Executive Summary

Chronic Tacos is a American Mexican fast food chain that will invest in a international franchise and using a creative approach to the Chronic Tacos’s image. Chronic Tacos is the new way to eat Mexican food and also people call it as “Tacos Subway”.

There are many chains of Mexican fast food in North America and Chronic Taco will invest in São Paulo Brazil, this new life style to eat fresh and fast food. For information São Paulo is one of the biggest cities in the world with and estimated population of 11 million residents.

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Chronic Tacos priority is open um restaurant in a busy Mall and Street Stores with looking for a different Marketing target.
Looking by this marketing plan national and international investors can understand why is able to invest in the Brazilian marketing.
The objectives of the franchise is create a presence of a Mexican food in Brazil being the first in fast food style. Establish market share among fast food chains and to expand nationwide.
Focus on quality, low price, and excellent customer service are the ingredients that made us a successful of sales and combine with a huge market in São Paulo it will be one step for the future success of the company.

Description of Product / Service.
1. Detailed description.
Chronic Tacos is a fast food Mexican restaurant which born in 2002, New Port Beach, California. The idea is serve a made-to-order Mexican food, with all fresh ingredients and full of flavor mixing with a sporting environment, serving beer, wine, pool tables, DJ and huge TVs. Basically the customers are adults under thirties at night and all age during day time. After three years in 2005 after successful sales in New Port Beach, they open a second restaurant in Huntington Beach, California, famous for surfboard and young adults. In 2006 the first franchise opened in San Clement. After eleven years, Chronic Tacos has more than 30 locations in USA and count with 4
locations in Vancouver, Canada. Basically the service and product serve are related with a Texas-Mexican food such as Tacos, Burritos, Quesadillas, Taquitos and Flautas, Tortas, Salads, Nachos, pop, beer, wine and specials drinks. The restaurants serving two options of rice, white lime and spanish rice, three kinds of beans, black, brown and refried Beans. For meats they call by proteins and they are:

Carne Assada – Grilled Beef
Pollo Assado – Grilled Chicken
Carnitas – Slow Cooked Pork
Al Pastor – Sweet and Spicy Pork
Shrimps – Grilled or Beer Battered
Fish – Grilled or Beer Battered
The cold bar is served always fresh as hot bar and is included for the customer order: cheese, onions, cilantro, limes, guacamole, fresh salsa, spicy and medium salsa, lettuce, cabbage, sour cream, spicy mayonnaise and jalapenos. All the plates are done by the ideas of the customer.1

2. Features and Benefits to the customer.
The great benefit of Chronic Tacos is always serving a fast, fresh and homemade food. Cheap and a delicious meal It can attract customers at lunch time who wants a quickly and health food. Night customers can enjoy premium beers and share plates before or after going to night club. Street stores can provide DJ to give a aspect of pub and change de environment and atmosphere Catering services is also available.

3. Proprietary Issues.
Chronic Tacos will be the unique tex-mex fast food in São Paulo. Everything on cold bar is included.
Fresh and made upon order.
Generous servings
Serving Beer
Open for Breakfast, Lunch and Dinner.
Restaurant and bar on Street Stores.

Source: Followmefodie, 2010.
Source: Foodology, 2010.
4. Modifications needed.
Some ingredients must to be adapted for example: in California, USA it is used mahi-mahi for recipes with fish. It is typical in north pacific but really expensive fish in Brazil (South Atlantic) and the most commonly used in São Paulo is the dogfish. Ingredients as Tomatillos and Spices Must to be imported at first time to make sure the same taste it will be the same if you buy in California.

Rationale for Selection of Country and / or Market.

1. Describe the Target Market for the company and product.
Chronic Tacos has focus in customers at lunch time and dinner, especially customers from night clubs, in São Paulo, Brazil the target market it must to be the same customers, day time (shop mall) Family and night time (street restaurant) for young adults that can enjoy good food and music (hip-hop, electronic music). The Franchise has focus in give to the customer’s good quality of food in a low price. In shop mall the intent is to meet all the social classes, but in street stores at night intend to looking for young adults, median and high classes who want spending money in alcoholic beverage.

2. Why is this appropriate market for the company and product. São Paulo is the biggest city in Brazil with 11,8 million residents and the urban area has 19,8 million of population that represent 10% of population of Brazil.2 Continuing with data São Paulo has more than fifty five center mall, and has the largest hub of shopping centers in the country. Brazil has a total of 609 shopping centers with a total in sales of R$ 114 billion (2012)3 . The average monthly rate in 2012 was 472 million people. Reasons why people go to shopping centers in Brazil:

By Age

Visit
–%
17-24
25-34
35-44
45-54
55
Buy
40%
37%
38%
41%
44%
44%
Ride
14%
19%
14%
13%
10%
11%
Food
15%
15%
17%
15%
15%
11%
Leisure
4%
5%
4%
3%
2%
3%
Services
10%
7%
10%
11%
12%
12%

Source: ALSHOP 2012.

The night life in São Paulo is also a big market and it has a total of 15,000 bars and Pub, 13,000 restaurants and 2,000 night club which can be sold alcoholic beverage 24 hours a day.
Usually night life in São Paulo starts to cool down at 5:00 am.

Market Entry Rationale
1. Describe your Market Entry Strategy
Franchise is a typical way for North American companies expand their markets and widely used by fast food and restaurant chains.
According with Trade Start (2013) there is two concerns about operate a franchise abroad. The business model must be unique or different with a strong brand already recognize in the home country.

Secondly going to investments abroad, you will compete with new competitors.
Chronic Tacos working with the franchise system since 2006 with successful of sales in all outlet.
Between 2004 and 2011 the number of Brazilian traveling to US increase 292%, from 385,000 to 1,508,000 and the top cities are Miami, New York, Los Angeles and Las Vegas.4
The people in Brazil are addict to the American culture, in cloths and food.

Legal/Political/Cultural Impact
1. Legal Issues
The franchise will work under the foreign country law and in this case São Paulo, Brazil. Chronic Tacos must register the name in São Paulo, this register is one security to protect the trade mark and brand. The franchise
must to get license from Health Inspection for operate legally. It must to respect the time of work hours of each employee by labor laws. There are specific laws for people who work at night and weekends earning extra wages.
2. Political Issues
Brazil is a democracy that contributes for the growth of the companies with government rules and regulations. It was not possible to find cases of nationalization of companies by Brazilian government. Companies do not need be afraid of appropriation by the government. One problem that affects companies and the population is the high tax that everyone has to pay to the government. At least seven kinds of tax must to be paid, as four federal tax and state and city tax, import and income tax. All this tax can reduce drastically the profit of the companies.

3. Cultural Factors
Rice, beans, beef, chicken and sea foods are present in the Brazilians diet. Brazil is a country with a society that absorbs the North America Culture as we can see, Burger King, Mc Donald’s, Nike, Pizza Hut, Subway are example of success sales in São Paulo, Brazil.

Brazilians are friendly and they are always willing to try new flavors and especially new environments.
The People in São Paulo don’t have too much time and a fast food is the first option for save money and time. After work it is really common “happy hours” with the co-workers and customers try to find new places with good food, nice music and drinks.

Brazilians passions are: Soccer, Women and Beer.

Pricing / Promotion Mechanisms.

1. Product.
Chronic Tacos will introduce in Brazilian marketing different kinds of Mexican dishes with modification by American Culture specifically California. Pops and alcoholic drinks will be available on both type of
stores and serving beer at shop malls stores and beer and sophisticated drinks at street stores. For promoting the dishes it will be used visual displays with a real picture of the product and the same it will be offered to the customers. The company has emphasis on extreme sports. The bases for the products are:

Tortillas
13 inches wheat flour
10 inches wheat flour
6 inches wheat flour
6 inches yellow corn flour
6 inches white corn flour
Tortas Bread

Meats
Carne Assada – Grilled Beef
Pollo Assado – Grilled Chicken
Carnitas – Slow Cooked Pork
Al Pastor – Sweet and Spicy Pork
Shrimps – Grilled or Beer Battered
Fish – Grilled or Beer Battered

Grains
Black Beans
Pinto Beans
Refried Beans
Spanish Rice
White Lime Rice

VeggiesSauces
OnionsSour Cream
CilantroBaja Sauce
Salsa FrescaSalsa Roja
LimeSalsa Verde
GuacamoleEnchilada Sauce
Lettuce
CabbageCheese
Potatoes

We can see below the Full Menu of Chronic Tacos.5 It will be adapted to Portuguese.

Source: eatchronictacos, 2013.

2. Price
First of all the prices will be set out in U.S. dollar (1 USD = R$ 2,18) 6 Mexican food is known to Brazilians as an expensive dish, the reason is because there is no Mexican fast food and only restaurants a la carte. Usually Brazilians from São Paulo spend an average of USD 9 to 15 a day during the lunch time. The appropriate strategic price is the penetration pricing to compete directly with the big chains of fast food. The price will start at UDS 1,50 for tacos to UDS 4,50 for burritos the expensive meal. Customers can save money doing combos (pop + fries or chip) for the price of UDS 7,50. Comparing the price of one Big Mac in São Paulo is around UDS 5,707. At Night Chronic Tacos has focus in selling liquor with share plates ( fries or Nachos).

3. Promotion
Introductory offer will be used to promote selling and starts the market share. Chronics Tacos will start to sell at low prices less than competitors and locals restaurants a way to make customers try for the first time the food. Every day of the week will have a special offer that the customer can save money. Burritos on Monday

Tacos on Tuesday
Tostadas on Wednesday
Taquitos on Thursday
Beer + Tacos on Fridays and weekend.
Advertising in local newspaper with coupons attached, it will encourage new customers to try the new fast food chain. 10 % discount for local
customers and Chronic Tacos will apply loyalty card system to give discount to the customer

4. People
Chronic Tacos was created by Randy Wyner and Dan Biello. In 2010 one famous skater started to operated one franchise in California, Redondo beach. The CEO and CFO of the Chronic Tacos Enterprises is Michael Mohammed and has plans to open more 75 restaurants throughout the next three – five years. Workers from Chronic Tacos must be outgoing and be sympathetic with customers at all time

5. After Sales.
When we talk about after sales in a franchise fast food business is really difficult to keep in touch with the customers. Customers Page on internet as Facebook, Instagram and Twitter in Portuguese version will be able to customers leave tips and comments about the restaurant and try to improve and adapt to the Brazilian culture.

Logistic Mechanisms

1. Warehousing, Outside Resources.
Chronic Tacos is a franchise that it will operate in shop mall or street stores. In case of malls the product must to be delivery in small quantities for reasons of space and the products must be fresh to give quality to the customers. Chronic Taco cannot have a Warehousing to keep products, for this reason the manager of each outlet has to work with local distributors to maintain the delivery service working. Brazil and Mexico are tropical countries and there is no necessity to import product that can be easily to find with local distributor. Supply Chain and Logistic

Operating with autonomy each outlet knows what they needs for the best system of storage.

Conclusion and Action Plan
Complete the marketing plan, it can be conclude that is able to open a
franchise of Chronic Tacos in São Paulo, Brazil. All the analysis points that Brazilian are getting used to American culture and in California is extremely popular eat Mexican food.

Customers are willing to pay for a healthy and cheap food and Chronic Tacos with an interesting concept for renovating the industry of restaurant in São Paulo, offering a great new way of customer service.

The price will be more attractive it being cheaper than competitors. The stores must be opened by the end of June, together with the main event of 2014 FIFA World Cup in Brazil. Many international people from all the world will be in São Paulo to cover the games is the best moment to introduce different styles e culture for the society. Training from U.S will be provide.

Bibliography

AlShop – (http://www.alshop.com.br/industria-de-shoppings-nobrasil.asp);2013.

Chronic Tacos Enterprise; 2013 (www.eatchronictacos.com)

D. Riker and J. Vila-Goulding: The boom in Brazilian Traveling to the United States; Journal of International Commerce and Economics; January 2013.

FITTskills: International Marketing, Six Edition; 2013

Follow me Food (http://www.followmefoodie.com/2010/11/chronic-tacos), 2013

Foodology ( http://foodology.ca/chronic-tacos/ )2013

K. Tuckwell: Canadian Marketing in action 7th ed. Pearson Education Canada. Toronto; 2007.

Trade Stat – (http://www.tradestart.ca), 2013

Wikipedia , (http://en.wiipedia.org/wiki/greater_São_Paulo)

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