Background
The name of the company is Qwik Sandwiches, and it will operate a food truck from which it will sell various types of sandwiches and soft drinks. The food truck will be mobile, it will not have a fixed location but will shift periodically based on human traffic. In the middle of the day to late afternoon, the truck will be located in the middle of the city while in the evenings, the truck will be moved near the subway stations. Additionally, clients can order products online, and delivery can be arranged. The business will commence operations with five staff members, which include four employees and one manager. The marketing plan will outline the strategy of the business, an overview of the expenses to be incurred by the company, target clients, marketing strategies, how payments will be collected, and the types of market research that were carried out.
Strategy
The primary strategy adopted by the company is to provide customers with an easy to prepare product at an affordable price. According to the market analysis conducted, many people prefer a wholesome snack during the day, and the most preferred items are cheap and healthy. Based on an internal analysis, the company opted to provide only sandwiches as the core product since they can be prepared within minutes, and this reduces the chances of wastages and ensures that all clients are guaranteed of fresh products. A competitive analysis was conducted, and the results indicate that there are other food trucks within the same environment, but none exclusively sells a wide range of sandwiches. As such, this represents a niche that the company decided to focus on. The product will be positioned as a fresh, cheap, and nutritious snack that is readily available and ideal for everyone, including vegetarians. Positioning the product will be determined by the brand color, which is green.
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Processing
The products that are being processed include food and drinks. However, the items sold by the company are easy to prepare, and this reduces the time between taking of an order and the serving of the client (Figure 1). Although the business will be providing more than ten varieties of sandwiches, the goal is to prepare them using a streamlined process which will guarantee that the product is handed over to the client as quickly as possible. The business will be continuously collecting information related to consumer trends to ensure consumer satisfaction.
The Product
The cost of purchasing and customizing a food truck is approximately $75,000. While a cheaper truck can be obtained for around $50,000, it will lead to increased maintenance expenses. The main product of the company is sandwiches. Some of the types of sandwiches that will be sold at the food truck include Grilled chicken, bacon, club, ham, roast beef, grilled cheese, egg salad, peanut butter and jelly, and tuna. All of these ingredients will be bought at wholesale in the market at the following prices:
Ham: $1.10 a pound
Bacon: $6 a pound
Peanut butter: $3 for 500g
Cheese: $4 per pound
Beef: $3.7 per pound
Tuna: $20 per pound
Lettuce: $30
Tomatoes: $5 per pound
Onions: $2.5 per pound
Bread: $2.5 per loaf
Cranberry sauce: $3 per jar
Only five employees are required for the food truck. Two of these will be tasked with the customer-facing segment, whereby they will be taking orders and serving the clients. Ideal skillsets for these employees include excellent customer relation skills and necessary accounting skills since they will be handling payments and issuing change to the clients. Two other employees will be qualified chefs who will be tasked with preparing sandwiches for clients. Based on the wide variety of sandwiches that are offered, the chefs should have the experience to ensure that all orders fulfill the tastes of customers. The fifth employee is a manager whose task is to coordinate all the functions of the food truck. Some of the duties of the manager include sourcing and ensuring all ingredients are available, selecting ideal locations to place the truck, and confirming that all legal requirements to run the business are fulfilled.
One service center is required for the business. The facility will mainly be used to store some of the ingredients since purchases will be made at wholesale to reduce the costs. It will include several refrigerators to ensure that all the vegetables and meats remain fresh. In case supplies are depleted during the day, the manager will rush to the service center and bring more supplies instead of having to drive the whole food truck. The perfect location for the service center is within proximity of the various streets that the food truck will be stationed. As such, a location in town will be ideal. The location will also be used to store cash that is collected from the daily sales before it is banked. Handling cash can be risky since it can lead to theft, the best solution is to reduce the amount of cash in the truck by keeping it safely at the service center.
The food truck company will use one intermediary to deliver goods to customers. Since the business will have social media pages, customers will be able to order for sandwiches online. However, an intermediary company will be used to handle all deliveries to customers. An advantage of this approach is that it reduces the cost of operations given that the expenses of hiring and maintaining a deliveryman and a scooter can be higher.
Customers
The target customers of the food truck are working-class individuals and students aged between 20-35 years old, both males and females. People within this age group prefer quick snacks during the day, want something cheap and readily available, and are also health-conscious. Additionally, most would not mind waiting in line for a few minutes so that they can be served, making them perfect customers for the food truck service. Apart from the sandwiches, which are the main product, clients can purchase soft drinks and coffee. Customer loyalty will be instilled by offering a complimentary drink for every five purchases made by a client. Such clients will also be invited to test samples of other sandwich varieties that they might not be accustomed to. The strategy is aimed at introducing them to other sandwiches and therefore increase the variety of products that they can order. For large orders such as office lunches, the company shall deliver and also include complimentary drinks for everyone. These strategies are aimed at increasing visibility for the brand and also leading to client loyalty.
Market Research
Two types of market research were conducted: The first is secondary research, whereby the focus was on case studies of other food trucks within the industry. Based on this strategy, several companies like Kogi that are leading players in the industry were identified ( Ibrahim, 2011 ). It was, therefore, possible to identify factors leading to their success and the challenges they face. All of these provided crucial information that will be used to ensure the success of Qwik Sandwiches.
The second type of market research undertaken was the use of observation (McDonald, 2015) . This approach involved taking time to walk through the streets to identify various factors relating to the food truck industry. Some of the questions that were to be answered based on this strategy include: What are the most popular foods among clients of food trucks? Who are the clients? What is the preferred mode of payment by clients? Which are the best locations? At the end of this research, it was identified that there are various competitors, although the difference is in the service offering. While some offered gourmets, while others offered a wide range of fast food snacks (Pohopien, 2013). Some of the food trucks had long queues, and this seemed to be because of high-quality food that was being served cheaply and quickly. As such, it was established that these are some of the critical qualities that are needed to be successful in the industry.
Flower of Service (Figure 2)
The core product that is offered by the company is selling sandwiches. However, there are other supplementary services that facilitate the process, these include enhancing and facilitating services. Examples of facilitating services include payment, order taking, billing and information. Some of the enhancing services include hospitality, exceptions and consultations.
External Influences
There are various external factors that influence the food truck. Some of these include government policies, business trends, IT advances, and taxes and fees. Policies by the government determine the types of businesses that can be run within the country. In case the government decides to pass restrictions that favor walk-in restaurants, such a move can hurt the food truck business, and this can lead to financial loss. The government also sets the regulations in the industry that should be observed by all players in the food trucks.
Business trends change regularly, and this affects business operations in all sectors. Several years ago, walk-in restaurants were popular before healthy meals became the preferred choice for consumers . Currently, there is a high demand for food trucks among customers, and in 2015, the industry was valued at $856.7 million with forecasts of reaching $996.2 million by 2020 (Alfiero, Lo Giudice & Bonadonna, 2017) . However, this can change in the future when there is a shift in the preference for consumers, which can be detrimental for investors in the food truck business.
Taxes and fees increase the costs of doing business. Currently, food truck operators have to pay annually for various licenses. Some of these include sellers permits, business licenses, health department permits, food handler's permit, vehicle licenses, fire certificates, and health department permits. All of these are costly, and an increase in either of them can significantly increase the operational costs for the food truck.
Advances in IT also have a significant impact on physical businesses like the food truck (DiPietro, 2017) . Online-based businesses have low overhead costs, and it enables them to offer similar products cheaply, unlike the food trucks that have many costs. Additionally, since these online firms have low operational costs, they can invest in increasing their awareness of online platforms, which enhances their brand visibility and ultimately leads to more sales. On the other hand, social media platforms have become useful in enhancing the success of businesses by providing them with an online presence and access to thousands of clients.
The 7Ps Of Service Marketing
The business meets the 7Ps of service marketing.
Product: Everyone needs food daily, and this creates a constant need for these products. The company has, therefore, selected sandwiches as the core product since they are highly nutritious and tasty, which makes it perfect for customers who need a quick snack.
Place: The products shall be available at selected street locations that have high pedestrian traffic. Clients who are further away can make orders online, and these can be delivered to their exact location.
Price: Since many companies are offering similar services, the price of sandwiches shall be the same, but will depend on of the type ordered. It is aimed at attracting and retaining customers.
Promotion: The company shall run an extensive campaign on social media to increase awareness of the products that are available and how clients can access these products.
Process: There are clear guidelines that have been established by the business to ensure that products meet the required standards.
Physical environment: The food truck will always be clean and well-branded so that it creates a positive perception of the company to customers.
People: The success of the business is based on having people with the right skills to handle various tasks (Hoffman & Bateson, 2017). As such, the experienced chefs and service attendants will play a critical role in the success Qwik food truck.
Three Stages of Service Consumption
There are three stages of service consumption. The first is the pre-purchase stage, whereby the client comes across the marketing content by the company and learns the various available products. The second stage is the service encounter whereby clients make their orders at the food truck or make an order online. The final stage is the post-encounter stage, whereby the clients will give feedback based on their experiences (Fischbach & Guerrero, 2015) . It is the user-generated content that helps to drive the growth of the brand since it enhances positive perceptions relating to the brand.
Risk
There are various risks associated with running a food truck business. The first is concerning the food truck, which faces numerous risks such as breakdowns, theft, accidents, and damage by weather elements. When any of these incidences arise, the truck will not be able to function, and this disrupts the business operations. As such, it is necessary to ensure that the truck is in good condition mechanically to prevent unexpected mechanical breakdowns. The problem can be prevented by purchasing a new truck instead of opting for used trucks that have a high probability of breaking down. Secondly, the business can face liability risks when clients get ill after consuming food from the truck or slide while they are waiting to be served (Lelieveld, Holah & Gabric, 2016) . Proper checks should be observed within the food truck to ensure that high standards are maintained during the food preparation process and high levels of hygiene are maintained when handling various ingredients. The final risk is that employees can get injured while preparing dishes. Since the food truck has limited space, there are chances that some employees might suffer from smoke inhalation, which can lead to further health complications unless proper measures are taken to handle the situation (Fabuš & Čejková, 2018) . However, all these risks can be covered by purchasing comprehensive insurance to cover employees and the food truck .
Delivery and Distribution
The service will be delivered straight from the food truck, located on the street in metropolitan areas. All orders that are made via the online platforms will also be prepared in the truck before being dispatched to respective clients. Considering that focus of the company is to provide fresh sandwiches to clients, time is critical for the business. It is important that all orders are delivered within ten minutes from the moment an order is placed. In the case of deliveries, the maximum delivery time should be fifteen minutes.
Branding
The food truck shall have distinctive green branding that will enable it to stand out in the street. Similar branding will be present in the marketing and advertising content that will be run by the company on various social media platforms (Ibrahim, 2011) . All the products will be branded in the same way, green wrapping with the name of the particular sandwich variety on the top. The goal is to ensure that the corporate brand is recognizable to all clients. Green will be representing health and environmental awareness. Qwik Company is an individual branding business.
Franchise
The company currently operates a single truck, but according to the financial projections, franchises can be considered after 2-3 years if the business environment remains constant. The employees has a uniform and caps for easy identification.
Pricing and Costs
The average cost of preparing a sandwich is as follows:
Bread: 65 cents
Garnish: 5 cents
Ham: 90 cents
Lettuce: 5 cents
Cheese: 80 cents
Cranberry sauce: 7 cents
Total costs: $2.52
All the sandwiches will retail at: $10
Profit: $10-$2.52 = $7.48
Since the cost of producing some sandwiches will be higher, the average profit per sandwich is expected to be: $5
The price was arrived at because of various reasons:
The prices of sandwiches by competitors’ range between $11-$18.
The average amount spent by customers at food trucks is $12.40 ( Alfiero et al., 2017).
The business will provide various sandwiches, and the cost of production will be higher for some varieties. However, having a fixed and cheap price is attractive to customers instead of having to always go through the list of products to check the cost before making an order.
The business is not a loss leader. A loss leader pricing strategy arises when an organization lowers the prices of individual products to attract buyers with the expectation that they also spend on products with higher profit margins (Choi, Ryu & Cho, 2019). In the case of Qwik Sandwiches, all the sandwiches will be sold at a standard price even though the cost of production for some sandwiches will be higher, resulting in lower margins.
There are both fixed and variable costs relating to the business. Some of the fixed costs include the cost of the licenses and the truck.
| Fixed costs | |
| Cost of truck | $75,000 |
| Total annual licenses | $5,000 |
| $80,000 | |
Variable costs relating to the business include the cost of foods, marketing expenses, and salaries for the staff.
The break-even point of the business: = Fixed costs/average price per unit
$80,000/$5
=16,000 sandwiches
Average sandwiches to be sold per day: 80
Days to break even: 16,000/80= 200 days
Months to break even: 6 months 20 days
Payment Collection
Payments will be made via cash and both credit and debit cards. The cashiers will handle all the payments. The fee that is charged for card payments ranges between 1.4% to 2.8% depending on the volume of transactions. Clients who order sandwiches using online platforms will make payments through online platforms via their credit cards. Orders will only be dispatched once payments have been confirmed.
Conclusion
The marketing plan outlines the strategies that will be adopted by Qwik Sandwiches to ensure its success. As such, it includes a detailed analysis of the costs that will be incurred to run the business, both fixed and variable costs, the break-even point, the external factors that influence business operations, risks facing the business, and how services and products will be delivered to the client. Additionally, there is a breakdown of the market research that was carried out to find more information relating to the food truck industry. Based on the expected sales of the business, it should break even after 6 months and 20 days. Some of the risks facing the food truck business include the likelihood that the truck can be stolen or get involved in an accident, workers can be injured or customers can slide and get injured while waiting for their orders. Examples of external factors that affect the operations of the food truck include government policies, advances in IT and taxes and fees.
References
Alfiero, S., Lo Giudice, A., & Bonadonna, A. (2017). Street food and innovation: the food truck phenomenon. British Food Journal , 119 (11), 2462-2476.
Choi, K., Ryu, S., & Cho, D. (2019). When a loss becomes a gain: different effects of substitute versus complementary loss leaders in a multi-sided platform. Electronic Markets , 1-11.
DiPietro, R. (2017). Restaurant and foodservice research: A critical reflection behind and an optimistic look ahead. International Journal of Contemporary Hospitality Management , 29 (4), 1203-1234.
Fabuš, M., & Čejková, V. (2018). Motor Vehicle Insurance in SMEs. European Financial Systems 2018 , 102.
Fischbach, S., & Guerrero, V. (2015). Transporting Services to the Customer: Exploring User-
Generated Content and Entrepreneurship. Journal of Business and Entrepreneurship , 27 (1), 109.
Hoffman, K.D. & Bateson, J.E.G. (2017). Services Marketing (5th edition). Boston, MA: Cengage Learning.
Ibrahim, N. (2011). The food truck phenomenon: A successful blend of PR and social media . University of Southern California.
Lelieveld, H. L., Holah, J., & Gabric, D. (Eds.). (2016). Handbook of hygiene control in the food industry . Woodhead Publishing.
McDonald, M. (2015). Market segmentation. Wiley Encyclopedia of Management , 1-10.
Pohopien, L. (2013). A phenomenological study of gourmet food truck owners as entrepreneurs. (Doctoral dissertation, University of La Verne).
