FOOD2YOU

JenniferDayAustinBenzinger

VictorSaca

2016

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TableofContents

Abstract 2 Introduction 3AboutFood2You 4CurrentSituation 4WhatisFood2You? 521stCenturyTechnologies 6-7Marketing 7 HistoryofMarketing 8 MarketingStrategy 9PromotionalMaterials:PromoCode&Cup 10TargetAudience 11DigitallyMarketingMobileApplicationstoMillennials 12BenefitsofImprovingMobileApplications 13

ABillionDollarIndustry 14FoodDeliveryServiceCostAnalysis 14 StrategiestoObtainRevenue 15

-Strategy1 16-Strategy2 17

CostofLabor 18CostofMarketing 19CompleteFirstYearCostAnalysis 20-21TheFuture 22 Conclusion 22WorksCited 23-24

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AbstractThe purpose of this report is to analyze all the elements needed to create a successfulbusiness, such as identifying the current situation, determiningwhat types ofmarketingstrategies to use, aswell as preparing a cost analysis to justify the company’s costs. Tostart,ourteamdeterminedthattherewereonlyafewviableoptionsforstudentswhenitcametofooddelivery.Food2YouisanonlinedeliveryserviceforPurdueUniversitydiningcourtsthatwillgivestudentsaccesstoqualityanywhereonoroffcampus.Thereportalsomentionsaffluentwaystomarketthisservice.Theseincludepromotionalmaterialssuchasstadiumlogocupsandbusinesscards.Withanynewbusinessacostanalysismustalsobeproducedinordertoprovidepotentialinvestorswithfinancialoutlook.“Dependingontheindustry, marketing budgets can range from as low as 1% of sales to over 30%. Newcompaniesmayspendasmuchas50%ofsalesforintroductorymarketingprogramsinthefirstyear,”(Morrow,2009).Food2Youexpectstogenerateenoughprofit tobefinanciallystable, evenwith spending50percentof salesonmarketing in the first year. Finally thereportconcludeswithwhatcanbeexpectedinthefutureandhowthecompanywill facecertainchallengesalongthewayinordertobecomethepremierefooddeliveryserviceoncollegecampuses.

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IntroductionFooddeliveryoncollegecampusesischangingthegamebyallowingstudentstoeattheirfavoritemealsfromthecomfortoftheirhomes.Thehighpotentialofcollegecampuseshasmotivated investors to seek and fund new innovative projects that could possiblytransformthewaydiningcourtsareoperated.Currentlyoneof themostdiscussed ideasregarding the future of the fooddelivery industry relies on the concept of virtual diningcourts.Themainconceptofthisprojectreliesonfooddeliverycompaniesworkingalongwith thecollegediningcourt services.Anyservice fees typicallyassociatedwithdeliveryserviceswouldbeincludedinthediningplansofferedtostudents,meaningthatitwouldbeacash-freetransactionwhenordersarebeingplaced.Dependingonthelocationofeachuniversity, climate conditions and campus sizemay be some of the factors that play animportant role in the profitability and efficiency of this type of service.With a strategicbusinessplan,thisprojectcouldpotentiallyrewardeveryoneinvolved,whilecontributingpositivelytothelocalcommunities.Thedevelopmentandtransformationofthefooddeliveryindustrystartedduringtheearly2000’swhen entrepreneurs andweb developers saw the opportunity of developing andinnovating the food delivery industry. Companies such as GrubHub and Seamless wereestablished and increased the sales of local restaurants by implementing an online fooddeliverysystem.Duringtheyear2012bothcompaniesprocessedaround$875million inonlineorders,which resulted in the revenueofmore than$100million.Bothcompaniesalso tookadvantageof socialmediaplatformsandsmartphones tomarket theirservices,andhelpedgainrecognitionallover thecountry.Another importantaspect thatplayedakeyroleinthesuccessofbothcompanieswasgeographicalandpopulationanalysis.EachcompanystudieddifferenttargetpopulationsacrosstheUnitedStates;gatheringdatathathelpeddeterminethepossiblesuccessrateforthebusiness.College campuses are amongst the locations that can offer themost rewarding benefitssincecurrentservicesintheseareasdonotmeettheimmediacyandefficiencythatcollegestudents seek. Startup companies suchasTapingo,whichwas founded in theyear2012,developedamobileapplicationthatallowsuserstoorderfoodwhiletheapplearnsauser’spreferences for future suggestions. One of the characteristics that have made Tapingouniquewastheirfocusononlyservingcollegepopulationsratherthanprovidingapublicandopenservice.Thisallowsthecompanytogatherinformationandusefuldataonwaystoimprovetheirfooddeliverysystemstomeettheneedsofcollegestudents.

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AboutFood2YouOur team developed the idea of Food2You when we discussed the few food deliveryoptionsavailabletostudentsatPurdueUniversity.Collegestudentsforthemostparthavebusyschedules,whichlimitstheiroptionswhendecidingonplacestobuydailymeals.OneofthemainobjectivesforFood2Youwastoprovidemorenutritiousmealstostudentsandtoincreaseastudent’smentalandphysicalperformance.ThereforetheFood2Youdeliveryserviceisbasedontheprinciplesofefficiencyandreliability,wherecustomersatisfactionremainsasoneofthetopprioritiesforthecompany.ThedecisionofcreatingapartnershipwithPurdueUniversity'sdiningcourtswillhelpmaintainthequalityoffoodbeingserved,whileinnovatingthediningcourtoperationstoawholenewlevel.

CurrentSituationInordertoremaincompetitiveandactiveinthedeliveryindustryitisnecessarytoalwayskeep innovating and planning ahead to outplay the competition. While youngentrepreneurshavepreviouslydiscussedtheideaofvirtualdiningcourts,beingoneofthefirst companies to implement this service could help generate brand awareness forconsumers, especially when taking into consideration expanding the operation to otherstatesaroundthecountry.WiththousandsofcollegecampusesintheUnitedStates,therearemany possibilities of targeting awide range of college campuses thatwould benefitfrom a delivery service like Food2You. Therefore the notion of virtual dining courts ifmanaged correctly, could change the future of the food delivery industry forever byinnovatingandexceedingcustomerexpectationsandcurrentsatisfactionlevels.When compared to other services such as HungryBoiler, GrubHub, and Seamless ourcompany is different in the sense that Food2You utilizes existing resources, such as thevarious dining courts located on campus. By taking advantage of these resources,Food2Youcanfacilitatethetransitionandincorporationofamobileapplicationthatwouldintegrate delivery services in students dining plans. Recent research and financial datahaveshownthatthefooddeliveryindustryiscurrentlyatitspeak.Thereforerestaurantsand other food companies are becoming more willing to partner up and implement adeliveryserviceasitincreasesprofitabilityforeveryoneinvolved.

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WhatisFood2You?Themain concept of Food2You revolves around the idea of providing an accessible andinnovative food delivery service to students at Purdue University. One of the mainobjectives for project would focus on creating a partnership between the food deliverycompany and the various dining courts around campus. The company would strive toachieveahighlevelofefficiencybydeliveringmealsinthelocalarea,tostudentsthatmayfind it inconvenient due to long distances orweather conditions. On the other hand thecompany aims to create new job opportunities in the West Lafayette area, in order topromotesocialandeconomicwellbeinginoursociety.Some of the potential benefits from Food2You include additional job opportunities andeconomicbenefitsforPurdueUniversity.Creatingastrategicmarketingcampaignisakeyfactorindeterminingtheinitialsuccessofthecompany.Eachyearatthebeginningofthefall semester thousands of incoming freshman and transfer students arrive at PurdueUniversity. This situation serves as an excellent opportunity to test and locate possibleflawsandimprovementsthatcouldbemadeinordertomaintainefficiency.Asthenumberof orders increasemorepersonnelwill need tobehired, generating jobopportunities inadditiontoincreasingrevenuesfortheuniversity.When presenting this idea to Purdue University administration, our team will have toenforce how both dining courts and the delivery services will complement each other,whileoperatingasseparateentities.Thiswillhelpavoidanylegalresponsibilities,asbothinstitutionswillsignacontractanddeterminecertainresponsibilitiesandfeestobepaid.Overall Food2You revolves around economic and social well being. This service willprovideourcollegecampuscommunitywiththeability toorderdiningcourtmeals fromrelatively anywhere around campus. In addition, Food2You can provide students withhealthier and varied meals that will eventually increase the yearly revenue for PurdueUniversity.

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21stCenturyTechnologiesPerhaps themost common digital communication tactic was foreseen in 1983 by Applecofounder,SteveJobswhospokeataconferenceinAspen,Colorado.Attheconference,hediscussed the potential development of software known as a mobile application. Thiswould allow cellphoneusers to download a digital servicewithin a variety of categoriessuch as music, health, games and shopping to name a few. Steve Jobs explained thatapplications,commonlyreferredtoasapps,make iteasy for theconsumertocompleteaplethoraofeverydaytaskswitheasewithinashort timespan,addingthat thedeveloperbenefits by attracting numerous users and therefore a dedicated consumer base for itsspecificproductorservice.Applelaunchedthemobileappstorein2008withabout500appsforindividualstochoosefrom.Thestorehascontinuedtogrowinpopularityduetoavarietyofreasonsincludingthe increased production of cellular devices that are also affordable and easy to use byalmost anyone.Many young school students andprofessionals in theworkforce are alsorequired to use cell phones to complete a variety of tasks both in and outside of theeducationalandworkplaceinstitutions,makinglearninghowtousethedevice’sfeaturesasimpleundertaking(Strain,2015).ApplicationswouldnotbepossiblewithoutthecontinueddevelopmentoftheWorldWideWeb. The shopping apps, for example, would not be able to function without a directInternetlinktothewebsite.Thismayraisethequestionregardingthepurposeofamobileappifsomeonecouldjusttypethelinkdirectlyintotheuniformresourcelocatorbaratthetopofawebpage.Applicationsallowtheusertogroupsimilarservicesintoafolderthatbringsupnumerousappswhichallrelatetoonecategorysuchashealth.Thesecategoriesmayincludeadigitalbodymassindexcalculator,apedometeroracaloriecounterthatalsobenefitstheuserbysavingalltheinserteddatawithinthedownload.Thistechnologycontinuestobeverypopularinthattheycanbeascomplexorassimpleasthe developer wishes to make it. Applications are priced for their complexity and timespentdeveloping it,butcanalsobeusefulevenatapriceofzerodollars.Developerscanspendyearsperfectingtheskillstomakeanapporcanfollowastep-by-stepprocessonawebsite like YouTube or wikiHow with directions for its development. This is anotherreasonwhysmartphoneshavecontinuedtobeapopularconsumerproductthroughouttheworld (FederalTradeCommission,2015).With theamountofappsavailable forphones,computers,andtablets,itisimpossibleforonepersontoknowabouteverysingleavailableappineachcategory,whichiswhymarketingstrategiesaresoimportant.Asstatedabove,

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it is important for developers to understand the app audience and the strategies toinfluencethoseindividualsindownloadingandusingthedownloadedprogram.

MarketingInformationsmothersthehumanbraineverysingleday.Fromwatchingatelevisionshowbeforefallingasleepforthenight,toreadingamagazineinthewaitingroomatthedoctor'soffice, individualsareconstantlyunderstandingandevaluatingmessages,manyofwhomfallingintothepersuasioncategorythroughvariousmarketingandadvertisingtechniques.Many of these message that filter through the mind on a daily basis are presented innumerouswaysand inorder forabusiness toadvertise itsgoodandorservices, itmustunderstand the wants and needs of its target audience and what triggers that possiblecustomer base to positively respond to a certain advertisement. For instance, placing awrittenadvertisementinthebookofYellowPagesorthelocalnewspaperwon’tappealasmuch to millennials due to the influx of digital technology. A print advertisement willappealtoanoldergenerationsuchasthebabyboomersbecausethoseindividualsgrewupusingthephonebookandreadingthenewspaper.ScanningaQRcodewithasmartphonefromafoodwrapperorcontainertosavethe linkonawebsitewouldbeabetterwaytograbandholdtheattentionofalargestudent-baseaudiencebecausethelinkcanbeeasilysavedonacellphoneandbroughtupagainwithjustafewclicksofabutton.ThisishowtheFood2YouapplicationwillbeadvertisedtoPurdueUniversitystudents.

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HistoryofMarketingMarketingisanadvertisingstrategythathasevolvedfromits19thcenturydiscoverydueto technological advancements and is believed to have passed through multiple stagesbefore arriving at its current phase known as the digitalmarketing era. Companies andorganizationswhopersuadeconsumerstopurchasetheirgoodsandorservicescommonlyuse this advertising tactic.Marketing is also a communication tactic that can easily helpothers understand the benefits and downsides of a service in comparison to itscompetitors.Inordertocreateandmaintainaloyalcustomerbase,marketingdevelopersmust research the best publicizing practices to implement a campaign that relates andattractsaspecificdemographicthatthegoodorserviceisgearedtoward(Ingram,2014).Millennialsrangefromtheageof18toabout35andhavebeentaughtextensivelyonhowtodifferentiatebetweengoodandbadmarketingstrategiesforcertaingoodsandservicesinordertoensuretherightproductischosen.Badmarketingtechniquesincludeblogpoststhatarewrittenwithoutanycredibilityaswellasoutdatedorinactivewebsitesthatmightraisearedflagfortheviewer.Theviewermaythennoticethatthesitedeveloperhasnotfollowedthepopularmarketingtechniquesforthetimeperiod,whichwillraiseadditionalconcerns(Stamouls,2012).The best way to attract a large audience is to make adjustments so that the productdevelopers andpossible consumers can communicatewith each other easier. Cell phoneserviceproviders,bankingandotherservicewebsitesarenotoriousforhavinganopenlineofcommunicationwithcustomerservicerepresentativesavailable24/7,eitherthroughachatroomorcallcenter.However, this tactic iscostly forsmalloperations,sincestaffingemployees forall threeshifts isexpensive. If thebusiness isnotbringing inmoremoneythanitisspendingtohireaservicerepresentative,thenitshouldforcemanyoperationstoevaluateanotherwaytoconnectwithanaudience(Krotz,2013).Socialmedia siteshavealsobecomea commonmarketing strategydue to resources likeFacebookthatdonotcostanythingtocreateawebpageandareopentothepublicforfree.Facebookisalsocommonamongmillennialssincetheycanbrowsebusinessesanywhereintheworldwithreviewsfromothercustomerswithphotos,videosandtextdescribingtheproductandorservice(Robshaw-Bryan,2013).

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MarketingStrategyStudentsatPurdueUniversityandothercollegesacrossthenationarebusywithmultipleclasses and extracurricular activities allowing for little free time to pay attention andrespond to an advertisement unless the message is integrated into their daily lives oncampus.Ofcourse,allstudentsmusteatanddrinkandmaystopat thecampusunionorotherlocalfoodhotspotsuchasTheDentopickupaquickbite.Whetherornotastudentsitsatatableorgrabsthefoodordrinkandcontinueswalkingtoclass,thecontainerwillmost likelyhaveanadvertisementon theoutside that the studentwill eventuallynotice.Oncetheadvertisementhasdrawnthestudent’sattention,thenextstepistopersuadehimorhertotakeactionandlearnmoreabouttheproductorservice.However,toomuchtextonapromotionalitemcanbeoffputtingtopossibleconsumers.Thisiswhytheitemmustincludeapieceofinformationthatwillurgethecustomertolearnmoreaboutthebusinessor product at hand. The easiest way to attract a student to visit a website with moreinformationaboutaproduct istohaveaQRcodeorawebsite linkonthepackagingthatwill entice the individual to visit that link. Most Purdue University students, especiallyfreshmen, have eaten or at least heard of the campus dining halls. Theywillmost likelyrespondpositivelytoadigitalmarketingcampaign.Studentswhohavepurchasedamealplanorhavediningdollarsontheirstudentidentificationcard,aswellasstudentslivingoffcampus without a meal plan are eligible to download the mobile application. Deliveryorders though, will only be accepted during the normal dining hall operation hoursthroughout theweek. Below shows the dining hours for all five dining courts located atPurdueUniversityallsevendaysoftheweek.Figure1:https://dining.purdue.edu/docs/2015_01_DiniGenHrs.pdf

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PromotionalMaterials:PromoCode&Cup

Inthisdayinage,itisrareforastudenttospendaday on campus without using some sort of digitaltechnologysuchasacellphoneoracomputer.Themost efficient strategy to reach a large number ofstudents who are busy with classes, work andextracurricular activities is to directly market tothem.SimilartowhatHotBoxPizzadoes,Food2Youwill pass out free Food2You cups throughout thesemester. These promotional plastic cups will atcertain times throughout the school year have QRcodes printed on them. These codes will unlockamazing deals on ourwebsite. The digital elementof thecupmakes it exciting for studentswhowishtosavemoneyonfood.

Inadditiontopromotionalcups,businesscardswillbehandedout on campus. These business cards will have our logo,website,andnameonthem.Duringcertainbusytimessuchasthe beginning of the school year and Grand Prix week, thebusinesscardswillhaveacouponcodeprintedonthem.Thiswill help bring in students on and off campus to use ourservices.

In order for Food2You to be successful, students must beaware of the company’s services, which is why ourpromotional materials must be passed out at numerous on-campus locations.LocationssuchasTheDen,OvalCircle,andEngineeringMallwill bewherewemarketmostly. These areallheavytrafficareaswherestudentshangoutand/orpassonthewaytoclass,whichwillallowmanystudentsatoncetobereached.

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TargetAudiencePurduestudentsarethetargetaudiencefortheFood2Youcampuswidedininghallmobilewebsite.Specifically,thestudentswhohavepurchasedanAppleoranAndroidcellphone,tabletorotherdigitaldevicearethepeoplethatwillbenefitthemost.Thisisbecausetheadvertisementsonthefoodproductwrappingsatcampusconveniencestores,likeTheDen,experience a high amount of student foot traffic through the business. Although it isdifficulttoknowtheexactageofthetargetaudience,sincesomestudentsaresignificantlyolderthanthemedianage,itisimportanttomaketheadvertisementcleartoread,easytounderstand and persuasive. Some studentsmay not knowhow to use aQR code, so themessage must also include directions on how to download and use the 21st centurywebsitereader.TheUnitedStateshastransitionedfromthetraditionalstylemealsathometogoingouttoeat.Duetothischangeinmoderndaysociety,studentsareeatingawayfromhomeandon-the-go more than ever before. Students favor quality, variety, and convenience overanythingelse.Food2Youwillprovideallof theseservices toyouandwillbewhatall thestudents are looking for. Understanding exactly what students are spending on foodoutsideofthediningcourtscandeterminethepotentialprofitabilityofthenewmarket.Thusfar,Purdueoff-campusstudentshavebeenidentifiedasthetargetaudience,buton-campus students are part of the target audience as well. Many students enjoy going todifferentdiningcourtsaroundcampus,evenifthediningcourtisfarawayfromwheretheyreside.Theselongwalkstaketimetocomplete,whichthestudentmaynothave.Food2Youwilldeliverfooddirectlytoyou,whereveryouareoncampus.Thiswillgetridofthelongwalksandhelpstudentsnotbeinsucharush.

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DigitallyMarketingMobileApplicationstoMillennialsCollegestudentsfromtheagesof18toabout25arepersuadedtoatleastopenandviewanapplicationifitincludesstrongphotos,graphicsandconcisetextthatdescribestheproductor service (Williams,2010).Thispresentation ispopular amongmillennialsbecause thisgenerationconsistsofindividualswhohavebeengroomedtotakeinasmuchinformationas possible using a limited amount of time, whereas the baby boomer generation spentmuchmore time gathering information from a variety of sources full of ethos, which ismostlikelyduetothefactthattheworkforcehasbecomeincreasinglystressfulandisnotconducivetoawork-lifebalancehencethepopularityofquickandeasy-to-useapplications(Leong,2015).College students are specifically attracted to mobile apps because they are busy withclasses,homeworkandmostlikelyatimeconsumingjob.Theydonothavetimetoseekoutproducts and services and are becoming more dependent on services coming to them.Advertising the application on campus convenience store products is one way to reachstudents.Anothermoreefficientandcost-effectivewaytoreachallthestudentsoncampusatonetimeisthroughanemailmarketingcampaign,whichcanincludeinformationaboutthe Food2you application and campus locations where promotional materials are beingpassedout.Anemailblastisaconvenientwaytomessagealotofpeopleinashortamountoftime.Allstudentswhoareenrolledinacollegeclassacquireacampusemail.Thisisonewayforallthestudentstoeasilyaccessinformationsuchasbusinesspromotions.Manystudentsalsohavetheiremailslinkedrighttotheircellphones,whichmakesiteasyfor students to obtain information anywhere they go and at any time of the day. Emailcampaignsareusefulineducatingthepublicaboutaspecificproductorserviceandhavebeenprovedtoleadcellphoneandtabletuserstocheckoutthepromotedmaterial.Therealways should be a subscription box within the content of the email to ensure thesubscribers’emailsarecompiledintoanemailblastlistsotheycanbekeptuptodatewiththedevelopmentsandchangeswithintheapplication(Kumar,2012).Email is not the main means of communication for millennials as it was for the babyboomergeneration.Althoughthiscommunicativemethodisstillusedbymanypeople,theyounger generation uses email to receive and communicate information. They alsotypically share content with others via social media such as Facebook, which is whysuccessful email campaigns include buttons that directly link the website with a sharebutton.Thisdirectlytargetsanaudienceonasocialmediawebsiteanddirectsthemtothepromotedmaterial(Krattenstein,2015).

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BenefitsofImprovingMobileApplicationsPurdue University, for example has created a fewapplications that are beneficial to the student body.However,thePurdueApptotherightdevelopedbyQuinnDamerellaccordingtotheGooglePlayStore,hasn’tbeenupdatedsince2012.Theapplicationonlyallowsstudentsto view each dining hallmenu, receive directions to theeateryandlookupthehoursofoperation.Thisisslightlybeneficialtostudentslivingoncampus,buttheapphasasignificantamountofconstraints,especiallyforthosewhoreside off campus. The app can attractmore userswithimplementations such as listing the ingredients in eachoffering.Bydoingthisitwillhelpindividualsdecidewhattheycaneatiflimitedbydietaryrestrictions.Purduediningservicesofferprepackagedfoodto-go,butstudentsarerequiredtoviewandpickupthefoodatthedining court. A way to save time is to order it aheadinsteadofstandinginlinetochoose.Itcanthenbepickedupinabrownbagduringthewalktoclass.Manyoftheuserreviewsalsostatefrustrationswiththeoutdatedappincludingthechangeofsomedininghalls’hours.Anemailmarketingstrategywould be beneficial in this sense because itwould allow the users and the appdevelopers to communicate with each other about the problems. Meaning the appdeveloperswouldbeabletoregularlyupdateandmaintainittoattractmoreusers.Although email has been around since its creation in the 1970s, email is not the onlybeneficial marketing strategy for a mobile application. The article, “Marketing withEquipmentonCampus”, states that callingor texting througha cellphone is aneffectivewaytorelayinformationaboutpromotions,suchasonesatacampusdiningcourt(Doty,2006).Thedownsideof this tactic is thatsomeonehas tobepresent in thehall toeithergrab a flyer or to view a television screen publicizing the promotion. However, theadvertisement could also be included in an email blast and on the application under apromotionstab.

Figure 2: https://play.google.com/store/apps/details?id=com.tp77.PurdueApp

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ABillionDollarIndustryOrderingfoodonlinehasincreasedfromapproximately$25millionin2012to$46millionin2013andjumped13percenttoa$600milliondollarindustryin2014.InMayof2015,the online food ordering business grew to about $1,152 million to make it anapproximatelya1.2billionannualizedindustry.Thetakeoutindustryisabouta$70billionmarketwith$61billionintheofflinemarketandtheremaining$9billiononline.Althoughtheonlinetakeoutordeliverysystemisn’tanywhereneartheofflineorphonecallmarket,it is a strongmarket andhas plenty of room to grow, especially amongmillennials. It isexpected that by 2022 and beyond, the online food ordering servicewill eithermeet orsurpasstheofflinemarket,whichiswhythePurduediningcourtmobileapplicationshouldbe revamped to include a delivery service for studentswho live on or off campus (Kim,2015).

FoodDeliveryServiceCostAnalysisInordertodeterminewhetherornotabusinesswillbesuccessful,acostanalysismustbepreparedtodeterminethatrevenueswillexceedthecosts.However,foranyservicetobeprovided the musts be costs for both parties involved, the consumer and the serviceprovider.Withcosts,thecustomeristhenabletoreceivethefoodorderedandtheproviderof the food is able to generate some revenue for their business. For Food2You, the fooddelivery service will be inexpensive to use and to operate. Our company has evenresearchedtwocompetitorsinthisfieldtodeterminethecostsassociatedwithoperatingasuccessful delivery service. Food2You evaluated both the Jimmy John’s Franchise andGrubHubInc.inordertodeterminewhichstrategywasbestintermsofgeneratingprofit.ThemaingoalofFood2Youistoprovideexcellentserviceratherthanmakelargeamountsofmoney. As a business there is awant and need to have revenue exceed all costs, butFood2Youwants tomake all our customers keep coming back and thatmeans spendingprofit tomake them happy. Thus the purpose of analyzing the costs for Food2Youwillallowourteamtobreakdownalltheelementsneededtooperatethefooddeliveryservice,the amount of money it takes to keep customers coming back, and make it easier toevaluateeachcostseparatelyforfuturereferenceandconvenience.

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StrategiestoObtainRevenueIn the beginning developmental stages of Food2You, determining exactly how revenuewouldbegeneratedwascrucial for thesurvivalof thebusiness.Our teamexamined twopossible solutions. The reason for this was due to the company having to focus on twocompletelydifferentdemographics.SinceFood2You is located inWestLafayette, Indiana,the fooddeliveryservicewillbeavailable tobothon-campusandoff-campusstudentsofPurdueUniversity. The goal is to provide everyone the ability to experience the Purduediningcourtfoodfromthecomfortofhome,evenifastudentdoesnothavetheabilitytogoto a Purdue dining facility. One main reason why the Food2You delivery service willexclusively deliver only Purdue University dining court food at themoment is based onrank of the college.Niche.com, a website that ranks colleges and universities in variouscategories,nationallyrankedPurdueUniversitynumber35outofthetop100collegesforbestcollegefoodwhenover1000collegeswereconsidered(Niche).ThisrankingsupportstheideathatPurduediningcourtsofferoutstandingservicewithexceptionalcuisinethatishealthy and has a huge variety. With these standings for 2016, Food2You and willultimatelymakemoneyforboththecompanyandPurdueUniversity.Additionally, the consumer base can also impact the possibility of gaining profit. OurcompanyunderstandsthattheUnitedStateshastransitionedfromthetraditionalstyleofdinnerathometogoingout toeat. In theUnitedStatesalone, foodaway fromhomehasincreased because of the quality, variety, convenience, and affordability available to thepublic.Themajorityofincomebeingspentonfoodrelateditemsisfortake-outfood,andthehighestincomehouseholdsarespendingalmosthalf,47percent,oftheirincomeonthistypeoffood(Franzao,Meade,&Regmi,2008).Seeingthatconsumerswanttake-outfoodwithquality,Food2YouwentawayfromtheideaofdeliveringfromrestaurantsintheWestLafayette area. The Purdue dining courts offer everything that the consumerswant andmoreandthereforeour teamhas tailoredFood2Youto thecustomer’sneedsrather thanthecompany’s.

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Strategy1The first strategy going tobeused togain revenue is by altering the wayconsumers will pay for the fooddelivery service. Knowing theFood2YoumustaccommodatePurdueUniversity students on the Purduedining plan, the food delivery servicewillbeintegratedintothediningplantomaketheprocesseasier.ByhavingFood2You connected to the diningplanthestudentswillonlyberequiredto enter their student identificationnumber on thewebsite. To the right isanexampleofaPurdueStudent I.D.andthe11-digitnumber iswhatmustbeenteredtoplaceanorder.Oncetheorderisplacedoneoftheallotteddiningswipesperweekwillbededucted from the total.However,due to the studentsusingaprepaidmealplan for thefooddeliveryservice,thepriceofallthediningplanscanbeexpectedtoriseforthenextyear. The current prices for themeal plans from eightmeals aweek to unlimitedmeals

ranges from $2,998 to $5,398 for theentireacademicyear(“MealPlans2016-2017”). A recent survey also assessedthat 37 percent of the total number ofstudents enrolled at Purdue Universitylive in affiliated housing such as theresidence halls (U.S. News) . Food2Youprojects that the 14,345 students livingon-campus will use the food deliveryserviceatleastonceaweek.Ifeveryoneof the 14,345 students purchases aPurdue dining plan then that will alsohelp keep the costs from rising toodrastically. Our company expects that araiseinpriceof$120.00foreachdiningplan offered will cover all the costs forFood2Youtobesuccessfulandgeneraterevenue.

Figure 3: http://www.cr80news.com/news-item/purdue-id-gets-a-makeover/

Figure 4: Total enrollment at Purdue University is 38,770 students.

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Strategy2For the off-campus students who reside in the town of West Lafayette, Indiana, thepaymentmethodwillbemuchdifferentthanthatoftheon-campusstudents.Sincetheon-campusstudentshaveprepaid for thePurduediningplantheywillno longerbechargedfortheuseofFood2You.Theoff-campusstudentswillobviouslynothavethisoptionandthereforemustpaywithcashonarrivaloffoodorbycreditcard.Themethodofpaymentwillbeselectedbythestudentwhenconfirmingtheorderthroughthewebsite.Inaddition,thepricesthathavebeensetforthisfooddeliveryserviceareclosetothepricesforPurdueUniversitystudentswhenbuyingamealatthediningcourtswithcashorcard.Asoftoday,the Purdue dining courts offer three differentmeals at three different prices for Purduestudents not using thepre-purchasedmeal plan (“GuestMeal Prices”). Theprices are asfollows:

The prices shown are representative of a buffet-stylemeal where there is an unlimited amount of food apersoncanconsume.Food2Youwillonlybeofferingoneserving per person within a to-go box. Therefore thepriceswill not be the same as stated above andwill becharging the lowest amount possible while still able tomaintain a profit. With this pricing strategy, Food2Youwillalsobetakinga60percentcutofthetotalfromeachorder and Purdue University will pocket the remaining40percent.Thiswillhappenfor thePurdueDiningPlanusersaswell.ThusthepricesforFood2Youfooddeliveryserviceareasshownontheleft.Our company hopes that this will distract off-campusstudents from using other competitor sites, such as

HungryBoiler.Thecompetitorsitesadddeliveryfeesseparatefromthetipandwiththesefees a $10.00meal turns into a $15.00meal. By students also paying one price and notworryingabouttaxes,tips,orfeesandpayingonestraightprice,studentsmayactuallyfeellike they are getting their money’s worth. Food2You understands that students want adecentmealforagenerallylowcostandthatiswhatthisserviceaimstoprovide.Again,themaingoalismakingthecustomerhappyandthesecondgoalwillbetomakeaprofit.

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CostofLaborAservicecannotfunctionwithoutthelaborofpeople,andFood2You’sfooddeliveryserviceisnoexception.Foranybusiness,thewagesandotherbenefitstheemployeesreceivemustbe accounted for in the annual budgetunder the cost of labor. SinceFood2You is only adeliveryservicetheonlyemployeesweareinneedofaredeliverydrivers.ThusourteamreferencedtheBureauofLaborStatistics,aunitoftheUnitedStatesDepartmentofLaborthatgroupsoccupationsintocertaincategoriestodeterminetheaveragewageforasectorof jobs. For delivery drivers, the categorywas titled Drivers/SalesWorkers. The hourlymean wage as of today for restaurants and other eating establishments was at $9.80,equalingto$20,770fortheannualwageifafull-timeemployee(BureauofLaborStatistics,2015).However,Food2YouemployeeswillmostlycompriseofPurdueUniversitystudents

andnoneof theemployeeswillbehired on as full-time due toconflicting school schedules. Thisallowsthecompanytosavemoneyby not having to provide benefitsto full time employees. Since theemployeeswillmostlycompriseofcollege students andwill be usingbikestodeliverfood,ourcompanyhas decided to pay on the lowerend of the wage range suggestedby the Bureau of Labor Statistics.The starting wage for Food2Youwillbeat$8.50perhour,which isstill higher than the wage offeredby the Purdue dining facilities.

Indiana is also a state with agenerally low cost of living and

has one the lowest annual mean wages indicated on the corresponding map, meaningFood2Youisabletopaylesstosavemoneyinthebeginning.Food2Youwantstokeepouremployees happy and excited to come to work and paying above minimum wage ishopefullythekey.Bykeepingouremployeeshappythecustomersarethenhappybecausetheservicewillbefriendlyandpleasantinsteadofaterribleexperience.Alsopayingbelowthemeanwageforhourlyworkers,Food2Youcanremaininbusinessandhopefullyraisethewagesofouremployeesoncethecompanyhasbecomeestablishedandstable.

Figure 5:http://www.bls.gov/oes/current/oes533031.htm

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CostofMarketingMarketingFood2Youisextremelyimportantwhentryingtogainrevenue.Thoughinordertomarket a service costswill be accruedby the company. Asmentionedpreviously, themainpromotionalmarketingmaterials beingused for Food2Youwill be thepromo codeand the Food2You cups. Both these marketing products will hopefully entice PurdueUniversitystudents,onandoffcampus,intousingFood2You’sdeliveryservice.Otherwaysofmarketingwillincludeonlineadvertisementsonwebsites,aPurduediningmobileapp,and ads andbanners at Purdue affiliated events such as sporting competitions.Byusingmultipletypesofmarketingthough,ourcompanywillhopefullygenerateenoughrevenuethattherewillbenodebtaccumulatedafterthefirstyear.The estimated amount ofmoney to be spent onmarketingwillmost likely change aftereach year Food2You is in operation. Legal Zoom, an online legal technology company,explained that, “Dependingon the industry,marketingbudgets canrange fromas lowas1% of sales to over 30%. New companies may spend as much as 50% of sales forintroductorymarketingprogramsinthefirstyear,”(Morrow,2009).Anothertacticbesidessetting a percentage for our company could be matching the marketing of a directcompetitor,suchasHungryBoiler.Therevenuegeneratedfromanentireyearisexpectedto be $1,435,852.50 and after calculating all marketing costs, Food2You will spend$532,699.95onmarketing.Thatis37percentofthesalesmadeinthefirstyear,andasthecompany becomes more established that percentage should lower. Though as statedbefore, during the first year our company doeswant tomake an impact on the PurdueUniversitystudentpopulationandfeelsitisnecessarytospendover30percentofsalestogenerateareputation.

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CompleteFirstYearCostAnalysisThiscostanalysisisindicativeofthefirstyearinoperationforFood2You.Onthispageandthefollowing,bothcostsandrevenuesexpectedthroughouttheyearhavebeenidentifiedand are shown in an accounting format. By formatting the cost analysis this way thecompany, investors,andthoseaffiliatedwithFood2Youareabletoeasilydistinguishthatmorerevenueisgeneratedthancostsaccumulated.

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TheFutureAfterFood2You’sfirstyear,thecompanyshouldhaveahighvolumeofprofittogoforwardintothenextsteps.ThefirstmaingoalforFood2Youistocreateamobileapplication.Thiswould be available for all smartphones and free to all students with their studentidentification number to access the app once downloaded. Totherightisthedesignforthemobileapplication,withthelogoF2Y centered. During the first year that Food2You is inoperation, the service will only operate through a website.Knowing that studentsdonothave their computers or tabletsconstantlyaccessibletheservicecannotsustainbythisorderingmethod alone. Food2You realizes that students are on the goandbyhavingthemobileapplicationonaphonewillmaketheorderingprocessmuchsimplerinthefuture.The next step in Food2You’s journey of expansion is potentially branching out to othercollegecampuses. If thefirstyear issuccessful,othercollegesanduniversitiesmayreachout asking to partner with Food2You and provide their students with the sameopportunity. However, another reason for partnering with other colleges may be do tooutsourcing. Purdue University has mentioned the possibility of outsourcing the foodservedatthediningcourts,whichwillultimatelybeamuchlowerthanthefoodpreparednow. Therefore, Food2You may relocate to other college campuses who have notoutsourcedandwillbeabletoprovideotherstudentswithquickserviceanddelicious,highqualityfoodfromjustaboutanywhereoncampus.Themaingoalforthefutureistospreadtoothercollegesandprovidestudentswiththeserviceknownas,Food2You.ConclusionFood2Youhasahighpotential tobea successnotonlyatPurdueUniversity,but alsoatcollegecampusesaroundthecountry.Thisservicewillnotonlyprovideonandoffcampusstudentswithquality food, butwill provide the convenience they seek aswell.Withouruniquemarketingtacticsourcompanywillstandaboveallourcompetitors.Hopefullyafterreviewing this report, investorswill be interested to fundourbusinessventureandgiveFood2Youthesupportitneedstokeepexpandingtoitsfullpotential.

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