Download EZ-Khaana File

Contact Information
Haresh Mehta
85, Easton Avenue
Apt. # 3 H,
New Brunswick, NJ 08901
Tel # (973) 393 0537
[email protected]
EXECUTIVE SUMMARY
CONCEPT NOTE
EZ-Khaana is a fixed menu Indian style food service (restaurant), serving healthy, low calorie nutritionally balanced meals, at
inexpensive prices, in the US.
A convenient alternative to home cooking, which will be inexpensive, healthy & fast…
Document Objective: To present the reader a picture of the critical elements that lend support to this innovative concept.
Some of these being: lead promoters/ key management personnel, sales, marketing & launch strategies, financial projections &
a time line of capital infusion, growth strategies and other important information.
DEFINING THE MARKET
Product Positioning & Market Void

A high density of single Asian Indian immigrant populations concentrated in pockets around the major cities, across
the country. The Indian population has grown at over 106% annually, in the 1990’s.1

The dual income structure of immigrant families, the rising health consciousness of the population at large and an
increasing practice of eating out due to the value of quality time.

The problems associated with Indian cooking in poorly ventilated houses.

Absence of standardization in food quality and the high price of existing take out services. We offer consistently great
tasting meals starting at a mere $4.99.

Growing consciousness about healthy eating (a complete meal amounts to no more than 750 calories).
COMPETITIVE STRATEGY & POSITIONING
Company Goals & Objectives

To establish EZ-Khaana as a meal service offering meals for sit down and take out, and expand to multiple markets by
the end of year two.

To establish a foundation for bulk order/catering business in the New Jersey/New York area.

To use low cost marketing tools to establish a loyal customer base, through subscriptions and deliveries. In addition,
develop distribution centers at high traffic/demand locations.
1
http://www.asian-nation.org/history4.html
Friday, April 11th 2003
2
A concept being tried for the first time in this country, we could comfortable say that we face no direct competition; but to say
that we face no competition at all would be really short sighted. EZ-Khaana would attempt to differentiate itself on the basis of
product variety, price and quality.

To begin with, EZ-Khaana would directly compete at the concept stage in terms of take out alternatives, with Chinese
take outs, American fast foods, salad bars, localized pizzerias/pasta and other snack food outlets.
QUALITY & VARIETY
LOW
PRICE
HIGH
Carts/Stands/Trucks
Cafeterias
EZ-Khaana
Burgers/Sandwiches
LOW
Burritos
Delis
Restaurants
Chinese Take-outs
Salad Bars
HIGH

EZ-Khaana would differentiate itself on four parameters
1.
Price – No other food chains provide a complete meal with fixed portions of 3 entrees plus rice, bread and
yogurt, for just $4.99 a meal.
2.
Nutritional quality & taste of the meal – Low fat cooking medium will be used to ensure that the meal usually
measures just 750 calories or less.
3.
Variety of the meal – Unlike most of our competitors, our team of chefs serves a variety of entrees, which do
not get repeated for at least a fortnight (except the rice, lenticels, bread and yogurt). Most of our competitors,
serve a meal with just a single entrée for at least 120% of our price. This is particularly important for our
subscribers, who are entitled to a further 20% discount to encourage take-outs.
4.
Convenience & pace of service – Our operational plan helps us deliver meals at strategic distribution points
and also by the drive-through method. The transaction time for each customer is extremely low.
This is also the key feature of our business model, as we attempt to cut transaction time from ½ an hour (as in
the restaurant business) to less than a minute, per customer served.
MARKETING & SALES PROMOTION
Positioned as a low-calorie healthy meal provider, EZ-Khaana is targeted at the growing immigrant Indian population, as a
convenient and affordable alternative to home cooking. The major thrust of the marketing campaign would promotions backed
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by press write-ups & coverage in ethnic dailies, magazines, radio and cable TV. PR will be the dominant tool to inform
consumers about the food service & convey the health benefits of a balanced meal.
The chief objective of the marketing strategy is to ensure that we satisfy the following criteria.

Acceptability – The strategy would have a two pronged approach. The first would be to ensure that we have adequate
distribution in geographic pockets that house our target customers, i.e., be close to populations that need not be
convinced about the food or its taste. This is the most important criterion in site selection for the restaurant and the
distribution centers.
The second challenge is to create acceptability to sections of the population, which flirt with Indianized cuisine.

Affordability – This is not just a part of our marketing strategy, but also the key foundation of our business
model…EZ-Khaana…Just $4.99.

Availability – As noticed earlier, the operations model ensures, a great network of timely deliveries and a wide
geographic reach, too.

Awareness – We propose to achieve awareness through our media campaign, promotions and in-store sampling. In
addition, we also hope to receive media support through our chief supplier. Promotions will include discount coupons
as well as incentives for referrals. This strategy will help create repeat orders, market expansion & growth.
Sources of revenue include sit downs; take outs, catering/banquets & concessions (beverages). Marketing innovations
include monthly subscriptions, deliveries (to other densely populated pockets) & distribution points at strategic locations
and high-traffic zones like factory floors, offices, work shops, etc.
BUSINESS MODEL – HIGHLIGHTS

Replicable business model that can be carried to multiple cities, across the US.

Economies of scale exist in each market but do carry across to other markets and therefore each market can be treated
independently. Once the operation is in place in one city, venturing into other target markets is merely a function of
resource availability.

We are in the business of food service and not restaurants. The restaurant component is merely a form of economical
advertising and sales promotion. It also acts as a centralized operations hub.

The conventional restaurant business relies on weekend sales for its revenues and we on subscriptions and banquet
sales. We are in a volume business & our marketing efforts will drive on increasing subscriptions, banquets and
recurring sales. 2

Invest in information systems to manage near perfect supply chain operations and logistics.

Build Brand through customer-delight. Attract them by price; Let the quality & variety of the product hold the
customer there.
2
See graph for sources of revenue listed in the finance section.
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
Centralize production for each market as a means to control cost, quality and distribution.

No main stream advertising, except for the launch. Most campaigns would be promotional in nature and aimed at
creating awareness.

Offer membership and renewals through phone and internet and other available media like kiosks located at malls.

Controls cost, reinvest profits and manage pace of expansion.

Build a brand loyal customer base. The loyal customer will be particularly crucial in fending competition.
OPERATIONS MODEL & DISTRIBUTION

The revenue stream and value in the system is generated from two aspects: quality of the food at the great price, and the
pace of service/convenience. Packaging systems ensures that the food remains fresh for over 3 hours in the pack.

To ensure that we carry the value across as intended, the operations are based on the classic spoke and hub pattern. The
production is centralized & the food is then shipped out to various locations in a 20 mile radius.

Banquets orders are received well in advance. Delivery and execution will depend on the size of the order, and also the
location from the central hub.

The important point is that none of the spokes contribute to any production activity. The main reason for their existence
is spread tentacles into population pockets, that are too small to support an independent distribution center, but too large
to ignore.
FINANCE
The business has extremely low external cash infusion demands and uses most of the cash generated from operations. With an
operational objective of a dozen major markets over a 7 year period, we envisage a project cost of $0.5 million/market. We
money will be raised by contributions from company founders, friends and relatives.
The income documents attached along with base financials for any one independent market, as economies of scale do not exists
across markets. The company expects a turnover of $0.5 million in the year 1, with a profit after tax of around 15%. Over the
next five years, economies of scale, impact of brand building exercises and growth in customer base, result in a annual
revenues of about $55 million/year ( for FY VII) over the 12 markets in North America and a profit after in the range of about
25%. With the current projections we expect to generate a NPV of $1,611,312.60 an internal rate of Return (IRR) 70.89%.
Some of the key Financial highlights of this project:

Steady growth in market share and finances, with a profit-center approach to each of the markets.

The project shows a healthy cash flow from operations and has an extremely low capital investment structure.

High differentiation with low investments. Positive cash flows earlier on in the life of the project.

Highly scalable project.
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KEY MANAGEMENT PERSONNEL
The key management personnel bring in the initial investment capital, a clear understanding of the industry and over 60 years
of combined, industry experience. The team is comprised of six key executives:3

Haresh Mehta, lead promoter & marketing specialist.

Sudhanshu Pant, HR specialist.

Ankur Patel, Finance & Supply Chain.

Khurram Khan, Marketing.

Dr. Vivek Savant, Food tech consultant

Arvind Patel, Small business owner.

Dhiren Kanwar, Executive Chef.
Our Belief: Our operational ability, experience and commitment, and our unique concept with focus on cost containment give
us adequate reasons to believe that we can succeed, in providing substantial returns and growth.
3
Resume summary’s in the Key management personnel section.
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CONTENTS
1. Management Team
……………………………………………………………………… 8
2. Financial Highlights ……………………………………………………………………… 9
3. Introduction, market segmentation & product positioning
4. Competitive positioning
……………………………… 11
……………………………………………………………… 14
5. Marketing and sales ……………………………………………………………………… 16
6. Operation and distribution
……………………………………………………………… 19
7. SWOT Business Model Highlights
8. Appendix
……………………………………………………… 21
……………………………………………………………………………… 23
a. Database sources for marketing assumptions, etc
b. Sample telephone research form
c. Monthly Cash Flow Break up – 5 years
d. Pro forma Annual income statements – 5 years
e. Pro forma balance sheet – 5 years.
f. Acknowledgements
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MANAGEMENT TEAM
The key management personnel bring in the initial investment capital, a clear understanding of the industry and over 50 years
of combined, industry experience. The team is comprised of six key executives including the chef.
Haresh Mehta, lead promoter & media specialist: As an entrepreneur & media professional, he has worked in various
segments of the recreation industry for over 7 years. His experience at Gold Dust Media, DNA Networks and Blueberry health
Inc greatly contributes to his sense of innovation and presence of mind. Haresh will graduate from the Rutgers Business School
(May 2003) specializing in Finance & Entrepreneurship. New ventures & turnarounds have been his domain of activity.
Sudhanshu Pant, HR specialist: With over 12 years with ITC-Hotels, Oberoi Hotels & IHCL (Taj Group). T his assignment at
the Taj Mahal, Mr. Pant had over 1200 people reporting to him. He will graduate from the Rutgers Business School, in May
2003, specializing in Finance & Human Resources. Organizational design, employee compensation, and recruitment & talent
retention have been his special skills.
Ankur Patel, Finance & Supply Chain: From a family of entrepreneurs, Mr. Patel has learned the nuances of supply chain and
finance, while helping his family consolidate its engineering business, spread over the state of Gujarat, India. With a first
degree in engineering, Ankur will graduate in May 2003, from Rutgers Business School. Supply chain, operations and finance
are his key strengths.
Khurram Khan, Marketing & Sales: A second generation entrepreneur, Khurram has dabbled with his family holdings in the
pharmaceutical and restaurant business (in India). His first degree is pharmacy, has helped him cultivate an attitude of a
scientist and his environment has forced him to think like a businessman A MBA from Rutgers, class of 2003, Khurram looks
forward to establish the sales part of the business at EZ-Khaana. His key strengths include new markets, strategic tie-ups &
client servicing.
Arvind Patel, Entrepreneur: With over 30 years in the food service business, across Canada and North America, Mr. Patel has
run large-scale catering operations. Currently involved with a string of Dunkin’ Donuts in New Jersey, Mr. Patel offers us
invaluable expertise and access to a network of other entrepreneurs and financiers.
Dhiren Kanwar, Executive chef & Entrepreneur: A graduate of the Institute of Hotel Management & Catering (IHMC)
Bombay, India, he has worked at various levels of hierarchy and served as an executive chef for WG Sheraton, India. Over the
last 14 years, this member of our team has served Indianized curries and more, to clientele from across the globe. Dhiren and
Namrata Kanwar own one of Bombay city’s finest gourmet dessert addresses, Gourmet Street.
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FINANCE HIGHLIGHTS
Important Facts

The population of Asian Indians in the NJ/NYC area is an approx. 600,000 people4 and assuming that each person
consumes 2 meals a day, we are dealing with a huge potential market size.

The Asian Indian population in North America has grown by approx. 106% over the past decade. 5

The documents attached along with are financial projections for Market 1 spread over 5 years. We expect the other 12
markets identified, to follow a similar growth pattern.

The income documents attached along with base financials for any one independent market, as economies of scale do not
exists across markets.

To buffer effects of inflation, we have increased variable costs, in a compounded fashion by about 10% annually over the
period of the projection.

In addition, an increase in salaries and a 5% (of gross revenue) has been reserved for revenue sharing.

Provisions have been made for expansion of kitchen facilities to support the exponential increase in demand in Y4 & Y5.

Inflation has not been taken into account as a real estate price in other potential locations is lower than NJ/NYC.

Depreciation has been computed using the straight line method.

Revenues in earlier part of the business are a result of the banquet orders, that we are confident of receiving prior to
formal start of the business.

Provisions for tax have been made at 30% of revenues.

The discount rate used for discounting the cash flows is 12%.
Highlights

Operational break even in the first few months of operations.

Deals with the problem of high capital infusion (due to real estate cost and glamorous outlook) as usually seen in the
restaurant industry.

Considered effects of increase in cost of variable expenses while constructing the cash flow expenses.

Investments in PPE and provisions for manpower requirements have been factored to meet increasing requirements of
growth in business.
The business has extremely low external cash infusion demands and uses most of the cash generated from operations. With an
operational objective of a dozen major markets over a 7 year period, we envisage a project cost of $6 million i.e. $500,000 for
4
The census data states a population of 450,000 Indians as tabulated in the year 2000. This data does not include, visa
categories such as H1, F1, L1 and their dependents.
5
http://www.asian-nation.org/history4.html
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9
each market. The founders propose to fund this expense with their personal investments, supported by investments from friends
and relatives.
The company expects a turnover of $0.5 million in the year 1, with a profit after tax of around 15%. Over the next five years,
economies of scale, impact of brand building exercises and growth in customer base, result in a annual revenues of about $70
million over 12 market, across North America and a profit after in the range of about 30%. The directors propose to plough
back profits back into the business. The model does not use debt for financing its growth. For convenience, it is assumed that
taxes are filed in the same year as they are computed.
Valuation: We foresee placing 40,000 shares of common stock (per market) at an average price of $12.50 per share, placed at
separate intervals over a 4-year horizon. Valuations have been based on the assumption that the growth line may not grow as
aggressively year 10, until perpetuity. The discounting used has been at 12% and a scenario analysis has also been worked out
at lower and higher growth rates. At a lower market penetration of almost 20% below our original estimates we foresee a value
of $193 per common stock held.
With the current projections we expect to generate a NPV of $1,611,312.60 an internal rate of Return (IRR) 70.89%.
Some of the key Financial highlights of this project:

Steady growth in market share and finances, with a profit-center approach to each of the markets.

The project shows a healthy cash flow from operations and has an extremely low capital investment structure.

High differentiation with low investments. Positive cash flows earlier on in the life of the project.
Friday, April 11th 2003
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INTRODUCTION, MARKET SEGMENTATION & PRODUCT POSITIONING
A close look at the Deloitte & Touché6 industry report points a growing trend towards take out meals. Some highlights being

On an average day in the 1998, 21% of the US population used some form of take out or delivery.

The average household expenditure for food away from home in 1997 was $1,921.

More than 45% of the food dollar is spent away from home.

More than half of all adults (53%) agree that they are busy and so convenience is critical.

According to the associations’ report consumers rise in trend wrt take outs’ will continue through 2010, as indicated in
The Restaurant Industry: The road ahead, 2010.

Only 7% of the US households today live in traditional families.

17% are latch key families, where both parents are employed and only 13% are married couples with no children at
home.

A substantial 16% are unmarried live-ins & another 28% of the population has never been married.

A high immigrant population with close to 1 million people migrating each year and the Asian Indian being one of the
faster growing sects, in this immigrant pool.
Asian Indian have been around in the US for over a century, but it’s the last 15 years that have marked an era of exponential
growth in this segment of the population. In the 1990’s alone the Asian Indian population grew at a rate of 106% each year. A
leading website (2001), reported that the census count of Asian Indians in the US has doubled in the last decade7 and is has
grown faster than any other Asian immigrants 8. Though most of this may be attributed to the software boom, the flow of Asian
Indians has not really declined. The growing student population in US universities too has had a substantial impact.
From ancient times, the Indian society has been male dominated. This attributes to certain characters in this segment of the
population, not usually seen in many other races. The male counterpart is not expected to help out with the household chores,
especially cooking. The man is considered as the bread winner and the woman the homemaker. With women too joining the
work force, this conditioning though heavily criticized has not undergone much change. In addition, the easy availability of
domestic help has only produced individuals, who are pampered.
A study by the census shows that the Asian Indian is the fastest growing population among Indians and currently constitutes a
mere 3.6% of the population. The higher numbers of immigrants, who are mostly male, are our prime prospects.
Restaurant Industry operations, report 2000. Deloitte & Touché and National Restaurant Association – Report 2000.
http://www.rediff.com/news/2001/may/16usspec.htm
8
Source: Census 2000 analyzed by the Social Science Data Analysis Network (SSDAN).
6
7
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A look at the population distributions above indicates that the Asian population is not thinly spread across the country, but
packed in small pockets around the major cities, in the US. The Asian Indian comprises 16% of the total Asian population in
the US, preceded only by the Chinese and the Filipino, at 23% and 19%, respectively.
ASIAN INDIAN MARKET
Top states of Asian Indian
Population include: CA, NY, NJ,
IL, TX, FL, & PA.
The top cities of residence are LA,
NYC, Chicago, Houston, Miami &
Philly.
Asian Indians have a median
annual HH income of $44,320.
79.6% of Asian Indians are
married, with the average family
size of 3.8.
Proportion of Asian Indian
Immigrants with Bachelor’s or
higher degree – 64.9%
But including other smaller factions of the Asian population like Pakistani, Bangladeshi
and Sri Lankan, which share similar food habits, we are placed a
near second after the Chinese and are growing very fast.
http://www.globadstrategies.com/
markets/india.shtml
Interestingly, the Pakistani, Bangladeshi and Sri Lankan part of
the population form the formidable labor class who depend on
affordable alternatives to home cooked food, and form a small
but critical mass of our target customers.
A high density of single Asian Indian immigrant populations
concentrated in pockets around the major cities, across the US.
Summarizing, the findings we conclude that

A high density of single Asian Indian immigrant
populations concentrated in pockets around the major
cities, all over the country. The Indian population has
grown at over 106% in the 1990’s.9
9
http://www.asian-nation.org/history4.html
Friday, April 11th 2003
12

The dual income structure of immigrant families, the rising health consciousness of the population at large and an
increasing practice of eating out due to the value of quality time.

The problems associated with Indian cooking in poorly ventilated houses. Indian cooking uses a variety of spices that
tend to leave behind a stench long after the meals are cooked, especially in poorly ventilated houses, like that in the
US.

The large population of Pakistani, Bangladeshi and Sri Lankan population which forms a formidable chunk of the
labor force in major cities. 10

Absence of standardization in food quality and the high price of existing take out services. We offer consistently great
tasting meals starting at a mere $4.99. 11

Growing consciousness about healthy eating (a complete meal amounts to no more than 750 calories). This is created
because we serve predominantly vegetarian meals cooled in low fat cooking medium like soy. In addition, the variety
of greens, beans and lenticels served in every meal serve not only the purpose of offering variety in the meal, but all
high nutritional content.

A general trend in the structure of the population has resulted in a mere 25% living in traditional family homes and a
substantial 10% increase in the population of single fathers, over the past few years. This section of the population has
never been addressed by restaurants and food chains. But the pre-cooked, ready to eat foods address this section very
clearly. We have a potent price and nutritional quality advantage against this food group. 12
10
http://www.infoplease.com/ipa/A0778584.html
See detailed competitive landscape in the competitive positioning section.
12
Marketing Management – Lamb, Hair and McDaniel, 6th edition, page 107.
11
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13
COMPETITIVE POSITIONING
COMPETITIVE LANDSCAPE
EZ-Khaana is a food service provider and hopes to offer an alternative to home cooking that is convenient, healthy and fast.
The competitive landscape is like seeing the other side of the target market coin. Our target market includes

Immigrant Indian Asians, seeking a convenient, affordable and healthy alternative to home cooking.

The working class of the population, which eats out during the week. We can deliver to most office locations, with
orders of 100 units per day or more.

Other sections/races of the population that are attracted to Indianized foods.

And lastly, new customers.
Since this is the first time this concept is being tried in this country, we do not face any direct competition from other
established Indian restaurants because they do not seek recurring customers on a recurring basis. All the same, whilst targeting
the above sections of the population, we shall indirectly compete with
QUALITY & VARIETY
LOW
PRICE
HIGH
Carts/Stands/Trucks
Cafeterias
EZ-Khaana
Burgers/Sandwiches
LOW
Burritos
Delis
Restaurants
Chinese Take-outs
Salad Bars
High

Chinese take outs

American fast foods – burgers, subs, etc.

Localized pizzerias/pasta and other snack foods

Salad bars
EZ-Khaana would attempt to differentiate itself on the basis of product, price and quality. The 4 parameters of differentiation
are:
Price – No other food chains provide a complete meal with fixed portions of 3 entrees plus rice, bread and yogurt, for just
$4.99 a meal. Price is one of the key weapons in our arsenal.
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Nutritional quality & taste – Relative as it may sound; no product can survive on marketing strength alone. Once we attract
the customer on basis of price, the promise of nutritional quality and taste will play a critical role in ensuring that we convert
him into a recurring customer.
Our experienced chefs ensure that our customers get the best value for each $ spent by selecting the best quality spices and
other raw material. Low-fat healthy cooking medium like soy, help us in serving a complete meal measuring about 750 calories
or less. Specialized recipes like pasta and cottage cheese in tomato sauce, vegetable au gratin, mint chatni’s (ketchups),
mushrooms in yogurt and sweet onion sauce and many more have been formulated for Americanized populations.
Variety of the meal – Unlike most of our competitors, our team of chefs serves a variety of entrees, which do not get repeated
for at least a fortnight (except the rice, lenticels, bread and yogurt). Most of our competitors, serve a meal with just a single
entrée for at least 120% of our price. This is particularly important for our subscribers because we aim to replicate the homecooked meal experience minus all the hassles.
Convenience & pace of service – Our operational plan helps us deliver meals at strategic distribution points and also by the
drive-through method. The transaction time for each customer is extremely low. We are in the process of confirming our
packaging equipment. Provisions have been made in the budget to facilitate packaging material other than Styrofoam, which
can be conveniently used for transportation and reheating.
STRATEGIC GOALS

To establish EZ-Khaana as a meal service offering meals for sit down and take out, and expand to multiple locations
by the end of year two.

To establish a foundation for bulk order/catering business in the New Jersey/New York area.

To consolidate supply chain operations and systems to minimize wastage. Currently, there is a budget provision for
wastage of up to 15% over 3 cities.

To use low cost marketing tools to establish a loyal customer base, through subscriptions and deliveries. In addition,
develop distribution centers at high traffic/demand locations.

Create a brand loyal customer base through price attractiveness, quality and sustained media efforts.
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MARKETING & SALES
CONSTRUCTING BASIC PRODUCT PARAMETERS
Product – EZ-Khaana is a food service/restaurant positioned as an affordable alternative to home cooked meals, which is
healthy, convenient and fast. The product mix would be as follows
Meals/Thali – A very popular form of meal service in India, whereby the guest is served various dishes, yogurt, rice, bread and
pickle in a single plate. The entrees consist of adequate source of vitamins, proteins, carbohydrates and other essentials that
constitute a complete diet.
A customer could pay for the meal by means of subscriptions or by cash. Subscriptions would be valid for 15-day and 30-day
periods. He would get a 20% discount if he purchased a 30-day subscription and a 8% discount for a 15-day meal card. The
meal plan operation is discussed in detail in the operations section. Meals would also be served for bulk/banquet or catering
orders.
In addition, revenues would be generated through sales of beverages and other snacks. Beverages constitute cold beverages like
colas. Hot beverages include filter coffee, masala chai (tea) and kawa (tea). These beverages are popular among residents of
South India, western India and Northern India, respectively. Of these masala chai is the most popular one; Dunkin’ Donuts and
other vendors in the beverage industry have being toying with the idea, modified to please the American palette, Vanilla Chai.
Lastly, the meal service will create other snack foods and deserts, to be sold in addition to the meals. ½ pounds packets would
be stacked on our store and distribution shelves. Customers could pay for these either by cash or by means of their meal
subscriptions. No discounts would be offered on these dishes.
Price – Price is the greatest attraction to most of our customers at the outset. A random survey has revealed that most students
and families who cook meals at home generally spend about $100 per person/month and at least about 4 hours a week in the
kitchen. This is in addition to the time spent in maintaining inventory. This budget usually buys them one entrée with rice or
roti (Indian bread) and never both for a 5-day week i.e., about 20 meals a month or approx. $5 per meal.
We serve our customers a meal with 3 entrees, coupled with side dishes like yogurt, lenticels (the famous Indian curry or dal),
rice, bread and pickle for a mere 4.99 per meal. To the subscribers of the meal plans, we offer a stronger incentive. An
additional discount of 20% is offered to customers who subscribe to meal plans for a package of 25 meals to be consumed in a
Friday, April 11th 2003
16
month. The reason for the discount to be 20% is because 20% has been proven to be the threshold of perception. The threshold
of perception can be defined as the minimum price difference as a stimulus for a consumer to notice. 13
Place – The restaurant front is the strategic tool in the marketing plan. This restaurant will house the central kitchen. An
extremely basic, no-frills 80-seat restaurant, which will support 2 distribution centers, which in turn will dispense foods
produced in the restaurant. In addition, the restaurant complex will also function as the distribution center, to locations that are
not large enough to sustain independent distribution centers, but are large enough to be ignored.
Material produced in the central kitchen will be dispensed as single meal sales, banquets and through subscriptions. Points of
distribution include the restaurant, banquets, distribution centers and other smaller delivery points like office complexes,
residential complexes, factory floors, etc.
Pace – Pace of dispensing food is extremely important because the food produced being perishable, needs to be
dispensed/delivered at an extremely fast pace. Moreover, pace is an integral part of our plan. Since, we do not propose to have
a restaurant with a bigger seating capacity, take outs need to be dispensed at an extremely fast pace to help us optimize our real
estate utilization.
Food packets will be packed about 60 minutes prior to the estimated rush hour and dispensed accordingly. The packaging
material used seals the food boxes, and is re-heat-able. Leased vehicles will carry the food to the distribution and delivery
centers and start about 2 hours before the scheduled time. A detailed operations plan has been explained in the operations and
distribution section.
Promotion – Promotions will be focus at creating awareness and generating trials. The tool used most will be write-ups in
magazines and other leading and ethnic publications. The 2001 annual report from the Soy Institute states that magazine writeups influenced 43% of the people who changed their diet or tried a new restaurant or cuisine. The report also confirms that
Americans are getting conscious about their eating habits and the percentage of the population changing food habits for health
reasons has dramatically increased over the past few years. 14
Use of cine stars – Cinema is a religion in India and cine stars are a extremely popular among south Asian populations. The
lead promoter brings to the table a vast network with the Indian film world. These stars dining at the restaurant would create
terrific material for the ethnic press, which in turns would attract more people to the eatery.
13
14
Marketing Management – Lamb, Hair and McDaniel, 6th edition
Consumer attitudes about Nutrition – United Soybean Board – Annual Report 2000-2001 www.talksoy.com
Friday, April 11th 2003
17
Advertisements would focus on offering great food at 4.99. We would attempt to sell the price, associated with the quality.
Promotions and sampling exercises would be instituted to generate trials at the restaurant and in and around distribution center.
MARKETING OBJECTIVE
The marketing and sales strategy aims at achieving a 4 point objective, namely

ACCEPTABILITY – The strategy would have a two pronged approach. The first would be to ensure that we have
adequate distribution in geographic pockets that house our target customers, i.e., be close to populations that need not
be convinced about the food or its taste. This is the most important criterion in site selection for the restaurant and the
distribution centers. The second challenge is to create acceptability to sections of the population, which flirt with
Indian cuisine. These people might be further attracted by the price and build a bond with the eatery through the
quality of food served.15

AFFORDABILITY – This is not just a part of our marketing strategy, but also the main foundation of our business
model. This is the point of focus in all our advertising material. We connect quality to price to attract customers.
Subscriptions are placed at a threshold level of perception offer a discount of 20% on monthly meal plans.

AVAILABILITY – The operations model ensures, a great network of timely deliveries and a wide geographic reach,
too. Demands from products will be met with in timely fashion, ensuring freshness of the products delivered. The hub
and spoke model of production will be used centralize production and quality control.

AWARENESS – We propose to achieve awareness through our media campaign, promotions and in-store sampling. In
addition, we also hope to receive media support through our chief supplier. Promotions will include discount coupons
as well as incentives for referrals. This strategy will help create repeat orders, market expansion & growth.
The awareness campaigns hope to achieve a 2-point agenda.
The first is to make the customers aware about the existence of this great food service and its benefits. This
part of the exercise will be achieved through sampling and other promotions like all you can eat brunch.
Advertising in flight magazines, local trains, etc. are some of the media vehicles we propose to use.
The second is to attract new trials, from non Indian populations. With growing health awareness among
Americans16, press write ups conveying the health benefits of nutritionally balanced meals and information
about points of purchase, would be the objective.
15
Consumer attitudes towards food and Nutrition – Annual Report – 2000 -2001 www.talksoy.com 1-800 TALK SOY
16
Consumer attitudes towards food and Nutrition – Annual Report – 2000 -2001 www.talksoy.com 1-800 TALK SOY
Friday, April 11th 2003
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OPERATIONS & DISTRIBUTION
The operations and distribution has been planned to

Grow the distribution chain to reach various pockets of concentrated Asian Indian populations.

Deliver the food in a manner, which keeps the food fresh, clean and presentable.

Improve systems to forecast demand, cut wastage and ensure timely deliveries.
This section is particularly important because even after everything going right, this section will determine if we can actually
deliver. Moreover, this is the sections that really differentiate us from the rest of the competition. A low cost efficient operation
is the main objective of the exercise. A strong distribution system also provides us the much needed entry barrier from existing
businesses and other imitators.

The revenue stream and value in the system is generated from two aspects: quality of the food at the great price, and the
pace of service/convenience.

Since the size of each transaction is relatively small, we do not charge credit cards for single unit sales. Single unit sales
are either paid in cash or billed to a debit meal plan swipe card, EZ-Khaana.

EZ-Khaana Card is a pre-paid meal subscription that our customers could purchase for a discounted rate, which buys
them 25 meals for $100. The 25 meals have to be consumed in a 6-week period. A 25-day variant is also available. The
unused meals would be billed at card rate (not the discounted rate) the unconsumed monies on a card could be used
within the first 7 days of the month, at the restaurant to purchase snacks, deserts and other delicacies served only at the
restaurant. The pass can be used for a maximum of 5 meals in a particular day.

EZ-Khaana Card – Highlights
Benefits to customers
o Discount on card rates.
o
Preferred customer status.
o
Additional benefits at the time of sign-up.
Benefits to EZ-Khaana
o Up front and assured cash flows.

o
Customer information/database.
o
Opportunity for cross-promotions.
To ensure that we carry the value across as intended, the operations are based on the classic spoke and hub pattern. All
the meal production and packaging is centralized & is then shipped out to various locations in a 20 mile radius.

Take NJ as an example, we locate the restaurant at a site with a concentrated market, the hub, say Edison.

The distribution centers have no production or sit-down facilities. The major distribution centers will in NYC and
Newark, Dover, Parsippany, etc. They are only equipped with a swipe card machine that registers the number of meals
charged to the EZ-Khaana card.

The drive through operates on cash, as well as swipe card systems.

Banquets orders are received well in advance. Delivery and execution will depend on the size of the order, and also the
location from the central hub.
Friday, April 11th 2003
19

The important point is that none of the spokes contribute to any production activity, except beverages. The main reason
for their existence is spread tentacles into population pockets, that are too small to support an independent distribution
center, but too large to ignore.
Retail
Distribution
OPERATIONS MODEL
Banquets
CENTRAL
KITCHEN
Self-service
Outlets
Delivery
Network
Banquets – Bulk orders for banquets halls, caterings and special events; especially high during the festive season.
Self-service outlets – These are located in the areas pre-dominantly populated by people of Asian Indian origin. These offer
basic seating facilities supported by self-service microwave ovens and not supported by any wait staff.
Retail distribution – Areas of high traffic, which dispense prepared meals supports by self service microwaves.
Delivery network – This form supports subscriptions in areas which are not large enough to support and independent self
service outlet, but yet substantial to be ignored.
SUPPLY CHAIN OPERATIONS

The supply chain operation would ensure an optimal batch size in for orders and plan for inventory back-up.

Inventory would be related to demand. The contents of the inventory back-up would be proportional to the volume of
banquet orders.

Although, we have planned for operation in three cities only, we propose to service adequate-size banquets in
neighboring states and townships. Historically, banquets have known to contribute particularly well during festive
seasons (October to December).

Scheduling of transportation for deliveries too falls under this function.
THE EZ-KHAANA– OPERATION
 The EZ-Khaana is a prepaid meal plan card, with 15-day or 30-day duration for use.

It could be purchased over the counter, telephone or the Internet.

The operation of the EZ-Khaana would be fully computerized.

Each of the swipe card terminals would be connected to a central computer in the restaurant.

This would help us monitor the daily transaction and replenish supply to each of the distribution centers.

The unused monies in the card can be used to purchase meals or snacks from any of our counters at ticketed prices, latest
within 7 days of the expiration of the card.
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SWOT & BUSINESS MODEL HIGHLIGHTS
STRENGTHS

Focused, competitive & innovative concept.

Clearly defined product niche and lack of players in

WEAKNESS

No insurance against price changes in commodities,
especially grains and cooking oil.
the current market niche.

High manpower turnover is an industry norm.
Great management team – good balance of

Consumer education, especially the American born
enthusiasm and experience.

Promoters’ network and industry experience.

Success record of the promoters in a relevant
customer, could take longer than expected.
industry.

Operational efficiency of the model.

Great business model with low investments at the
start and exit protection.

Easy cash flow with almost no chance of bad debts.

Special recipes/trade secrets, mix of spices and
supplier agreements available to us.

OPPORTUNITY
THREAT

Banquet sales

Price war from existing players in the market.

Management of underwriting/monopoly contracts at

Operational smoothness.
popular banquet locations

Transportation detail like food freshness, timing and

Additional product lines - Lateral expansion to
cost between the central kitchen and the distribution
serving captive audiences other entrees like desserts,
center.
snacks, brunch, etc.


Growth from non-Indian markets. With many more
populations changing their eating habits to move
towards nutrition, over the next three years will be
Simultaneous demands of prepared food from the
distribution centers.

Changes in governmental policies with reference to
immigrant laws, in the face of terrorism or war.
well established to capitalize on that wave.
BUSINESS MODEL – HIGHLIGHTS

We are in the business of food service and not restaurants. The restaurant component is merely a form of cheap
advertising and sales promotion.
Friday, April 11th 2003
21

The conventional restaurant business relies on weekend sales for its revenues and we on subscriptions and banquet
sales. We are in a volume business & our marketing efforts will drive on increasing subscriptions, banquets and
recurring sales.

Invest in systems to manage speedy delivery of orders for customers.

Build Brand through customer-delight. Attract them by price; Let the quality & variety of the product hold the
customer there.

Centralize production for each market as a means to control cost, quality and distribution.

No main stream advertising, except for the launch. Most campaigns would be promotional in nature and aimed at
creating awareness.

Offer membership and renewals through phone and internet and other available media.

Controls cost, reinvest profits and manage pace of expansion.

Build a brand loyal customer base. The loyal customer will be particularly crucial in keeping away competition.

The distribution system not only creates a strong entry barrier with respect to competition from existing players or
attracting fresh competition, but also creates an opportunity for multiple product lines.

Multiple product lines, offer additional growth avenues and also buffer current growth projections.
Friday, April 11th 2003
22
APPENDIX
The map below indicates the census data regarding the distribution pattern of the Asian Indian population in North America.
Interestingly, the Asian population seems to be locked in small clusters predominantly around the coast (smaller sized states),
in and around the bigger cities.
For Census
purposes, the racial
category Asian
includes Asian
Indians, Chinese,
Filipino, Japanese,
Korean,
Vietnamese, and a
number of other
Asian ethnicities. In
2000, all these
groups together
accounted for 3.6
percent of the total
U.S. population, up
from 2.8 percent in
1990.
http://www.censuss
cope.org/us/map_n
hasian.html
Consumer attitudes about Nutrition – United Soybean Board – Annual Report 2000-2001 www.talksoy.com
Friday, April 11th 2003
23
Other data sources

Census data: www.census.gov

www.talksoy.com

http://www.asian-nation.org/history4.html

http://www.globadstrategies.com/markets/india.shtml

http://www.infoplease.com/ipa/A0778584.html

http://www.censusscope.org/us/map_common_race.html
Friday, April 11th 2003
24
Dear friend,
Greetings!!! As part of my Masters Project, I am working on the feasibility of starting a food service network
targeted at the people of Asian Indian origin in North America. I would greatly value your suggestion for the
venture.
 Name: _______________
City/State:_______________
 Number of times you Eat at Indian food every week:
Lunch ______________
Dinner _______________
 What kind of Indian food do you prefer the most: Please rate on the scale of 1-5 (with 5 as the BEST)
( ) Muglai
( ) South-Indian
( ) Punjabi
( ) Gujarati
( ) Konkani
 Name of your Favorite Indian restaurant:
_______________________________________________________
 What do you like the most about it: Please rate on the scale of 1-5 (with 5 as the BEST)
( ) Healthy Food
( ) Convenience
( ) Affordable
 Number of Indian Restaurants in your area: ____________
 Amount you would like/willing to spend on:
Lunch $ _______
Dinner $ ________
 Amount per head you actually spend on each trip to an Indian Restaurant
: $_____________
 Comments/ Suggestions:
Thanks a lot for your valuable time and support.
None of the information you provide will be shared or distributed
Please feel free to contact me regarding any concerns or queries.
Khurram Khan ([email protected])
Rutgers Business School, NJ
Tel. # (732) 822 5307
Friday, April 11th 2003
25
ACKNOWLEDGEMENTS
In addition to the team, some friends, who have contributed immensely in helped us in making this project, valuable:

Prof. Thomas Bryant, Rutgers Business School.

Prof. Hart Singh, Rutgers Business School.

Mr. Brian Schilling, Food Policy Institute, Rutgers: The State University of New Jersey.

Mr. Jack O’Connor, Food Policy Institute, Rutgers: The State University of New Jersey.

Mr. Lucas M, Food Policy Institute, Rutgers: The State University of New Jersey.

Mr. Devang Bhandari, Ernst & Young, Oregon.

Mr. Dwarkesh Trivedi, Goldman Sachs, Utah.

Ms. Radhika Rao, DNA NETWORKS, India.

Ms. Yang Sue Kim, CPA, Class of 2003, Rutgers Business School.

Mr. Ramchandran Sitaram, Class of 2004, Rutgers Business School.

Ms. Hetal Doshi, Rutgers Business School.

Mr. Kapil Daryani, New Jersey Institute of Technology, NJ.

Mr. Shashi Khakkar, Case Western University, Cleveland.
Friday, April 11th 2003
26