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La Salsa Fresh Mexican Grill

Market Analysis Summary

Market segmentation is described in the next section.

3.1 Market Segmentation

The 2000 Census of Eugene/ Springfield says there are currently over 300,000 people populating this metropolitan area. Using basic demographic characteristics of age, gender, income, location, food preferences, ethnicity, an estimate of 150,000 potential customers was used in developing this plan.  

The University of Oregon was established in 1876, and currently has over 20,000 students. It is expected to gradually increase in size as it has over the previous years. 

Across the street from the University is Sacred Heart Hospital, which currently employs over 3,500 people (according to a hospital information representative) though it is likely moving to North Eugene in the near future. If this happens the current hospital will remain open only as an emergency room. This move and change will take time, hence the growth rate is listed as -50%.

Both of the proposed initial locations are close to university student residential areas. At the 18th Ave. and Willamette St. location high school students might be substituted for Sacred Heart Hospital employees as a source of mid-day customers. South Eugene High School has over 1,500 students.

Mexican restaurant business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Eugene/ Springfield 3% 150,000 154,500 159,135 163,909 168,826 3.00%
University of Oregon 3% 20,000 20,600 21,218 21,855 22,511 3.00%
Sacred Heart Hospital -50% 3,500 1,750 875 438 219 -49.99%
South Eugene High School 2% 1,500 1,523 1,546 1,569 1,593 1.52%
Total 2.50% 175,000 178,373 182,774 187,771 193,149 2.50%

3.2 Target Market Segment Strategy

The target market for the quick casual dining industry is very broad and should incorporate most demographic regions. Almost all ages, genders, races, and incomes should be considered potential customers.

Eugene is a rapidly developing city and is building the infrastructure for a larger metropolitan area. Currently, in this expansionary effort, Eugene is working on the following projects….

  • Building a new public library near the city center.
  • Broadway St. is being renovated and reopened to traffic. 
  • A new Federal Courthouse in is being built adjacent to downtown.
  • Low-income housing covering five square city blocks in downtown has been recently funded by St. Vincent DePaul.
  • The highway off-ramps to Eugene have recently been earmarked to be renovated at an estimated $88 million.    
  • The University of Oregon is spending between $80 and $100 million on additions to the football stadium.

Projects such as these are promising for the future of Eugene and show that the city is preparing for expansionary times.

3.2.2 Market Needs

In Eugene there are no high-quality, quick food Mexican restaurants. Most local Mexican restaurants use canned foods, lard, and shredded meats. Our food will be 100% fresh prepared in front of our customers’ eyes. Our salsa bar will allow customers to customize their food to their specific tastes.

3.3 Main Competitors

Quick Service Mexican-

Burrito Boy–  This is probably the most popular quick Mexican restaurant in town. We will offer much higher food quality and service. The atmosphere will be much cleaner and more comfortable. The food will be prepared in front of the customer, with no lard, canned food or shredded meats. Menu prices will be very similar, though the final products will not be.

Santa Fe Burrito–  Located on Willamette St. between 25th and 26th Avenues, Santa Fe Burrito is another low quality quick Mexican restaurant in Eugene. This store is very dirty and is an old Taco Bell. Using canned foods and some lard products, this restaurant provides a far-from-fresh feeling. They have a decent location that might be negotiable for buyout, thereby eliminating a weak competitor and picking up a pretty good location.

Burrito Amigos–  Not located near the university campus, this chain has been trying to expand. Currently, they have three or more stores. They create, almost, the taco stand feeling. Again there would be no comparison in quality of food. Though they will probably continue to attract the traditional style Mexican food consumer. Alternatively, La Salsa’s food could almost be considered “gringo” Mexican food.

Ritta’s Burritos–  These folks started out with one mobile stand and did some catering business, then opened a full-time store in Eugene, but this Mama and Papa business could not cover costs. Currently they set up a stand on the University of Oregon campus once a week, and during the summer they are located at the Saturday Market and do very well. They always have a really long line, but one is left to wonder if that is because there is no real competition in this area. Once again using shredded meats and some canned foods.

Las Brasas–  Las Brasas is located on Blair Street a few miles away from campus. From the outside Las Brasas looks really small and could be confused as a taco stand. People like their food, but due to location and size, they are not likely to be a competitive threat to La Salsa.   

Other Quick Service Mexican-

La Salsa will most likely not be a direct competitor with drive-thru fast-food Mexican restaurants like Taco Bell and Taco Time. The chicken, steak, shrimp, and Mahi Mahi will all be prepared fresh in front of the customers. Quality of produce will be much higher as will the atmosphere, so consequently the menu price range will be higher than fast-food, matching the  dietary needs and gastronomical expectations of the potential customer. We will offer a completely different menu and should not be compared to traditional fast-food Mexican.

Sit-Down Mexican- 

La Salsa with its fresh and extraordinary taste will offer menu items at a fraction of the cost of sit-down dining (perhaps 20%-50% cheaper). There will also be no charge for service that usually comes with being waited on. Another important difference is the quick service without compromising high quality food.