La Salsa Fresh Mexican Grill

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Mexican Restaurant Business Plan

Strategy and Implementation Summary

The next sections will help in understanding the competition, and the ways in which La Salsa plans to gain market share.

4.1 Marketing Strategy

Advertising costs can overwhelm a new business, so keeping marketing simple and creative will be challenging. Cost effective marketing is one of our keys to success, and fortunately a large portion of it will be taken care of by Santa Barbara Restaurant Group.

A combination of local media and event marketing will be utilized at each location. Radio is most effective, followed by local print media. When the La Salsa construction in Eugene is finished, broader media will be employed. Print media, radio and college events advertising will be the most effective way of generating publicity.

The following are a list of possible places to advertise with:

Qwest Eugene/ Springfield Yellow Pages Pricing-

Customer Service

1/8 page-$258.50/ month Black/ White and $402/ month Color

1/4 page-$507/ month Black/ White and $740/ month Color

1/2 page-$986/ month Black/ White and $1501/ month Color 

Register-Guard Newspaper-

Contact: Dave

An advertisement 2 columns wide once a week runs for $57.02 on weekdays and $62.44 each weekend day.

They offer a "Restaurant Special"- 13 weeks with one ad per week, including ad on Register-Guard website, directory listing, voice message listing, and is included in the non-subscriber paper touching nearly all of Eugene/ Springfield.

AT&T Cable Television Advertising-

Contact: Kristi

A wide variety of pricing options are available, cable advertising is a proven good way to reach potential customers.

Clear Channel Broadcasting KPNW-KODZ-KDUK

Contact: Kim

Clear Channel Broadcasting owns news radio, oldies, and new rock stations in Eugene/ Springfield and offers many advertising plans. The price range seems to be between $850-$1500 per month for between 40 and 80 time slots.

4.1.1 Pricing Strategy

All menu items are moderately priced. An typical customer will spend between $5-8 including food and drink. The menu prices are dictated by the Santa Barbara Restaurant Group and there is little room for modification. A student discount might be offered.

4.1.2 Promotion Strategy

If the site location ends up being near 13th Ave. next to the University of Oregon campus, advertising close to and on campus would be very appropriate. This is an area with limited parking where most of the traffic will come by foot. It will be very important to gain recognition from students and hospital employees. Promotional events close to campus, at sporting events, in the dormitories, and through the campus newspaper will tremendously increase sales.

On the other hand, if the store has a high traffic location with ample parking more traditional forms of restaurant promotion and advertising will be used.

4.2 Sales Forecast

Supplies in the restaurant industry, particularly fresh produce and meats and seafood, are constantly subject to changes in the prices, so, while we attempt to maintain consistency, menu prices are also subject to change. The sales forecasts start out at a moderate level and build until the end of the school year where we hope to have the strongest sales. Due to location (by campus) it is probable that sales will see a sharp decline during the summer months (off months). As students begin to come back to school again in the middle of September the sales will pick up again. If the proper location is found the sales may not decrease as much as expected, because if parking is available we could appeal to a larger market. If it is not located near campus the sales might be more consistent, but it would yield close to the same in revenues.

The location next to Blockbuster Video Rental and Little Caesar's Pizza would offer a chance of more consistent sales and rental costs could also be considerably cut. This is a high traffic location next to a wealthy residential neighborhood. It would be nice to compensate for the sales decline during the summer months next to campus. This location offers a lot of possibilities. 

Two La Salsa franchisees who have provided helpful information on their sales revenues. One, located in Phoenix, Arizona, said that he has a lot competition in town (Quedoba, Chipotle's, Baja Fresh, etc.). His rough sales were at a very similar level as predicted in the Sales Forecast table. The numbers used seem to be consistent with experience in this industry.

In Eugene, the strongest competitors have not arrived in town yet. If La Salsa is established first it will gain the loyalty of the community, and sales could be considerably higher than those predicted in the Sales Forecast Table.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Meal Deals $266,169 $284,801 $304,737
A La Carte $139,720 $149,500 $159,965
Burrito/ Taco $249,068 $266,503 $285,158
Other $37,151 $39,752 $42,534
Total Sales $692,108 $740,556 $792,394
Direct Cost of Sales Year 1 Year 2 Year 3
Meal Deals $69,204 $74,048 $79,232
A La Carte $29,341 $31,395 $33,593
Burrito/ Taco $77,211 $82,616 $88,399
Other $6,316 $6,758 $7,231
Subtotal Direct Cost of Sales $182,072 $194,817 $208,454