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Acknowledgment Case Solution

MARKETING PLAN

Market Analysis

The food industry and the restaurant industry is always steady growing industry. One aspect of this industry that needs to be taken into account in the industry life cycle and the immense competition between competitors. Since there are many different players in this industry all over the world, there are those that are the “dominant” players but there are never one or two that completely corner the market or have all the market share, that is why there is always room for growth in this industry, taking into account you have found the right opportunity and solution. With this industry being quite cyclical, it tends to get hit the hardest where there is uncertainty in the region or if we are in a recession.

In Spain, the food industry on average has about a 1.28% compound annual growth rate (CAGR) (MordorIntelligence, 2020). According to Mordor Intelligence, a business in industry analysis and consulting, they realized that the relatively high level of growth in the restaurant industry can be attributed to the increasing tourism, increasing number of women in the workplace, the change in consumer patterns, and the growing preference to try out a range of different foods from ranging cultures. With the increase in disposable income, pre-Covid, the foodservice industry was primed to experience huge growth in the next few years, which would provide a great opportunity for those already in the business, and those wishing to enter. A quote that I felt reflected the upcoming trends and future was that “the demand for good food in an affordable, informal, social environment is growing, as consumers place format secondary.” What I believe this quote was trying to iterate was that consumers are now focusing more on the quality of the food they are eating, for the price they are eating, rather than the actual locale.

Market Trends

Vegetarian Eating

Since the beginning of 2019, almost 10% of all Spanish adults declared themselves “veggies”, representing a growth of 27% since 2017 (Market, 2019)that accounts for almost 817,000 new “veggie” consumers. The term “veggies” refers to those who maintain a mainly vegetable/plant-based diet and occasionally consume meat or fish or dairy. According to the report from “The Green Revolution,” this trend is not just a short term trend, but it is a “consolidated and rising social reality.” The driving forces in this trend are strongly correlated to the role of women in society, the necessity to adopt a better diet and lifestyle, and the climate crisis we are facing. In Spain, since one in every 8 Spanish women is considered a “veggie,” they represent 64% of this trend. This has increased from one in every 10 women in 2017. The younger generation of people is driving this trend, where 15% of veggies fall between the ages of 18-24. However, the main driving force for this trend is personal health. 67% of Veggies chose their diet to take care of their health, 23.8% because of concerns for animals, and then 22.8% for sustainability and the future of our planet. Not only is this trend growing, but it is growing extremely fast. According to AliMarket, they predict that in 2020 there will be at least 1,200,000 new “veggies” in Spain. And not only is it just veggies that are driving this trend, but even 35% of Spaniards stated that they have reduced or eliminated their consumption of red meat in the last year.

Becoming More Local

In recent years, the tendency in Spain to eat at more “local restaurants”, restaurants that were created in Spain, has increased 7% since 2018. People would rather eat at a local restaurant rather than an international chain restaurant, or a restaurant that is not fresh at all. We strive to always have fresh ingredients, especially since our products will not include meats and therefore will be much easier to locally source and to keep fresh for longer. This trend also has to do with consumers becoming more health-conscious. Eating at a more local and locally sourced restaurant means that the food you are consuming has most likely not been shipped from a different corner of the world and is now on your plate. That type of eating would be done at a more international food chain where they rely on a low-cost method of getting their food.

Market Size and Potential Growth

Spain, being the country in the world with the highest number of restaurants and bars per capita, and the second most visited country in the world, there is space for major opportunities here. With many countries still under a lock-down or with extremely tight travel restrictions, the food and leisure industry took a major hit and came to a standstill while the COVID pandemic took control over global tourism. All around the world, the restaurant, bar, and hotel industry could only watch from the sidelines as their beloved businesses came to a halt for much of the year. According to AliMarket, the restaurant industry in Spain reached sales of 31.14 billion USD in 2019, an increase of 5% from the year before, and was expected to increase even more in 2020 (CISION, 2020).The image below shows the past, current, and future projected revenue generated by the food industry in Spain (Statista, 2020).

The global fast-food market is increasing at an extreme rate every year. With a CAGR of 4.6%, this industry is a fast-growing one. According to a report done by Research and Markets about the fast-food market and potential opportunities, the global fast-food market was expected to reach $931.7 billion by 2027, in comparison to the $647.7 billion in 2019 that is an extraordinary amount of growth. They explained that the high growth expected over the next 7 years can be attributed to changing lifestyle patterns such as hectic schedules, working women, and a rise in exposure to international cuisine. All three of these changing lifestyle patterns are opportunities that Mediterranean Palate can take advantage of and use to our advantage. Since we will be a more healthy option than most fast food options, this will cater to those women workers who wish to maintain their healthy lifestyle while also following a very hectic schedule. We are also an international cuisine company and that will prove more sustainable in the long run with the rise in international cuisine through media around the world.

Our Customer Segments

Our primary market segment will be young Spanish and young people in Madrid. This age range will be from 15-30 years old. These people will ideally be either in school, whether that be grade school or university, and people entering the workforce or have recently entered the workforce. Younger people especially are having a “wake up call” to everything they ingest into their bodies. With the rise in health optimization, spirituality, and general well-being around the world, the need for generic fast food around the world is diminishing. People and potential customers are now not only looking for fast, affordable food, but there is now another adjective you need to add to the mixture, and that is “nutritious.” The days of all students getting together after class and having a Mcdonald's, or a Burger King, or even Subway are starting to be trends of the past. We are primarily aiming towards the more educated side of this segment as they will be the most health-conscious and care more about what they put into their body. These values and beliefs will be one of the core values of Mediterranean Palate and that is another way we will influence consumer purchasing behavior, by merging our values with the customer's psycho-graphic traits.

Our second market segment is “working professionals” in Madrid. We will mainly be focusing on the more “foreign” professionals as the Spanish have a very different eating culture than the rest of the world and favor a more formal and lengthy meal rather than a quick, affordable, healthy meal. These working professionals will be those that do not have much time to sit down and enjoy a meal and a nice sit-down restaurant and would prefer to either get their work done while eating or they need something in between meetings and/or work.

Our last segment, which will be an outlier segment, will be young people in Madrid who are hungry at night. We will offer a special “late night” menu which will be open late for those people who wish to eat something late at night and this service will be available in stores (varies by store) and through delivery with Glovo, UberEats, and Deliveroo. We chose this as an outlier segment because we will attempt this only after establishing our main segment (segment 1) and then attempting to see if this is a viable market segment. Ideally, our customers have several core similarities and these would include but are not limited to:

Wants variety and flavor in its food, preferably something healthy
Looks for speed of service
Looking for an entertaining and fun experience
clean, friendly, and attractive environment
Adopts a global lifestyle
Relatively well educated
Enjoys eating out
Lives an active lifestyle
Comes from various ethnic backgrounds.....................
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