Market_Analysis_Summary

Market Analysis Summary During the past five years, the Fast Food Restaurants industry experienced a slowdown due to changing consumer tastes and a struggling economy. Over the five years to 2013, industry revenue has grown at a sluggish average annual rate of 1.0% to $191.0 billion. After revenue declined 0.6% in 2009 to $181.1 billion, however, it began its recovery, climbing at an annualized rate of 1.6% from year-end 2009 through 2012. In 2013, revenue is expected to grow an additional 0.5%. As disposable income decreased due to the recession, consumers cut back on luxuries like eating out. Compounding the resulting decline in demand, consumers also became increasingly health conscious during the period. While major fast-food retailers have responded by expanding the number of healthy options on their menus, the general trend toward health awareness has hurt demand for the typically greasy food provided by the these restaurants. In response to weak market conditions, the number of establishments has stayed relatively flat over the five years to 2013, growing at a projected average annual rate of 1.3% to 232,611. (Fast Food Restaurants in the US. Rep. IBISWorld US, Feb. 2013. Web. Apr. 2013.) Getting a quick bite is associated with convenience and speed of service—in essence, it implies consumer motion. When in motion (“on the go”), consumers will likely desire foods that keep them in motion, not sap them of it. For this reason, food health attributes such as low fat and smaller portions, as well just something “healthy” (either a healthy meal item or something with fruits and vegetables) become more important. According to a 2011 Technomic survey, when asked if they had eaten a healthful meal during their most recent visit to a fast-food restaurant, only 13% of those surveyed said yes. However, consumers are interested in making healthy lifestyle choices, and—to varying degrees—they utilize a variety of ways to do so. This tendency toward health appears to have increased during 2007-11. Despite or because of higher economic concern, higher unemployment & stagnating wages (medical bills triggered by poor diet, obesity, or lack of exercise are not going to pay themselves) more consumers are tuned into healthful eating & nutrition. Regular exercise, experimentation with new health foods, and interest in inherent health (organic/natural/no additives) are each on the upswing, registering percentage increases of at least 15% during 2007-11. ("Health on the Restaurant Menu: Foodservice Trends in the U.S." Packaged Facts (2011): n. pag. Print.) Women tend to ascribe more importance than men to more food health attributes. Generally, the degree of importance ascribed to these restaurant food health attributes is highest among 18-24s and 25-34s, and it rises with HH income. ("Health on the Restaurant Menu: Foodservice Trends in the U.S." Packaged Facts (2011): n. pag. Print.) Therefore, Salad Express customers will tend to be female, 18-34, and have children in the household. They have moderate to high incomes so they are able to pay the price premiums for health food. They are health-conscious and have active lifestyles. They also have concerns for food safety, the environment, and animal welfare. Marketing Strategy Salad Express will price its salads at a slight premium. The prices will have to remain lower than what customers would expect to pay at full-service restaurants because Salad Express is limited-service, quick and convenient. However, the prices will remain slightly higher than what customers would expect to pay at fast-food chain restaurants in order to signal to customers the increased quality of ingredients used by Salad Express. Salad Express will not be competing on price, but rather will position itself as a differentiator in the market. Salad Express offers the convenience of a drive-thru, quick service combined with quality organic ingredients. Consumers no longer have to sacrifice one for the other. Salad Express’ target age group of 18-34 year olds has an increased presence and familiarity with the Internet and social media. For this reason, Salad Express will employ the use of a company website, Facebook page, and Twitter account. This type of marketing is low-cost to free and very effective. Because Salad Express customers will likely have active lifestyle, be health-conscious and engage in exercise, Salad Express will seek to form alliances with local gyms. Placing flyers in local gyms will increase visibility and brand awareness to the target market. To add value to the customer, a 10% discount will be offered when they present their gym membership card. In recent years, many large corporations have implemented healthcare initiatives that reward their employees for leading healthy and active lifestyles. In an effort to partner with large corporations where these initiatives are in place, Salad Express will offer a 10% discount to those corporation’s employees. This specific marketing strategy may be employed later in the business’s life cycle when demand has been established. Many of Salad Express’ customers may be on diets or just beginning to make healthy choices when it comes to food. Many of these diets or lifestyle changes are started on Monday. To capitalize on this trend, Salad Express will run a “Fresh-start Mondays” promotion during which all salads are discounted for the day.