Food truck
Topic
Introduction
Food truck business is an emerging trend in the hospitality sector which is advancing very well as a business venture. The business is growing in popularity due to the lowered operational cost and highly reduced overheads especially the labor overhead. These food trucks use self-service approaches in their operations which highly reduce the number of service personnel requirement. Due to this, the profit margins involved in the operations are better as compared to other restaurant setups. Other major cost reduced include, space renting cost- this is because the operations don’t require a permanent operational space to be rented. All the operations from the storage of raw materials, production and service of food and beverages take place in the truck. Utility cost such as electricity is also highly reduced making the business attract many investors. However, Most operational food trucks deal with fast foods as their main products. Due to this, there has been saturation in the fast food market due to other fast foods operating in areas where these food trucks may choose to operate from. Due to this therefore, the food trucks are required to diversify their products and market offering in order to remain profitable ventures for the investors. Due to this therefore, the report presents a differentiated form of food truck which engages in production and service of traditional menus. The idea was generated due to increased concern for health and the rise of awareness on the health hazards associated with fast food products. The products which will be offered are those that are naturally grown without any chemicals being used in their production. The use of traditional menus therefore will be essential. The target market for these products will mainly be middle-aged to the old age customers who are health cautious and thus are sophisticated when it comes to choosing their food items. The choice of this target market is strategic because this demographic segmentation is well informed of about the health hazards associated with fast foods. Due to this, therefore, to capture the market, the investor has to offer foods which a help them avoid the lifestyle diseases associated with their eating habits.
The approach also gives the venture a competitive advantage since many competitors in the market offer fast foods and therefore enabling this new venture to have a new market to target. Increased concerns on healthy eating also have made many shifting from intake of fast foods to embracing healthy eating habits as a result. Therefore, the products will be easily adopted in the marketplace. The food truck operations will be based on producing fast food items using properly grown ingredients. Use of purely grounded flour from traditional food items such as cassava will be used instead of using the wheat flour. Studies have indicated that these food items have more nutritional value than the use of processed wheat flour. Through this approach thus, our products will be highly diversified and unique making them superior in the marketplace.
Business model
The business will earn revenue from the sale of their newly designed menu items which will be served to the target market. These items being new in the market however as a business we will require to undertake serious advertisement to make the customers aware of their existence and also persuade them to purchase from us. The business will, therefore, undertake massive advertisement through use of social media platform to make sure they reach the target customers. The firm also plans on collaborating with some of the health eating enticing groups to enable them to reach as many customers a possible. Through this, the healthy eating enticing group will be allowed to use the business brand as an example of the organization which is engaging in healthy production. The approach of engaging these groups will promote the advertisement of the business offerings. The health benefits associated with the products will also be relayed to the customers enabling them to have more information before making the purchase decision. The use of internet marketing, therefore, will be used to increase the profits by improving the market base. The use of food truck approach to introducing such business will be effective since as the truck moves from station to another station, it will act as a moving advertisement. The firm will use the online marketing platform also to educate the public about the health benefit associated with their products. Through this, the firm will be able to reach and influence more customers who had no previous awareness about the health risks associated with the intake of fast foods products. The main goal of the company is to make a profit and ensure a healthy society is created. The firm will not only be making profits but will be engaging in philanthropic activities of ensuring they take care of the society they are serving. The approach, therefore, will enable the firm to have a competitive advantage over its competitors who may be termed as not being cautious of their customer’s health status.
Internet presence
The firm will increase its internet presence by ensuring that it has a well-designed website which is easily navigable by the potential users. Through the website, the form will include the use of online cart through which customers can purchase from the comfort of their homes and after that receive free delivery. More information about the firm also will be available on the website such as operational hours, firms’ vision and also their main objectives of achieving a healthy society. The information will enable the visitors of the website to get more insights about the firm. The same information will also be available through the firm’s social media platform. The social media platform will also offer ways through which customers can make purchases without necessarily visiting the location of the truck and thus improving the profitability of the firm.
Online campaign
The approach to use online marketing and selling is not a new concept since it has been adopted by our competitors and its working effectively. The firm, therefore, has to highly invest in online marketing and create the best infrastructure to support their venture. The investment will surely be expensive for the firm since it’s a startup company and this may hinder its operations in the marketplace. The online campaign will be aimed at early adopters who will, in this case, will make the better portion of the firm’s customers.
Situation analysis
The firm has many competitors especially the fast food outlets located on major streets of the United state cities. These outlets have a competitive advantage due to their permanent location, and therefore. As a result they have acquired loyal customers. Their physical presence also gives them a competitive edge since they can be easily accessed and identified by the customers. Lack of a permanent geographical location, therefore, forces the firm to undertake heavy investment in online selling which may increase the operational costs and reduce the profit margins. The firms approach however of engaging in healthy production practices provides the firm with a competitive edge. The firm also has another advantage of not having a permanent geographical location as a result of this engaging in delivery services will not be an added cost but will still be part of its normal operations. The demographic segmentation approach was chosen by the firm also gives it a competitive edge. Due to this, the firm can compete in any setup since it provides unique products and to an informed market segment. Instances of product failure, however, can have dire consequences to the firm since it may lose the sophisticated customers permanently. Effective approaches, therefore, ought to be undertaken to ensure that the products designed to match the promise made by the firm to the customers.
Budget and Evaluation
The budget estimation to facilitate this venture is $200,000 which will be used both as the starting capital as well as the working capital for the business. Return on investment approach will be used to measure the growth and expansion of the venture. Expansion of the market base will also be used as an indicator of good business performance. Market expansion will be gained through increased training of the locals on the health impacts of the new food item.
Work cited
Annenberg, E. and Kung, E., 2015. Information technology and product variety in the city: The case of food trucks. Journal of urban economics, 90, pp.60-78.
Escaron, A.L., Martinez-Donate, A.P., Riggall, A.J., Meinen, A., Hall, B., Nieto, F.J. and Nitzke, S., 2016. Developing and Implementing “Waupaca Eating Smart” A Restaurant and Supermarket Intervention to Promote Healthy Eating Through Changes in the Food Environment. Health promotion practice, 17(2), pp.265-277.