marketing plan

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MARKETING PLAN

Prepared for:

DANG! Fancy Southern Grub

Prepared by:

Stephen Warren

12/01/2014

© Copyright In2010. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties. IT IS ILLEGAL AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN A COURT OF LAW.

Table of Contents

Statement of Confidentiality & Non-Disclosure.......................................................................3

EXECUTIVE SUMMARY............................................................................................................................. 41.1 Industry Analysis......................................................................................................................... 61.2 Sales Analysis........................................................................................................................... 211.3 Competitive Analysis................................................................................................................. 211.4 Customer Analysis....................................................................................................................381.5 SWOT Analysis......................................................................................................................... 41

2.0 OBJECTIVES.................................................................................................................................. 422.1 Corporate Objectives................................................................................................................422.2 Marketing Objectives................................................................................................................42

3.0 MARKETING STRATEGY..............................................................................................................433.1 Market Segmentation Strategy..................................................................................................433.2 Targeting Strategy.................................................................................................................... 453.3 Product Life Cycle..................................................................................................................... 493.4 Potential Strategies...................................................................................................................503.5 Core Strategy............................................................................................................................ 53

4.0 MARKETING PROGRAMS............................................................................................................554.1 Marketing Mix............................................................................................................................ 554.2 Loyalty Programs...................................................................................................................... 584.3 Customer Service & Support.....................................................................................................584.4 Market Research....................................................................................................................... 584.5 Personal Selling........................................................................................................................ 594.6 Trust and Credibility.................................................................................................................. 59

5.0 IMPLEMENTATION PLAN.............................................................................................................605.1 Product Design and Development............................................................................................605.2 Marketing & Sales..................................................................................................................... 61

6.0 PERFORMANCE EVALUATION AND MONITORING..................................................................646.1 Monitoring Ad Campaigns.........................................................................................................646.2 Sales Analysis........................................................................................................................... 656.3 Profit and Loss Statements.......................................................................................................666.4 Meeting Schedule..................................................................................................................... 66

7.0 FINANCIAL INFORMATION...........................................................................................................677.1 Financial Capsule.....................................................................................................................677.2 Financial Assumptions..............................................................................................................677.3 Budget...................................................................................................................................... 677.4 Sales Projections (3 years).......................................................................................................69

8.0 CONTINGENCY PLANS.................................................................................................................708.1 Symptoms of Failure.................................................................................................................708.2 Alternative Strategies................................................................................................................708.3 Potential Problems and Solutions.............................................................................................70

APPENDICES........................................................................................................................................... 71Bibliography............................................................................................................................................. 73

DANG! Fancy Southern Grub Marketing Plan 2


Statement of Confidentiality & Non-Disclosure

This document contains proprietary and confidential information. All data submitted to Texas A&M University is provided in reliance upon its consent not to use or disclose any information contained herein except in the context of its business dealings with DANG! Fancy Southern Grub. The recipient of this document agrees to inform its present and future employees and partners who view or have access to the document's content of its confidential nature.

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EXECUTIVE SUMMARY

In the United States today, the restaurant industry comprises of roughly

“550,000 restaurants with combined annual revenue of more than $400

billion” (SBDCNet, 2012). Within this industry, there is a sector gaining in

market share, comprising of roughly one percent of the total yearly

revenue: the Street Vendors Industry. The value of consumer time, coupled

with the consumer’s demand for fresh, high-quality local food, will continue

to apply pressure on the restaurant industry to offer fresh meals for those

on the go. The Street Vendors Industry comprises of traditional street

vendors, mobile food preparation vehicles, and industrial catering vehicles

that target consumers who do not have time to dine at a traditional

restaurant. This industry has establishments that are engaged primarily in

the preparation and serving of meals as well as snacks for immediate

consumption.

The Food Trucks industry “has only grown in strength over the past five

years and is one of the best performing segments in the broader food-

services sector” (IBISWorld, 2014). The industry has seen a remarkable rise

beginning in 2008, just as the recession hit, “as hundreds of new vendors

recognized changing consumer preferences favoring unique, gourmet

cuisine;” cities such as Portland, Austin, and Los Angeles “sought to

differentiate themselves by crafting laws and creating areas specially

designed for mobile food trucks” (IBISWorld, 2014). DANG! Fancy Southern



Grub is poised to garner a sizable piece of this growing marketing over the

next 5 years.

Mission The Dang! Fancy Southern Grub Company’s mission is to bring

the fastest and tastiest food at value that our customers will appreciate over

other local businesses and food trucks.

Local Objectives Be the cleanest, best tasting, food truck with sales

that remain both profitable yet affordable to our customer base.



1.1Industry Analysis

1.1.1 Market Characteristics

Industry

Appetite in the United States, like its population, is constantly changing.

Foods once popular are rarely eaten today; foods once only limited to the

imagination are now reality. As the United States’ population grows

“wealthier, older, more educated, and more ethnically diverse” than in any

previous period in American history, “demographic changes are likely to

become more pronounced [over] the next 20 years,” fostering demand for

“new food products, new packaging, more convenience, new delivery

systems, and safer and more nutritious foods” (Blisard, Lin, Cromartie, &

Ballenger, 2002). By 2020, the U.S. population is projected to add “between

50 and 80 million people;” based on this increase, “U.S. food expenditures

are projected to rise 26 percent between 2000 and 2020” in which this

increase is projected to “boost food sales of supermarkets, restaurants, fast

food outlets, and other retail food establishments by $208 billion” (Blisard,

Lin, Cromartie, & Ballenger, 2002).

As a result, answers to questions such as “how population growth, an

aging population, ethnic diversity, other demographic trends, and income

growth will affect future food choices and how the food system will respond

to such changes” are variables of increased importance (Blisard, Lin,

Cromartie, & Ballenger, 2002). Further, societal changes such as “rising



incomes, longer workdays, and a growing tendency for both spouses to hold

full-time jobs, are widely credited for the rise in away-from-home

expenditures of all types” (Blisard, Lin, Cromartie, & Ballenger, 2002).

In the United States today, the restaurant industry comprises of roughly

“550,000 restaurants with combined annual revenue of more than $400

billion” (SBDCNet, 2012). Within this industry, there is a sector gaining in

market share, comprising of roughly one percent of the total yearly

revenue: the Street Vendors Industry. The value of consumer time, coupled

with the consumer’s demand for fresh, high-quality local food, will continue

to apply pressure on the restaurant industry to offer fresh meals for those

on the go. The Street Vendors Industry comprises of traditional street

vendors, mobile food preparation vehicles, and industrial catering vehicles

that target consumers who do not have time to dine at a traditional

restaurant. This industry has establishments that are engaged primarily in

the preparation and serving of meals as well as snacks for immediate

consumption.

The industry is heavily concentrated in urban areas, “particularly in the

central parts of large cities.” thriving in cities such as L.A, Portland, New

York, Austin and San Francisco (Ehrlich, 2010). Further, websites dedicated

to the locations of mobile food trucks have come online in many of these

cities. According the IBISWorld, the industry is most heavily concentrated



in the Far West, the Great Lakes region, the Mid East (which includes New

York), and the South East (Ehrlich, 2010).

History

The shift in public perception towards food trucks, from denigrated

‘roach coaches’ to a pop culture phenomenon, is the result of two

interrelated factors: economics and social media. In the late 2000s, at the

start of the economic recession, food trucks began to emerge as customers

demanded quick, inexpensive, and healthier meals.

French sociologist Pierre Bourdieu specifically talks about class-

related tastes, arguing that tastes in food depend on the idea each

class has about the effects of food on the body. Bourdieu describes the

eating habits of the working class and the professions, with the

former being ‘more attentive to the strength of the body than its

shape, and tend to go for products that are both cheap and nutritious,’

while the latter opts for ‘products that are tasty, health-giving, light,

and not fattening.’ Likewise, the quality of food in food trucks has also

improved—no longer are these trucks serving defrosted, instant

meals, but gourmet food prepared by former chefs of upscale

restaurants (Seo, 2013).

A change in the landscape of American food culture had begun; “with

their relatively low marketing and operational costs, food trucks proved to

be extremely prosperous” (Seo, 2013). Within a few years, “the business



solidified as a lucrative venture that chefs lauded as being more rewarding

and financially feasible than maintaining brick-and-mortar restaurants”

(Seo, 2013).

Moreover, the economic landscape of the restaurant industry changed

with the Great Recession, increasing the difficulty for entrepreneurs

wanting to start and operate a conventional restaurant. With financing

extremely difficult to secure, coupled with slow industry growth and fierce

competition, the risks became greater than in years past. In response,

many aspiring entrepreneurs and restaurateurs chose to launch food truck

businesses instead.

However, economics only partly explain the transformation of the food

truck business. The food truck phenomenon “owes much of its success to

the explosive growth of social media, smartphones and other mobile

technologies” (Intuit, 2012). It is no coincidence that the boom in the food

truck industry coincides with the social networking explosion, especially

that of Facebook and Twitter. The gourmet food truck “owners’ savvy use of

social media serves as a classic example of how entrepreneurs can harness

technology to promote their business and communicate with their

customers in an authentic way” (Intuit, 2012). Social media marketing “has

enabled food trucks to interact directly with their customers to foster a

sense of community and to create brand loyalty” (Seo, 2013). Also playing



an important role in the food truck boom are mobile payment systems, such

as Intuit’s GoPayment, which enable food trucks to accept credit cards.

Owners use tablets and other handheld computing devices to take orders

and manage business operations. Cellular data networks connect food

trucks to their suppliers and, of course, smartphones help food trucks

communicate with their customers.” (Intuit, 2012)

Market Size & Growth

The Food Trucks industry “has only grown in strength over the past five

years and is one of the best performing segments in the broader food-

services sector” (IBISWorld, 2014). The industry has seen a remarkable rise

beginning in 2008, just as the recession hit, “as hundreds of new vendors

recognized changing consumer preferences favoring unique, gourmet

cuisine;” cities such as Portland, Austin, and Los Angeles “sought to

differentiate themselves by crafting laws and creating areas specially

designed for mobile food trucks” (IBISWorld, 2014). While the recession

slowed the growth on the broader food-services sector between 2008 and

2009, the Food Trucks industry boomed as consumers looked to maximize

disposable income. As a result, “industry revenue has increased at an

impressive annualized rate of 12.4% over the five years to 2014”

(IBISWorld, 2014).

Gourmet food trucks are a growing enterprise as well; over the past four

years, “these upscale meals on wheels have motored into major cities from



San Francisco to Miami;” according to the National Restaurant Association,

“these mobile eateries generate about $650 million in revenue–about 1

percent of total U.S. restaurant sales” (Intuit, 2012). At one time, food

trucks, or ‘roach coaches,’ were simply mobile canteens that brought food

to sell to construction sites or other places where laborers gathered for

lunch. Since around 2008, however, food trucks have become more

widespread, offering myriad types of cuisine, ranging from grilled cheese to

lobster, and catering to office workers in urban areas; “by one estimate,

total revenues of food trucks across the country were $630 million in

2011and a billion dollars by 2012” (Wallsten & Rhyan, 2014).

Market Potential & Industry Forecasts

Food trucks will expand geographically over the next several years.

Currently, most operate in college towns and major cities. Over time, their

range will expand to smaller communities and suburban locations.

Emergent Research “expects food trucks to generate between 3 and 4

percent of total restaurant revenue–about $2.7 billion–by 2017, a fourfold

increase from 2012” (INTUIT, 2012). In other words, “food trucks are not

a fad but a viable market segment with significant competitive advantages

over quick-serve, fast-food and take-out food vendors” (INTUIT, 2012).

Food trucks will also “gain share in catering and special events, such as

weddings, corporate gatherings and sporting events” (Intuit, 2012).

Conversely, “successful food trucks will also expand by opening brick-and-



mortar locations… This is already happening and the numbers will

accelerate as more entrepreneurs and businesses use food trucks as

incubators to test and develop new food and restaurant concepts” (Intuit,

2012).

Level of Competition, Dominant Players, Presence of

Conglomerates

The Street Vendors industry is highly fragmented with over 80% of

enterprises being owner-operators with no employees; of those firms

in the industry that do have paid staff, most employ four people or less

(IBISWorld, 2014).

There are no major players in the industry with a market share of

5.0% or greater (IBISWorld, 2014).

In 2014, IBISWorld estimates that the top four players in the industry

account for well under 5.0% of available market share, providing the

industry with a low level of concentration (IBISWorld, 2014).

While food trucks operate all-day and late into the evening, it is

estimated that they generate about two-thirds of their revenue during

the day and before dinner. This indicates that food trucks compete

primarily with fast, quick-service and take-out food. Relatively



speaking, they do not have much market impact on traditional full-

service restaurants (Intuit, 2012).

Competition will increase as large brands and existing restaurants

launch food trucks. About 26 percent of quick-service chains are

interested in getting in on the act, according to the National

Restaurant Association. Major brands such as Chick-fil-A, Burger King

and TCBY have already added food trucks with a growing number of

brick-and-mortar restaurants expected to hit the road (Intuit, 2012).

The food truck industry also has relatively low costs of entry and exit

when compared to traditional brick and mortar restaurants, which

creates a dynamic environment with very high turnover of new trucks

(Wallsten & Rhyan, 2014).

Market Trends

Within the Food Trucks Industry, “demographics, consumer tastes, and

personal income drive demand” (SBDCNet, 2012). Recent trends are as

follows:

From 2007 to 2012, the combined forces of evolving consumer tastes,

the recession, and slow economic recovery have produced slower

growth in fast food business revenues. Most of the slowdown was felt

during 2009 when revenues retreated by 4.3%, however, revenue



growth returned in 2010 (1.8%) and 2011 (1.3%) and is forecast to

rise 1.1% in 2012 (SBDCNet, 2012).

With less money to spend during the recession, and continued caution

during the slow recover, consumers are eating out less frequently.

When they do eat out, they are more likely to choose lower cost

solutions. In the past, this may have meant choosing fast food

restaurants. More recently, food retailers are offering more appealing

easy to prepare home dining solutions. General health concerns over

fast food also are steering customers to healthier options and health-

oriented quick service restaurants (QSRs) (SBDCNet, 2012).

Market research supports this trend, showing the number of fast food

restaurants fell by 0.3% since 2007 to 263,944 in 2012, while

employment at QSRs has averaged annual declines of 0.6% over the

same period, reaching an estimated 3.5 million employees in 2012

(SBDCNet, 2012).

Despite these headwinds, IBISWorld identifies several positive trends

that should help boost fast food industry revenues by 2.2% in 2013. At

the macroeconomic level, these trends include a slowly improving

economy, gradual labor market improvement, and building consumer

confidence leading to more spending on eating outside the home.



IBISWorld predicts that consumer spending will increase by 3.3%, on

average, over the next five years (SBDCNet, 2012).

Another positive trend forecast is for QSRs to creatively address the

health concerns of their customers with alternative menu it ems, such

as fresh salads, chicken burgers, and pasta. Some fast food operators

also may open entirely businesses around these alternative menu

concepts, but co-locate them with existing stores (SBDCNet, 2012).

Another positive source for revenue growth is in specializing menus.

With existing operators, this can be similar to McDonald’s foray into

the specialty coffee market. Some of these new menu it ems can be

low-cost, high-prof it additions to a stable product mix that improves

location profitability (SBDCNet, 2012).

There are also significant opportunities for fast food operators in new

ethnic food segments. Mexican food is one commonly cited example,

but the recent popularity in Food Trucks underscores the opportunity

(SBDCNet, 2012).

Taken together with the general improvement in macroeconomic

conditions, these positive trends should power an increase of 1.9% in



fast food industry revenues, possibly reaching $186.2 billion in five

years, according to IBISWorld (SBDCNet, 2012).

1.1.2 Trends and Drivers

Food trucks’ success reflects a combination of many powerful

consumer trends:

A hunger for quality, value and speed. Those are the top three

attributes consumers look for in quick serve or fast-food restaurants,

according to the National Restaurant Association’s 2012 Restaurant

Industry forecast. Food trucks often outperform traditional quick-

serve and fast-food restaurants in all these areas (Intuit, 2012).

An appetite for fresh and local food. According to the Hartman

Group, a food research and consulting group, “fresh is the cultural

shift toward all things healthy, real, pure and special.” Most gourmet

food trucks use fresh, local food to differentiate themselves from

traditional quick-serve, take-out and fast food (Intuit, 2012).

An affinity for local. Consumers increasingly are supporting nearby

businesses. Buying from and supporting local merchants sparks a

sense of belonging and being part of the neighborhood. The personal

interaction between diners and food truck owners often transforms

transactions into meaningful relationships (Intuit, 2012).



A desire for small and sustainable. In addition to supporting local

activities, the appeal of food trucks counters the conventional wisdom

that bigger is always better. Going beyond being a small, local

business, most gourmet food trucks stress their use of sustainable

food sources and practices (Intuit, 2012).

A need for speed. The fastest-growing part of the restaurant

industry over the past few years has been the fast casual or quick-

serve segment, such as Chipotle. These restaurants do not provide full

table service, but offer a higher quality of food and a better

atmosphere than traditional fast-food establishments. Food trucks

also serve this segment, providing time-challenged customers easily

accessible, quality food and the fast service they require (Intuit,

2012).

Major Drivers of Change

Economic indicators

Food cost pressures

Government legislation

Obesity

Millennials drive usage

Locations

Shifting U.S. demographics



New Categories of Product Users

$14,131,848,180 Total household spending on breakfast and brunch at fast food restaurants

…busiest people are the biggest spenders on breakfast at fast-food

restaurants—workers and parents. Householders of prime working

age, 35 to 44, spend 39 percent more than average (SBDCNet, 2012).

…Married couples with children at home spend 38 percent more than

average (SBDCNet, 2012).

….Hispanics spend 31 percent more than average on breakfast at fast-

food restaurants (SBDCNet, 2012).

…Households in the Northeast outspend the average by 26 percent

(SBDCNet, 2012).

$42,853,554,670 Total household spending on lunch at fast-food restaurants

…Workers and parents are the best customers of fast-food lunches

(SBDCNet, 2012).

… those aged 25 to 44, spend 20 to 33 percent more than average

(SBDCNet, 2012).

…and account for 44 percent of the market. Married couples with

children at home spend 55 percent more than average on lunches at

fast-food restaurants (SBDCNet, 2012).

…Asians spend 29 percent more than average (SBDCNet, 2012).

$42,383,459,840 Total household spending on dinner at fast-food restaurants

…Families with children are the biggest spenders on dinners at fast-

food restaurants. Householders ranging in age from 25 to 54 spend 19

to 37 percent more than average (SBDCNet, 2012).



…and account for 71 percent of the market. Married couples with

children at home spend 67 percent more than average on dinner at

fast-food restaurants (SBDCNet, 2012).

…Single parents, whose spending approaches average on only a few

items, spend 8 percent more than average on fast-food dinners

(SBDCNet, 2012).

…Asians spend 19 percent more than average on fast-food dinners

(SBDCNet, 2012).

$13,317,339,400 Total household spending on snacks at fast-food restaurants

…Parents are the best customers of snacks from fast-food restaurants.

Householders aged 25 to 44, most with children, spend 27 to 47

percent more than the average household (SBDCNet, 2012).

…Married couples with children at home spend 60 percent more than

average (SBDCNet, 2012).

Demand Cycles & Seasonality Effect

Business in the restaurant industry is known to fluctuate. The frequency

of diners eating out may increase or decrease dependent upon the economic

climate; moreover, seasonal changes can also have an impact on customer

traffic to restaurants. Mobile food trucks require access to a large quantity

of pedestrian traffic in which to garner the revenue needed to stay in

business. Understanding the demand cycles help to hedge against slower

months and better plan for the ebbs and flows of the restaurant industry.

During holiday seasons, customers are more likely to eat at home, as they

typically spend more time with family and prepare meals at home. Further,



customers tend to cut back on unnecessary spending during the holidays as

they use their disposable income on holiday shopping. It is estimated that

“61 percent of restaurants notice a decline in patrons during a seasonal

holiday or major event;” this “decline in patrons or business can be as much

as 20 percent” (Higuera, 2014). However, in many instances, quick food

restaurants have an opportunity to thrive while dine-in restaurants struggle.

This is mainly due to a hectic schedule in which patrons grab a quick meal

between entertaining family and friends or shopping for presents.

The winter months can have an adverse effect on business as cold

weather—and even snow or ice—deters customers from eating out.

However, in the southern regions—where many food truck vendors are

thriving—weather conditions are not as severe as those in the north.

Nonetheless, fewer customers are still a real concern as colder months

encourage patrons to stay home and cook or eat in their office during lunch

breaks.

During the summer months, moreover, the restaurant industry tends to

thrive. In many cities, tourism tends to increase during these months, and

the warmer climate fosters more outdoor activities as locals and visitors

venture outdoors. With the increase in tourism, the hotel industry also sees

an increase in traffic; as such, restaurants and street vendors located in or

around busy hotels notice a dramatic increase in business. Further, “some

restaurants hold events during the summer months, such as outdoor music



and other fun entertainment, which is likely to draw customers and increase

sales” (Higuera, 2014).

1.1.3 Legal, Political & Economic Factors

According to IBISWorld Industry Analyst Andy Brennan, “The industry

will face various challenges over the next five years, most crucially

regulatory hurdles, which have restricted the industry's growth over the

past five years” (PRWEB, 2014). Brennan goes on to say, “Despite strong

industry-wide performance, some operators have been held back by city

regulations, increased competition and low profit margins” (PRWEB, 2014).

Governing laws differ between cities with respect to food trucks, with most

laws specifying particular hours of operation and location restrictions.

Further, citywide regulations that “impede mobile vending operations…

include public property bans, restricted zones, proximity bans, and duration

restrictions (McConnell, Common, & McFarland, 2013).

The industry competes directly with the broader food-services sector,

and some brick-and-mortar establishments that pay taxes have

lobbied against the industry (PRWEB, 2014).

Parking laws and other city ordinances are still evolving in many cities

to catch up with the industry’s transformation. Industry associations

will need to work closely with city governments and other



restaurateurs to resolve these issues if food trucks are to play a

bigger role in the country’s food services sector (PRWEB, 2014).

Regulations are grouped into four policy areas:

Economic activity : this policy area provides insight into aspects of

food truck regulation that could potentially enhance economic

development, and looks at specific processes that can be barriers to

market entry. Two areas of regulation that impact economic activity–

streamlining and permit costs (McConnell, Common, & McFarland,

2013).

Public space : mobile vending takes place on both public and private

property, but public property presents a unique set of challenges.

With the rapid expansion of food trucks, there is increased demand

for limited space, which increases the likelihood of conflicting

interests and encroaches upon the ability of stakeholders to maximize

the advantages that public space can offer. Time constraints,

proximity rules, and geographic limitations related to density are

examined here (McConnell, Common, & McFarland, 2013).

Public health : this is one of the most basic concerns regarding mobile

vending. All stakeholders realize the need for comprehensive

regulations around sanitation and food safety. These issues should be



addressed within a regulatory framework that is cost-efficient,

thorough, and results in a streamlined process for all stakeholders

(McConnell, Common, & McFarland, 2013).

Public safety : public safety is a key reason why many cities

began regulating food trucks. Regulations examined here

include private property, vending near schools, and

pedestrian safety (McConnell, Common, & McFarland,

2013).

1.1.4 Sociocultural Factors

…rapid growth of Hispanic and Asian populations in the U.S., which

will continue to drive demand for more ethnically diverse foods,

including spicier flavors (SBDCNet, 2012).

…large Millennials and Boomers demographics will influence

restaurant foods. Based on NPD Crest information, the younger age

group will provide a boost to juice/specialty drinks, and more brands

will continue to shift their marketing dollars toward this

demographic… (SBDCNet, 2012).



…foodservice operators are smart to offer greater menu variety to

meet Millennials’ interests (SBDCNet, 2012).

“Millennials will overtake Baby Boomers as the most sought-after

target for restaurateurs in the coming years,” said Bonnie Riggs, NPD

restaurant industry analyst. “This is the time to reach them to build

their loyalty. It’s important to understand that Millennials are not a

one-size-fits-all generation and their needs and wants are varied”

(SBDCNet, 2012).

…older Baby Boomer consumers are expected to contribute to the

growing popularity of coffee, fish/seafood items and breakfast foods

(SBDCNet, 2012).

1.1.5 Technological Factors

The worlds of food and technology have increasingly become entwined.

The perceptive food truck owners’ use of “social media serves as a classic

example of how entrepreneurs can harness technology to promote their

business and communicate with their customers in an authentic way”

(Intuit, 2012). Social media marketing “has enabled food trucks to interact

directly with their customers to foster a sense of community and to create

brand loyalty” (Seo, 2013). The use of social media by food truck

entrepreneurs “is unique from other businesses because of the mobile



nature of the industry, and Twitter, Facebook and other tools provides a

way to broadcast their location” (Wallsten & Rhyan, 2014). The use of social

media sites—such as Twitter, Facebook, and Pinterest—is an imperative for

growth and differentiation in this industry.

Also playing an important role are mobile payment systems, such as

Intuit’s GoPayment, which enable food trucks to accept credit cards. The

use of tablets and other handheld computing devices in which to manage

business operations and to take orders creates efficiency, which cuts costs

and adds to the bottom line. Staying current on the latest technological

advances is crucial to gain an edge within this industry and garners a

completive advantage. That is, “cellular data networks connect food trucks

to their suppliers and, of course, smartphones help food trucks

communicate with their customers” (Intuit, 2012).

Moving forward, “mobile payment options (which Intuit

offers) will be one force in expanding food trucks beyond big

cities and college campuses, notably the suburbs” (Hepler,

2012). It is important to keep current on all mobile payment

technologies in which to cut operations costs and increase

margins.



1.2 Sales Analysis

Refer to section 7.4

1.3 Competitive Analysis

1.3.1 Competitive landscape

Fast Food

Consumers demand quick and convenient meals; “they do not want to

spend a lot of time preparing meals, traveling to pick up meals, or waiting

for meals in restaurants” (Jekanowski, 1999). As a result, most consumers

rely on fast food. Knowing this, “fast food providers are coming up with new

ways to market their products that save time for consumers” (Jekanowski,

1999). For example, “McDonald’s currently has outlets inside nearly 700

(out of 2,374) Wal-Mart stores across the United States, and almost 200

outlets in Chevron and Amoco service stations” (Jekanowski, 1999). These

arrangements allow consumers to “combine meal-time with time engaged in

other activities, such as shopping, work, or travel,” which is the idea that

“shapes the growth strategies of most firms in the industry”—strategies that

can be characterized by this passage from the 1994 McDonald’s Annual

Report (The Annual):

McDonald’s wants to have a site wherever people live, work, shop,

play, or gather. Our Convenience Strategy is to monitor the changing

lifestyles of consumers and intercept them at every turn. As we



expand customer convenience, we gain market share (Jekanowski,

1999).

The accelerated rate at which the fast food industry continually adds fast

food outlets is as much a “reflection of consumer demand for convenience

as it is a reflection of demand for fast food itself:” expanding the number of

outlets “increases accessibility, thus making it more convenient for

consumers to purchase fast food” (Jekanowski, 1999). Most notably, much

of the expansion in recent years has been in the form of “satellite” outlets,

similar to those mentioned above. These outlets tend to be “smaller in size,

with little or no seating capacity, and are often in nontraditional locations,

such as office buildings, department stores, airports, and gasoline stations;

locations chosen specifically to maximize convenience and consumer

accessibility” (Jekanowski, 1999).

Supermarkets

As most fast food chains emphasize the factor of convenience, coupled

with lower prices—thereby “offering a narrow range of menu items, which

are usually based around ‘hand-held’ foods”—such firms as “Boston Market,

Koo Koo Roo, and Kenny Roger’s Roasters are blurring the lines between

fast food, casual dining, and supermarket foodservice” (Jekanowski, 1999).

By expanding food menus to include “fully prepared, multi-course meals for

eat-in or carry-out,” these firms promote a ‘home-cooked’ image whereby

such entrees as “ham, meatloaf, roast beef, and baked chicken, along with



numerous vegetable choices,” positioning themselves to compete with fast

food firms and full-service restaurants for the time-constrained healthy

conscience consumer (Jekanowski, 1999). Intended to eliminate a

consumers’ need to cook at home, Home Meal Replacements (HMR’s)

provide a wider variety of high quality foods to which are as convenient and

affordable as fast food (Jekanowski, 1999).

Supermarkets are capitalizing on the popularity of HMR meals by

increasing the quality, variety, and promotion of their HMR offerings in

which the HMR design focuses on an easily reheated meal using an oven or

microwave at home, and may be stored in the refrigerator for 3 to 4 days

without significant reductions in quality (Jekanowski, 1999). This aspect

provides an advantage over traditional fast food offerings, which usually

requires the immediate consumption of a meal for the best quality and

taste. Although supermarkets tend to be more inconveniently located as

many fast food outlets, “consumers clearly enjoy the quality and variety of

many of their prepared meal offerings” (Jekanowski, 1999). Additionally, the

average trip to the grocery store per week by the consumer amounts to 2.2

trips, which grant consumers ample opportunities to regularly purchase

HMR meals; thus, vastly becoming a “major competitor to traditional fast

food” (Jekanowski, 1999).

Full Service Restaurants



Full-service restaurants tend to “offer more varied menus and dining

amenities” than fast food or fast casual establishments, but also lacks

convenience (Stewart, Blisard, Bhuyan, & Nayga Jr., 2004). However, to

provide more convenience to the consumer, full-service restaurants “could

both open more outlets and offer more variety/dining amenities at each

establishment;” in 2001 for instance, “full-service restaurants were offering

31.6 percent more items on their menu than in 1997” (Stewart, Blisard,

Bhuyan, & Nayga Jr., 2004). Full-service restaurants were also expanding

the scope of their services, which include new options for takeout. In short,

“full-service restaurants may try to capture the growing demand for varied

menu items among consumers who also remain time-starved” (Stewart,

Blisard, Bhuyan, & Nayga Jr., 2004).

Although spending for fast food has been shown to increase in

conjunction with the number of hours worked by a household manager,

dining at a full-service restaurant, by contrast, can take as long as

preparing, eating, and cleaning up after a meal at home. Thus, “there is

neither a clear theoretical nor empirical relationship between a household's

demand for food at full-service restaurants and its time constraints”

(Stewart, Blisard, Bhuyan, & Nayga Jr., 2004). The specific value to the

consumer appears to be the expanded menu options, specifically those

items in which healthier meal options are offered. Further, “this restaurant

industry segment experienced the largest drop in sales volume following the



economic decline in 2008, according to the National Restaurant

Association” (Akers, 2014).

Quick Service

This segment includes fast-food chains and casual restaurants, of which

offers buffets and take-out service. Similar to that of their full service

counterparts, they feature menus centered on a particular type of food,

such as American or sub sandwiches. Customization is offered at some

restaurants, and meals are typically prepared in front of the customer. Most

quick service restaurants “prepare meals immediately after a customer

places an order,” with serving times usually within minutes, and prices

relatively inexpensive; moreover, “food may be consumed off-premises, at a

customer's home or work location” (Akers, 2014).

Eating and Drinking Place

This segment includes caterers, food truck vendors, and refreshment

stand vendors. Typically, meals served by these establishments are

consumed on-site. For example, a food truck may prepare and serve meals

for patrons at an outdoor festival or a catering company may prepare and

serve meals for consumption at a company sales convention.

Retail Host

Located inside gas stations and grocery stores; typically, these are

“franchises of major brands, such as specialty coffee or fast-food chains”

(Akers, 2014). Some convenience stores “are replacing franchises with their



own quick-service restaurants and menu items;” these locations “give

convenience and grocery store customers the option of freshly prepared

meals that are reasonably priced” (Akers, 2014). Customers usually do not

consume the food on-site. In the last few years, “the retail host segment

experienced some of the restaurant industry’s solid growth” (Akers, 2014).

Level of Competition, Volatility, & Competitive Barriers

The Food Trucks Industry is a sector of the restaurant industry that

experiences moderate to fierce competition—depending on the region. That

is, competition is at its highest where mobile locations are limited due to

regulatory restrictions. Further, this sector is still in its early growth phase,

and it is projected to grow exponentially in the next five years.

DANG! Fancy Southern Grub specializes in BBQ and this food truck

primarily serves the Dallas Fort Worth metroplex. In the Dallas Fort Worth

metroplex, there are 10 food trucks that offer BBQ; thus, competition his

high within this market.

The Food Trucks industry exhibits a low level of concentration due to

the highly fragmented nature of the industry. New enterprises have

entered the industry at a faster rate, causing the industry to become

more fragmented. IBISWorld anticipates this trend to persist in the

upcoming years as mobile food vending becomes popular in less

saturated regions (PRWEB, 2014).



Food trucks must face many barriers in order to break through and find

success. These include overcoming a lack of physical location, meeting

governmental regulations, finding a way to achieve operational efficiencies,

and meeting the needs of mobile consumers. While some food truck

operators have found unique ways to solve these issues, they are often the

problems keeping these mobile restaurateurs awake at night (Mintel Group

Ltd., 2013).

Potential Sources of Competitive Advantage

A potential competitive advantage is to improve operations by

streamlining the menu in which to be best at the few things. Through

limiting the number of menu items served, it helps to better track

ingredients and fosters a more sustainable operation.

Better positioning equates to a competitive advantage: “Continuing to

build the food truck’s presence offline and online… improves the

business’s growth potential and positions it against the rising number

of competitors” (Zirker, 2013).

Consistency is another potential competitive advantage. By keeping a

consistent schedule, this helps to increase customer following. This is

done by being in the same space at the same time, every week, and

then letting customers know about the day’s location on Twitter and

Facebook.

Leveraging the truck’s off hours also gives operators an opportunity

to differentiate their business. Some food trucks have developed



additional streams of income by booking private events when the

truck is not scheduled to be anywhere else (Zirker, 2013).

Becoming an expert at individual municipalities’ regulations will also

give new food-truck operators a competitive advantage, the experts

say. Local regulations have proved to be one of the biggest challenges

food-truck owners have faced since the trend exploded (Zirker, 2013).

By offering superior service, this results in a critical competitive

advantage. Large companies have advantages in purchasing, finance,

and marketing. Small companies can offer superior food or service.

1.3.2 Key Players

The Competition

DIRECT COMPETITORS

HORNS N SNOUTS

Service Offering : BBQ, Sandwiches

Size : one truck

Brand Equity : 5 Facebook Likes; 170 Twitter followers; Brand

awareness is low.

Strengths & Weaknesses : A recent winner of the Northwood

Church Food truck Competition. The food truck is professional

and well designed with advertising and branding on sides and

front. However, this company is not very active on Twitter, and

does not have their route schedule posted on their website,



which makes it hard for customers to find them. Further, this

truck is not connecting with potential customers on a real time

basis. Their social media usage lacks anything to be desired.

Financial Resources : This truck likely does around $80k to

$100k in revenue a year, mostly relying upon catering business

for most of their revenue.

THE BUTCHER’S SON

Service Offering : American Classics, BBQ, Southern

Size : 2 trucks

Brand Equity : 4,800 Twitter followers; 6,545 Facebook Likes;

Recognized in The Dallas Observer, Eater, QSR, Entrée Dallas,

OHHEYDALLAS, Social Hospitality, Side Dish, Nation’s

Restaurant News, Eat Street, and Dallas Business Journal.

Strengths & Weaknesses : This food truck has high brand

awareness, a sizable number of customer loyalists, and excellent

customer reviews. This truck is also a gourmet food truck and

has a national brand affiliation with Johnsonville Sausage. This

truck is also very active on Twitter and Facebook, which is a

crucial component for success. Further, their association with

Johnsonville Sausage garners a large distribution network, likely

increasing profit margins and lowering food costs. However, the

menu is bulky and there is no clear branding message, other



than their affiliation with Johnsonville Sausage. Further, their

website does not include prices or a route schedule.

Financial Resources : This truck is not a million dollar operation;

however, their revenue is likely to be between $250.000 and

$500,000 a year.

FRED’S TRUCK WAGON

Service Offering : BBQ

Size : one truck

Brand Equity : 18,500 Facebook likes; 1,200 Twitter followers; 4

½ Stars on customer reviews; Brand awareness is high due to

its brick-and-mortar locations; customer loyalty is moderately

high.

Strengths & Weaknesses : Their brick-and-mortar locations help

to increase customer visits to their food truck. The website has a

schedule that is clearly labeled, with times and street corners.

Menu is posted clearly on the website, however prices are not

listed. Moreover, this business is not active on social media

daily, limiting customer interactions and also limiting customer

expansion.

Financial Resources : Backed by three brick-and-mortar

locations, with revenue likely between $1 Million and $2 Million.

OINKNMOO BBQ




Size : 1 truck

Brand Equity : 1,075 Twitter followers; 111 Facebook Likes;

Recognized in The Dallas Observer, Featured on Travel

Channel's BBQ Crawl, reviewed on Thrillist and CraveDFW;

high brand awareness and actively engaging potential

customers in which increase this awareness.

Strengths & Weaknesses : This food truck has high brand

awareness, a sizable number of customer loyalists, and excellent

customer reviews. This truck is also very active on Twitter,

which is a crucial component for success; this business also

interacts with potential and current customers in real time,

connecting with each customer. Further, the website includes a

detailed schedule on locations and time as well as a detailed

menu. Daily specials are tweeted out to their followers, actively

engaging the customer. The one weakness is that pricing

information is not included on the website or on social media.

Financial Resources : This truck is not a million dollar operation;

however, their revenue is likely to be between $250.000 and

$500,000 a year.

INDIRECT COMPETITORS

THE LAB FOOD TRUCK

Service Offering : BBQ, Burgers, Seafood, Cajun, Soul Food

Size : 1 truck



Brand Equity : 470 Facebook likes; 648 Twitter followers; Brand

awareness is moderate; customer loyalty is low to moderate.

Strengths & Weaknesses : Very active and engaged on social

media. Locations are tweeted out to followers as well as posted

on Facebook. Further, this truck is active every day, actively

pursuing customers by rotating between a few locations.

However, menu and prices are not listed on social media and

this business does not have a website. Branding is confusing

and product identity absent.

Financial Resources : Typical small business with low to

moderate financial resources.

ROCKN’ RICK’S

Service Offering : American Classics, Burgers, Seafood, Cajun,

Salads

Size : 1 truck

Brand Equity : 3,607 Facebook Likes; 1,144 Twitter followers;

Brand awareness is moderate; customer loyalty is high.

Strengths & Weaknesses : Very active and engaged on social

media. Locations are tweeted out to followers as well as posted

on Facebook. Further, this truck is active every day, actively

pursuing customers by rotating between a few locations.

Schedule is posted on website and their blog is current and



presents relevant information regarding business activities.

However, prices are not listed on social media or website.

Branding is confusing and product identity absent.

Financial Resources : Typical small business with low to

moderate financial resources.

SUBSTITUTES

Arby’s


Size : Corporation; over 1,000 locations

Brand Equity : Customer awareness is high; customer loyalty is

low to moderate

Strengths & Weaknesses : Multiple locations is a convenience for

the customer. Price of meals are low relative to non-fast food

restaurants. However, the food is not fresh or healthy.

Financial Resources : Company revenue in the Billions; million

dollar advertising campaigns.

Wendy’s

Service Offering : BBQ, Sandwiches, Burgers

Size : Corporation; over 1,000 locations


low to moderate



Strengths & Weaknesses : Multiple locations is a convenience for

the customer. Price of meals are low relative to non-fast food

restaurants. However, the food is not fresh or healthy.

Financial Resources : Company revenue in the Billions; million

dollar advertising campaigns.

POTENTIAL ENTRANTS

Bodacious BBQ


Size : 1 brick-and-mortar location

Brand Equity : Customer awareness is low to moderate;

customer loyalty is low to moderate.

Strengths & Weaknesses : Quality of food is high; fresh and

cooked to order meals. However, brand awareness is low to

moderate. Social media activity is weak.

Financial Resources : Typical small business with moderate

financial resources

Outlaws BBQ


Size : A couple of locations

Brand Equity : Customer awareness is moderate; customer

loyalty is low to moderate.

Strengths & Weaknesses : Food is prepared fresh. However,

quality and taste of food get moderate reviews from customers.



Financial Resources : Typical small business with moderate

financial resources

RELATED PRODUCTS

Dickey’s BBQ


Size : 100s of locations across the country


moderate to high.

Strengths & Weaknesses : Quality of food is moderate to high;

fresh and cooked to order meals. However, franchise locations

invite inconsistencies in the product.

Financial Resources : Revenue in the Millions

Spring Creek BBQ


Size : Over 20 locations across Texas


moderate.

Strengths & Weaknesses : Quality of food is moderate to high;

fresh and cooked to order meals. However, customer

satisfaction reviews indicate inconsistencies in the product and

customer service.

Financial Resources : Revenue in the Millions



1.3.3 Key Players vs. Your Company

Direct Competitor

s

Market

Share

Productor

Service Descripti

on

Product

or Service Featur

es

Strengths Weaknesses

Marketing

Strategy

Aggressiveness

Threat

Level

THE BUTCHER'S SON

< 1% BBQ Food Truck

High Brand Awareness

Bulky Menu; No Clear Branding Message

Social Media

Medium Medium

Fred’s Truck Wagon

< 1% BBQ Food Truck

Menu, Prices & Route Schedule on Website

Poor Social Media Marketing

Social Media

High High

OINKNMOO BBQ

< 1% BBQ Food Truck

High Brand Awareness, Active Social Media Marketing

No Pricing on Website or Social Media

Social Media

Medium High

Indirect CompetitorsThe Lab Food Truck

< 1% BBQ, Cajun

Food Truck

Active Social Media Marketing

Menu & Prices not posted; No Website

Social Media

High Low

Rockn’ Ricks

< 1% American Classics

Food Truck

Active Social Media Marketing

Menu & Prices not posted; Inconsistent Brand Message

Social Media

High Medium

…Substitutes

Arby’s < 5% BBQ Fast Food

Convenience, Low Meal Prices

Food not Fresh; Not Healthy

National Campaign

Medium Medium

Wendy’s < 5% BBQ, Burgers

Fast Food

Convenience, Low Meal Prices

Food not Fresh; Not Healthy

National Campaign

Medium Medium

…Potential Entrants

Bodacious BBQ

< 1% BBQ Food Truck

Quality, Fresh Food

Brand awareness is low

Mailers Low Low

Outlaws BBQ

< 1% BBQ Brick & Mortar

Quality, Fresh Food

Low Customer Loyalty; Poor Customer Service

Mailers Low Low

…Related Products



Dickey’s BBQ


Customer awareness is high

Product Quality Inconsistencies

Mailers Low Medium

Spring Creek BBQ


Quality, Fresh Food

Poor Customer Service

Mailers Medium Medium

…

TABLE 2. Main Competitors

1.3.4 Competitive Advantage

Social Media Marketing

o In the Food Trucks Industry, the location of

operations change every day; thus, schedule updates

—with times and location—in real time, using social

media sites as Facebook and Twitter, is critical to

success. DANG! Southern Fancy Southern Grub uses

Twitter and Facebook to update customers on

business activities multiple times a day. Compared

with its competitors, DANG! Southern Fancy

Southern Grub is more active on social media than

are all others in the marketplace.

Signature Homemade BBQ Sauce

o DANG! Southern Fancy Southern Grub uses its

signature homemade BBQ sauce in all of its

products. No other BBQ food trucks in the



Dallas/Fort Worth marketplace offers a unique

proprietary sauce.

Signature Homemade Chips

o DANG! Southern Fancy Southern Grub is the only

food truck in the Dallas/Fort Worth marketplace that

offers fresh homemade chips, prepared fresh daily.



Customer Loyalty

o Those who have tried DANG! Southern Fancy

Southern Grub immediately becomes hooked. Based

from customer reviews, customers come back

because DANG! Southern Fancy Southern Grub

offers a unique BBQ product that others do not offer.

This is mainly due to its proprietary homemade BBQ

sauce and chips.

Customer Service

o Realizing that customers can go anywhere to eat,

DANG! Southern Fancy Southern Grub takes pride

in going the extra mile for customer satisfaction.



This customer focused element gives DANG!

Southern Fancy Southern Grub a huge competitive

advantage.

1.3.5 Strategic Group Map

FIGURE 1. Strategic Group Map

1.4 Customer Analysis

1.4.1 Segmentation Dimensions

The Food Truck Consumer – By Day

Speed of service and health are important at breakfast Lunch consumers less likely to order fried sides or desserts Portability matters when it comes to snacks Mediterranean foods popular at dinner Late-night consumers are social

The Food Truck Consumer – By Gender

Women perceive food trucks to be unclean or unhealthy Men value portability


HIGH

LOW

Price/Quality

Customer Service OrientationLOW HIGH

Outlaws BBQ

The Lab FoodTruck

The Butcher’s Son Fred’s Truck Wagon

Wendy’s

Arby’s

Spring Creek BBQ


The Food Truck Consumer – By Age

Millennials are price sensitive and like variety Despite higher incomes, Baby Boomers prefer to eat at home or at

restaurants instead

The Food Truck Consumer – By Income

Low-income consumers prefer fried sides, not too concerned with variety

Middle-class consumers have trouble locating food trucks easily Cuisine type is important to affluent consumers

The Food Truck Consumer – By Race

Whites seek food trucks that are easily accessible Blacks enjoy traditional American fare Asians prefer a variety of cuisine types, as long as they are authentic

The Food Truck Consumer – By Hispanic Origin

Hispanics rely on word-of-mouth and provide reviews

The Food Truck Consumer – By Region

Northeasterners skew healthy in their item selection Midwesterners are concerned with price and portability Southerners are well-suited for combo meal deals Westerners are interested in ethnic cuisine

1.4.2 Target Market

Demographics

Age : From 18 to 34.

Gender : Appeal to both genders.

Social status : Successful, motivated, and well educated.

Ethnicity : All people.

Income : Have a disposable income.

Social class : Middle to upper class.



Millennials

Psychographics

Lifestyle : Fast paced, always on the go, and health conscious

Attitudes and beliefs : Food trucks are a good place to eat.

Perceptions : Food trucks are the new and cool trend.

Personality : People who feel they are young, fun, and are looking for

the newest trend.

Adopter category : Early adopters starting off and then early majority

once established.

1.4.3 Forecasted Changes

Future Target Customer Needs

Successful recent tactics to drive traffic and boost profits include

beverage loyalty programs, promotions to build off-hour demand for

specialty drinks, an influx of new and non-carbonated options, and

offerings that appeal to the aging population. Finding new ways to

promote beverages will continue to be a successful strategy for

restaurants (SBDCNet, 2012).

Social media will be important in stimulating consumer trial and

restaurants will use discounts, loyalty and other programs to convert

these consumers into regular customers (SBDCNet, 2012).

Future Buying Behavior



The fastest-growing part of the restaurant industry over the past few

years has been the fast casual or quick-serve segment, such as

Chipotle. These restaurants do not provide full table service, but offer

a higher quality of food and a better atmosphere than traditional fast-

food establishments. Food trucks also serve this segment, providing

time-challenged customers easily accessible, quality food and the fast

service they require (Intuit, 2012).

Future Changes in Market Segments

IBISWorld predicts that consumer spending on meals away from home

will increase by 3.3%, on average, over the next five years (SBDCNet,

2012).

Food trucks will expand geographically over the next several years.

Currently, most operate in college towns and major cities. Over time,

their range will expand to smaller communities and suburban

locations.

Emergent Research “expects food trucks to generate between 3 and 4

percent of total restaurant revenue–about $2.7 billion–by 2017, a

fourfold increase from 2012” (Intuit, 2012).

1.5 SWOT Analysis



STRENGTHS

- Cost structure / efficient production process- Culinary know how- Very good reputation- Superior product- Highly qualified workforce- Customer Service

WEAKNESSES

- Little financial resources- Poor brand awareness- Inexperienced in navigating political system- Lack of relationships with key industry

members

OPPORTUNITIES

- Emerging markets- Growing demand- Changing customer tastes, specifically that of the younger generation of millennials- New product uses- New regulations- New distribution channels

THREATS

- New competitors entering market- National chains with prior branding entering market with their own food trucks- New regulations- Market saturation

TABLE 3. SWOT



2. OBJECTIVES

2.1 Corporate Objectives

Corporate Objectives

The Dang! Fancy Southern Grub Company’s mission is to bring the

fastest and tastiest food at value that our customers will appreciate

over other local businesses and food trucks.

Local Objectives

Be the cleanest, best tasting, food truck with sales that remain both

profitable yet affordable to our customer base.

2.2 Marketing Objectives

2.2.1 Short-term (upcoming year)

Acquire 25% of the market share within the first year of operation

Marketing blitz within the first year to reach newspaper, local

internet ads, radio stations, flyers, and pamphlets.

Establish a base of customer loyalty with at 33% minimum repeat

customers weekly

Integrate customer satisfaction and suggestions into future

development to achieve 90% satisfaction within the first year

Gain at least 100 new clients per day in the first quarter

Maintain cleanliness standards to maintain 90% and above on all food

inspections with no major violations



2.2.2 Long-term (3 to 5 years)

Acquire 60% of the market share by year 4

Become the top selling and grossing food truck brand in our market in

year 5

Build strong ad awareness over next three years

Make our brand synonymous with a fast, tasty, and affordable lunch

option

Increase profit margin by 15% by the end of year 3

Maintain customer loyalty base with 50% repeat customers weekly

3. MARKETING STRATEGY

3.1 Market Segmentation Strategy

Geographic Segmentation

Geographic segmentation is segmenting customers based on

geographic area, such as city, country, ZIP code, metropolitan

statistical areas, time zone, etc. A survey done by the National

Restaurant Association about people who visited a food truck found

“Consumers living in the West (29 percent) and Northeast (24

percent) were much more likely than those in the South (15 percent)

and the Midwest (9 percent) to see a food truck parked in their

community this summer” (Stensson, 2011). While the South has some

catching up to do in numbers this shows that there is a market in the



area for Dang! Fancy Southern Grub and a lot of room for growth,

which means more customers.

Product-User Segmentation

Product-user segmentation is segmenting customers based on product

usage. This can be based on the amount and/or consumption patterns

of a product category or brand. The National Restaurant Association

survey also found in their 2011 survey “nearly six out of ten (59

percent) would be likely to visit a food truck if their favorite

restaurant offered one, up from 47 percent just one year ago”

(Stensson, 2011). This shows that people are becoming more aware of

food trucks and are more likely to buy food. Thanks to social media

the old perception about the food truck industry is changing. This is

good for Dang since this should help increase consumption of their

product.

Lifestyle Segmentation



Lifestyle segmentation is segmenting customers based on their

lifestyle. This type of segmentation can be based on many different

areas in a person’s life. For instance this segmentation can include

values, beliefs, attitudes, perceptions, leisure activities, sports

interest, media usage, political views, etc. With this type of

segmentation we are concerned with the thinking of millennials which

is our target market. Millennials are the type of people who want

things done fast because their life is moving at a quick pace. At the

same time they want food that is health because they are more

concerned and educated about their health.

Main Market Segment

The main market segment Dang! Southern Fancy Grub will focus on is

lifestyle segmentation. We are interested in how the millennials are

living and why they make their choices. This will help use to

understand them and marketing to them on a more personal level. By

understanding someone on a more personal level you can make sure

your advertisement will actually have an effect on the person. You are

also area of what you should not put out on your site because you can

offend the customer. A political quip you think is funny may not be

funny to several of your customers, which means you may have just

lost those customers. Keeping customers is not just about serving

great food you also have to make the customer happy and feel

comfortable about coming to your truck.



3.2 Targeting Strategy

The targeting strategy used by Dang! Southern Fancy Grub will be target

marketing, meaning we are going after a certain segment with a tailored

offer. We plan to do this through the use of social media. Dang! Southern

Fancy Grub is focused on serving the millennials, which are 18 to 34 year

olds. The marketing will be done with different social media applications,

including Facebook, Twitter, Linked In and other social media tools. The

social media area is continually growing with new applications and this area

is always changing with updates. “Some social media experts put the

number of applications available today at more than 100 if you’re counting

bookmarking sites, blog publishing tools, the Ustreams, and the Nings of

the world” (Smith, 2010). While not all of these applications will apply to

the marketing efforts of Dang! Southern Fancy Grub, it does provide several

avenues for the company to pursue. With the use of social media, the

company will be able to stay in constant contact with its customers.

We decided against mass marketing and differential marketing because

of the cost hindrance. Trying to run ads on TV, the internet, or print up

flyers are all costly and are not guaranteed to reach potential customers.

“The average millennial checks his or her smartphone 43 times and spends

5.4 hours on social media per day” (Taylor, 2014). Since we are focusing on

the millennial’s who have the largest presences on social medial

application, using social media to advertise seems the logical and cost effect

way to go.



3.2.1 Target Market

The target market for Dang is the millennial generation. Since our

advertising relies on the use of social media, the millennials are the best

groups to reach. As mentioned above, this group of people spends around

5.4 hours on social media per day. The millennial’s world is quick paced so

they have become accustom to moving at a quick pace. They want

everything fast but they want these items to be made with high quality.

They are also health conscious, so they want healthy, good food fast as well.

Below is a breakdown of the millennials based on several different areas.

Demographics

Age: From 18 to 34.

Gender: Appeal to both genders.

Social status: Successful, motivated, and well educated.

Ethnicity: All people.

Income: Have a disposable income.

Social class: Middle to upper class.

Psychographics

Lifestyle: Fast paced, always on the go, and health conscious

Attitudes and beliefs: Food trucks are a good place to eat.

Perceptions: Food trucks are the new and cool trend.

Personality: People who feel they are young, fun, and are looking for

the newest trend.



Adopter category: Early adopters starting off and then early majority

once established.

Consumption patterns

Buying motives: When the customers are hungry or thirsty.

When, where and how they buy: The customers have to buy at the

food truck location around lunch time and dinner time.

How often they buy: They can buy lunch or dinner.

Types of important buying situations: The customer’s lunch time and

break times.

Marketing and Brand dimensions

Openness to marketing: Open to marketing because they want to try

new things.

Familiarity with brand: Are willing to try new things based on others

recommendations.

Brand loyalty: Have a strong brand loyalty as long as the service and

quality meets their expectations. A survey of 2,000 millennials about

brand loyalty found “Some 64% of Millennials say they feel at least as

much brand loyalty to their favorite brands as their parents do to their

own favorite brands” (Nanji, 2014). This shows that once this group of

people likes something they stick with that brand.

Customer satisfaction: Want the food quickly but made with high

quality and care.



How they choose between competing brands: Varying reasons, but a

main reason is price. The survey done by Nanji also found that 62%

said value or price, 53% said friend recommendation, 47% said

reputation, and 35% said quality as well as several other reasons seen

in the chart below (Nanji, 2014).

Do they select a product based on brand or product attributes? Both

brand and product attributes can affect the selection decision.

Millennials have a strong brand loyalty as seen above. However, they

are also looking for the next best things based on several categories

as seen above.

Nature of your relationship with customers

Face-to-face, telephone, Internet, mail: Face to face and social media.

Closeness of the relationship: Close so people will want to come back.



How often is their feedback requested? Always, feedback will help us

grow and meet their needs better.

How often do you communicate with them? Dang! Fancy Southern

Grub will be in contact with customers everyday so as to always stay

current with market feedback.

3.3 Product Life Cycle

Pioneering stage

o Dang would enter the Dallas marketing in the pioneering stage.

There are some food trucks in the Dallas area but it is not

overflowing with competition. The advertising used in this stage

is mainly focused on social media, as we are trying to appeal to

the younger generation. With different social media

applications, we would show and explain exactly what Dang!

Fancy Southern Grub has to offer. We will let people know what

types of food are offered and why it is better than any other

restaurant or food vendor in the area.

Competitive stage

o During the competitive stage, Dang will still use social media to

advertise. Using social media, Dang! Fancy Southern Grub

would retain their original customers and try to bring in new

customers. We would continue to seek out the best and most

popular social media apps available. During the competitive



stage, more time and effort will have to be put into monitoring

the different sites; this will help us keep out customers because

they will be up to date on the newest information and always

know our location.

Retentive stage

o During the retentive stage, we will continue to use social media

to reach out customers. Out regular customers will be used to

this method of contact. We will always try to get new customers,

since new people will always be joining social media sites. With

social media, we will continue to reinforce what is great about

the company. The advertising used in this stage simply

reinforces or reminds customers of the qualities and acceptance

your product is already recognized for.

3.4 Potential Strategies

3.4.1 Strategy Formulation

There are three main strategies of focus. There is the differentiation

strategy, cost focus strategy, and the differentiation focus strategy or niche

strategy. Each one of these strategies offers Dang! Fancy Southern Grub a

unique perspective on how to do business. The product, place, and

promotion are the same for any strategy. Dang! Fancy Southern Grub has a

set menu for when it opens. The menu can change in the future as new food

is added but the food will always revolve around southern grub. The place is



subject to change as we try to find the best place for the truck and which

area will give us the most access to our customers. The customers will

always be aware of our location through social media. The promotion is the

same for any strategy, we are using social media. It is a way to save on cost

and keep in constant contact with our customers. Price is the only element

that would have to be changed between the strategies. Using the

differentiation strategy and the niche strategy the price and stay the same.

If we were to use the cost focus strategy then we would have to consider

cutting cost somewhere to lower our prices.

Differentiation Strategy

o This is a marketing strategy which involves differentiating your

company from competitors. This can be done by highlighting key

variables such as price, quality, features, customer service, etc.

It is always important for your company to stand out from the

competitors. While there is not an overflow of food truck

vendors in Dallas, it is never too early to start separating

yourself. Eventually more food trucks will enter the market and

the strategy may have to be tweaked but we would still stand

out from any new competition.

Differentiation Focus Strategy or Niche Strategy

o The niche marketing strategy will focus on a very distinct,

sometimes small and possibly overlooked market segment. We

are focusing on marketing to the millennials through social



media. While this is not an overlooked group, it is distinct and

small. Millennials view things differently than past generation.

They are always on the moving and want items quickly and high

quality. They are also more health conscious than previous

generations. They food truck is able to meet their needs with

quick, healthily, and high quality food.

Cost Focus Strategy

o This type of marketing strategy involves offering a basic low-

cost product to a small market segment, which would be the

millennials. Everyone wants to pay the least amount possible for

anything they buy. This is seen in the survey done by Nanji

where 62% of the people interviewed looked at price when

choosing a brand (Nanji, 2014). At the same time of wanting

items for a low price, they want the items to be of high quality.

However, this is hard to do sometimes because in order to lower

prices something else in the company has to either be lowered

or possibly cut as well.

3.4.2 Strategy Pros & Cons



Strategy #1: Differentiation Strategy

Pros:

Using this strategy Dang! Fancy Southern Grub would stand out for

the competition. We would show everybody what is great about the

company and why they should eat at this establishment.

As new vendors show up you will have already have made your

position know and standing out for the new vendors could just require

a few changes.

Cons:

A con of using differentiation strategy is you are trying to appeal to

everyone. Dang! Fancy Southern Grub would not solely be focusing on

the millennials.

The changes that have to be made in order to keep standing out could

be costly and/or time consuming.

Strategy #2: Differentiation Focus Strategy or Niche Strategy

Pros:

Dang! Fancy Southern Grub would be able to focus on the millennials,

which is the target market, with the full effort of their promotion.

Dang! Fancy Southern Grub would be able to save time with their

promotion because the company would not have to create as many

types of promotion areas. The company can keep a steady and similar

stream of promotion with the millennials.

Cons:



Dang! Fancy Southern Grub could be missing other groups of people

who would like the type of food served. These people would have to

find out by word of mouth.

Strategy #3: Cost Focus Strategy

Pros:

Dang! Fancy Southern Grub would have lower prices than

competitors would, which is a strong consideration for many people.

Cons:

In order to lower prices, Dang! Fancy Southern Grub would have to

cut cost in some area of the company. This could mean serving food

with lower quality or having less staff which means the wait time

increase.

Sometimes having to low of prices can have the opposite affect and

make people wary of buying from your company. People will wonder

about what they are getting and may decide to go elsewhere.

Trying to lower prices without losing quality can hurt the company’s

bottom line.

3.5 Core Strategy

Dang will use the differentiation focus strategy or niche strategy. This

way we are able to focus the promotional effort directly on our target

market. While doing this we may miss some other potential customers, we

would rely on word of mouth of the millennials we serve. This strategy will



help us save time in our promotion because we will not have to think of an

advertisement to fit several different groups. This strategy is steady and

strong method and will stay that way well into the future. As the food truck

industry matures in Dallas we will stay focus on our niche strategy of

appealing to millennials through social media. Social media is always

changing so we will have to stay on top of the newest app that is being

used. By using the social media apps we will use several types of marketing

within the niche strategy. Dang! Fancy Southern Grub will work at maintain

a steady growth of customers through the use of digital marketing and

creating relationship with their customers. Dang! Fancy Southern Grub will

also rely on type of word of mouth marketing from their loyal customers.

This type of word of mouth would still be used through social media by one

customer altering their friends and family to Dang. “According to Nielsen,

92% of consumers believe recommendations from friends and family over all

forms of advertising” (Whitler, 2014). This type of word of mouth will be

useful and help with maintaining a steady growth of customers.

3.5.1 Positioning Strategy

Dang! Fancy Southern Grub’s unique selling proposition is fancy southern

grub. We will use this stance in order to separate ourselves from other food

truck vendors in the area. The main focus of the separation will be on the

product attributes. People have to know what Dang! Fancy Southern Grub

offers in order to see the difference. We will make people aware of what

makes our food special to other competitors. In the early stages we will try



to avoid direct competition with other food trucks that offer similar food.

Once we are established we can compete against similar vendors and

hopefully draw some customers away with our product.

3.5.2 Branding

Branding is an important aspect of creating a business. A brand can

either be an idea or an image that customers can connect with and relate

back to the company. Williams (2014) feels that branding tell the customer

what they can expect for your product and services and why it is better than

the competition. Our brand name is Dang! Fancy Southern Grub and the

product is fancy southern grub. We have a brand logo which appears on the

company site, truck, and a variety of other items. We will use name and

product attributes of fancy southern grub as we advertise on social media.

The millennials will become aware of our company through branding and

understand why it is better than the competition.



4. MARKETING PROGRAMS

4.1 Marketing Mix

Marketing will begin with a blitz of local advertising to announce both the

opening of the first food truck and each additional truck for the first three

years. This will ensure brand notification and recognition and will directly

influence decisions over other competitors. Local advertising includes social

media at a minimum; and if cost effective, will include Television.

4.1.1 Product

Product lines will include sandwiches, sides, and drinks. They will be

mostly pre-prepared or easy to assemble with a fresh appear. For full

detail, please see the menu.

Our line differentiates from other competitors as it will be clean, fast,

and affordable served with a friendly face. The quality will appear

fresh as it will be mostly assembled to order but will still be available

fast to save time. Affordability and speed will keep the customers

coming back.

The brand will be distinguishable amongst other competitors and will

provide food that is not only just the traditional and easy tex-mex but

will also offer a higher class of product with a flair that can be

matched at traditional restaurant. Prices will remain low by saturation

into the market and focus will be more on volume than net profit.



Customer feedback and monitoring of sales will be taken into effect

when discontinuing and adding new product lines. Also, before a

product is about to be discontinued, it will be announced on the

website to see if there is still an interest.

Additional seasonal items will also keep the appearance and feel of a

dynamic product line that will spur interest as well as help with the

volume of sales for certain items.

4.1.2 Pricing

Pricing will match or be 10% lower than competitor’s price as long as

it is still marginally profitable. Please refer to menu for specific

pricings as all of the items will have different prices. Price will be

determined by market survey and demand of the individual items.

Rotating specials will be available to help shape demand as well

appeal to the frugal shopper.

The pricing strategy will be market penetration with having the

lowest price. Volume over individual net is the goal, this will be a

direct part of the marketing as we will advertise the lowest price

around.

Schedules will include a daily rotating special, a happy hour for

dinner time and a member program to encourage repeat customers.

Prices will be determined according to region and will most likely be

seasonal including prices for tourist seasons. Higher prices during



tourist seasons will be reduced for repeat customers and rewards

members.

4.1.3 Distribution (Place)

Penetration throughout the whole market is the goal. While food

trucks may only reach the local market, the catering side of Dang!

Fancy Southern Grub will be available for all markets and will

increase brand recognition.

Sales locations will be available for areas around the trucks and

available for those areas where parking is either legal by pay or free.

4.1.4 Advertising (Promotion)

4.1.4.1 Copy

The advertising for Dang! Fancy Southern Grub will use four different ad

types though the use of social media. We will use emotional ad types as we

want the customers to feel connected to Dang! Fancy Southern Grub. We do

not just want to be another food truck; we want people to want to come

back because they like us. The emotional ads will use humor and a love of

good food. Another ad type we will use is factual. We will let people know

what Dang! Fancy Southern Grub is all about.



People are more health conscious so they want to know exactly what they

are eating. On our sites we will post what goes into our food so people will

know exactly what they are getting. Also we will use imaginative ad types.

This will be done through pictures of the food and the food truck. This way

people will see what we are serving and where we are serving. The last ad

type we will use is comparative. People want the best deal and the best

quality. On the different social media sites we will let people know why we

are the better restaurant choice of the restaurants around us.

4.1.4.2 Media

Our choice of media is social media. With this method we will be able to

use all four of the ad types mentioned above. We can give details about our

meals and what we are currently making. We can take pictures and post

those on the different sites so show people what we are serving. Through

the use of social media we want to reach our customers and continually stay

in contact with them. Also through social media we want to bring exposure

and awareness to Dang so we can gain more customers.



4.2 Loyalty Programs

The loyalty program will be a simple punch card system. After purchasing

ten meals from Dang! Fancy Southern Grub you will receive a free meal.

People always look forward to free items and want to come back in order to

receive the free item. Using this program it will encourage people to eat a

Dang! Fancy Southern Grub regularly and often.

4.3 Customer Service & Support

Customer service would take place in two main ways. The first way would

be at the food truck when an item is purchase. If the order is not made to

the customer specifications then the problem will be handled then and there

as quickly as possible. The second way would be through the social media

sites. If the customers leave feedback about their recent experience with

Dang! Fancy Southern Grub, then we will respond to their messages. If one

of these feedbacks is complaint then it will be handled with an immediate

response. We will try to pacify the customer and clear whatever issue they

have with Dang! Fancy Southern Grub.

4.4 Market Research

We need to know what the customer wants in order to successfully

implement the marketing program. If you do not know what the customer

wants then you cannot appeal to them. We will obtain market research

information through the feedback on our social media sites. One of the best

ways to figure out and understand what your customers want is to ask



them. If the customers love something or hate something we need to know.

We will also use reputable sources, including the internet, magazines, and

official documents, in order to keep up to date with what is happening to

food truck vendors in our area and across the country. If there is a new

trend happening in Dallas that can help us sell more food, then we need to

know about it. Also, a trend sometimes tends to happen in one part of the

country and then spreads across the country. Having information that lets

us know when this typically happens will allow us to get ahead and be ready

for when the trend hits. We will constantly be on the lookout for information

that relates to food truck, restaurants, and food preparations. We will keep

detail records of what we find out from our customers and sources in order

to determine what works for us, what did not work, and what to be on the

lookout for.

4.5 Personal Selling

Personal Selling will mainly be where a potential customer comes to the

look at food truck. The workers will talk to the customer to get to know

them and see what they may want. If the customer is unsure the workers

will encourage them to try a something, such as the best-selling meal. We

will not be pushing and try to force the customer into buying something as

that is a way to lose business.

4.6 Trust and Credibility



Trust and credibility will be obtained through several methods. First and

foremost we will always have a great ranking with the health inspectors and

display it so the customers can see are grade. Another method is the

testimonials of the customers who have ate at Dang! Fancy Southern Grub.

We will encourage people to leave feedback on the various social media

sites. Also we can use samples as a way to attract customers and show them

that Dang! Fancy Southern Grub is a great restaurant.



5. IMPLEMENTATION PLAN

5.1 Product Design and Development

5.1.1 Outsourcing Requirements

Employee(s) in charge of establishing provider requirements, requesting proposals, comparing offers, selecting provider and negotiating:

Chris Stone

Molly Wilson

Schedule for shopping for providers and comparing offers:

December 1st – December 22nd Schedule for sending request for proposals to service providers, vendors, suppliers or partners and deadline for choosing provider:

December 26th – January 4th Deadline : January 4th

5.1.2 Marketing Requirements

Responsible for writing up new product description and collateral material:

Molly Wilson

5.1.3 Resource Requirements

Tools, equipment, facilities or other elements required to implement product changes:

Food Truck Grill Fryer Meat Fridge Secondary Fridge Slow Cooker Sauces Spices Poultry



Employee(s) in charge of defining specific item requirements and making purchases:

Molly Wilson (Purchasing) Chris Stone (Defining Item Requirements)

5.2 Marketing & Sales

5.2.1 Pricing Requirements

Product Cost Wholesale Price MarkupSouthern Fried Lobster Roll

$18 $8 44%

Grilled Pimento Cheese

$10 $4 40%

DANG! 1/3 lb. Burger

$10 $4 40%

Divine Swine Po’boy

$10 $4 40%

Pulled Pork Mac N Cheese Bowl

$10 $4 40%

Pulled Pork Tots $10 $4 40%

* All menu items come with homemade BBQ chips and Bottled Water

5.2.2 Positioning, Branding & Corporate Literature

Marketing director in charge of company’s positioning and brand strategies:

Molly Wilson

Creative director in charge of corporate style guide and creative guidelines:

Chris Stone



Date: [December, 2014]Brand or product: DANG! Fancy Southern Grub

KEY OBSERVATION

The most important market factor that will shape the company’s advertising strategy is mobility; that is, mobile food trucks do not have set locations, and all advertising is done on a daily basis. Facebook and Twitter are the avenues with which to successfully advertising towards the target market. The company’s target market are that of millennials, which is also the segment that most uses social media.

CONSUMER INSIGHT COMMUNICATION OBJECTIVE

The consumer’s sensitive points that ads should trigger are time sensitive people looking for quality food at a low price.

The ad’s main goal is to increase awareness of the food truck and to gain followers on Twitter and Facebook in which to promote locations on future dates as well as promote the quality of the products.

PROMISE

The brand stands for offering customer quality, original BBQ that they cannot find anywhere else. This is offered by the brand’s homemade BBQ sauce and chips.

AUDIENCE SUPPORT

The company’s target market are that of millennials, which is also the segment that most uses social media. Reviews on social media give the product 5 out of 5 stars; further, the product gets rave reviews that are written out in posts.

The owner’s goal to offer the market original BBQ that is made with homemade sauces is what drives the brand. Customer feedback drives the promise behind the company; that is, customer loyalty and expectations motives the continuation of the product promise.



Responsibilities for registering trademarks and for creating corporate documents and information kits that bear the company’s logo, positioning and brand:

Molly Wilson

5.2.3 Advertising

Responsibilities for researching, planning, creating, reviewing, approving and testing advertisements and for placing media buys:

Molly Wilson

Elements that are to be done in-house and outsourced:

In-House OutsourcedAd Design Web DesignMailing (Social Media) PrintingGoogle AnalyticsBlogging

Employee(s) in charge of establishing provider requirements, requesting proposals, comparing offers, selecting provider and negotiating:

Chris Stone

Schedule for shopping for providers and comparing offers:

December 1st – December 22nd

Schedule for sending request for proposals to service providers and deadline for choosing provider:

December 26th - January 15th

5.2.4 Trust and Credibility

Person in charge of acquiring and implementing method of obtaining credibility:



Molly Wilson

How trust and credibility will be obtained: Ad copy Testimonials Seal of approval / expert recommendation Trial offer / samples / demonstrations



6. PERFORMANCE EVALUATION AND MONITORING

6.1 Monitoring Ad Campaigns

6.1.1 Performance Metrics

We will use several different metrics to measure the success of the ad

campaigns. A main metric will be the number of website and apps visitors.

We will also look at the length of their stay, the depth of their navigation,

and the number of clicks on the website and apps. This will let us know if

customers and potential customers are looking at the information about

Dang. If the numbers are not high or are dipping then we know we need to

do something different. Other metrics we will use is the number of

complaints. A complaint always reflects badly on the company, so we want

this number low. If people do not like something we do need to know about

so it can be fixed. This sort of goes hand in hand with the customer

satisfaction level. If we need to know what people like and do not like in

order to make people happy and want to come back.

We will also perform surveys through the website, apps, and face to face

at the truck. “Done right, surveys can reduce new product and other risk;

generate insights about employees, customers, and markets; and align PR,

advertising, and other communications programs with target

constituencies” (Wreden,2002). The surreys will be about the customer’s

impression of the brand and the product. The customer’s feedback will let

us know what they like and do not like. It will also let us know if we are



making an impression on the customers with our brand and what their level

of recognition with the brand.



6.2 Sales Analysis

6.2.1 Reporting Schedule

The marketing manager, who is also the owner, of Dang will run the sales

reports on a daily basis. This way the owner always know what is happening

with their company. The owner will be able to adjust marketing as needed

in order to increase sales.

6.2.2 Sales Breakdown

Sales will be broken down in two ways. We will use a product breakdown in

order to see what items are selling and what items are not. For the items

that are not selling we can then ask customers through surveys what they

do not like about the items. From there we can make adjustments as

necessary. We will also use a customer type break down; this will be done

through a survey. Doing these surveys we can find out how many customers

are old and new. We can also look at the demographics and see if are

advertisement is hitting the right demographics.

6.2.3 Benchmarking

Benchmarking will be done through two main aspects. To start we will

research data about other food trucks. The research data will give us an

idea of whether we are on par with other food trucks when they first started

out. Once we are establish we will also use past sales period figures to see if

our numbers are rising or decreasing. We will still us research data to give



us a general guide of where we should be at comparatively to other food

trucks.

6.2.4 Performance Index

To determine performance levels we will compare our actual sales data to

the market segment. This comparison will be done in a variety of ways. We

would compare our sales to the sales of all other food trucks. However

every food truck is different so just a generic comparison to all other food

truck would not be enough. We would also compare our sales to sales of

other food trucks in the same food genre. Also we would want to compare

our sales to the sales of food trucks in the Dallas area. This will give us an

overall picture of how we are comparing to other food trucks.

6.3 Profit and Loss Statements

Profit and Loss Statements for 1st Quarter ended [September 30], [2014]

Total Lobster Pork Beef Chips & Desserts

Net saleslessCost of goods soldequalsGross marginlessOperating expenses

AdvertisingPersonal sellingOrder processing & billingWarehousing & distributionAdministration

67,000

26,200

40,800

2,400700450350260

10,000

4,400

5,600

1,000300200150100

33,000

13,200

19,800

800180120100

60

20,000

8,000

12,000

300120

805050

4,000

600

3,400

300100

505050

Total expenses 3980 1,750 1,260 600 550



Net profit 36,820 3,850 19,580 11,400 3,250

Net profit as % of sales 55.0% 38.5% 59.3% - -

6.4 Meeting Schedule

Schedule for meeting to review and track progress of marketing activities:

First Tuesday of every month

Time-based checkpoints for reassessing strategies, for considering adding new ones or for reassessing budgets:

Every 3 Months



7. FINANCIAL INFORMATION

7.1 Financial Capsule

The desired market share to be captured is 3 percent, which is expected in year 4.

Sales Forecast

Last Year Year 1 Year 2 Year 3 Year 4 Year 5

Sales $ 86,000 $ 100,000 $ 125,000 $ 160,000 $ 250,000 $ 330,000

Gross profit $ 47,800 $ 56,200 $ 74,800 $ 81,750 $ 112,950 $ 156,820

EBITDA $ 33,250 $ 47,750 $ 57,450 $ 66,250 $ 84,850 $ 117,950

7.2 Financial Assumptions

Expected success rate of marketing programs is projected to decrease costs for per customer acquisition cost by $2.50: From $8.00 to $5.50. Market conditions is expected to steadily increase by 15% per yearLegislation and taxes will ease as more food trucks band together and lobby for consistency with respect to regulation and also lower tax rates. Equipment performance/durability will result in a lower operations cost after year 2.

7.3 Budget

7.3.1 Advertising

Y1Q1

Y1Q2

Y1Q3

Y1Q4

Year 1 Total

Y2Q1

Y2Q2

Y2Q3

Y2Q4

Year 2 Total Total

Print $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0Radio $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0TV $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0Outdoors $ 85 $ 85 $ 85 $ 85 $ 340 $ 85 $ 85 $ 85 $ 85 $ 340 $ 680Events $

250$ 250

$ 250

$ 250

$ 1,000

$ 350

$ 350

$ 350

$ 350

$ 1,400

$ 2,400

PR $ 250

$ 250

$ 250

$ 250

$ 1,000

$ 350

$ 350

$ 350

$ 350

$ 1,400

$ 2,400



Online $ 250

$ 250

$ 250

$ 250

$ 1,000

$ 275

$ 275

$ 275

$ 275

$ 1,100

$ 2,100

Samples $ 100

$ 100

$ 100

$ 100

$ 400 $ 150

$ 150

$ 150

$ 150

$ 600 $ 1,000

Other $ 150

$ 150

$ 150

$ 150

$ 600 $ 150

$ 150

$ 150

$ 150

$ 600 $ 1,200

Total $ 4,340

$ 5,440

$ 9,780

TABLE 7. Advertising Budget



Outdoors Events PR Online Samples Other0

200

400

600

800

1000

1200

1400

1600

Year 1Year 2

Advertising Budget, Year 1 – Year 2

7.3.2 Marketing Programs

Annual budget for Marketing Programs on a yearly basis is $5,000, which include:

Product research & development Distribution Advertising Loyalty programs Personal selling Customer service & support Trust and credibility Market research Trade promotions



7.4 Sales Projections (3 years)

Sales Projections - 3 Year Forecast

YEAR 1

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov DecTOTAL

Lobster Units Sold 64

64 64 64 64 64 64 64 64 64 64 64769

Sale Price per Unit $13.00

$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00

Lobster Total $833 $833 $833 $833 $833 $833 $837 $833 $833 $833 $833 $833 $10,000

Pork Units Sold 541.6 541.6 541.6 708.3 875 1041.61208.31041.6875 875 541.7 541.6 9,333

Sale Price per Unit $6.00

$6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00

Pork Total $3,250 $3,250$3,250$4,250$5,250$6,250$7,250$6,250$5,250$5,250$3,250$3,250$56,000

Beef Units Sold 1055.5 1055.51055.51222.21555.51722.22055.51722.81555.51555.51055.51055.516,66

7Sale Price per

Unit $6.00$6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00

Beef Total $2,250 $2,250$2,250$2,250$3,250$3,250$4,250$3,250$3,250$3,250$2,250$2,250$34,000

TOTAL

$6,333

$6,333

$6,333

$7,333

$9,333

$10,333

$12,333

$10,337

$9,333

$9,333

$6,333

$6,333

$100,000

YEAR 2


Lobster Units Sold 55.07 55.07 70.46 124.30 124.3 139.6 155.0 155.0 124.4 71.07 55.07 55.07 1185

Sale Price per Unit

$13.00 $13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00

Lobster Total $716 $716 $916 $1,616$1,616$1,816$2,016$2,016$1,616 $924 $716 $716 $15,400

Pork Units Sold 700 700 783.3 1000 1083.31166.6 1250 1250 1033.3 866.6 700 700 11,23

3Sale Price per Unit

$6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00

Pork Total $4,200 $4,200$4,700$6,000$6,500$7,000$7,500$7,500$6,200$5,200$4,200$4,200 $67,400

Beef Units Sold 416.6 416.6 466.6 633.3 716.6 766.6 800 800 633.3 550 416.6 416.6 7,033

Sale Price per Unit

$6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00

Beef Total $2,500 $2,500$2,800$3,800$4,300$4,600$4,800$4,800$3,800$3,300$2,500$2,500 $42,200

TOTAL

$7,416

$7,416

$8,416

$11,416

$12,416

$13,416

$14,416

$14,420

$11,416

$9,416

$7,416

$7,416

$125,000

YEAR 3




Lobster Units Sold 71.7 71.76 76.9 78.7 67.9 225.6 225.9 133.3 79.5 64.07 71.7 71.7 1239

Sale Price per Unit

$13.00 $13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00$13.00

Lobster Total $933 $933 $1,000$1,023 $883 $2,933$2,937$1,733$1,033 $833 $933 $933 $16,107

Pork Units Sold 783.3 783.3 883.3 1033.31116.7 2000 2000 1416.7 1400 1016.7 783.3 783.3 14,00

0Sale Price per Unit

$6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00

Pork Total $4,700 $4,700$5,300$6,200$6,700$12,000

$12,000 $8,500$8,400$6,100$4,700$4,700 $84,0

00

Beef Units Sold 616.7 616.7 672.2 851.7 958.3 1400 1400 850 816.7 566.7 616.7 616.7 9,982

Sale Price per Unit

$6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00

Beef Total $3,700 $3,700$4,033$5,110$5,750$8,400$8,400$5,100$4,900$3,400$3,700$3,700 $59,893

TOTAL

$9,333

$9,333

$10,333

$12,333

$13,333

$23,333

$23,337

$15,333

$14,333

$10,333

$9,333

$9,333

$160,000



8. CONTINGENCY PLANS

8.1 Symptoms of Failure

- Loss in both market share and gross sales three quarters in a row

- Decreased customer satisfaction four months in a row

- Profit loss three quarters in a row

8.2 Alternative Strategies

- Offer a reduced menu to accommodate price and taste preferences while reducing production costs

- Offer an increased customer benefits program to reward and maintain a customer base

- Change locations and incorporate and customer locations into truck placement to keep customers while reaching new customers with other trucks

8.3 Potential Problems and Solutions

Potential ProblemSolution

The truck doesn't meet a city code, or needs more modernization than was originally planned.

Work with contractors, inspectors, and code enforcement to make the proper changes.

The unemployment continues to remain the same or climb and people limit the amount they spend on eating out.

Change advertising strategy to "inexpensive alternative to dining out" or "save time while reducing your food bill."

The company loses the manager or owner in an accident (business related or not)

Establish a will and purchase a "successionary" insurance policy.

The funding falls through or not enough revenue is able to cover the loan payment.

Locate other funding sources such as venture capitalist to continue funding the business with limitation. (see symptoms of failure)

A similar franchise opens in More aggressive advertising and



the area and reduces our market share as well as takes our customers

promotional campaigns to include, but not limited to, local targeted marketing, coupons, loyalty program, and/or daily specials.



APPENDICES

Appendix A: U.S. Food Truck Revenue

Appendix B: Homemade BBQ Sauce Ad



Appendix C: DANG! Fancy Southern Grub Menu



BIBLIOGRAPHY

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Research Report No. 42.McConnell, K. J., Common, B., & McFarland, C. (2013). Food On Wheels: Mobile Vending Goes

Mainstream. George Washington University Trachtenberg School of Public Policy. Washington, DC: National League of Cities. Retrieved October 21, 2014, from www.nlc.org

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mobile-cuisine. (2012, December 6). Food Truck Industry to Grow from 615M to 2.7B in 5 Years. Retrieved from Off the Wire: http://mobile-cuisine.com/off-the-wire/food-truck-industry-to-grow-from-615m-to-2-7b-in-5-years/

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