Zara Restaurant and Lounge

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Ethnic Food Restaurant Business Plan

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Market Analysis Summary

Instead of building a business around a preconceived concept, we conducted market research and built a concept around our consumers. Our market analysis identified the following key drivers as areas of opportunity to service Atlanta's restaurant customers:

  1. Portion Selection: Nearly 95% of our surveyed focus group endorsed having a choice of different size portions. This statistic is in line with findings reported by the Tableservice Operator Survey. Zara's Tapas concept is built to offer different-sized portions. Our customers want the option to choose what satisfies their appetite.

  2. Menu Variety: Ethnic restaurants are increasing in Atlanta. The proliferation of international cookbooks, food magazines, TV cooking shows and imported goods offers ample evidence that America, as a whole, is currently on an international tasting spree. In fact, eating places that identify themselves as ethnic establishments numbered nearly 78,000 in 1999 and recorded sales of $30.5 billion. Our research results do not identify any single ethnic style of restaurant as desired, but rather suggest that incorporating strong multi-ethnic influences in the menu selection will be popular. Again, variety is the underlying element for this concept.

  3. The Dining Experience: Customer satisfaction with food and service has been and continues to be of utmost importance, but our findings indicate that the décor, lighting, bar, and other options to improve the dining experience are also factors in customer decisions. Zara takes all these factors in consideration for the design of this cosmopolitan restaurant.

  4. Reasonable Prices: This was no surprise given the economic tide. Although the restaurant industry as a whole has seen growth in 2002/2003, customers are demanding value for their dining dollar. Zara's menu is priced at a mid-tier level, with no entrée over $20. In addition we have an extended Tapas and Appetizer selection priced between $3.50 - $9.50, allowing budget dining in a full-service restaurant.

Market Segmentation

Zara's Restaurant & Lounge intends to cater to a wide customer base. We want everyone to feel welcome and entertained. We have defined the following groups as targeted segments that contribute to our growth projections:

  • The Business Person
  • Downtown Atlanta Couples
  • The Destination Customer
  • High-End Singles
  • Tourists

These particular market segments are 25-45 years old, have disposable income, and are seeking upscale, trendy, and comfortable restaurant options. These are the types of people who frequent other restaurants and bars in the area. They are likely to spend more on experiences they perceive as unique, cosmopolitan, and sophisticated. They are also the most open to trying something new, foodwise, and will embrace our international fusion cuisine. 

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Business Person 18% 9,925 10,223 11,348 11,688 12,039 4.95%
Downtown Atlanta Couples 32% 17,645 18,527 20,565 21,593 22,673 6.47%
Tourists 13% 7,168 7,311 7,896 8,054 8,215 3.47%
The Destination Customer 8% 4,411 4,499 4,724 4,818 4,914 2.74%
High-end Singles 29% 15,991 16,950 18,815 19,944 21,141 7.23%
Total 5.76% 55,140 57,510 63,348 66,097 68,982 5.76%

Target Market Segment Strategy

The Business Person: They work hard all day and often stay overnight in a strange city. They need a competent establishment that helps impress clients and prospects. Afterward, they want to relax and use the money they are making (or is expensed by their company). They spend the most on drinks, food and tips. Zara's cosmopolitan flair and comfortable atmosphere will be perfect for sophisticated business people, whether they live in and around Atlanta or are here for work.

Downtown Atlanta Couples: The restaurant will have an intimate, romantic, enticing adult atmosphere that suggests "date." Zara's will be the best date location in town. These young Midtown couples are generally very successful working professionals. In most cases they are budgeting to eat out on a regular basis, as they don't have the time to prepare food nightly.

The Destination Customer: Atlanta is a very 'sectioned' city, and consumers often look only in their own neighborhoods for restaurant options. Zara will break these habits, using marketing to draw customers from outside the main city limits. Zara will be a destination restaurant. Our Destination Clients tend to be new suburbanites that miss the excitement of the inner city. They have disposable income, and will spend quite a bit on such outings. Zara's will be especially appealing to married suburban couples indulging themselves with a "date night" downtown, away from  the kids. Many of these consumers are new to Atlanta from larger cities, accustomed to dining within the city and at non-franchised restaurants.

High-end Singles: We will attract them with our eclectic atmosphere and layout. Our international menu, striking decor, entertainment and events, excellent service and engaging clientele will confirm the feeling of being in "the in place" in Atlanta. These are the individuals that pride themselves on socializing and dining at the premier locations - The Image Seekers.

Tourists: Atlanta attracts many vacationers during the summer months of May through September. Zara's will be a destination dining locale, with its attractive atmosphere, international menu, and lounge. A large percentage of the tourist population are vacationing singles, here to socialize and be entertained. This is especially true for the tourist population that visit for sporting and social events - they are not interested in family establishments.

Service Business Analysis

The restaurant industry is highly competitive and risky. The owners know this through their many years of experience opening, running, and improving restaurants across North America. Most new restaurants opened by inexperienced owners struggle or fail. However, those based on solid understandings of the market needs, and management of inventory and staff have a much higher chance of success, especially when combined with prior experience in the restaurant industry.

Restaurants make money by taking inexpensive ingredients, combining them in creative ways, cooking them properly, and selling them at a much higher price. Any ingredients wasted in the kitchen are money thrown out. Any time wasted in seating customers, taking orders or preparing food is money walking away. While some entrepreneurs think that success is as simple as a good location and a trendy concept, we know the truth:

To succeed in the restaurant industry, you need an understanding of the risks and financial conditions, the ability to handle enormous pressure, and the organizational skills to bring off what is essentially a giant catered party, two to three times a day.

 

Competition and Buying Patterns

In 2003, the top ten Atlanta restaurants shared two things: cozy, hip interiors and reasonably priced, regionally specialized menus. Only one of them offered traditional "southern" cooking. And half of them were located in Midtown. Our competitors are heading in the right direction, but only Zara is based on sound market research in the local market.

Atlanta consumers are seeking variety and new experiences. Location is clearly important, but so is atmosphere and distinctiveness. Our marketing challenge is thus to stand out from our competitors, not only as the "new" restaurant, but as one that offers consistently high quality food, menu variety, and a unique atmosphere. Maintaining our edge will depend partly on marketing ourselves as an adult-only destination, and not a family restaurant.