W03 Case Study: A Home for Soup:
Products, Price, Place, Promotion
Source:
Pexels
Maria smiled as she studied the figures and her market research. She knew she had a viable
product idea, and it was time to begin finding The Soup Shack a home.
She knew if she could find the right location to make and serve her soup, she should have a high
enough gross margin to cover her fixed costs. One of her major fixed costs would be to pay for
the location.
She had three options:
1. Make payments on a food truck.
2. Cook soup at her home and make deliveries.
3. Rent a restaurant space.
Maria loved the idea of a colorful food truck blasting dance music as she drove to different
locations throughout the day to serve her soup. She found a great second-hand truck and found
, that she would have to make payments of $500/month. Then she learned that each location where
she parked would charge a fee. She would pay $150 to park at the bus stop, $200 a month to park
at the post office, and $400 just to park in an empty lot in the center of town. She also realized
she would have additional gas costs and maintenance on her truck. There would be some benefits
to having the food truck, but it is not as straightforward as she hoped. This option was easy to nix
before she got too far into the analysis; by the time she added on all the extras, it was going to be
very expensive with limited options to expand and grow.
The least expensive option seemed to be making soup in her kitchen and delivering it with her
van, but that too would be very difficult since she lived several miles away from town. From her
market research, she learned that when her target market typically bought soup, they wanted to go
somewhere to sit down to eat while visiting with a friend or colleague. They also want it to be
inexpensive since most people in her town were paid low to middle-income wages.
Maria moved to her last option–renting a space for a restaurant. She found a few spaces around
town that could possibly work:
Location 1: The Bus Stop
Source:
Pexels
She could rent a space for $750/month by the bus stop on the edge of town.
• 35-40 people got on the bus at 7 AM to commute to work
• 20-30 people got on at 10:30 AM to go shopping in a nearby city
• 20-30 people got off at 3 PM returning from their shopping
Products, Price, Place, Promotion
Source:
Pexels
Maria smiled as she studied the figures and her market research. She knew she had a viable
product idea, and it was time to begin finding The Soup Shack a home.
She knew if she could find the right location to make and serve her soup, she should have a high
enough gross margin to cover her fixed costs. One of her major fixed costs would be to pay for
the location.
She had three options:
1. Make payments on a food truck.
2. Cook soup at her home and make deliveries.
3. Rent a restaurant space.
Maria loved the idea of a colorful food truck blasting dance music as she drove to different
locations throughout the day to serve her soup. She found a great second-hand truck and found
, that she would have to make payments of $500/month. Then she learned that each location where
she parked would charge a fee. She would pay $150 to park at the bus stop, $200 a month to park
at the post office, and $400 just to park in an empty lot in the center of town. She also realized
she would have additional gas costs and maintenance on her truck. There would be some benefits
to having the food truck, but it is not as straightforward as she hoped. This option was easy to nix
before she got too far into the analysis; by the time she added on all the extras, it was going to be
very expensive with limited options to expand and grow.
The least expensive option seemed to be making soup in her kitchen and delivering it with her
van, but that too would be very difficult since she lived several miles away from town. From her
market research, she learned that when her target market typically bought soup, they wanted to go
somewhere to sit down to eat while visiting with a friend or colleague. They also want it to be
inexpensive since most people in her town were paid low to middle-income wages.
Maria moved to her last option–renting a space for a restaurant. She found a few spaces around
town that could possibly work:
Location 1: The Bus Stop
Source:
Pexels
She could rent a space for $750/month by the bus stop on the edge of town.
• 35-40 people got on the bus at 7 AM to commute to work
• 20-30 people got on at 10:30 AM to go shopping in a nearby city
• 20-30 people got off at 3 PM returning from their shopping
