Tapmaster Hoboken llc | The development of the business concept (1)

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The development of the business concept

• Tapmaster Hoboken llc

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CHAPTER OBJECTIVES

• Describe the initial concepts and activities
  related to new business development.
• Explain a market survey profile, the development
  of a target market, an analysis of the
  competition and feasibility.
• Discuss the foundation for the formal business
  plan.
• Discuss the development of the business concept.

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• Market survey research is essential to the
  success of every catering service.
• The four major interest segments that a market
  survey must investigate are the customer, the
  competition, the community and the labor pool.

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• Statistics and data from the market survey yield
  information that can be used to assemble a
  profile of the average customer.
• The customer profile is a major means of
  identifying the target market on which to focus
  marketing efforts.

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• Customers base the decision on which catering
  services to use for a private function on four
  major factors availability, location, facilities
  and service.
• A thorough survey of the competition with
  respect to these factors identifies those
  restaurants and catering services that are
  directly competing for the same target market.

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• The availability of trained food service
  personnel is critical concern of every catering
  business.
• Catering service does, however, offer
  prospective employees the benefit of flexible
  hours and guaranteed income.
• Both of these factors have a significant
  perceived value in the part-time labor pool.

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• Caterers who can develop a core of reliable
  part-time employees, both production and service,
  will be secure in their ability to service
  customers.
• The application of market survey information
  throughout the menu program can increase sales,
  as well as customer volume.

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• Menu pricing is one area in which this
  information can have a significant effect.
• By thoroughly analyzing the menu process of the
  catering businesses identified as direct
  competition, a pricing structure can be developed
  to reflect current acceptable menu prices and
  customer needs.

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1. DEVELOPING A CATERING BUSINESS.

• Successful development of any business rest on a
  foundation of information identifying the market
  for the products or services offered for sale.
• Define target market
• Discuss how information on the target market is
  gathered (gathered through market survey
  research conducted in the community).

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The four market segments

• Customer
• Competition
• Community
• Labor pool

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2. MARKET SURVEY INFORMATION.

• Market survey information profiles the target
  market and begins to identify characteristics and
  trends important to the success of a catering
  business.

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3. CUSTOMER.

• Determining a customer profile is difficult due
  to the span of age groups participating in
  catered functions.
• Because of the shortage of time to prepare food,
  many single and two-income families to turn to
  catering services.

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4. COMPETITION.

• Competing businesses can often provide valuable
  information to new and developing operations.
• Existing foodservice operations indicate the
  presence of customer and community need.
• A complete analysis of the competition requires a
  comparison of the variety of catering services,
  their menu items, and their pricing structure.
• Explain the package-pricing format.

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COMPETITION.

• It includes food and beverage services along with
  entertainment or theme programs.
• It is important to identify the number and type
  of services contained in the packages of each
  competitive catering business in to accurately
  compare prices.

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5. ANALYZING THE COMPETITION.

• A comparison of competitive catering services
  reveals trends in private party formats, cuisine
  menus, theme and entertainment concepts.
• Prospective caterers can use the information to
  the competition survey form to identify the
  direct competition and determine how their
  catering services can compete in the established
  marketplace.

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ANALYZING THE COMPETITION.

• When the pricing structure for similar services
  is reasonably close, customers consider four
  additional major factors
• Availability
• Location
• Facilities
• Service

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6. COMMUNITY.

• Economic health of a community is the single
  most important contributing toward disposable
  income habits.
• Community Demographics are also critical to the
  level of disposable income available.
• Communities, as well as individuals, adjust their
  dining and social activities according to the
  current economic situation.

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7. LABOR.

• The availability of both skilled and able to work
  the flexible hours required by catering services
  is essential to the success.
• Labor is one of the most critical supply areas.
• Trained wait staff is difficult to find and
  retain.
• Labor turnover is often high.

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8. LOCATION.

• The primary consideration for off-premise
  caterers is the distance traveled to function
  locations.
• On-premise catering companies must consider how
  guests will access the facility and the location
  of other businesses offering catering services.

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9. FEASIBILITY STATEMENT.

• Determine the feasibility of making a profit.
• Estimate the amount of revenue and profit that
  can be achieved.
• Discuss the importance of forecasting.

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10. APPLYING MARKET SURVEY INFORMATION.

• Market survey information can be applied to
  catering menu management in a number of areas of
  a menu program and is particularly helpful in
  menu pricing.

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Management should review the following questions

• What is the competition charging for a similar
  catering menu? Are portion sizes and quality of
  food items similar to the competition?
• How important is this menu to the total menu
  program?
• Will a lower selling price and the resulting
  higher food cost of this menu cause the overall
  food cost to be too high

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Management should review the following questions

• Will volume sales of this menu create the desired
  profit at the lower menu price?
• Will the average catering customer accept this
  price as meeting their perceived value of all the
  menu items included in the menu?
• Will this menu price blend into the pricing range
  for the total menu program?

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Key Points Review

• Market survey research is essential to the
  success of every catering service.
• The four major interest segments that a market
  survey must investigate are the customer, the
  competition, the community, and the labor pool.
• The customer profile is a major means of
  identifying the target market on which to focus
  marketing efforts.

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Key Points Review

• Customers base the decision on which catering
  service to use for a private function on four
  major factors availability, location,
  facilities, and service.
• The availability of trained foodservice personnel
  is a critical concern of every catering business.
• The application of market survey information
  throughout the menu program can increase sales as
  well as customer volume.

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Key Points Review

• Menu pricing can have a significant effect.
• By analyzing the menu prices of the catering
  businesses competition, a pricing structure can
  be developed to reflect current acceptable menu
  prices and customer needs.

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Review Questions

• Name and discuss the importance of each of the
  four market segments which contribute to the
  success of a foodservice operation.

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Customer

• The customer profile includes age, average
  income, occupation, and a family profile.
• This information can be used to target direct
  marketing efforts toward the customer group that
  matches the profile.

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Competition

• The market survey profile, development of a
  target market, an analysis of the competition,
  feasibility estimates must be developed to
  determine if the business concept is feasible.
• All of these activities produce the information
  that provides the foundation for the formal
  business plan and a basis for deciding whether to
  continue developing the business concept.

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Community

• Owners and managers need to estimate the amount
  of revenue and profit that can be achieved by
  these efforts based on the predicted volume of
  business.
• In addition, it must also identify the number of
  catering functions available to be booked within
  the target area.
• This becomes the projection for new business
  development.
• Forecasting is based on the number of functions,
  group size, and average check rather than table
  turnovers and daily receipts.

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Labor pool

• By thoroughly analyzing the menu prices of the
  catering businesses identified as direct
  competition, a pricing structure can be developed
  to reflect current acceptable menu prices and
  customer needs.

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Thank You