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Consumer Behavior and Marketing

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Launching a new food product

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Consumer Behavior and Marketing

  1. 1. Boroti Food Inc. 1 Loraine Toorie MG460 10/28/2010Introduction: Thesis statement: As innovator/manager of a new food product to researchpotential markets within diverse areas by mirroring selected industry analysis (data). The restaurant industry has altered the Greater Boston area due in great part tochanges in consumer behavior and the elements of consumer purchasing decisions.Consumer behavior research attempts to model and understand how individuals or groupsacquire, use, and dispose of products or services, activities and ideas, in order to satisfyneeds and desires over time. For innovators interested in introducing a new food productinto a market, it is sensible to know that market and, if that market would support theproduct. Following the marketing and sales principle “know thy customer” is the core ofany research in the field of consumer behavior. But keeping up with new culinary trendsis vital in developing a food product. Not paying attention to trends in the food industrycan potentially be a “spook-in-the-wheel” for innovators. To arrive at a perspective on aspecific market, in this case the “dine-out” market, requires research into who, what,why and where dimensions. Attempting to map these dimensions of consumer behavior,would be to observe the community effects, or the contagious factors (lifestyle) of thecommunity members, as an important driver of change and getting to know yourcustomers. This research starts with some basic background demographics of the restaurantindustry in the Greater Boston area. This will provide insights into the following. • The competitive forces in the food industry (trends). • Growth opportunities (within a new industry).
  2. 2. Boroti Food Inc. 2 Loraine Toorie MG460 10/28/2010 • Strategies to raise profitability and competitive position in an industry. What this study will do is examine how marketing should best be geared todemographics and affluence in an area in order to support a quality product for the lowestcost that meets customers’ expectations. The goal of the project is to keep marketing costlow, to monitor the trend of ethnic restaurants in the Greater Boston area, to look forother measures that can track consumers’ tastes and behavior that account for the wave ofchange that has altered the area.
  3. 3. Boroti Food Inc. 3 Loraine Toorie MG460 10/28/2010 Background: The National Restaurant Association, 2011, predicts sales turn positive after athree year slump. The number of national restaurants recorded by the industry is in thevicinity of 960,000, over 14,100 restaurants reside in Massachusetts. The revenue fromfood is rising with the National Restaurant Association figures showing “the U.Srestaurant industry sales in 2010 will exceed a half trillion dollars.”(Figure 1) $580.100 $600.00 $500.00 $379.000 $400.00 $300.00 $239.300 The U.S. restaurant industry’s sales $200.00 $119.600 $100.00 $42.800 $0.00 1970 1980 1990 2000 2010 (Figure 1) * Projected Source: National Restaurant Association An important measure of food businesses in the area is the number, and the types ofrestaurants, that have increased market share. The types of restaurants and the factorsthat produced such change in the Greater Boston area is the main focus of this research.Datamonitor’s Products scan online indicates consumption of international herbs andspices within a 20 year range from (1983 to 2003) has doubled in the United States.(Stagnito, 2005) This statistic is one indicator, in our view of the alteration in consumertastes, from “meat and potatoes”, to a more diversified mélange of foods, and the degreeto which this is accounted for by new immigration. “The U.S. Census bureau 2009
  4. 4. Boroti Food Inc. 4 Loraine Toorie MG460 10/28/2010American Community survey indicates that there are more than 38.5 million foreign bornpersons living in the United States – roughly 13% of the population.” (mintel.com)Boston has seen the effects of different ethnic groups and their varying culinary skills onthe community at large. The National Restaurant Association predicts the top 20 trends inthe food and beverage industry for 2010, with “Ethnic fusion” and “LatinAmerican/Nuevo Latino” included in the picks. Included in the line-up of trends in thefood business, is “organic” and “natural” foods that may be a competitive force againstethnic food trends.
  5. 5. Boroti Food Inc. 5 Loraine Toorie MG460 10/28/2010Section OneII. Validating the product concept:The new product to be launched combines a Mexican concept with a West-Indian flavor.The mission statement of Boroti Food Inc is to provide high quality food, freshingredients for an affordable price. Boroti is a niche concept, which utilize the “shell” orskin of the “dhalpuri”, a West-Indian roti, stuffed with ground seasoned split peas andvegetables as condiments. Various spices used are: curried powder, (“shadon beni orbandhania”) a relative of cilantro. The burroti will be prepared and packaged in fivestyles, curried (chicken, beef, pork, lamb, goat and shrimp). The condiments or filling forthe “borroti” include; “channa” chick peas, potatoes, sautéed “dasheen bush” a greenleafy vegetable derived from a root tuber, (spinach can be substituted), sautéed squash,sautéed “bhodi” (long green beans) and fried “carali” (bitter melon). These highlyflavored ingredients would be incorporated with the customary burrito filings such as;black beans, red beans, pulled pork, blackened or BBQ beef. The blending of the twoflavors would be in cooking the beans with West-Indian spices, adding rice as a filling tothe “dhalpuri” in combining the Mexican burrito and the West-Indian dhalpuri. The“Burrito” will be changed into the “borroti” with these highly flavored West-Indian“staples” to create the new food product, the “borroti”. Research based on spice imports,suggests taste has migrated to more ethnic flavors which supports the base for thisbusiness venture. The area has already shown that restaurants with a Spanish/Mexicanflavor have staying power. The National Restaurant Association shows that Tapas (smallplates) restaurants from Spain, has seen an increase in the amount of dine-out customersthat opt for this type of food (Restaurants USA, 2010).
  6. 6. Boroti Food Inc. 6 Loraine Toorie MG460 10/28/2010The Boroti list of food items on the Menu. Menu DHALPURIDhalpuri: A flat bread that is filled with ground split peas, geera (cumin), cilantro, garlic and saffron. It is toasted on a platen (tawa) to bring out thearoma and spices in this delicious, fresh roti.Chicken dhalpuri: filled with cubes of slow cooked chicken breast, seasoned to perfection and flavorful West-indian spices.Beef dhalpuri- filled with tender morsels of beef that is seasoned to perfection that compliments any condiments.Shrimp dhalpuri – filled with local market shrimp, cooked just right and served hot and fresh to maximize the delicious added West-indian spices.Goat dhalpuri- filled with curried goat (seasoned overnight) in Trinidadian rum, curry powder, shadon-beni, garlic and other local spices that makes thisdish truly unique to the West-Indies.Vegetable dhalpuri- filled with a choice of many fresh vegetables from the menu. Vegetable condiments: Curried chick-peas and potatoes. Sauted green, long beans Sauted pumpkin Sauted eggplant Sauted ochres Sauted spinach or (dasheen bush)
  7. 7. Boroti Food Inc. 7 Loraine Toorie MG460 10/28/2010 Quacamole (crushed, seasoned avocado) Tomato Salsa Mango Salsa Kuchila spicy (preserved sun-dried mangoes, cured in mustard oil) Rice- (white, brown, basmati) Beans and peas – chick peas (channa), lentils, red beans and black beans. Two such restaurants within the proposed location that have shown this stayingpower is Orinoco and Toro will be analyzed. A. Customer interviews i. Analyzing data capture ii. Defining a target marketii. Emerging restaurant concepts for 2010 indicates which age group and incomelevel is returning to restaurants first. Market drivers in the food market shows thatcolleges and schools provide the greatest revenue on its own, to the food industry. Andthe main reason for customers to dine out is ease and convenience. “Young adults, manyof whom may not be home cooks anyway, dine out less to avoid tasks than to findpersonal or group enjoyment. (Mintel). The target market is geared towards youngA secondary audience of “foodies” is also targeted for this product. B. Bubble diagram (describes and prioritizes elements of the product)
  8. 8. Boroti Food Inc. 8 Loraine Toorie MG460 10/28/2010Section TwoII. Demographics and AccessThe demographic profile of the Greater Boston area and the dine-out industry haschanged greatly in the last twenty years. The population of the area has seen changesfrom a low-income, predominantly black area to a hugely diverse population with a highpercentage of young, educated students and business people. The proximity of majorcolleges and Universities some (Ivy League), have contributed to the present population’sdiversity. What people eat depends upon who they are (ethnic, profession, heritage),where they live (urban, rural) areas, and how much money they earn (professionals havemore money than students). A. Demographics B. Affluence of the area C. Comparison of menus from (1970-2010) C. Number and type of new restaurants/cafes per year D. Analysis of industry standards
  9. 9. Boroti Food Inc. 9 Loraine Toorie MG460 10/28/2010Section threeIII. Marketing tools/instruments A. Market strategyProduct differentiation is a typical marketing strategy. When consumers are faced withchoices research has shown marketing strategies can affect the formation of choices andthus create competitive advantage. (Carpenter, Glazer, & Nakamoto, Aug 1994. p. 340)The use of meaningless differentiation is one medium of creating a meaningful brand.One of the first steps to differentiate a product is coming up with a good idea that makeseverything else in the market irrelevant. There are three core elements of successfuldifferentiation.1. significance2. provability3. sustainability i. Market selection (target market) – ethnographic strategy i. Product differentiation ii. Meaningful differentiation iii. Meaningless differentiation B. SurveysSurvey: (Based on food demonstrations). Carded for Saturday April 16th 2011. i. Survey questions (sample of designated area of product launch) ii. Survey respondents (sample of designated area of product launch) iii. Survey respondents (sample outside designated area)
  10. 10. Boroti Food Inc. 10 Loraine Toorie MG460 10/28/2010V. C. Interviews i. Personal interviews on food preferences ii. QuestionnairesSample questions: 1. What did you think of this new food product? 2. Would you incorporate it into your regular choice of “dine-out” options? 3. After trying this new food product, would you try it again? 4. Is the price affordable? 5. What recommendations would you consider to improve this new food product? iii. Data Analysis iv. Frequency distribution (mean, median, mode) D. Positioning of product
  11. 11. Boroti Food Inc. 11 Loraine Toorie MG460 10/28/2010Section FourVI. Market analysis of main competitor (Orinoco restaurant) Orinoco, a mere 830 square feet restaurant, located in the South-end, is owned byAndres Branger, a Venezuelan import who moved to Boston in 1979. Branger andRodriguez (business partner and chef) at Orinoco entered the Boston market with theniche concept “taguaritas.” Taguaritas are rustic, warm eateries that serve arepas: grilledcorn-pocket sandwiches stuffed with all sorts of fresh ingredients. Branger admits that"arepas are the great equalizer back home-absolutely everyone eats these there, whethertheyre rich or poor." (Improper Bostonian, February 2006) The restaurant serves eightchoices of arepas, the “reina Pepiada”($4.75) is filled with succulent chicken, cilantroand avocado is the runaway favorite. The menu includes other favorites such asempanadas, soups, and “pabellon criollo”: shredded beef and sauce with rice and sweetplantains, for ($13.25). The Latin restaurant is a mere 830 square feet. The chef paysattention to other trends in the Boston area and offers a “Boston-friendly” approach bycutting down on heavier ingredients and making the dishes lighter and healthier. TheImproper Bostonian reported in 2006 that Orinoco, a labor of love “ran out of food theday it was opened.” In 2009, the restaurant was featured in WCVB-TV, Chronicle “AlFresco” showcasing its homely, warm dining atmosphere and ethnic cuisine, a hit withBostonians that the owners opened another branch in Brookline Village, Brookline.
  12. 12. Boroti Food Inc. 12 Loraine Toorie MG460 10/28/2010Toro Restaurant Analysis:
  13. 13. Boroti Food Inc. 13 Loraine Toorie MG460 10/28/2010Section FiveVII. Monitoring the trend of diversification/gentrification in the restaurant industry in BostonVIII. Risk management In a fast-paced, evolving sector such as the food industry, risk management is acentral aspect in the strategic design process. Part of this process can be incorporated bydeveloping and laying down the framework. Laying down the Framework (Case Study) Case: Risk Management for the launch of a New Food product Project Name: Boroti Food Inc. Domain: Consumer Behavior and Marketing Deliverable: Brand launch of a new food product Vehicle: Promotional campaigns via food demonstrations and surveys Taste: “Quality, ethnic flavored street food” Campaign: Promotional campaign to match the trend of the new trend in ethnic foods Product Quality: An ethnic food blended with West-Indian spices and fresh vegetables. A combination of a Boritto and a Dhalpuri. Project Cost: Launch cost USD 60,000 Project Time: 12 months Risk: Insignificant market response
  14. 14. Boroti Food Inc. 14 Loraine Toorie MG460 10/28/2010IX. ConclusionX. Abstract References
  15. 15. Boroti Food Inc. 15 Loraine Toorie MG460 10/28/2010Carpenter, Gregory S., Glazer, R., Nakamoto, K. (August 1994). Meaningful brands from meaningless differentiation: the dependence on irrelevant attributes. Journal of Marketing Research. Retrieved from http://business.highbeam.com/138014/article-IGI-1 5702863/meaningful-brands- meaningless -differentiation-dependenceLassiter, J.B., & Gardner, D. (2006). Marketsoft: Case analysis. In B.Unger (Ed). MG*541EX: (Required Cases) The Innovation Process – Developing New Products and Services (pp. 61-87). Boston University. (Reprinted from Harvard Business School publishing 9-800-069)Opening a restaurant or other food business starter kit: How to prepare a restaurant business plan & feasibility study: With companion CD-ROM / author(s): Fullen, Sharon L.Washington, K., & Miller, R. K. (2010). Chapter 17: Buying influences. In (pp. 82-87) Richard K. Miller & Associates. Retrieved from Hyperlinkshttp://search.ebscohost.com.ezproxy.bu.edu/login.aspx? direct=true&db=bth&AN=45440622&site=bsi-livehttp://books.google.com/books? hl=en&lr=&id=eRmNJQfjF3kC&oi=fnd&pg=PR13&dq=consumer+behavior+in+the +food+industry
  16. 16. Boroti Food Inc. 16 Loraine Toorie MG460 10/28/2010http://www.foodtimeline.org/fooddecades.html#1900smakehttp://business.highbeam.com/138014/article-1G1-15702863/meaningful-brands-meaningless-differentiation-dependencehttp://www.innovationxbook.com/pdf/Innovation%20X%20-%20Chapter%201.pdf Additional Referenceshttp://www.restaurant.org/tools/magazines/rusa/magArchive/year/issue/article/?ArticleID=408

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