PREMIER INDIANO CUISINE LOUNGE EXECUTIVE SUMMARY: Today’s customers, especially business people and tourists crave for a high-end relaxing experience but in an affordable manner where they believe every dollar spent is worth it. Also, they wish for more food options without having to sacrifice one particular cuisine for another. This specially is true for people who go to restaurants in groups. Fusion Cuisine is a fast growing trend.Also, people crave for authentic food, whatever the cuisine may be. US is a land of immigrants. With different people come different cuisine. And it is difficult for people to have any authentic cuisine if they aren’t certified chefs to validate such food. Customers appreciate the fact that the food they are served is as good as it can get and is made by a certified chef. A restaurant ready to exploit this diverse demand of customers’ .i.e.: different authentic cuisines at one place will have unique product differentiator and a unique market stand as well. Manhattan is increasingly becoming a tourist destination. Especially a restaurant at Financial District will increasingly see an influx of customers. With 9/11 memorial and other significant places such as South Street Seaport Historic District, the New York City Police Museum, and Museum of American Finance, made Manhattan see some of the highest number of tourists in last few years. Also given the fact that Financial District is a financial hub, with multiple multi-national offices, we see our business to reach a break-even point in 5 yrs. And, we have been very conservative with our business model, considering every aspect of our business model and revenue on National Average statistics. Finally, the creation of a unique and innovative fine dining atmosphere will differentiate us from the competition. The restaurant will stand out from the other restaurants in the area because of the unique design and decor. We will offer a fine dining experience in an electric atmosphere.
MARKET CONTEXT Restaurant business is growing in New York. The National Average for restaurant growth rate stands at around 3%-4% per year but New York’s restaurant business is above national rate and is growing at a 5%. This extra-ordinary growth is attributed to the fact that lower Manhattan is a financial hub with headquarters of multi-nationals companies offices located. Also, the tourists have been a major growth factor. Manhattan saw nearly 9.8 million tourists visit last year, a record number for an area revitalized by development after the September 11 attack and the World Trade Center memorial site. Hudson Eats, a new food court in New York’s Financial District, is set to take over lower Manhattan’s lunch and dinner hour. The 35,000-square-foot food court is part of a $250 million renovation at Brookfield Place — a dining, retail, and office complex that was formerly the World Financial Center. Hudson Eats is located mere blocks from the 9/11 Memorial — an ideal location for both office workers and tourists. And it's beautiful, with superb views of the skyline and Hudson River, tall windows, white marble finishes, and leather booths. Restaurant business is successful when it provides a unique service that no other restaurants can. Lower Manhattan, being a financial hub of USA and a top tourists spot, people come from all over the world. It’s a place where different people with different culture and taste buds conglomerate. A restaurant that can provide different authentic cuisine at one place will not only provide people an option to try both these cuisines but will also tend to serve a larger customer base than a restaurant serving one specific cuisine. Figure 1: Sales of restaurant business in 2014 Figure 1: Sales of restaurant business in 2014
As the figure shows4, Restaurant business continues to show promising sales. The sales have grown continuously for 8 month and it only will grow as the economy continues to grow strong increasing people’s disposable income.
Growth Opportunity We have defined the following groups as targeted segments that contribute to our growth projections: ● The Business Person ● Downtown Manhattan Couples ● The Destination Customer ● High-End Singles
These particular market segments are 25-45 years old, have disposable income, and are seeking upscale, trendy, and comfortable restaurant options. These are the types of people who frequent other restaurants and bars in the area. They are likely to spend more on experiences they perceive as unique, cosmopolitan, and sophisticated. They are also the most open to trying something new, food wise, and will embrace our international fusion cuisine. Initially we are going to focus our business to the below customer segment: The Business Person: They work hard all day and often stay overnight in city. They need a competent establishment that helps impress clients and prospects. Afterward, they want to relax and use the money they are making (or is expensed by their company). They spend most on drinks, food and tips. Premier cuisine lounge’s cosmopolitan flair and comfortable atmosphere will be perfect for sophisticated business people, whether they live in and around Indiano Cuisine or are here for work. About 61,000 people live and work in New York’s Financial District. But during the day, commuters from the other boroughs and outside the city nearly double Financials District population to more than 1.2 million people. Capturing this large customer base is our one of main criteria. Our food, service and ambience gives a feeling of comfort and professionalism with a price that is placed between a 5-star hotel and a casual dining place (A casual dining space for us is a place where people come just for the taste and are not very concerned of the ambience or customer service) Tourists: Lower Manhattan attracts many vacationers during the summer months of May through September. With a number of tourist attractions such as the adjacent South Street Seaport Historic District, the New York City Police Museum, and Museum of American Finance and the 9/11 memorial just few blocks away, we are easily seeing over a one and a half million tourists visiting this particular area. New York’s financial district is already a must-see tourist destination. Premier Indiano Cuisine will be a destination dining locale, with its attractive atmosphere, international menu, and lounge. A large percentage of the tourist population are vacationing singles, groups of friends or family from all over the world who are here to socialize and be entertained. This is especially true for the tourist population that visit for sight-seeing and stay in and around various hotels. And of course we are catering to other 3 segments, which we think will mainly will be visiting us during dinner or after-hours time. We have kept our restaurant’s price, ambience, and décor sophisticated enough that it gives a feeling of luxury with a price that is easily affordable. Proposed Value Proposition and Positioning: Our strategy is simple: we intend to succeed by giving our customers a combination of delicious and more importantly authentic food in an appealing environment, with excellent customer service, whether on their first visit or their hundredth. Authentic certified Italian/Indian food gives people a trust towards the restaurant. Numerous restaurants exists specializing in very specific domain of service. With Indian food is fast becoming a mainstream food and Italian is already an established cuisine famous for its uniqueness and taste, it only makes sense to exploit such an opportunity and provide a blend of such service. Opting for one will not mean sacrificing the other cuisine.
We tend to propose our self as a sophisticated place, providing a fine dining and bar experience that costs between a 5-star hotel and a casual restaurant.
* Meal Customization: Fusion Cuisine is a new trend that is fast catching up the market. This is one of the most unique proposition of our restaurant. We give the customers the option to customize their order according to their needs. The option to have an Italian-fused-Indian or Indian-fused-Italian food will be one of our options. Such a diverse fusion gives people option to choose from than the contemporary specific Indian and Italian food. Also, given the fact we will have certified chefs for Indian and Italian cuisine gives us even more right to try such cuisines and serve them to customers.
* Technology: We will be using the IT technology from receiving orders to marketing. We will have customized app through which people can order by just checking the menu items they desire. This eliminates the need of any paper wastage. Our customized direction app will let people know the series of subways/trams or buses they have to take to reach to our restaurant. * Flavor Innovation: Just as the fusion style food, we will constantly valuate food choices for popularity, and keeping favorites on the menu as we rotate seasonal foods and specials.
* Authenticity: We give our customers the satisfaction that the food they are being served is an authentic one. Our certified lead Indian and Italian chef makes sure that the food served is of the same quality all year round with no lag in customer service.
* Easy Commute: Situated just few blocks away from the 9/11 Memorial gives us the advantage of easy commute from most of New York. Also, our customized app will help people to find our restaurant with the easiest way possible
Apart from uniqueness, we will have a very active management that will keep an eye on reviews we receive. Any negative reviews will be actively worked upon and rectified. Proposed Customer Equity | | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Potential Customers | Growth | Approximate customer growth | Business Person* | 4. 4% | 9,000 | 9100 | 9200 | 9300 | 9400 | Downtown Manhattan Couples | 8% | 5000 | 5100 | 5200 | 5300 | 5400 | High-end Singles | 20% | 2000 | 2100 | 2200 | 2300 | 2400 | The Destination Customer | 26.6% | 1500 | 1600 | 1700 | 1800 | 1900 | Tourists** | 40% | 10000 | 11000 | 12000 | 13000 | 14000 | Total | 5. 76% | 27,500 | 28,900 | 30,300 | 31 ,700 | 33,100 | Figure 2: An approximate growth of customer base (Given the fact that Business Person and Tourists are whom we are focusing our business, we chose to put a detailed analysis of this particular segment)
*Business Person: Almost a million people work in Financial District. Of that let’s assume 60% people go to restaurants. That gives us 600,000 potential customers. Of that we are assuming we are able to attract .015% of the business base. That gives us 9000 business person for year one. Though we will have a Category Market Share of .05% eventually, we will achieve that market share gradually. Being a conservative gives me a better chance to run a successful business. **Tourists: With the Financial District fast becoming an established tourist destination tourists are going to be more than the business person. Also, all tourists will have to eat at restaurants given the fact that they are outside their home. Let’s say there are 1.5 million people visit Financial District every year. Of that we assumed we can capture .0066% of people for my restaurants that gives us 10,000/year. Our Annual Sales Growth is based on attaining the following seating capacity percentage per dining period: We have 20 tables in a 3000 sq. feet area, with an average of 4 seats per table, depending on the design and position of seats in the restaurant:
Also, we will establish the prices as (all these prices are almost equal to National Average Meal Cost * Daily average for lunch spending is $10 per person * Dinner at $27 per person; and * $17per person for After-Hours dining. This comes around (assuming a table of 4 seating):
● Lunch: $40/table ● Dinner: $108/table ● After-Hours:$68
According to these assumptions we have below growth in 7 years: (By 2018, we have a cash flow of $135,000) Figure 3: Data based on Customer Equity Growth Model (See Appendices for detail) Key Resource Investments Areas: Our restaurant of almost 3000sq. feet at Financial District will have a unique blend of sophistication and a high-end experience yet in an affordable manner which is easily affordable by an average middle class family. The creation of a unique and innovative fine dining atmosphere will differentiate us from the competition. The restaurant will stand out from the other restaurants in the area because of the unique design and decor. We will offer a fine dining experience in an electric atmosphere. The menu will appeal to a wide and varied clientele. Our eclectic menu features specialties from Spanish ceviche, to Indian cuisines.
Also, our marketing strategies have been designed to get critics and initial customers into our doors through various external 3rd part reviews and in built app that has been built in our IPad app. Our sales will encourage customers to become repeat customers, and to tell all their friends and acquaintances about the great experiences they just had at Indiano Cuisine Restaurant. We are going to take any negative reviews seriously and work on negating it. Indiano Cuisine’s sales strategy will require consistent high quality food, service, speed, and atmosphere. We can accomplish this by: * Hiring employees who genuinely enjoy their jobs and appreciate Indiano Cuisine’s unique offerings
* Continually assessing the quality of all aspects of restaurant business starting from food, ambience, customer service and more importantly, customer experience, and immediately addressing any problems
* Interacting with our customers personally, so they know that their feedback goes directly to the owners Evaluating food choices for popularity, and keeping favorites on the menu as we rotate seasonal foods and specials (Indian/Italian) Due to intense competition, restaurateurs must look for ways to differentiate their business to achieve and maintain a competitive advantage. Lower Manhattan redevelopment after 9/11 attack requires a place that will fit into the 'new look' of the locality, one that is contemporary and entertaining. We are sure Premier Indiano Cuisine Lounge will find its niche and will be successful business. BACKGROUND APPENDINCES:
a) Customer Growth Equity Mode Model Parameters | Baseline Model Assumptions | Growth Model Projections | Explanation | Discount rate (i) | | 12% | (given) | Model Year | 2015 | 2018 | | DMU | Individual | Individual | | market potential (m) | 720,000.0000 | 720,000.0000 | #Financial District Population-60,000
#No. of tourists: 1,000,000
#No. of workers that commute everyday : 60,000
#Average Disposable Income/year: 45,463
#Market Potential= .6* 1,200,000
#I assumed the percentage of people in Financial District going to restaurants in 60%
#Since it already is a saturated market, i dont see an increase in the market share of restuarant going people. So kept it at 60% | market development index (MDI) | 83% | 83% | # I assumed the market for restaurant is almost saturated . Hence I assumed a 50% of 60% market is captured | Category market share (MS) | 0.05% | 0.05% | | Targeted Transaction: Per Customer | | | # No. of table 20
# 50% occupancy rate/ day
# $40 per table per sitting average income( this reaso#Average cost of a dinner/lunch: $43.46)
# 4 number of sittings per day
#$1400/day($510,000/365) | Number of Transactions/Year With Us | 10 | 12 | | Units/Transaction | 1 | 1 | | Average Price Paid /Unit | $40.00 | $45.00 | | Average Operating Margin/Unit | 30% | 35% | # I already am charging a average cost while providing a different class of product and service. With increase presence in market and an established business, I can charge more to the people in future increasing my profit margin | RR: Retention Rate- Targeted Transaction | 70% | 70% | # I don’t think I can have a 100% retention rate but if the person is thinking to have a good food and don’t want to to take a risk of trying other restaurants, the obvious choice will be a previous visited restaurnat. Hence, the same retention rate | Related Transaction* | | | | Number of Transactions/Year With Us | | | | Units/Transaction | | | | Average Price Paid /Unit | | | | Average Operating Margin/Unit | | | | RR: Retention Rate- Related Transaction | | | | | | | | Model Outcomes | Baseline | Projection | Growth | Model Year | 2015 | 2018 | | N: Number of Active Customers in Segment | 600,000 | 600,000 | $0 | BPR: Brand Penetration Rate | 0% | 0% | 0% | AMPC: Targeted Transaction | $120.00 | $189.00 | $69.00 | AMPC: Related Transaction | $0.00 | $0.00 | $0.00 | Segment Average CLV | $285.71 | $450.00 | $164.29 | | | | | Segment Total Customers (X) | 300 | 300 | 0 | Segment Total Annual Units: Targeted | 3,000 | 3,600 | 600 | Segment Total Annual Units: Related | 0 | 0 | 0 | Segment Total Annual Revenue | $120,000 | $162,000 | $42,000 | Segment Total Annual OM | $36,000 | $56,700 | $20,700 | Segment Customer Equity | $85,714 | $135,000 | $49,286 |
b) Customer Segment
c) Decision Making Process and Identifiers:
d) Value Proposition:
e) Key Differentiators:
f) SWOT Analysis
g)TEST CARD: Test Name | Measuring the market potential of an Indian/Italian premier restaurant business | Assigned to | | We Believe | Today’s customers, especially business people and tourists crave for a high-end relaxing experience but in an affordable manner where they believe every dollar spent is worth it | Verify our idea | To verify our proposal, we have calculate our growth model on National Average prices of menu and considered statistics of people food habits and location preferences | We are right if | We achieve breakeven of our investment in a 5-year period |
