Alyssa Phillips

Taco Bell Marketing Proposal

1

Taco Bell Proposal

Driving down A Ave, many people might think that they have plenty of options for
fast food stops in Oskaloosa. As people are driving and looking at the different restaurants
though, they will begin thinking, What about healthy options that are fast, convenient, and
low priced? That is why, for our marketing proposal, we have chosen to open up a Taco Bell
in Oskaloosa, Iowa. We want to enter the Oskaloosa market and compete against others for a
good market share in the fast food industry. Competitors in the area would include:
McDonalds, Wendys, KFC, Taco Johns, Hardees, Maid Rite, Subway, and Jimmy Johns,
with Taco Johns being our main competitor. Our target market will be aimed towards middle
and lower social class families and adults around 16 to 40 years of age who are in crunch for
time and looking for something fast and simple. Since Taco Johns is our main competitor in
the Oskaloosa area, we have provided a graph below that shows the price difference between
similar products.
12
10
8
Taco Johns

Taco Bell
4
2
0
Crunchy Taco

Soft Shell

Meat Potatoe Burrio Group Meal Deal

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(Source 1 and 2 for graph) Note: For the group meal deals, Taco Johns provided a 6 piece
meal against our 12 piece meal. We feel that the customer will perceive our prices as the
better deal and will choose us over our competitor. Not only are our prices lower, but we also
offer higher quality ingredients. We will gain competitive advantage by using the two basic
strategies of low cost and product differentiation.
With not having to hire a store manager since we will be running the store ourselves
or pay the advertising fees, we will keep our cost down so we can offer lower prices than our
competitors. With product differentiation, we will offer superior customer value through our
healthier food selection and our service which will be fast, reliable, and flexible with our
hours since we will be open 24/7. We are always trying to stay ahead of the competition by
keeping up to date and by continuously improving our daily processes and making
improvements with all networks within our chain through total quality management. We
want to position our franchise in the competitive race as a direct challenger to Taco Johns
with a goal to be the number one Mexican fast food restaurant in the Oskaloosa area by 2016.
We have chosen Taco Bell because since we already have a McDonalds, Wendys and
Subway in our local market, the next in line was Taco Bell which is ranked as 6 th in the fast
food industry. Taco Bell is the largest Mexican fast food restaurant chain in the United States
with 70% market share and 35 million consumers served each week. (Source 3) By opening
a location is Oskaloosa, we have the chance to help Taco Bells market share grow and to
help it reach more customers in the area, since the closest restaurant is in Ottumwa. As

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individual owners of this franchise, we wish to strive for lower expenses to help our store
gain more profit.
As a developing community, the choice of Oskaloosa was simple because the
population has grown 3.45 percent since 2010 and we believe that we can receive a profit
from the people in our community with Taco Bell being one of the top competitors in the fast
food industry. The average income per household in Oskaloosa was $35,354 in 2012.
(Source 4) About 14.1% of that is spent on fast food alone. (Source 5) Therefore, we feel we
can reach out to those particular families with our low prices and quick service. Once we
have a better understanding of our customers wants and needs, we will adjust our marketing
strategy accordingly.
Our marketing strategy will be based on the concept of knowing the needs and wants
of our consumers and target market, by delivering desired results better than our competitors.
Based on the value proposition of more for less, we will offer our consumers better quality
food for a lower price. When Taco Bell unveiled its $2 meal deals in 2013, it gave customers
four options that paired a burrito or taco with a drink and chips with our better quality meat.
This promotion will support our strategy to help our customers perceive us as a more for
less company.
We will evaluate Taco Bells market growth in the future by looking at sale
fluctuations and profit margins. For part of our market research, we will give a questionnaire
to all customers in efforts to receive feedback that will help improve the overall experience,
customer satisfaction and eventually help us gain customer loyalty. To be successful, we will

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make sure our products and services are customer based. After reviewing the information
received by the questionnaire, we will formulate a plan to stay up to date on the wants, needs
and demands of our customers.
Some of our strengths include the fact that we are a strong franchise within a
competitive market, we are also a popular brand name and we maintain high brand loyalty.
Taco Bell offers a wide variety of food at any time of the day; it also has high quality
ingredients, a food allergy and sensitivity menu, and a diabetes meal plan. Taco Bell offers
quality, low cost, and fast service by including the option of a drive-thru. Taco Bell has a
strong brand equity supported by wide spread promotions and marketing campaigns. One
incentive of opening a Taco Bell franchise is that there are no extra advertising fees; it is paid
for through the corporation.
Some of the weaknesses for our Taco Bell franchise would be the amount of
competition in the area for fast food restaurants. We have at least eight competitors in a
relatively small market area. This makes it harder for us to gain market share, but we may
put Taco Johns out of business. Even though Taco Bell has healthier ingredients than our
local competitors, its overall menu still consists of high calorie and fat food which is a major
weakness due to the world wide movement of getting healthy. Since Oskaloosa has formed a
local program called Blue Zones, which is all about making healthier choices, it would hurt
our franchise more than help it grow, without providing those healthy food options.
Since we are an independent franchise, we will deliver value to our consumers by
being socially and environmentally friendly. With our new building, we will make sure we

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have all environmentally friendly building materials and equipment. We will also encourage
recycling by having both trash cans and recycling bins in our store while also using
environmentally friendly containers and cups only when delivering food and drinks to our
customers. We want to be involved in our community, so we will use Public Relations
sponsor organizational and youth events that has long lasting positive events in the
community. Through these events, we will try to gain brand recognition in the community.
Some of our locations opportunities include growing these healthy foods, since we
already have healthy ingredients going into our somewhat healthy food. We would also
develop new recipes and flavors geared toward the rising percentage of health conscious
consumers. Another way to expand our market is by adding new franchises, using untapped
market segments. Taco Bell, as a corporation, has opportunities to strengthen itself by
penetrating new market areas, which is where we come in, introducing an old product to a
new market.
Our location also has threats, including the many competitors in the surrounding area
and since our location is new, we will have to penetrate the local market in effort to take
customers from our competitors. Since consumers are also starting to eat healthier, this could
potentially be a threat if we do not conform to the changing market. While there are not
many healthy fast food options within this market area, Oskaloosa is trying to improve upon
this through Blue Zones Project, which promotes living longer and healthier.
Taco Bell is a fast food delivery chain that specializes in offering a wide variety of
menu options. On average, Taco Bell offers one new product item on its menu every five

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years. The latest craze happens to tie between a waffle taco and a loco Dorito taco. The
newest addition is actually called a quesorrito which is a mixture of a quesadilla and a
burrito. Taco Bell also recently added a breakfast menu to compete with other fast food
franchises offering breakfast, namely McDonalds. With our franchise, we would develop
concept testing when introducing a new product.
With the challenge of keeping up with the new health craze, Taco Bell has introduced
a new variety of healthy choices for health conscious consumers. Looking at an online menu,
we see many healthy and unhealthy items listed. Whether our consumers want to be more
health conscious or not, we can target many people with our wide variety of menu options at
different sizes and calories.
We will get our healthy ingredients from the same places as headquarters. We will use
100% premium beef, seasoned with our signature recipe; USDA Select Marinated Grilled
Steak; Marinated all-white-meat chicken; Diced, fresh cut tomatoes; Guacamole made from
authentic Mexican-grown avocados; Pico de gallo freshly prepared every day; Nacho chips
freshly baked throughout the day.
Our menu offers not only lower prices, but also healthier, better quality ingredients
compared to Taco Johns, our number one competitor in the Oskaloosa area. Below is a chart
listing calories of similar products in comparison with Taco Johns. Note: For the group meal
deals, Taco Johns provided a 6 piece meal against our 12 piece meal. (Source 1 and 2)

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2500
2000
1500
1000
500

Taco Johns

Taco Bell

Now that we know that Taco Bell is the right franchise for our target market and that
the right place is the Oskaloosa area, we can move forward to the franchise fees. After doing
some additional research, our total investment will range between $1.1 million and $1.7
million. We will get a loan from Orion Bank for $1 million dollars at a 6% interest rate for a
20 year period which means we would owe $7,165 a month. We are expecting about 79
tickets per day with a profit rate of 20% of every dollar equaling $632 based off of our sales
which will be $790 since we took our 79 tickets at $10 which we expect our customers to
pay on average per ticket based on Taco Johns sales. Below is a breakdown of the franchise
costs to own a Taco Bell. (Source 9)

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Assuming we know we are eligible to invest in our own Taco Bell franchise, our next
step is to decide where the perfect geographical location will be. When doing research on
potential locations, there were a few options that would meet our space needs but none that
coincided as well as our final choice. We would like to place our new Taco Bell restaurant in
the old Dairy Queen Building which sells for $324,360 but since we know that a competitor
called Dunkin Doughnuts wants to buy that building, we will offer $330,000 to have a
competitive advantage. The reason we chose this location is because we can attract
customers who are traveling through Oskaloosa on Highway 92 which is one of the main
streets in town. Since we are the first fast food restaurant when entering town from Highway
163, we will make sure we get our brand on the food exit sign by contacting our State
Highway Transportation Department to ensure that our sign is on the exit ramp for $360 per
year, (Source 10) to attract travelers to stop at Taco Bell rather than our competitors further
along the highway.

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In Taco Bells franchise set-up, headquarters takes care of all advertising fees, which
will be a tremendous help due to the high cost that advertising usually costs with any other
company. Since we will save tremendous amounts of money on advertising, we will be using
the money saved to promote our brand within the community by providing free samples of
our product during community events. To promote peoples desire to come into our
restaurant, we will hand out 10 percent off the total purchase coupons that do not expire.
While handing out free samples during these community events, we will make sure to
highlight the usage of healthy foods in our franchise compared to other fast food franchises
in the area. We will use these healthy samples as a way to get one step ahead of our
competitors in the healthy food craze. To get our food samples out in the community, we will
need employees to help us promote our new franchise.
For the grand opening and the week that follows, our store will offer different
promotions each day. For our grand opening we will make promotional products like t-shirts,
water bottles, and bags to give to the first 1,000 customers to order an item from our menu.
This will also help us get our name out in the community. For the next six days, we will
offer discounts on different items on our menu that will change daily.
To get employees, we are going to advertise in multiple media outlets that include:
KBOE radio, hanging flyers around town, multiple social media networks, Oskaloosa Herald
ads, and the Oskaloosa Area Chamber and Development Group. In these ads we will specify
up front exactly what we are looking for in our employees. Once we have a strong presence

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in the community, people will start word of mouth advertising as the application process
begins.
Since Oskaloosa is a small community, it is important that we have good customer
service to differentiate our product from our competitors. While looking at staffing options,
we will choose to save time by implementing group interviews. During these group
interviews, we will choose applicants that stand out based on the six characteristics of hiring
good sales people. We will then individually interview the applicants that stand out. To stand
out, the applicants must make a good impression while being friendly, assertive, and very
engaging in conversation about the job requirements. The applicants also must prove to be
self-motivated, flexible with hours, and the ability to practice good customer service.
Since we plan on managing the store ourselves to save money, we plan to hire 4 part
time managers and 25 part time employees. Since our restaurant will be open 24 hours, we
will need 25 employees so we are double staffed at all times of the day. Our payment options
will be based mostly on minimum wage which is $7.25, but we plan to pay each employee
around $7.50 to $7.75 so that the employee has more of an incentive to work harder. We will
evaluate our employees quarterly and give them a raise based on performance annually. Due
to the extra job responsibilities of part time managers, we will start the 4 managers at $9.00
and raise their wage based on previous experience and job performance.
Once we have selected our top candidates out of the interviewees, we will begin the
training process immediately. Our training process will involve the right way to prepare and
handle food as well as extensive training in customer service. Along with our training being

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based off of Taco Bells company-wide process and protocol, we will also include our point
of sales system and how to run the equipment safely and properly within the OSHAs
standards. Every employee will receive an employee handbook that entails a code of conduct
and everything else that the Taco Bell wants every employee to know about job
responsibilities.
In conclusion, we have discussed our proposal to open our own Taco Bell franchise in
Oskaloosa. It is one of the top fast food companies that have not been opened up here. We
also talked about the benefits of Taco Bell verses Taco Johns in menu and price since it is
more profitable. Our marketing aspects included promotion, more for less, and a SWOT
analysis. Taco Bell has healthy, low cost and fast food service with a good geographical
location for our Oskaloosa branch. After training the employees we have hired under the
OSHA and Taco Bell headquarters rules and paid franchise fees, we will evaluate our market
growth with sale fluctuations and profit margins. We plan for our Taco Bell location to be
successful since we have a good plan for the launch of our franchise in Oskaloosa, Iowa.

Reference Page
1. Taco Bell Online Menu:
http://www.tacobell.com/food/tacos
2. Taco Johns Online Menu:
http://www.tacojohns.com/menu/index.cfm/
3. Fast Food Top Charts in USA:

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http://www.qsrmagazine.com/reports/qsr50-2013-top-50-chart
4. Median Household Income:
http://locallabs.org/oskaloosa-iowa-income
5. Chapter 5 notes written on June 12: Personal Consumption Expenditures in 2000
6. Dairy Queen information and costs:
http://beacon.schneidercorp.com/Application.aspx?
AppID=25&LayerID=152&PageTypeID=4&PageID=259&Q=946111386&Ke
yValue=1013353012#
7. Whitney called Bank of Orion Loan Officer (Kevin) at (309) 764.8811
8. Alyssa called Taco Johns Store Manager (Zach) called at (641) 673.3264
9. Name of Fee chart:
http://www.franchisedirect.com/foodfranchises/taco-bell-franchise07099/ufoc/
10. State Highway Transportation department

www.ehow.com/how_5591101_business-interstate-exit-sign.html