MIP Presentation: Food.2Home.in: A Marketing Strategy

for targeting corporate customers

MIP Presentation: Food.2Home.in: A Marketing Strategy

for targeting corporate customers

Company Name: Ictoban Online Services Pvt. Ltd.

Presented By: Mr. Kunal Madkaikar

Faculty Guide: Prof. Jaba M Gupta

Industry Guides: Mr. Nirmesh Mehta/Mr. Aravind R S

Presentation Flow

IntroductionObjectivesMethodologyPhase 1: Company and Industry AnalysisPhase 2: Exploratory ResearchPhase 3: Descriptive ResearchPhase 4: Analysis and RecommendationsScope for further study

Introduction to ICTOBAN Online Services Pvt. Ltd.

Startup firm by three IIMA graduates from the 2009 batch.

Two Independent Businesses: Food ordering website (Food.2Home.in) Management Consulting

Food.2Home.in: Online food ordering website. Operating in three cities (Ahmedabad, Mumbai and

Manipal) Completed one year of operations in May 2010. Customer base: 1400 customers

Objectives

Aim: To device a marketing strategy to get the corporations

/ employees who order food by telephone to switch to Food.2Home.in.

Objectives for fulfilling the aim: To understand the business and perform a Company

and Industry analysis. To conduct marketing research to understand food

ordering habits and patterns of corporations.

Methodology

The project was executed in the following Four Phases: Phase 1: Company and

Industry Analysis Porter’s Five force Framework SWOT Analysis Telephonic survey of current

customers New Customers Regular Customers Irregular Customers Lost Customers

Phase 2: Exploratory Research Phase (Qualitative) Four Focused Group

Discussions with corporations in Ahmedabad.

Phase 3: Descriptive Research (Quantitative) Questionnaire was

administered to 234 Corporate Employees belonging to 150 companies across 10 different cities.

Modes of questionnaire administration Personally Online

Phase 4: Analysis and formulation of Marketing Strategy Cross Tabulation Factor Analysis

Phase 1: Company and Industry Analysis

4 P Analysis

Product Website

Website Features User Interface

Service Food Attributes: Freshness,

Warmth Delivery Attributes: On-time

delivery, Packaging Confirmation Calls

Price Prices of the Food items:

Controlled by the restaurants Service to Customer: Free of

cost Service to Restaurants:

Commission Based

Placement Deliveries: Handled by

Restaurants Orders are transferred to

the restaurants via SMS Conformation calls made to

the Customers Promotion

Financial Constraints Word of mouth promotion

by satisfied customers Newspaper Articles, Fliers Posters in associate

restaurants Banners in cinemas

Business Model: Value creation through Complementarities

Restaurant

Supplier(Hosting Agency)

Customer

Food.2Home.in (Agent)

Porter’s Five Force Framework

Threat of Entry: High Low customer switching cost Low Capital requirement Low scale independent incumbency

advantage Easy access to existing chain of restaurants

Threat of Suppliers: Low Low cost of switching the hosting agent

Threat of Buyers: High Restaurant’s switching cost: Medium Buyer backward integration Lack of regular updates Low priority to website

Threat of Substitutes: High Buyer: low cost of switching to substitutes Presence of alternative : e.g. Just Dial

Threat of Rivalry: Low Low exit barrier Products are heterogeneous Highly fragmented market Rival websites: HungryZone.com,

BookMyKhana.com, WebDhaba.com, mhungry.in

Threat of Rivalry(Low)

Threat of New Entrants(High)

Threat of Buyers(High)

Threat of Substitutes

(High)

Threat of Suppliers

(Low)

Overall Threat: Medium to High

(Sources: www.WhatBlog.com, www.merosys.com, www.ehow.com)

Existing Customer Feedback: Telephonic Interviews

Objective: Problems faced with the service Features missing with the site Source of introduction to the

website Methodology:

Classification: New, Regular, Irregular and Lost customers

10 Customers from each class were selected for the telephonic interview based on judgmental sampling

Facts: 3324 Orders from July 2009 to

March 2010 Total revenue: Rs. 9031o Average of Rs. 27 per order Customer Lifetime Value: Rs. $42

Observations: Positives: User-friendly

Interface Problems Faced:

Late Deliveries Improper packaging Stale food delivered Price mismatch Menu items no longer served Too many steps to order

(Cumbersome process) Sources of introduction:

Friend Referrals (29.4%) Newspaper (23.5%) Posters in restaurants

(17.6%)(Among others)

SWOT Analysis

Phase 2: Exploratory Research

Focused Group Discussions

Objective was to understand: Social and behavioral aspects linked to food

consumption in offices. Motivating factors affecting food ordering decisions. Expectations from a food ordering service.

Methodology FGD Moderator’s guide was prepared 4 firms were identified using convenience sampling. Appointments were taken to conduct FGD in office

premises. Discussions ranging from 45 minutes to 1 hour were

conducted

Major Takeaways from FGD

Identified two distinct customers Individual Orders: Employees Bulk Orders: Office/Team

Celebrations Bulk orders:

HR Department Administration Department Senior Executives

Situations when food was ordered in the office were identified. Lunch Evening snacks Office parties Team parties (Among others)

Typical office policies on food reimbursement were identified.

Factors affecting individual ordering were identified Variety Time Discounts (Among others)

Expectations from food delivery service were identified Quick order facility Tie-up with quality restaurants Descriptive Menus Specialty Items Price Comparison (Among

others)

Phase 3: Descriptive Research

Questionnaire

Scope of the survey: Administered personally in

Ahmedabad (Number of responses = 100)

Online responses (10 cities) Sampling Method:

Personally Administered Survey: Convenience Sampling

Online Survey: Snowball Sampling

Sample Size: Factor Analysis:

No of observations/ No of dependent variables = 10/1No of dependent variables = 11Thus, Sample size > 110People surveyed = 240

Sections: Introduction Individual food ordering

preferences Lunch Related Office Policies Demographic Information

Phase 4: Analysis and Recommendations

Individual Orders by Employees

Lunch ArrangementsWhat are your current lunch arrangements in the

office?Total Percentage

At canteen inside commercial complex 2 0.85%Have lunch at home 1 0.43%I carry home cooked food 134 57.26%I eat at a restaurant outside the office 26 11.11%I have enrolled for a tiffin service 16 6.84%I order food to the office from outside restaurants 15 6.41%My office provides me food at subsidized rates 38 16.24%My office provides me food, but not at subsidized rates 2 0.85%

Grand Total 234 100.00%

What are your current lunch arrangements in

the office?

What are the typical situations when you order food to be delivered at your desk?

Daily lunch (I order almost on a

regular basis)Dinner Don't Order Evening

SnacksOccasional

lunchWorking late

at officeGrand Total

At canteen inside commercial complex 0.00% 0.00% 0.00% 50.00% 50.00% 0.00% 100.00%

Have lunch at home 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 100.00%I carry home cooked food 0.51% 0.51% 7.18% 22.05% 44.10% 25.64% 100.00%

I eat at a restaurant outside the office 8.57% 0.00% 2.86% 11.43% 48.57% 28.57% 100.00%

I have enrolled for a tiffin service 28.57% 0.00% 9.52% 9.52% 28.57% 23.81% 100.00%

I order food to the office from outside restaurants

17.39% 0.00% 4.35% 21.74% 43.48% 13.04% 100.00%

My office provides me food at subsidized rates

0.00% 0.00% 0.00% 0.00% 50.00% 50.00% 100.00%

My office provides me food, but not at subsidized rates

0.00% 0.00% 0.00% 0.00% 50.00% 50.00% 100.00%

Typical Ordering SituationsWhat are the typical situations when you order food to be delivered at your desk?

Number of responses Percentage

Daily lunch (I order almost on a regular basis)

14 6.0%

Evening Snacks 64 27.4%

Occasional lunch 144 61.5%

Working late at office 95 40.6%

Don't Order 21 9.0%

Total Responses 234  

What are the typical situations when you

order food to be delivered at your desk?

How many times per month do you order food to your desk?

Less than 2 times

2 to 5 times 6 to 10 timesMore than 10

timesDon't Order Grand Total

Daily lunch (I order almost on a regular basis)

0% 7.14% 7.14% 85.71% 0% 100%

Evening Snacks 14.06% 46.88% 28.13% 10.94% 0% 100%

Occasional lunch 22.38% 54.55% 16.78% 6.29% 0% 100%

Working late at office 28.42% 54.74% 10.53% 6.32% 0% 100%

Don't Order 0% 0% 0% 0% 100% 100%

Note: The percentage values do not add to zero since the question was multiple choice question

Factor Analysis

Q. Think of a situation in the recent past when you placed an order for food to be delivered to your office. Keeping this situation in mind rate the following statements based on how much you agree / disagree with the statements. 

Strongly Disagree

Disagree

Neutral

AgreeStrongly Agree

I seek a different restaurant every time I place an order.

I like trying new dishes / cuisines. I like to try restaurants that are recommended by friends

and family. I like ordering food from restaurants that have received

good customer reviews in newspapers and magazines. I only order food from restaurants that have delivered food

on time in the past. I only order food from restaurants that are close to my

office. I do consider discounts offered by the restaurants while

placing the order. I do compare prices of different restaurants while placing

the order. I prefer that restaurants mention their specialty items in

the menu cards. I would prefer ordering food from restaurants with

descriptive menus mentioning the ingredients along with the food items.

I do give importance to the restaurant brand while placing an order.

Factor AnalysisKMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .588

Bartlett's Test of Sphericity Approx. Chi-Square 229.355

df 28

Sig. .000

Communalities

Initial Extraction

Recomended_Restaurants 1.000 .765

Customer_Reviews 1.000 .720

Ontime_Delivery 1.000 .677

Proximity_to_Office 1.000 .661

Discounts 1.000 .758

Compare_Prices 1.000 .764

Speciality_Items 1.000 .676

Descreptive_Menus 1.000 .672

Extraction Method: Principal Component Analysis.

Rotated Component Matrixa

Component

1 2 3 4

Recomended_Restaurants .125 -.072 .845 .172

Customer_Reviews -.009 .274 .794 -.121

Ontime_Delivery -.060 .204 -.008 .795

Proximity_to_Office .152 -.151 .062 .782

Discounts .844 .182 .107 .030

Compare_Prices .869 .074 .012 .060

Speciality_Items .150 .794 .061 -.137

Descreptive_Menus .106 .780 .102 .204

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 5 iterations.

Note: The four factors explain 71.164% of the total variance

Factor Analysis

Factor Factor Name Components Average Factor Average

1 Referral Recomended_Restaurants 3.95

3.637Customer_Reviews 3.32

2 ReliabilityOntime_Delivery 3.77

3.718Proximity_to_Office 3.66

3 PriceDiscounts 3.64

3.506Compare_Prices 3.38

4 Value Added Features

Speciality_Items 3.46

3.511Descreptive_Menus 3.56

Observation: Priority given to the different factors is as follows1. Reliability2. Referral3. Value added features4. Price

Recommendations

Changes in the Product: Measures to improve reliability factor:

Tie-up with quality restaurants. Tighter control over Restaurants by strengthening the contract clauses.

Introduce value added services such as: Descriptive menus mentioning the food ingredients. Saving order history for reference and expenditure tracking. Saving you favorite order for one click order placement.

Changes in Promotion: Measures to improve online promotions:

Introduce a friend referral system on the website. Food ordering is a high involvement buying behavior. Web 2.0 interface can

be used to make the site more interactive by introduction of food related discussion forum.

Introduction of loyalty programs (e.g. registered customers would get loyalty points on each order which can be traded for discounts/prizes.)

Bulk Orders by Corporations

Industry Details

Advertising5%

Airline1%

Automotive1%

BPO3%

Consulting11%

Finance17%

Healthcare3%

Human Resource1%

Infrastructure5%

Insurance3%

IT services27%

Manufacturing5%

Marketing and Sales3%

Media2% Others

10%

Retail1%

Telecommunications3%

Traders1% Industry Split

234 Responses 150 Companies 10 different cities

Typical Situations For Ordering Food

Office Parti

es

Team Parties

Festival C

elebrations

Birthday Celebrations

Conferences

Client M

eetings

Working La

te0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

62.00% 59.33%

30.00%

64.00%

34.67% 35.33%

66.00%

Typical situations for ordering food

Percentage

Note: The percentage values do not add to zero since the question was multiple choice question with checkbox.

Ordering Responsibility Details

Consensus of office staff

HR Department

The Receptionist

A Senior Executive of the company

Admin

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

62.7

29.3

12.0

6.0

2.0

Percentage

Note: The percentage values do not add to zero since the question was multiple choice question with checkbox.

Observation: HR, Receptionist and Senior Executives were the major decision makers while placing the orders.

Reimbursement Policies

Does your office reimburse the food

expenses (or provide food

coupons) incurred during overtimes (or when working

late)?

Number of companies

Percentage

Yes 91 60.67%

No 59 39.33%

What are the limitations that are applied to such

orders?

Number of Companies

Percentage

There is an upper limit to amount that can be reimbursed in one order.

49 32.67%

There is an overall cap on the total amount that can be reimbursed in a month.

14 9.33%

This facility is only available to senior position employees.

7 4.67%

There are timing restrictions (E.g. Reimbursement will be provided to employees working after 8pm).

31 20.67%

Such facility can be availed only a limited number of times during a month.

8 5.33%

No Limitation 9 6.00%

Factor Analysis For HR and Administration Dept.

Rotated Component Matrixa

Component

1 2 3

Different_Restaurant .135 .006 .787

Recomended_Restaurants -.068 .332 .719

Ontime_Delivery .793 -.022 -.299

Proximity_to_Office .111 .428 -.594

Discounts .050 .826 .107

Compare_Prices .016 .907 -.015

Speciality_Items .713 -.009 .334

Descreptive_Menus .829 .118 .019

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 4 iterations.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .516

Bartlett's Test of Sphericity Approx. Chi-Square 68.077

df 28

Sig. .000

Communalities

Initial Extraction

Different_Restaurant 1.000 .637

Recomended_Restaurants 1.000 .632

Ontime_Delivery 1.000 .718

Proximity_to_Office 1.000 .548

Discounts 1.000 .697

Compare_Prices 1.000 .822

Speciality_Items 1.000 .621

Descreptive_Menus 1.000 .701

Extraction Method: Principal Component Analysis.

Note: The four factors explain 67.2% of the total variance

Factor Analysis For HR and Administration Dept.

Factor Factor Name Components AverageFactor

Average

1Variety and Proximity

Different_Restaurant 3.05

3.625

Recomended_Restaurants 3.975

Proximity_to_Office 3.85

2 Service

Ontime_Delivery 3.825

3.675Speciality_Items 3.725

Descreptive_Menus 3.475

3 PriceDiscounts 3.95

3.8Compare_Prices 3.65

Observation: Priority given to the different factors is as follows1. Price2. Service3. Variety and Proximity

Recommendations

Changes in the Product: Introduce corporate login accounts with facilities such as:

Individual login for employees Cap on expenditure per order Overall monthly expenditure cap per employee Time restrictions on order Expense tracker for the company

Advanced price comparison of the bulk orders for HRs and Admins.Changes in Promotion:

Advertising strategy should be Cognitive-Affective-Behavioral Cognitive: Highlight all the new features introduces and their

benefits. Affective: Keep a limited period free trial Behavioral: Acceptance and Recommendations. Highlight the good

recommendations received on the website.

Scope For Further Study

Confirmatory Factor Analysis using Structural Equations Modeling

Analysis of various Advertising channels and recommending the most feasible options.

The End

Thank You!!!