Saaksvuori, A. & Immonen, A. has stated that there are three different types of products in their book, ‘Product Life Cycle Management’ page 1, which are…
- Tangible products, which mean physical products and goods.
- Services.
- Intangible products, which mean non-physical products and are not services.
For example: software, an algorithm, etc.
A service is like a product, which you will provide to people within a market. There are many different definitions to the term ‘service’, but a service is generally, when a person or a group of people do something for other people.
‘YVS Fast Foods’ will be selling tangible products, such as burgers, chips, soft drinks and bottled water. These products will be bought and made to the highest quality of the fast food industry and sold at a competitive price.
‘YVS Fast Foods’ will also be providing its customers with a good service, so that all of its customers will be satisfied. This is because ‘YVS Fast Foods’ will produce fast food hot and ready to eat on the spot, for its customers to enjoy.
‘YVS Fast Foods’ will be aiming to sell their products to the local community and the London Olympic 2012 Games spectators.
3.2 Competitive Comparison
All businesses have competitors, who are a providing similar products and services. Competitors will want to increase the number of customers they have and would want to have the larger percentage of the market.
Fast food companies are increasingly growing within the market, as fast food is a quick, easy and a convenient way for people to eat. There is also a huge demand for fast food businesses within the market, as people nowadays are always on the go and wants a quick and convenient way to eat.
Competitor of ‘YVS Fast Foods’ are local and international fast food outlets such as McDonald’s, KFC, Burger King and other small local businesses. Most of these businesses provide a wide range of products, compared to ‘YVS Fast Foods’. These businesses will have also gained customers loyalty, within the local community and the product prices of the competitors are very competitive.
3.3 Future Products and Services
All businesses have a vision of where they want to be in the future and what products and services they will want to sell. Having new products and services in the future will be an advantage to businesses because it will keep up with the market and its needs and demand. Therefore businesses will not only increase or change their products, but they will increase the level of customers they receive. This is because customers will buy products or services from the businesses that have new products or services in the future, as they are selling products and services that the people in the market will want to buy.
‘YVS Fast Foods’ could sell new products as well as current products in the future, if they do well financially. These products could be oriental products such as fried chicken, as the percentage of chicken being sold in the fast food market is 5.1%.
[(http://www.keynote.co.uk/kn2k1/CnIsapi.dll?nuni=8019&usr=10600srv=01&alias=kn2k1&uni=1226898980&fld=K&noLog=1&NotInWorkset=1&key=414) figure 1]
‘YVS Fast Foods’ could also provide its customers with a breakfast menu, during the early hours of the day, in the near future and various other products could be sold at different times of the day.
The new products could be sold at the lower end of the market prices, in order to introduce the products into the market. By selling products at a great value, ‘YVS Fast Foods’ will be able to expand their business and branch out to other markets.
4.0 Market Analysis Summary
All new businesses will be producing a market analysis summary, in order to study the market in which they are going to do business in. The better the market is, the better the business would be.
‘YVS Fast Foods’ will be operating in a good market, full of great potentials. This is because ‘YVS Fast Foods’ will be officially authorised to the London Olympic 2012 Games and would be based in the surrounding area of the London Olympic stadium.
4.1 Market Segmentation
“Market segmentation is the process of identifying different groups of users within a market”, (Croft, M. J. page 1). There are many different groups of users within the fast food market and the main segments are…
- Fish & Chips
- Burgers
- Chickens
- Pizzas
- Sandwiches
- Other Fast Food Outlets
Fish & Chips
Fish and chips were very popular within the fast food market, as they have been around in the market for a very long time. However as there are a huge number of well known fast food brand for burgers, chickens and pizzas nowadays, the level of market for fish and chips are now starting to drop. “The overall market share held by the fish-and-chips sector, which stood at 8.5% in 2007, is falling steadily”. The percentage for this segment has come from the Key Note website.
(http://www.keynote.co.uk/kn2k1/CnIsapi.dll?nuni=48574&usr=10292srv=01&alias=kn2k1&uni=1226595363&fld=K&noLog=1&NotInWorkset=1&key=283).
Burgers
The Key Note website shows that the burger segment of the market has the second highest percentage of shares of the overall fast food market. “The burger sector, which held a 17.3% share of the overall market as at 2007”.
(http://www.keynote.co.uk/kn2k1/CnIsapi.dll?nuni=48574&usr=10292srv=01&alias=kn2k1&uni=1226595363&fld=K&noLog=1&NotInWorkset=1&key=283).
Below is a diagram, illustrating the different segments within the fast food market:
(http://www.keynote.co.uk/kn2k1/CnIsapi.dll?nuni=8019&usr=10600srv=01&alias=kn2k1&uni=1226898980&fld=K&noLog=1&NotInWorkset=1&key=414)
The diagram above shows that one of the segments of the market belongs to the businesses who are selling burgers, which is 17.3% of the whole market share of the fast food market. This is the second largest percentage (excluding coffee shop) in the market, which will buy burgers.
4.2 Target Market Segment Strategy
Target market is when people who are in business, are aiming for the people within the market. These people are targeted by businesses because they are the people who are most likely to buy products and services from the businesses. Therefore target market segment strategy is when businesses in the fast food market, target their customer to buy their products or services.
‘YVS Fast Foods’ will also have their target market and the people who ‘YVS Fast Foods’ will target are working-class people and people who enjoy watching sports. This is because ‘YVS Fast Foods’ are selling burgers and chips for the ‘London Olympic Games’. ‘YVS Fast Foods’ are targeting this market because they know that the people who will come and watch the ‘London Olympic Games’ will mainly be working-class people, who will want hot food fast and on the spot. Therefore ‘YVS Fast Foods’ will be meeting the needs of their market, which is to provide great tasting food fast. Working-class people will also want to pay less money for burgers and chips, whereas upper-class people will want to eat somewhere more posh and expensive as they can afford to pay for it.
Every business within the fast food market will have their own market segments and they will use various strategies to increase their share of the market. One of the strategies that are most commonly used within businesses is promotion. This is because promotion reduces the values within the promoted products and therefore increases the level of customers, as customers will be happier to pay less and save money.
4.2.1 Market Needs
Every market has various needs and demands and businesses use this to increase their revenue. This is because all businesses will want to meet the needs and the demands of the people within the market and the more the businesses can meet the needs and demands of the market, the more customers they will receive, as customers will be happy to buy things from businesses who are meeting their needs and demands.
The market needs of ‘YVS Fast Foods’ will be people who wants convenient food at a reasonable price. Fast foods such as burgers and chips are very convenient for the market, as people will be in a hurry to watch the ‘London Olympic Games’ and would require hot foods where they can eat on the spot. ‘YVS Fast Foods’ will also meet the needs of the market because they will not only provide hot food fast and on the spot, but they will also sell their products at a great value.
4.2.2 Market Trends
Market trend is they way the market keeps up with the people within the market.
Market trends relates to…
- The Economy
- Nutritional Information
- Outlet Growth
- Refurbishment of Fast Food Outlets and
- Advertising Expenditure.
Nowadays, most people in the UK are health conscious and therefore will want to eat healthily. As ‘YVS Fast Foods’ provides no healthy products, except water, to the customers, maybe in the near future they would be able to increase their business potential by providing a wide range of healthy products as well as their current products, which will be suitable for the entire market.
4.2.3 Market Growth
Market growth is when products or services, within the market, are increasingly growing and becoming more and more popular to the people within the market. This is because the number of people within the market is increasing and therefore there is a high demand of products and services within the market.
If ‘YVS Fast Foods’ is doing well with its business, providing burgers and chips, then they could expand their business to other locations and provide a wider range of products to suit its market.
4.3 SWOT Analysis
SWOT is short for Strengths, Weaknesses, Opportunities and Threats and a SWOT analysis shows the strengths, weaknesses, opportunities and threats within a business.
The strengths of ‘YVS Fast foods’ would be that it will cost customers less money to eat food that they enjoy and that most customers will eat regularly at ‘YVS Fast Foods’. If ‘YVS Fast Foods’ advertise their business well, then they will maintain brand and customer loyalty and sales will increase. This will help ‘YVS Fast Foods to expand their business, which is a great strength for its business.
The weaknesses of ‘YVS Fast Foods’ would be that as it is a fast food outlet, selling products that is a concern for the health of the people within the market. As ‘YVS Fast Foods’ do not sell healthy products, it is one of the business’s weaknesses. One of the business’s other weaknesses is that as other competitors are selling healthier products, this could affect the level of customers that ‘YVS Fast Foods’ receive.
The opportunities of ‘YVS Fast Foods’ would be that if it does well financially, then it could expand its business and provide its products and services a wider market. This would increase its sales revenue and the level of customers they receive.
The threats of ‘YVS Fast Foods’ would be that as other competitors are provide the people in the market with a healthy option of product, this could decrease the level of customers ‘YVS Fast Foods’ receive and in the worst scenario, even put them out of business.
5.0 Strategy and Implementation Summary
Every customer who has eaten at our ‘YVS Fast Foods’ is a potential customer. The better we run this fast food stall during the London Olympic Games the more business we will do. Customers will know that they can get better quality from our VSY Fast Foods during the Olympic Games. They will know that the service is better, and the people are better. The look of the new location will be fresh and clean. The area needs a fine fast food stall. The area needs an big name local operation with a home-grown name like VSY Fast Foods.
5.1 Competitive Edge
VSY Fast Food will follow a differentiation strategy to achieve a competitive advantage in the fast food market. By good food with very high quality foods, In addition, VSY Fast Food provides a comfortable environment with foods and drinks items.
5.2 Marketing Strategy
We at The VSY Fast Foods, including all management, crew personnel, supervisors, design people, family and friends, and new hires will put forth 100% effort to insure a profitable opening and on-going operations.
One core element of our marketing strategy will be that of differentiation form our competitors, we intend to offer our customers are reasonable prices compare to the competitors and we need to be able to sustain that.
5.3 Pricing Strategy
VSY Fast Food bases its prices for foods and drinks on the "retail profit analysis" provided by our supplier.
Determining a fair market, hourly price is very important because of our competition from another fast food restaurant. Some providers use a strategy with a combination of both pricing schemes. Thus, it can quickly become a high monthly cost for the individual. Second, VSY looked at how fast food in other markets such as Helford and west ham went about pricing how much their product cost.
5.4 Promotion Strategy
Our Promotion strategy will be based primarily on information potential customers of our existence and making the right information available to our target customers.
VSY will implement a pull strategy in order to build consumer awareness and demand. VSY to advertise has offers Olympics because of our competition.
5.5 Sales Strategy
We intend to focus on improving our implementation, by working on key objectives and better coordination of marketing efforts. Our selling process will depend on personal selling and advertising to inform potential clients about the product.
5.6 Sales Forecast
A sales forecast of the six weeks operation based on the following:
Sales forecast data is presented in the chart and table below.
6.0 Management Summary
The management team to run the day-to-day operations and shifts at the London Olympic Games.
People that will be coming to London Olympic Games are the most important people that we will focus on during our operations
We value the management as the single most important element in running a quality operation; the customers can see it in the quality of the food, how clean the store is and how friendly and fast they are served.
6.1 Organisational Structure
Presently, The VSY Fast Food is own by three people with one administrative and two staffs
6.2 Management Team
VSY Fast Food is not departmentalized. The owners and manager all make decision which based on the company mission statement.
VICTOR has extensive experience in sales, marketing, and management; he is the president of marketing department. SIDDIQUR brings experience in the area of finance and administration; he is the chief financial officer. YASLIMA specialised on new goods, what customers like to buy and she is the senior store manager
6.3 Personnel Plan
When you walk VSY Fast Food, there is three cashiers (usually the manager is part of them) working at all times. We’ve employ one more staff because of increase in sales volume and this will determine if we are going need more staff in the future. This is estimated into the personnel plan.
7.0 Financial Plan
Cashflow Forecast
The Term cashflow forecast is an estimate of anticipated cash movements for a future period of time. This is an analytical tool that YVS will use in their decision making. Using a cashflow forecast will allow us estimate and see a summary of what the stall expects to be going in and out of the business in terms of cash. The table below is a cashflow forecast that we have devised for YVS Fast Foods. The data it contains is an estimate from the time the stall first opens to six weeks down the line.
This is the revised projected cashflow that shows YVS Fast Foods cash position once the loan is accounted for.
Breakeven Analysis
Breakeven Analysis is I tool used to verify the level of output the business will need to be achieve in order to begin making profits. If sales reach beyond the break even point then the stall will be making a profit, and if the stall falls short of the breakeven point it will be making a loss. In short the breakeven point is the level at which the business is making neither a profit nor a loss. This is important for our business as it will be needed and used as one of the tool when we begin to compare YVS’s performance from one period to the other. Moreover it states the amount of sales revenue we need to cover our costs. The breakeven formula identifies the level of output that the business is making neither a profit nor a loss. The calculation below is based on our total selling price of £2.70, and not the individual prices for each product.
Breakeven Formula:
Fixed cost
= break even point
(SP – VC)
Contribution
Fixed price: Advertising £ 600
Running costs £500
Insurance £100
Wages and salaries £1000
Rent £250
Loan £135
Loan Interest £50
Total 2635
Selling price Variable Cost
Water : £0.20 Water : £0.17
Soft Drinks : £0.50 Soft Drinks : £0.30
Chips : £0.50 Chips : £0.45
Burger : £1.50 Burger : £1.20
2.70 £2.12
Contribution: £2.70
£2.12
£0.58
£2635
Breakeven in units: £0.58 = 4543 Units/products to sell
£2.70*£4,543 = £12,266.10 in revenue
Income Statements
Also referred to as Trading Profit and Loss Account refers this is financial statement that sets out the businesses revenues, and expenses. Thus revealing the profit or loss accumulated over a period of time. The Trading account is the first part of the statement. This sets out the amount of revenue that the business has generated. The Profit and Loss account is the second part of the document. This section states the expense of the business, and then reveals the profit or loss made by the business. This financial document is included as it will show how much YVS fast Foods can raise, and the amount of expenditure it will generate. Below is the stalls Trading Profit and Loss Account for the in the opening six weeks of trading.
Balance Sheet
The term Balance Sheet refers to the financial Statement that displays the value of the business at any particular time. The first part of the document records the assets (possessions) and liabilities (debts) of our business. The second section displays the opening capital (the amount of money the business had at the beginning of the period), retained profit (the figure from the profit and loss account) and any drawings (money taken out of the business by us for our own private use). This financial statement is required it sets out how YVS Fast Foods has raised and utilized its capital. Below is the stalls balance sheet for the first six weeks of trading.
8.0 Bibliography
Saaksvuori, A. & Immonen, A. ‘Product Lifecycle Management’. Published by Springer, 2008.
Croft, M. J. ‘Market Segmentation: A Step-by-step Guide to Profitable New Business’. Published by Routledge, 1994.
Key Note Websites:
(http://www.keynote.co.uk/kn2k1/CnIsapi.dll?nuni=48574&usr=10292srv=01&alias=kn2k1&uni=1226595363&fld=K&noLog=1&NotInWorkset=1&key=283)
Viewed on 13th November 2008 at 10.50am.
Figure 1: -
(http://www.keynote.co.uk/kn2k1/CnIsapi.dll?nuni=8019&usr=10600srv=01&alias=kn2k1&uni=1226898980&fld=K&noLog=1&NotInWorkset=1&key=414)
Viewed on 17th November 2008 at 12.30pm.