Customer Need and Industry Trends
Food truck business has high chances of becoming popular because food industry is one of the kinds of businesses that never go out of fashion. This business is designed to fulfill the customers’ need for food. The customers targeted by the food truck are hard working business men and women that almost never have time for proper meals, they often cannot allow themselves to leave work for too long, their lunch breaks are very short.
They also cannot afford having meals at the restaurants and cafes because this can be quite expensive or simply inconvenient. At the same time, it is a well known fact that having fast food every day is extremely harmful for health. It increases the cholesterol level in the human body, which may result as heart diseases. Besides, fast food contains unreasonably big amounts of sugar and this may lead to sicknesses such as diabetes.
Moreover, eating fatty and sugary food every day will certainly cause problems with weight and obesity. Today, most people try to be careful and concerned about the food they are consuming. This is why the customers are interest in purchasing the food of good quality, preferably, freshly cooked and with proper ingredients. They also have the need for meals that will be served fast, as they do not have much time to eat.
Finally, they require affordable food. The truck will answer all of these needs. It will be based in the busiest central districts of the city and address the needs of various kinds of customers. It will serve meals to business employees, it will also stop in park areas, where people will be having picnics and may have need for deserts and light fresh meals, it will also stand near the bars that do not sell food after a certain hour in the evening. This variety of places and clients will allow the business have a stable income at any time of the day on working days, weekends and on holidays.
Food Truck Target Market
The target market for the products sold by the food truck business will vary. Yet, the main group of potential customers that the business is oriented at is the people working in the offices based in the central business district of Portland. The business workers that have little time for proper meals will be especially interested in the services of the food truck.
These are the most profitable customers because they have an opportunity to pay well for the food served by the truck, they will appreciate the freshness and quality of the meals, and they also are numerous in the busiest area of the city. Besides, they work every day in the same offices so there is a good chance that these clients will become loyal to the business. These customers will buy the products of the truck on every working day, because the need for food is constant and daily.
The quantity of business people will be the biggest compared to other types of clients of the food truck. This is why they are considered as the most profitable group of clients for the business. The customers that belong to this group are averagely aged eighteen to forty. The group includes both men and women that occupy both lower and better paid positions. The food truck business is a physical business because it actually brings the salesman and the customers together in the same place, the truck will be based in a certain district for some while and the customers will come up to it for the meals (Riley 2012).
This business is also geographical and local, as the truck will intentionally arrive to the districts that have the biggest number of potential customers in certain times of the day. The geography covered by the business includes business districts of Portland, the biggest parks and recreational areas, and also in the evening the truck will travel to the streets with many bars on them. The population of Portland counts over six hundred thousand people, which means that the size of the market for the food truck business will include thousands of clients every month.
Market Research: Size & Demographics
In order to estimate the size of the market covered by the food truck several different researches need to be conducted. First of all, the managers need to identify the types of customers that are included into the target group. Secondly, the number of these clients needs to be calculated. Then the penetration rate of the products sold by the business has to be taken into consideration.
Since the truck sells food, it is logical to state that the penetration rate of the business is very high, because food is an essential product needed by everyone. The next step is to estimate the market size, its potential value and volume. This is done by means of multiplying the number of target clients by the penetration rate (How to Estimate Market Size: Business and Marketing Planning for Startups 2009).
Finally, the research needs to add the best case and worst case scenarios for the business in order to predict all possible results. This type of research that is required for the collection of the data needed for this analysis is qualitative and quantitative.
This research is extremely important because it is the base for the market planning; besides the budget of the business needs to be estimated beforehand and this cannot be done without the knowledge about the number of customers, penetration rates, value and volume of the market for the business. This analysis is necessary for the startups and new businesses, especially in cases where the third party budget is going to be included. Besides, the market analysis is the only way for the managers to understand the potential of the business and its future revenues.
Marketing Mix
The marketing mix for the food truck business will include the standard four P’s, which are product, place, price and promotion. The product section stands for what the business is selling. Food truck is designed to cook and sell meals and beverages of different kinds.
Mostly they will be lunch meals both vegetarian and non-vegetarian. The truck kitchen will also have an opportunity of preparing deserts for the holidays and weekends, when the truck will be based at the parks and recreational areas. The main benefits of the meals sold from the truck will be their freshness and their good quality, as those meals will not be fast food.
Besides, in order to reduce the harm caused by the big amount of trash that will be left in the areas around the truck, the managers decided to use eco-friendly packaging for the meals the business will be selling. The quality of the product will be guaranteed by the owner of the business, yet the meals will contain no preservatives this is why they should not be stored for a long time.
The place section describes the location of the business and the way, in which the business will interact with the customers. The food truck is in a physical kind of market, it will strategically base itself in the areas that potentially have the biggest number of clients. The customers will come up to the truck and order meals, which will be sold to them directly.
The price of the products sold from the truck will be determined my means of calculation of the costs of all the ingredients. The food cooked in the truck will be affordable. Its price will be definitely higher than the price for fast food of bad quality, but it will be significantly lower than restaurant prices.
Promotion is highly important for the future of the business and its popularity. The personal selling will be one of the types of promotion used by the food truck business. The customers will be able to speak to the salesman and the cook, find out about the details.
Besides, the most interesting information and the menu of the truck is going to be available on the display on the body of the truck. The truck’s appearance will be its own advertisement, its best propositions and catchy phrases may be written right on it.
Moreover, to attract more attention and to let the customers know the truck is nearby, it may use music, which will also serve to create a positive atmosphere among the clients. Loyal customers may be offered discounts. This means that the types of promotion the food truck business will use are advertising, personal selling, publicity that includes information about the products, and sales promotion provided by means of performance with the help of music and discounts made on holidays or offered to the loyal clients.
Food Truck Target Market Share
Since food is a very essential and important part of people’s lives, the food truck business will have a high penetration rate. Besides, the target group of the customers of this business is especially interested in quick and fresh meals of good quality. The truck will be strategically based in the most crowded and busy central districts that have lots of office workers, which compile the most profitable target group for the business.
The number of such workers in the business districts of Portland counts thousands of people every working day. The truck will be selling several hundreds of meals in the business districts every working day. On weekends it will relocate to the recreational areas of the city, the number of lunch meals will be lower on weekends; this is why this will be the time when the truck will switch so selling and promoting deserts such as ice cream and pastries of various kinds.
The truck will be able to perform several thousand transactions every month. Determination of the target market share of the food truck business will help estimate the costs it will be able to spend on the sales promotion and advertising, the payments of the workers and costs of production and distribution, which include the cost of gas and ingredients for the meals.
Reference List
How to Estimate Market Size: Business and Marketing Planning for Startups (2009). MaRS. Web.
Riley, J. (2012). Marketing – Types of Market.