provides a suitable opportunity for the new restaurant.

A recently conducted survey indicates that though there are numerous QSR establishments in Chicago, very few offer Healthy fast foods. Only Chipotle has a solid reputation for offering foods prepared using sustainably raised ingredients. The study, which was commissioned and financed by the founder of the company, included 1,200 participants (51% female, 85% aged 18 and above, 69% Whites, 59% presently working, and $40,000 average income), all from Chicago. Further, the study established that 47% of the participants visited a QSR more than once a week, with approximately two thirds of those who visited aged between 19 and 40 years. This represents the largest proportion of the working population.

The survey particularly wanted to determine participants\' perceptions of fast food and their associated health risks. 42% of those who indicated that they frequently visited QSRs reported that they were conscious about their dietary habits, especially with respect to fast foods. They reported that they were willing to shift to healthy fast foods. It is, therefore, evident that working adults in Chicago increasingly demand healthy fast foods. Thus, there is greater consumer value in offering healthy fast foods.

c) Competitor Analysis

The QSR industry is characterized by intense competition. The industry is dominated by brands such as Mcdonalds\'s, Starbucks, Subway, Burger King, KFC, Dominos, Pizza Hut, Wendy\'s, and Taco Bell. Mcdonald\'s particularly remains the king of the QSR market. In 2014, the chain\'s sales from the U.S. alone were $35.4 billion (QSR Magazine, 2015). Mcdonald\'s competitive advantage stems from its more than seven decades of operation as well as its franchise business model, which has seen it establish tens of thousands of outlets in over 110 countries around the world. Though Mcdonald\'s and other major rivals boast extensive operative experience, tremendous brand awareness, a strong franchising model and financial strength, they have largely ignored the health of the consumer, which is a major weakness in the face of consumers\' increased concern for healthy eating.

Whereas incumbent QSR firms have recently been claiming to shift from inorganically to organically raised ingredients, much of it has largely been through public relations. Even so, there has been a rapid rise of fast food chains evidently committed to healthy foods, notably Chipotle Mexican Grill, Sweet Green, Lyfe Kitchen, Veggie Grill, Native Foods, and Tender Greens. These chains present further competition for the upcoming restaurant. A major competitor in this category is Chipotle, which has been in operation since 1993 and has more than 1,700 locations in not only the U.S., but also the UK, Canada, France and Germany. With its \"Food with Integrity\" slogan, Chipotle has positioned itself as a provider of fast foods prepared from organically raised ingredients. In 2014, the company recorded revenues of approximately $4 billion, with each store bringing in $2.5 million on average (QSR Magazine, 2015). Table 1 below summarizes the major competitors for Quick Green Foods, clearly highlighting their strengths and weaknesses.

Restaurant

Strengths

Weaknesses

McDonald\'s

• Leading market share

• Extensive brand presence

• Lengthy operational experience

• Extensive marketing and advertising

• Little or no commitment to healthy foods

• High employee turnover

Subway

• Extensive brand presence

• Considerable market share

• Gradual shift to sustainably raised ingredients

• Individualized menu items

• Little commitment to healthy foods

• High employee turnover

Burger King

• Strong brand presence

• Gradual shift to sustainably raised ingredients

• Little commitment to healthy foods

• Overdependence on \"super customers\" • Fairly limited advertising

Wendy\'s

• Strong brand presence

• Unmatched reputation for fresh beef

• Effective marketing

• Little commitment to healthy foods

• Fairly limited presence in the domestic market

Chipotle Mexican Grill

• Fairly strong brand awareness and lengthy operational experience

• Uses sustainably raised ingredients

• Outstanding customer service

• Shorter menu

• Competent leadership and personnel

• Fairly limited presence in the domestic market

• Infringement of human rights

Table 1: Competitor analysis

d) Collaborators

To deliver healthy fast foods, Quick Green Foods must use healthy ingredients. The restaurant will collaborate with local farmers to achieve this. The organization will work closely with farmers to ensure adherence to sustainable agricultural practices.

e) Climate

Generally, business operations are affected by political, legal, economic, social, cultural, and technological factors (Wilson & Gilligan, 2005). From a political and legal perspective, the company will be subject to laws relating to aspects such as taxation, minimum wage, and animal welfare. In addition, shift in public health policies tend to be intrusive, which presents both an opportunity and a threat. For instance, increased regulatory supervision of fast food ingredients and disclosure requirements for genetically modified organisms (GMOs) may provide an opportunity for Quick Green Foods to advance given its commitment to green foods. On the other hand, local health regulations restricting food service at places of work may limit opportunities for revenue. Unfavorable political and legal events may significantly hinder the operations of the restaurant.

Business activities may also be affected by economic factors such as consumer income, economic growth, economic recession, and inflation. Consumer income is an important factor in this case. In Chicago, median household income in 2014 was $47,831 (U.S. Census Bureau, 2016). This means that consumers are able to pay more for healthier fast foods. Nonetheless, unfavorable economic events such as recession may be detrimental to the operations of the restaurant. Recession often results in a reduction in household income, which usually results in a decrease in consumer expenditure. However, as food is a basic necessity, it is quite unlikely that expenditure on fast foods would reduce during a recession. Instead, consumers would most likely cut back on luxuries.

From a social and cultural perspective, the consumption of fast foods in the U.S. has historically been a phenomenal aspect of the American people. Since the 1960s, fast food consumption in the country has grown exponentially (Amidor, 2013). This has presented a significant opportunity for players in the QSR industry. The growth of the industry is anticipated to be even greater in the next five years (QSR Magazine, 2015). Nonetheless, the industry has experienced a tremendous revolution against the backdrop of increased association between fast foods and lifestyle diseases. As a result, there has been a shift in eating habits on the part of consumers, with preference for healthy foods increasing. Americans have progressively reduced their consumption of French fries and other conventional fast foods (Li, 2014). Today, it is not uncommon to witness diners asking for vegetable smoothies and other healthier choices when they visit fast food restaurants. In essence, there has been increased demand for healthier fast foods, which presents a significant opportunity for industry players.

Technological factors are also worth considering. the last few decades have witnessed tremendous technological advancements. A particularly important technological factor in this case is the internet, which has offered limitless possibilities for retail and marketing. Organizations in the industry, including fast food chains, are increasingly relying on the internet to promote and retail their offerings as well as interact with consumers. Technology has also enabled organizations to automate business processes such as order placement and payment. For fast food restaurants, the incorporation of wireless internet in stores has been an important driver of customer attraction.

f) SWOT Analysis

Overall, despite its unique offering and an extensively experienced CEO, Quick Green Foods has to overcome limitations: lack of market share, lack of brand awareness and financial inadequacy predominantly due to its fresher status. These challenges are further compounded by the threat of rivalry as well as political and regulatory factors. Table 2 below summarizes the major characteristics of the internal and external environments.

Strengths

• Experienced CEO

• Use of sustainably raised ingredients

Opportunities

• Increased health consciousness

• The internet and social media

• Favorable public health policies

Weaknesses

• Lack of market share

• Lack of brand awareness

• Financial constraints

Threats

• Competition

• Unfavorable public health policies

Table 2: SWOT analysis

IV. Market Segmentation

As mentioned before, Quick Green Foods will primarily target working adults in Chicago. This population represents the largest consumers of fast foods (Li, 2014). Given their busy schedules, workers tend to be keen on time when it comes to taking breakfast or lunch. In this regard, owing to their ability to serve orders quickly, fast food joints are often the most appropriate solution. Workers visit fast food outlets for not only breakfast or lunch, but also after-work coffee or snacks as they catch up with colleagues or friends. In addition to working adults, the restaurant will target individuals and families as well as travelers. These segments may also visit fast food stores to quickly grab a meal, a snack or coffee. Table 3 below summarizes the characteristics of the company\'s primary and secondary markets.

Segment

Characteristics

Segment 1 (Primary market)

• Working adults

• Male and female

• Aged 18 to 55 years

• Middle to high income

• Diverse racial backgrounds

• Single, married, divorced, with or without children

• Health conscious

• Values quality

• Frequent and repeat buyers

• First-time buyers

Segment 2 (Secondary market)

• Individuals, families, and travelers

• Male and female

• Aged 18 to 65

• Middle to high income

• Diverse racial backgrounds

• Single, married, divorced, with or without children

• Business travelers

• Local and international tourists

• Health conscious

• Values quality

Table 3: Target market

V. Alternative Marketing Strategies

With an understanding of the internal and external environment, an organization is better placed to design its marketing strategy. Porter\'s generic model offers three strategies from which an organization can choose: cost leadership, differentiation and focused strategy (Wilson & Gilligan, 2005). Cost leadership entails providing offerings at a lower cost relative to competitors. Though this strategy can speedily accelerate growth, consumers may sometimes interpret low prices as low quality. Differentiation on the other hand entails offering a unique product in terms of not only tangible, but also intangible features. This helps an organization to gain an advantage over its rivals. A focused strategy may involve either cost leadership or differentiation. In each case, the organization attends specifically to the needs of a well-defined smaller, niche market.

VI. Selected Marketing Strategy

Differentiation provides the most appropriate strategy for Quick Green Foods, as there are already hundreds of fast food restaurants in the market. In such an environment, a new player must effectively differentiate its offering from the competition if it is to thrive in the long-term. Though the restaurant will focus on differentiation, it will also seek to offer more competitive prices compared to the ones offered by the few green fast food restaurants in the market.

a) Product

Product constitutes an important element of the market mix (Baines, Fill & Page, 2011). Quick Green Foods plans to beat the intense rivalry in the QSR market by changing the manner in which fast foods are prepared and served. Based on a philosophy that prioritizes the health of the consumer more than profit, the restaurant will offer foods prepared using organically raised ingredients while retaining the concept of fast food or quick service. The foods will mainly include fruits and vegetables, dairy products, fresh juices, salads, cereals, as well as fresh meats and bacon. Instead of having numerous items in the menu like most fast food restaurants, the restaurant will have a shorter menu. This will enable it to perfect on the items it can offer best. Using sustainably raised ingredients and focusing on a shorter menu will provide a significant competitive advantage for the upcoming restaurant.

In addition, the restaurant will be committed to transparency in terms of not only revealing the percentage of GMOs in its food ingredients, but also allowing customers to observe their orders while under preparation. The design of the store will particularly take this aspect into consideration. Physical appearance can be an important distinguishing factor or selling point in the restaurant industry. From fixtures and interior decor to utensils, the restaurant will feature an attractive internal environment, clearly articulating the restaurant\'s commitment to maintain quality.

b) Price

Price can also be a vital driver competitive advantage with respect to attracting and retaining customers as well as accelerating sales (Baines, Fill & Page, 2011). Quick Green Foods will position itself as a provider of quality and healthy fast foods at affordable prices. The restaurant will specifically utilize the cost-plus strategy to set its prices. This entails considering the major costs of production (such as ingredient costs, rent, utilities and salaries), and adding a markup element as profit. A fairly low-cost strategy will enable the restaurant quickly gain market share in the intensely competitive QSR industry.

c) Distribution

The importance of the distribution strategy cannot be overemphasized. In today\'s business environment, organizations can choose from conventional brick and mortar stores or online stores (Baines, Fill & Page, 2011). Other organizations tend to mix both. For a fast food restaurant, a physical store is crucial. Consumers usually want a strategically located outlet, where they can readily pop in and quickly order whatever they want. Quick Green Foods will be located on Clark Street, which is one of the busiest and most vibrant streets in Chicago. This will make the restaurant easily visible, accessible, and convenient for consumers.

Whereas the restaurant will mainly focus on the brick and mortar approach, it cannot ignore online retailing altogether. It will be important for the restaurant to enable customers make orders online. Online retailing is increasingly becoming a common phenomenon in today\'s world (Wilson & Gilligan, 2005). As the restaurant targets working adults, it is imperative to note that a section of the population may not have time to visit a fast food store even for a few seconds due to their extremely busy work schedule. Such customers may prefer their orders delivered in the office. In this regard, online retailing should be included in the distribution strategy.

d) Promotion

The fourth element of the marketing mix relates to promotion, which is essentially concerned with reaching and engaging the target market (Baines, Fill & Page, 2011). The restaurant requires an aggressive promotion strategy if it is to successfully set foot and thrive in the QSR market. An important of consideration in the promotion strategy is to package messages uniquely and, most fundamentally, as per the characteristics of the target market (Wilson & Gilligan, 2005).

Quick Green Foods primary target market is the working adult population, which mostly includes individuals aged 18 to 55 years. In this regard, it would be imperative to take advantage of both offline and online channels to promote the upcoming restaurant. Online channels would be particularly important for the target market as a significant proportion of the working population (especially younger adults) has increasingly become present in online platforms (Talpau, 2014). This is specifically true for social media. Popular social networking sites such as Facebook, Twitter, Youtube, Instagram, Pinterest and Linkedin have in the last few years gained huge followings, with working adults being major users (Chanthinok, Ussahawanitichakit & Jhundra-indra, 2015). Blogs have also become a major component of social media, enabling individuals and organizations to share their day-to-day experiences with their followers.