Marketing Market Summary the Market for Fast

Marketing

Market Summary

The market for fast food is, in general, congested. In the food court at the mall alone there are a dozen or so competitors. In fast food, the key to success is to keep turnover high, as the margins are quite low. The total market is massive, but Grill Kabob would primarily be competing for the market within the Fox Valley Mall. The total market for this mall is estimated to be around $20,000 per day, or $7.3 million per year in revenue. This is split among the outlets in the mall. There are significant fluctuations in mall traffic day-over-day, but the outlet is expected to be open when the mall is open, as per the operating lease. A 10% share of this market would give Grill Kabob $2,000 in daily revenues, or $730,000 per year.

SWOT Analysis & Competition

Grill Kabob's main strength is its distinctiveness. There are few such restaurants in the region, much less in the mall. This uniqueness can be emphasized in the marketing to give Grill Kabob a competitive advantage over less distinctive alternatives. A second strength is the appeal of the core product of Grill Kabob -- as Anthony Bourdain would put it "meat on a stick." Kabobs are common throughout the Middle East, Eastern Europe and even in many parts of Asia. Americans also love grilled meat, even if the format is different. Thus, the product has a high level of appeal. Third, the product is healthy. Grill Kabob's offering is less greasy than most fast food, and less salty, too. Additionally, because bread is optional, Grill Kabob can meet the health needs of those who prefer a low-carb diet.

There are two main weaknesses to the Grill Kabob idea. The first is that the brand is new, and entirely unfamiliar to the American audience. This is why the product and the method of preparation are in the name, to ensure that the audience is immediately familiar with our offering even though they are not familiar with the brand. The relative lack of experience of the proprietors of running a fast food restaurant is another weakness to be taken into consideration. That said, the opportunity is tremendous. We like the mall market as a means of starting the business, but ultimately there is no nation-wide kabob chain (QSR, 2012), so the opportunity for growth is actually quite staggering. Considering the success of this food around the world, and the success of doner kebab as a fast food in most of Europe, we believe there is true nationwide potential for Grill Kabob. The biggest threat in the external environment has to be the intense competitive environment, which drives down prices and provides consumers with nearly limitless alternatives to our restaurant.

The competition directly in the mall consists of established chains selling burgers, Mexican, Chinese, Italian, hot dogs, pizza and sandwiches. There is nothing close to a grilled meat specialist, but these companies all have established brand names backed by major advertising budgets. They are expert at running fast food operations and will be tough competition. If we can succeed in the mall, however, that will prepare us to succeed against these companies anywhere.

Product Offering

The core product is the kabob, which is a grilled meat product. There are multiple varieties of grilled meat products, and we will introduce ones from different regions of the Arab World and Turkey in order to provide variety to our customers. Grill Kabob will offer chicken and beef, along with veggie kabobs and all of the meat will be halal. Other offerings will include salads, soft drinks, flatbread, as well as tea and Arab-style coffee.

Keys to Success/Critical Issues

The tight margins typical of the fast food industry demand two keys to success must be mastered. The first is that the company needs to sell a high volume, which will require successful marketing, including the four Ps of product, price, place and promotion (NetMBA, 2010). Also, studies have shown that in quick service environment, service speed is directly correlated with sales, so service speed needs to be built into our production process (Brox, 2010). The other key to success for a quick service restaurant is on the cost control side. This is where our competition excels and where we need to learn how to be as good as they are. Management information systems are key to containing costs, especially when the company is small and has little bargaining power with suppliers. Marketing is important here as well, because we need to be able to charge prices high enough to cover the costs we do incur. Thankfully, we will initially be able to rely on my wife for the cooking and myself for the management, something that will contribute to a lower fixed cost structure