SIGMUND GOURMET PASTA January 2001 This sample marketing plan has been made available to users of Marketing Plan Pro M marketing planning software published by palo Alto Software. Names, locations and numbers may have been changed, and substantial portions of text may have been omitted from the original plan to preserve confidentiality and proprietary information You are welcome to use this plan as a starting point to create your own but you do not have permission to reproduce, publish, distribute or even copy this plan as it exists here Requests for reprints, academic use, and other dissemination of this sample emailed to the marketing department of Palo Alto Software at marketing @pa Poalts.com.fe productinformationvisitourWebsitewww.paloalto.comorcal:1-800-229-7526 Copyright Palo Alto Software, Inc, 2001
January 2001 This sample marketing plan has been made available to users of Marketing Plan Pro™, marketing planning software published by Palo Alto Software. Names, locations and numbers may have been changed, and substantial portions of text may have been omitted from the original plan to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to reproduce, publish, distribute or even copy this plan as it exists here. Requests for reprints, academic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright Palo Alto Software, Inc., 2001
Confidentiality Agreement The undersigned reader acknowledges that the information provided by in this marketing plan is confidential; therefore, reader agrees not to disclose it without the express written permission of It is acknowledged by reader that information to be furnished in this marketing plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to Upon request this document is to be immediately returned to Signature or printed Date This is a marketing plan. It does not imply an offering of securities
Confidentiality Agreement The undersigned reader acknowledges that the information provided by _______________ in this marketing plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _______________. It is acknowledged by reader that information to be furnished in this marketing plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to _______________. Upon request, this document is to be immediately returned to _______________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a marketing plan. It does not imply an offering of securities
Table of contents 1.0 Executive Summary 2.0 Situation Analysis 2.1 Market summary 2.1.1 Market Demographics 2.1.2 Market Needs 2.1.3 Market Trends 2.1.4 Market growth 2. 2 SWOT Analysis 2.2.1 Strengths 2.2.2 Weaknesses 2.2.4 Threats 111233455666677 2.3 Competition 2.4 Services 2.5 Keys to Success 2.6 Critical issues 3.0 Marketing Strategy 8 3.1 Mission 3.2 Marketing Objectives 8 3.3 Financial Objectives 3.5 Positioning 9 3.6 Strategy Pyramids 10 3.8 Marketing Research 10 10 4.0 Financials, Budgets, and Forecasts 4.1 Break-even Analysis 12 4.3 Expense Forecast 5.0 Controls 5.1 Implementation Milestones 5.2 Marketing Organization 5.3 Contingency Planning
Table Of Contents 1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . . . 2 2.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . 4 2.2 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.4 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.4 Target Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.6 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.0 Financials, Budgets, and Forecasts . . . . . . . . . . . . . . . . . . . . . . 11 4.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.1 Implementation Milestones . . . . . . . . . . . . . . . . . . . . . . . 15 5.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sigmund's Gourmet Pasta 1.0 Executive Summary Sigmund's Gourmet Pasta will be the leading gourmet pasta restaurant in Eugene OR with a rapidly developing consumer brand and growing customer base. The signature line of innovative premium, pasta dishes include pesto with smoked salmon, pancetta and peas linguini in an alfredo sauce, and fresh mussels and clams in a marinara sauce. Sigmund's gourmet Pasta also serves distinct salads, desserts, and beverages Sigmund's Gourmet Pasta will reinvent the pasta experience for individuals, families, and take out price, designing tasteful, convenient locations, and providing industry-benchmark customer able customers with discretionary income by selling high quality innovative products at a reasona service In order to grow at a rate consistent with our objectives, Sigmund's is offering an additional $500,000 in equity. Existing members will be given the first option to subscribe to the additional equity to allow each of them to maintain their percentage of ownership The portion not subscribed by existing members will be available for prospective new investors 2.0 Situation Analysis Sigmund's Gourmet Pasta is close to entering their second year of operation The restaurant has been well received and marketing is now critical to its continued success and future profitability The store offers an extensive offering of gourmet pastas. the basic market need is to offer individuals, families, and take out customers fresh, creative, attractive, pasta dishes, salads and desserts. Sigmund's uses homemade pasta, fresh vegetables, and premium meats and cheeses 2.1 Market Summary Sigmund's gourmet Pasta possess good information about the market and knows a great deal about the common attributes of our most prized and loyal customers. Sigmund's gourmet Pasta will leverage this information to better understand who is served, their specific needs and how Sigmund's can better communicate with them
1.0 Executive Summary Sigmund's Gourmet Pasta will be the leading gourmet pasta restaurant in Eugene, OR with a rapidly developing consumer brand and growing customer base. The signature line of innovative, premium, pasta dishes include pesto with smoked salmon, pancetta and peas linguini in an alfredo sauce, and fresh mussels and clams in a marinara sauce. Sigmund's Gourmet Pasta also serves distinct salads, desserts, and beverages. Sigmund's Gourmet Pasta will reinvent the pasta experience for individuals, families, and take out customers with discretionary income by selling high quality, innovative products at a reasonable price, designing tasteful, convenient locations, and providing industry-benchmark customer service. In order to grow at a rate consistent with our objectives, Sigmund's is offering an additional $500,000 in equity. Existing members will be given the first option to subscribe to the additional equity to allow each of them to maintain their percentage of ownership. The portion not subscribed by existing members will be available for prospective new investors. 2.0 Situation Analysis Sigmund's Gourmet Pasta is close to entering their second year of operation. The restaurant has been well received, and marketing is now critical to its continued success and future profitability. The store offers an extensive offering of gourmet pastas. The basic market need is to offer individuals, families, and take out customers fresh, creative, attractive, pasta dishes, salads and desserts. Sigmund's uses homemade pasta, fresh vegetables, and premium meats and cheeses. 2.1 Market Summary Sigmund's Gourmet Pasta possess good information about the market and knows a great deal about the common attributes of our most prized and loyal customers. Sigmund's Gourmet Pasta will leverage this information to better understand who is served, their specific needs, and how Sigmund's can better communicate with them. Sigmund's Gourmet Pasta Page 1
Sigmund's Gourmet Pasta Target Markets Table 2.1: Target Market Forecast Target Market Forecast Growth 2003 2004 CAGR Individuals 12,457 13.454 1569 16,947 8.00% 12,668 9.009 Take out 24.574 29.734 32,707 35,978 10.00% 9.27% 60.021 65,593 9.27% 2.1.1 Market Demographics The profile for Sigmund's gourmet Pasta's customer consists of the following geographic, demographic, and behavior factors Geographics Our immediate geographic target is the city of Eugene with a population of 130,00 A 15 mile geographic area is in need of our services The total targeted population is estimated at 46,000 Demographics Male and female Ages 25-50, this is the segment that makes up 53% of the eugene market according to the Eugene Chamber of Commerce Young professionals who work close to the location Have attended college and/or graduate school An income over $40,000 Eat out several times a weel Tend to patronize higher quality restaurants Are cognizant about their health
Individuals Families Take out Target Markets Table 2.1: Target Market Forecast Target Market Forecast Potential Customers Growth 2001 2002 2003 2004 2005 CAGR Individuals 8% 12,457 13,454 14,530 15,692 16,947 8.00% Families 9% 8,974 9,782 10,662 11,622 12,668 9.00% Take out 10% 24,574 27,031 29,734 32,707 35,978 10.00% Total 9.27% 46,005 50,267 54,926 60,021 65,593 9.27% 2.1.1 Market Demographics The profile for Sigmund's Gourmet Pasta's customer consists of the following geographic, demographic, and behavior factors: Geographics • Our immediate geographic target is the city of Eugene with a population of 130,00. • A 15 mile geographic area is in need of our services. • The total targeted population is estimated at 46,000. Demographics • Male and female. • Ages 25-50, this is the segment that makes up 53% of the Eugene market according to the Eugene Chamber of Commerce. • Young professionals who work close to the location. • Yuppies. • Have attended college and/or graduate school. • An income over $40,000. • Eat out several times a week. • Tend to patronize higher quality restaurants. • Are cognizant about their health. Sigmund's Gourmet Pasta Page 2
Sigmund's Gourmet Pasta Behavior Factors Enjoy a high quality meal without the mess of making it themselves. When ordering health concerns in regard to foods are taken into account There is value attributed to the appearance or presentation of food 2.1.2 Market Needs Sigmund's Gourmet Pasta is providing its customers with a wide selection of high-quality pasta dishes and salads that are unique and pleasing in presentation, offer a wide selection of health conscious choices, and utilizes top-shelf ingredients. Sigmund's gourmet Pasta seeks to fulfill the following benefits that are important to their customers. Selection. A wide choice of pasta and salad options Accessibility. The patron can gain access to the restaurant with minimal waits and can choose the option of dine in or take out. Customer service. The patron will be impressed with the level of attention that they receive Competitive pricing. All products/ services will be competitively priced relative to comparable high-end pasta/Italian restaurants 2.1.3 Market Trends The market trend for restaurants is headed toward a more sophisticated customer. The restaurant patron today relative to yesterday is more sophisticated in a number of different ways Food quality. the preference for high-quality ingredients is increasing as customers are learning to appreciate the qualitative differences Presentation/ appearance. As presentation of an element of the culinary experience becomes more pervasive patrons are learning to appreciate this aspect of the industr Health consciousness. As Americans in general are more cognizant of their health idenced by the increase in individuals exercising and health club memberships, patrons are requesting more healthy alternatives when they eat out. They recognize that an entree can be quite tasty and reasonably good for you Selection. People are demanding a larger selection of foods, they are no longer accept a limited menu The nd is that within the last couple of years the restaurant offerings ha increased, providing customers with new choices. Restaurant patrons no longer need to accept a limited number of options. With more choices, patrons have become more sophisticated. This trend is intuitive as you can observe a more sophisticated restaurant patron in larger city markets such as seattle portland or new york where there are more choices available
Behavior Factors • Enjoy a high quality meal without the mess of making it themselves. • When ordering, health concerns in regard to foods are taken into account. • There is value attributed to the appearance or presentation of food. 2.1.2 Market Needs Sigmund's Gourmet Pasta is providing its customers with a wide selection of high-quality pasta dishes and salads that are unique and pleasing in presentation, offer a wide selection of health conscious choices, and utilizes top-shelf ingredients. Sigmund's Gourmet Pasta seeks to fulfill the following benefits that are important to their customers. • Selection. A wide choice of pasta and salad options. • Accessibility. The patron can gain access to the restaurant with minimal waits and can choose the option of dine in or take out. • Customer service. The patron will be impressed with the level of attention that they receive. • Competitive pricing. All products/services will be competitively priced relative to comparable high-end pasta/Italian restaurants. 2.1.3 Market Trends The market trend for restaurants is headed toward a more sophisticated customer. The restaurant patron today relative to yesterday is more sophisticated in a number of different ways. • Food quality. The preference for high-quality ingredients is increasing as customers are learning to appreciate the qualitative differences. • Presentation/appearance. As presentation of an element of the culinary experience becomes more pervasive, patrons are learning to appreciate this aspect of the industry. • Health consciousness. As Americans in general are more cognizant of their health, evidenced by the increase in individuals exercising and health club memberships, patrons are requesting more healthy alternatives when they eat out. They recognize that an entree can be quite tasty, and reasonably good for you. • Selection. People are demanding a larger selection of foods, they are no longer accepting a limited menu. The reason for this trend is that within the last couple of years the restaurant offerings have increased, providing customers with new choices. Restaurant patrons no longer need to accept a limited number of options. With more choices, patrons have become more sophisticated. This trend is intuitive as you can observe a more sophisticated restaurant patron in larger city markets such as Seattle, Portland or New York where there are more choices available. Sigmund's Gourmet Pasta Page 3
Sigmund's Gourmet Pasta Market Forecast 10.000 2001 2002 2004 2005 2.1.4 Market Growth In 1999, the global pasta market reached $8 billion dollars. Pasta sales are estimated to grow by at least 10% for the next few years. This growth can be attributed to several different factors. The first factor is an appreciation for health conscious food. While not all pasta is "good for you, particularly the cream based sauces, pasta can be very tasty yet health conscious at the same time. Pasta is seen as a healthy food because of its high percentage of carbohydrates relative to Another variable that is contributing to market growth is an increase in the number of hours our demographic is working. Over the last five years the number of hours spent at work of our archetype customer has significantly increased. as the number of work hours increases there is a high correlation of people that eat out at restaurants this is intuitively explained by the fact that with a limited number of hours available each day people have less time to prepare their meals and eating out is one way to maximize their time
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2001 2002 2003 2004 2005 Individuals Families Take out Market Forecast 2.1.4 Market Growth In 1999, the global pasta market reached $8 billion dollars. Pasta sales are estimated to grow by at least 10% for the next few years. This growth can be attributed to several different factors. The first factor is an appreciation for health conscious food. While not all pasta is "good for you," particularly the cream based sauces, pasta can be very tasty yet health conscious at the same time. Pasta is seen as a healthy food because of its high percentage of carbohydrates relative to fat. Another variable that is contributing to market growth is an increase in the number of hours our demographic is working. Over the last five years the number of hours spent at work of our archetype customer has significantly increased. As the number of work hours increases, there is a high correlation of people that eat out at restaurants. This is intuitively explained by the fact that with a limited number of hours available each day, people have less time to prepare their meals and eating out is one way to maximize their time. Sigmund's Gourmet Pasta Page 4
Sigmund's Gourmet Pasta Target Market growth 10.00% 6.00% 4.00% 2.00% 0.00% Families Take out 2.2 SWOT Analysis The following SWoT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing Sigmund's Gourmet Pasta 2.2.1 Strengths Strong relationships with vendors that offer high-quality ingredients and fast/frequent delivery schedules. Excellent staff who are highly trained and very customer attentive Great retail space that is bright, hip, clean, and located in an upscale mall, suburban neighborhood, or urban retail district. High customer loyalty among repeat customers High-quality food offerings that exceed competitors offerings in quality presentation and rice
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% Individuals Families Take out Target Market Growth 2.2 SWOT Analysis The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing Sigmund's Gourmet Pasta. 2.2.1 Strengths • Strong relationships with vendors that offer high-quality ingredients and fast/frequent delivery schedules. • Excellent staff who are highly trained and very customer attentive. • Great retail space that is bright, hip, clean, and located in an upscale mall, suburban neighborhood, or urban retail district. • High customer loyalty among repeat customers. • High-quality food offerings that exceed competitors offerings in quality, presentation, and price. Sigmund's Gourmet Pasta Page 5
Sigmund's Gourmet Pasta 2.2.2 Weaknesses Sigmund's name lacks brand equity A limited marketing budget to develop brand awareness The struggle to continually appear to be cutting edge 2.2.3 Opportunities Growing market with a significant percentage of the target market still not aware that Sigmund's Gourmet Pasta exists Increasing sales opportunities in take out business The ability to spread overhead over multiple revenue centers. Sigmund's will be able to spread the management overhead costs among the multiple stores decreasing the fixed costs per store 2.2.4 Threats Competition from local restaurants that respond to sigmund's gourmet Pasta's superior offerings Gourmet pasta restaurant chains found in other markets coming to Eugene a slump in the economy reducing customer's disposable income spent on eating out. 2.3 Competition National Competition Pastabilities: offers consumers their choice of noodles, sauces, and ingredients, allowing the customer to assemble their dish as they wish. Food quality is average Pasta Fresh: has a limited selection but the dishes are assembled with high-quality ingredients. The price point is high, but the food is quite good Pasta Works: offers pasta that is reasonably fresh reasonably innovative and at a lower price point. The company was sold a few years ago, and consequently the direction of management has been stagnant lately and has resulted in excessive employee turnover. Perfect Pasta: has medium-priced pasta dishes that use average ingredients, no creativity and less than average store atmosphere. sigmund's is not sure how this company has been able to grow in size as their whole product is mediocre at best Local Competition (Name omitted). This is an upscale italian restaurant that has a limited selection of pasta dishes. Although the selection is limited and pricey the dishes are quite good (Name omitted). An Italian restaurant with a decent pasta selection, however quality is inconsistent (Name omitted). An upscale restaurant with a large wine selection and good salads Everything else is mediocre at best and over-priced. service can often be poor
2.2.2 Weaknesses • Sigmund's name lacks brand equity. • A limited marketing budget to develop brand awareness. • The struggle to continually appear to be cutting edge. 2.2.3 Opportunities • Growing market with a significant percentage of the target market still not aware that Sigmund's Gourmet Pasta exists. • Increasing sales opportunities in take out business. • The ability to spread overhead over multiple revenue centers. Sigmund's will be able to spread the management overhead costs among the multiple stores, decreasing the fixed costs per store. 2.2.4 Threats • Competition from local restaurants that respond to Sigmund's Gourmet Pasta's superior offerings. • Gourmet pasta restaurant chains found in other markets coming to Eugene. • A slump in the economy reducing customer's disposable income spent on eating out. 2.3 Competition National Competition • Pastabilities: offers consumers their choice of noodles, sauces, and ingredients, allowing the customer to assemble their dish as they wish. Food quality is average. • PastaFresh: has a limited selection but the dishes are assembled with high-quality ingredients. The price point is high, but the food is quite good. • Pasta Works: offers pasta that is reasonably fresh, reasonably innovative and at a lower price point. The company was sold a few years ago, and consequently the direction of management has been stagnant lately and has resulted in excessive employee turnover. • Perfect Pasta: has medium-priced pasta dishes that use average ingredients, no creativity, and less than average store atmosphere. Sigmund's is not sure how this company has been able to grow in size as their whole product is mediocre at best. Local Competition • (Name omitted). This is an upscale Italian restaurant that has a limited selection of pasta dishes. Although the selection is limited and pricey, the dishes are quite good. • (Name omitted). An Italian restaurant with a decent pasta selection, however quality is inconsistent. • (Name omitted). An upscale restaurant with a large wine selection and good salads. Everything else is mediocre at best and over-priced. Service can often be poor. Sigmund's Gourmet Pasta Page 6
Sigmund's Gourmet Pasta Table 2. 3: Growth and Share Analysis rowth and Share Competitor Price Growth Rate rket Shar Name ommitted Name ommitted Name ommitted Other 10.50 4.88% 9.75 s4200 19.50% 3900% 2.4 Services Sigmund's has created gourmet pastas and salads that are differentiated and superior to competitors. Customers can taste the quality and freshness of the product in every bite. the following are characteristics of the product 1. Sigmund's dough for the pasta is made with Italian semolina flour 2. Cheeses are all imported 3. Vegetables are organic and fresh with three shipments a week 4. Meats are all top-shelf varieties organic when possible. At Sigmund's, food is not a product, the experience of dining is a service. Sigmund's prides themselves on providing service that is on par with fine dining This is accomplished through an extensive training program and only hiring experienced employees At a Glance--The protype Sigmund's store Location: an upscale mall, suburban neighborhood or urban retail district Size: 1, 200-1, 700 square feet. Employees: six to seven full time Seating: 35-45 Types of transactions: 80% dine in, 20% take out 2.5 Keys to Success Location location location Sigmund' s site selection criteria are critical to success. Arthur Johnson, former VP Real Estate Starbucks, helped us identify the following site selection criteria Day time and evening Shopping patterns Car counts Household income levels Page 7
Table 2.3: Growth and Share Analysis Growth and Share Competitor Price Growth Rate Market Share Name ommitted $16 7% 15% Name ommitted $12 6% 11% Name ommitted $14 7% 13% Other $0 0% 0% Average $10.50 4.88% 9.75% Total $42.00 19.50% 39.00% 2.4 Services Sigmund's has created gourmet pastas and salads that are differentiated and superior to competitors. Customers can taste the quality and freshness of the product in every bite. The following are characteristics of the product: 1. Sigmund's dough for the pasta is made with Italian semolina flour. 2. Cheeses are all imported. 3. Vegetables are organic and fresh with three shipments a week. 4. Meats are all top-shelf varieties, organic when possible. At Sigmund's, food is not a product, the experience of dining is a service. Sigmund's prides themselves on providing service that is on par with fine dining. This is accomplished through an extensive training program and only hiring experienced employees. At a Glance--The Protype Sigmund's Store: • Location: an upscale mall, suburban neighborhood, or urban retail district. • Design: bright, hip, and clean. • Size: 1,200-1,700 square feet. • Employees: six to seven full time. • Seating: 35-45. • Types of transactions: 80% dine in, 20% take out. 2.5 Keys to Success Location, Location, Location. Sigmund's site selection criteria are critical to success. Arthur Johnson, former VP Real Estate, Starbucks, helped us identify the following site selection criteria: • Daytime and evening populations. • Shopping patterns. • Car counts. • Household income levels. Sigmund's Gourmet Pasta Page 7