Market Study

Creative Cuisine, to be located in Somerville, Massachusetts, will provide personal chef services to busy working professionals in the West Suburban Boston area. This service will include personalized menu planning, grocery shopping and preparation of dinner entrees and side dishes on a regular basis. The service will be available as a monthly, bi-weekly or occasional service. Price will vary according to level of service selected.

CREATIVECUISINE
Personal Chef Service

Market Study

Introduction
Creative Cuisine, to be located in Somerville, Massachusetts, will provide personal chef services to busy working professionals in the West Suburban Boston area. This service will include personalized menu planning, grocery shopping and preparation of dinner entrees and side dishes on a regular basis. The service will be available as a monthly, bi-weekly or occasional service. Price will vary according to level of service selected. The meals will be prepared in the client's home during a weekday while the client is at work. All meals will be packaged, labeled and refrigerated or frozen with complete instructions for final preparation. Creative Cuisine will use all its own utensils and will do complete clean-up.
Creative Cuisine's target market will be affluent working couples with children who want to enjoy healthy dinners at home with minimum preparation. The average clients will be homeowners age 35 to 55, with incomes over $100,000. Creative Cuisine's marketing focus is to provide them with a convenient, unique and high-quality alternative to cooking, dining out, or take-out meals.

Creative Cuisine's targeted high-end consumers continue to demand more convenience and quality in their dinner meal. Nearly half of America's dinner meals are currently prepared outside the home by full-service restaurants, grocery store prepared food sections, and take-out food retailers. Two of Creative Cuisine's advantages over such competitors are: 1) its ability to completely customize meals to the client's tastes, preferences and dietary requirements; and 2) its ability to deliver these meals directly to the client's home refrigerator/freezer, thus saving clients valuable free time that would otherwise be spent shopping, driving, and cooking. The customized meals personally prepared by Creative Cuisine will be significantly higher in quality, taste and nutrition than the mass-produced food offered by its competitors.
What follows is a detailed analysis of the current market for a personal chef service.

Current Market Size
Economists at the National Restaurant Association estimated total foodservice sales for 1996 at $313 billion, representing a 5 percent increase over 1995. That means consumers spent an average of $855 million per day on food away from home.
According to the National Restaurant Association's1996 Foodservice Industry Forecast, fast food comprised the largest segment of this market, capturing 47.8 percent of the dollars spent. The report attributes this success to "fast food's ability to meet consumers' desire for value and convenience." It was further estimated that at least 64 percent of all fast food purchases were consumed off-premises.
According to Technomic, Inc., a food industry consulting firm in Chicago, almost half of consumer food dollars are spent on meals prepared away from home. In addition, food expenditures rise significantly as income increases according to the Bureau of Labor Statistics' Consumer Expenditure Survey Data.

Industry Trends
This significant trend of consumers purchasing prepared meals is so pervasive that the foodservice industry has coined a new term to describe it: "home-meal replacement." Many businesses are shifting their focus to meet the growing demands of consumers:
Most supermarkets now include a deli, bakery, and a prepared-foods section. Also, many offer fast-food service.
Boston Market has continued to expand its product lines and market share.
Famous chefs, such as Wolfgang Puck, are offering high-end prepared meals in upscale supermarkets.
Fast-food chains such as KFC, Pizza Hut and Taco Bell have formed alliances to offer multiple product lines under one roof.
There are also several economic and cultural trends that have contributed to this growing demand:
Increasing number of women in the workforce
Increasing number of woman-owned businesses
Growing number of higher-income households
Americans working longer hours
Decreasing amount of leisure time
Premium placed on convenience
Trend toward purchasing personal services (i.e., personal-trainers, house-cleaning services, home shopping services)
According to Foodservice Solutions, a Tacoma, Washington hospitality consulting firm:
"Home-meal replacement is not a luxury today - it's a necessity. People don't want to take the time to cook; they have too many other things to do. Americans want high- quality prepackaged foods. It's the American way - to make life easier."
Entrepreneur Magazine's February 1997 article selected "Personal Chef Services" as one of the top service businesses to start today:

"Convenience-craving consumers are always looking for a way to do things better, faster and cheaper. Often, that means turning to a specialty-services entrepreneur who knows how to get the job done right. Those with culinary competence can likely find a hungry clientele among the ranks of America's busy working families."

Growth Potential of the Market
Based on the National Restaurant Association's 1996 Foodservice Industry Forecast, the percentage of food dollars spent away from home has grown from 25 percent in 1955 to 50 percent in 1996.

More importantly, the proportion of the food budget spent on meals away from home increases significantly as income increases. Households with incomes of $70,000 spent 81 percent more per capita ($1,278 per person) on food away from home than the average income-reporting household ($705 per person) according to the Consumer Expenditure Survey conducted by the Bureau of Labor Statistics.

Also contributing to the potential growth in the market is the rise in affluent households documented by the Current Population Survey from the Bureau of the Census. From 1990 to 1994 the number of households earning $50,000 to $74,999 increased by 16.4 percent; households earning $75,000 to $99,999 increased 36.1 percent; and households earning $100,000 or more increased by 61.1 percent in the same period.
Affluent Households Gaining Ground
Change in Number of Households from 1990 to 1994

Household Income

Increase (Decrease) in
Number of Households

Percent
Change

Source: Bureau of the Census
A personal chef service is uniquely positioned to take advantage of the increasing demand for fast food, growing health concerns, and the rise in high-income households. Affluent working couples want "fast food," but they want it upscale, healthy, and convenient. The founders of Truly Unique Personal Chef Service in Newport Beach, California, report that their business has grown 10 to 15 percent every year since opening in 1992. Many of their clients said they were getting bored with going out to restaurants and wanted something different.

Customer Profile
Creative Cuisine's' target customer will be families with two working, professional parents who are too busy to cook every night but are fed up with takeout and restaurant food. Their specific demographics are as follows:

Household Income: Over $100,000
Age: 35 to 55
Education: College degree and/or advanced degree
Marital Status: Married couples or high income single
Job: Professional status (one or both partners)
Children: Preferably ages 7 to 18
Homeowners: Preferably
Location: Live in neighborhoods with high concentration of affluent families

Customer Benefits
Here are just a few of the benefits to customers if they hire Creative Cuisine:

·         6 hours per week more free time (1 hour per day cooking/acquiring meal plus 1 hour per week grocery shopping)

·         Very convenient

·         Meals customized to personal tastes

·         More variety

·         Health and nutrition benefits

·         Less stress

·         Client feels pampered

·         It makes life easier

·         Don't have to cook

·         Less grocery shopping

·         Minimal kitchen clean-up

·         Peace of mind

The Competition
There are a handful of other personal chef services in the Boston metropolitan area; however, since this is still a new business concept, there remains a large untapped market.

Most competition for home-meal replacement exists from neighborhood restaurants, upscale fast-food outlets (e.g., Boston Market) and supermarket prepared meals. Following is a competitive analysis of the various meal replacement alternatives:

(Website visitor, the size of most monitors prevents us from placing the competitive analysis chart on this spot. Please link to the Competitive Analysis. After you've read the chart, click the link at the bottom, Return to Creative Cuisine's Market Study, to return to this page.)

Creative Cuisine's competitive advantage is its ability to deliver consistently high quality, personalized meals, custom menu planning, grocery shopping, and preparation of meals right in the client's home for consumption at the client's convenience.

This is an opportune time for beginning a personal chef service. According to Entrepreneur Magazine, some of the fastest growing trends in service businesses today include:

• Servicing smaller, upscale markets
• Products and services for children and their parents

Creative Cuisine is better positioned to service small, upscale markets in a personal way than are the other competitors. Creative Cuisine's personal chef services are specifically geared toward affluent couples with children. Busy working parents have more quality time to spend with their children when they aren't rushing to get dinner on the table, and their children get a more nutritious dinner. Creative Cuisine also has the advantage of being a home-based business which requires lower overhead and start-up costs than a traditional foodservice business.

Target Markets
The following cities in the West Suburban Boston area have been targeted by Creative Cuisine. All have high average household incomes and large populations of educated, married couples with families who own their own homes:

Demographic Summary
West Suburban Boston Communities

Community
Ave.
Household
Income

1996
Households

1996
Pop.

Owner
Occupied

Married
Couple/
FamilyAve.
Age

College Degree

Source: Equifax National Decision Systems, 1996, Courtesy of Community Newspaper Company

Market Penetration

Research indicates the most effective advertising tool for a personal chef service is placing a small display ad in a weekly community newspaper with a paid subscription base of 5,000 to 40,000 readers. All of the above communities have a weekly community newspaper, although some offer free subscriptions and some have a paying subscriber base.

In addition, the following marketing tools will be used:

• Offering $100 discount on initial service for first-time customers
• Developing contact list for referrals through friends, family, co-workers and networking
• Fliers and business cards placed at strategic locations
• Occasional advertising in other publications (e.g., Boston Symphony program)
• Press releases to community newspapers and radio stations

During the initial inquiry by the prospective client, an appointment will be scheduled in the client's home to discuss the service. At the first meeting, the Creative Cuisine chef will present sample menus and sample meal options. A questionnaire on food choices and preferences will be completed. After presenting the pricing structure, a plan will be chosen, a check will be collected, and a date will be set for the first service. An interim phone call will be made to present the personalized menu and obtain menu approval. A small gift will be left at the first service appointment with a thank you card. A follow-up call a few days after service begins will inquire into the client's satisfaction with the meals. If this is a trial customer, an additional call will be made one week later to see if their is interest in becoming a regular client; if so, a regular service date will be set. For all future service, a check made out to Creative Cuisine will be left at the client's home on the service date.

Creative Cuisine has the potential to create a very profitable business by capitalizing on several major trends of the 1990s. With the increasing numbers of affluent families comes their increasing demands. Creative Cuisine can help solve some of their problems while meeting these demands.

Problem

Creative Cuisine Solution

The above marketing plan was written by a student in Boston's Center for Women & Enterprise's 9-week business feasibility course-Fast Trac 1. The author can be reached by email at ChefLinda@aol.com.

(Center for Women & Enterprise, Boston, MA, 12/97)

Competitive Analysis - For Creative Cuisine
Competitive Analysis - For Creative Cuisine
Content provided by the U.S. Small Business Administration, Online Women's Business Center. SBA's programs and services are provided to the public on a non-discriminatory basis.

Factors:

Priority (*)

  Creative  Cuisine

Boston
Market

Bertucci's

Peking
Garden

Super-
market

(*) Priority: Level of importance to target customer - affluent, busy professionals.

Legend:

Segment Your Audience
Customer segmentation is understanding your customers' unique characteristics and behaviors so you can come up with a marketing message that communicates with them effectively. It also helps you to spend your marketing dollars wisely, using only those vehicles that can reach your identified segments.

Evaluate your customers against these five criteria to ensure that you have clearly segmented your audience.

1. Type of customer
Perhaps the most basic way to segment your audience is to decide whether you plan to target consumers or other businesses. Few small companies can successfully target both, and while there may be some overlap, you will more than likely need to create a firm distinction to hone your marketing message.

2. Geography
The geographic location of your customer base is crucial to determining the marketing methods your business will employ. Customers can be local, regional, national, or international. For some businesses, the target will be obvious - a dry cleaning store's target audience may only be within a few miles of its location. In cases such as these, it may be a good idea to break down geographic location even further - by postal code or neighborhood, for example. Similarly, national or international sellers might want to track the cities or countries where the majority of their customers are located to help them sharpen their focus.

3. Demographics
Demographics are the basic "vital statistics" of your customer base. By segmenting on demographics, you can determine the specific statistical characteristics that set your customers apart.

If your business is targeting consumers, demographic segmentation might cover characteristics such as age, gender, level of education, job classification (blue vs. white collar), income, marital status, and ethnic or religious background. It may not be necessary to use all of these criteria; rather, you want to focus your research on those that are most appropriate to your product or service.

Business demographics, on the other hand, break down differently. Start by looking at what industry your target customers are in. You can also segment your targets by size of business based on number of employees or total sales. Finally, consider who makes the buying decision for a product or service such as yours - what is this person's job title and what department does this person work in?

4. Psychographics
Psychographics refer to personality and emotional behavior that influences purchasing. In other words, what are the buying habits of your customers? For example, is the customer impulsive or risk averse? There are a broad range of variables you can consider and they often play against each other, but some of the most common psychographic components include:
The customer's predisposition to purchasing a new product or service vs. another

Influences on the customers' purchasing habits (such as peer pressure or education)

Attributes of a product or service that may be important to the customer

Brand loyalty or reputation

Buying decision criteria, such as whether the purchase will be based on price or value

5. Beliefs and lifestyle
These areas generally refer to ways that consumers look at themselves. Beliefs may include religious, political, nationalistic, or cultural values and attitudes. Lifestyle segments may relate to ways customers use their non-work time for things such as hobbies, recreation, entertainment and other pursuits. These segments may be important, since these variables can often be used to predict future purchasing behavior.