Wing Zone

Marketing Plan and Feasibility Study for

Wing Zone

Team Wingin’ It

Greg Finke – [email protected] Johnson – [email protected] Squibb – [email protected] Turner – [email protected] Vargas – [email protected]

Table of Contents

Executive Summary............................................................................................................1Franchisor Background Information...................................................................................2Product/Service Description...............................................................................................3Situation Analysis...............................................................................................................3SWOT Analysis..................................................................................................................5Target Market......................................................................................................................5Site Location.......................................................................................................................7Marketing Strategy..............................................................................................................8Recommendation................................................................................................................12Appendix.............................................................................................................................14References...........................................................................................................................17

Executive Summary

In just fifteen years, Wing Zone has gone from a restaurant in a fraternity kitchen to a

huge, multi-state operation with nearly one hundred locations. Growth has been tremendous,

and it appears to be no end in sight for expansion. This take-out restaurant is catered mostly

to the college crowd, and offers a number of items such as chicken wings, hamburgers, and

salads. Wing Zone offers a unique blend of up-scale menu items with the convenience of a

take-out eatery.

There are a number of factors that must be determined in order to decide whether or

not a Wing Zone would be profitable in the New River Valley. The biggest determinate is the

target market, and the company states that it likes its restaurants to be located near large

colleges in order to target the students. Also, it must be determined that competition, such as

Pizza Hut and Buffalo Wild Wings, will not run Wing Zone out of business. Another major

factor is finding a central location in which to locate this restaurant, and this can be

accomplished by studying the demographics and lifestyles of the people in the region.

In order to make the restaurant a success a number of strategies must be put in place.

The menu must not be too cheap, or too expensive, for the area. Both sides of that spectrum

could ruin the establishment. Also, the promotion and advertising of the restaurant must be

handled in a responsible manner in order to reach the maximum number of people.

Advertisements in newspapers, on radio, and by means of special displays are all ways in

which Wing Zone could reach its customers. The establishment must also pay close attention

to the weaknesses and threats that this region will offer, and capitalize on the strengths and

opportunities that it also offers. Wing Zone would be a big success in this region thanks to its

unique menu items and its take-out dining style.

Franchisor Background Information

Wing Zone began as a unique alternative to late night pizza delivery in 1991. Two

fraternity brothers started the business out of their Florida fraternity house kitchen; starting a

business that has sprawled into 22 states. The concept of quick delivery of traditional Buffalo

wings, chicken sandwiches, burgers, and chicken strips complete with a variety of 25 sauces

has exploded around college campuses throughout the United States. Wing Zone has become

one of the fastest growing franchises, and with good reason; the product is unique,

convenient, and in high demand.

With an estimate between $60,000 and $75,000 in liquid capital available it is a

relatively low-cost franchise venture. The company urges franchisees to open businesses

around college campuses, military bases, hospitals, and other areas in which delivery options

are needed. Additionally, because this business is solely take-out and delivery only a small

retail space is needed in which to operate. This allows for already developed areas to embrace

the concept because there is no need to build an excessively large structure. Wing Zone

makes it very easy for potential franchisees to join in the experience by providing training,

lease negotiations, signage, structural specifications, and insurance. Additionally, throughout

the length of ownership, the company provides the franchisee with constant support, an

intranet for communication, as well as the advantage of corporate advertising. All in all,

Wing Zone calculates the complete start up costs including insurance, leasing, computer

systems, etc. anywhere between $179,500 and $229,500.

Wing Zone provides prospective franchisees with all the support and assistance one

could possibly imagine. The company has earned its spot as one of the most sought after

franchisors through the exceptional level of support, as well as the opportunity for significant

financial compensation. With 87 stores either already in business or nearing completion,

there is a strong base within the franchise, but also numerous untapped markets with the

potential to become very successful locations for this establishment.

Product/Service Description

The fast food industry appears is growing each year, currently accounting for nearly

$126 billion in sales. In the next five years those sales are expected to increase to nearly $200

billion, which is a massive increase. The low carbohydrate diet which hurt the fast food

industry several years ago is a dying trend, thus representing the upswing in sales over the

next five years.

Sports continues to increase as a form of recreation for millions of people. Also, there

has been a revival of card games in recent months thanks in part to the poker championships

that are popular on television. Chicken wings have always been the popular snack food for

both of these activities.

A typical consumer for Wing Zone will without hesitation be a fan of chicken.

“Chicken consumption in the U.S. increased by almost 25% in 2004,” making poultry a

favorite among Americans. (Restaurant Business) Chicken is seen to be one the “most cost-

effective and least expensive” item on most menus; which will in turn allow customers to

purchase more or visit more frequently. Even though the low carbohydrate diet is going out

of style, people are paying much more attention to their diets. Chicken has increased in

popularity because of the low carbohydrates and fat when compared to other types of meat.

Situation Analysis

The greatest threat for competition in the New River Valley would definitely be dine-

in chicken/wings restaurants that also have a bar. Their major competitive advantage is that

they offer a sit down dinning area that is very attractive to the city or town where they decide

to build. Also, this potential competition offers alcohol, which is a major draw to college

students. While only being a take-out establishment is a disadvantage, it is also an advantage

for Wing Zone because take-out restaurants are very popular. With people living busier lives

now than ever before not everyone has enough time to go to a restaurant and sit down waiting

to be served, such as at Buffalo Wild Wings. After pulling a long day at work many people

simply want to pick up a meal and take it home to their family. Because of this type of

atmosphere Wing Zone would be able to place orders much faster than most dine-in

restaurants because of the lack of a “sit down” crowd to cater to.

The majority of the college students and locals that live in the New River Valley like

to sit down with their friends and family, eat, have a few drinks, and enjoy the social

atmosphere. Also, Buffalo Wild Wings allows the customers to purchase their assorted sauce

flavors that go on the chicken, which is in contradiction to Wing Zone.

Wing Zone’s more indirect competitors would be eating establishments such as

Outback, Texas Roadhouse, Applebee’s, Hooters, and TGI Fridays. These restaurants are

considered to be upscale, and they all serve chicken wings. This could conflict with Wing

Zone’s attempt to establish itself as an upscale wing establishment. The advantage is that

while those establishments sell wings they also sell a number of other items, thus not allowing

those competitors to focus mostly on wings. The toughest competition the New River Valley

region would be take-out establishments such as Dominos, Papa Johns, Pizza Hut, and other

pizza delivery places. These would be stiff competitors because they offer a delivery service

that is very appealing to the college market, and they have all entered the chicken wing

market also.

One major draw back with Wing Zone is that you unable to place your carry-out or

delivery order online. The larger pizza restaurants have the technology necessary to offer

online ordering and have it delivered without talking to a person. This has proven very

successful with pizza establishments because college students are very computer savvy, and

most find it easier and more convenient to place orders over the Internet.

SWOT Analysis

Strengths:

- One of only a few chicken/wings-exclusive restaurants that delivers nation wide- Targets only college and university towns - Award winning sauces for taste- Not just a chicken restaurant; offers other items such as burgers and salads

Weaknesses:

- Not a sit down restaurant, only carry-out and delivery - Targets only college and university towns

Opportunities:

- Establish an agreement with local and college sporting events to set up food stands- Take away market share from other delivery establishments such as pizza restaurants

Threats:

- Dine-in chicken/wings restaurants - Local pizza delivery services (Papa Johns, Dominos, Pizza Hut, etc.)

Target Market

The target market profile will enable Wing Zone to zero in and reach out to those

potential customers that best fit the establishment. The main market segment that would best

fit Wing Zone would be college students (Wing Zone, 03). However, Wing Zone would fit

well in a location that serves urban and/or suburban geographic locations, such as downtown

districts, universities, military bases and/or hospitals. The high population that these locations

will provide would be a perfect match for the company and would be easy to market. The

New River Valley has a wide variety people who are of different ages and income levels.

However Wing Zone targets a smaller segment within those demographics. The primary ages

are between 20-50 years old with an average income of $30,000 (BW3’s). The highest

concentration of students and/or population that fit Wing Zone’s criteria in the New River

Valley is Blacksburg. The surrounding areas in the region are not an optimal fit because of

decreased education levels and older populations (See Table 3 in Appendix). Choosing

Blacksburg would enable Wing Zone to max the potential benefits of the target market

because Blacksburg has one of the highest concentrations of high-income households in the

region. This makes the town an ideal location for high and low end establishments (See Table

4 in Appendix). Wing Zone can fit into high or low-end centers, and matches the surrounding

population of Blacksburg better than those in other area of the New River Valley. The

proximity of Virginia Tech provides business opportunities with an array of conference

visitors, as well as visitors to athletic and special events, to enhance business. Blacksburg has

a beautiful natural setting to attract new residents and tourists, and well-established events and

festivals all of which is in the target market profile of Wing Zone. The area will attract old

and new visitors that will help keep local businesses alive. The area of Blacksburg is growth

oriented in business and population, and this is beneficial to anyone planning to open a

business in the town. Nearly 50% of the population in Blacksburg is between the ages of 20-

50 years old and ¼ of the student population of the New River Valley is in this area (See

Table 3 in Appendix), which are highly desirable demographics for Wing Zone.

Site Location

The area in which Wing Zone locates needs to have a minimum of 25,000 people

within a five-mile radius of the establishment. Within that five-mile radius, 80 percent of the

people or greater should be 20-50 years old. The target area also should have a minimum

daytime/lunch population of 5,000 people within a one-mile radius of the location. The

required average income is approximately $30,000 per year with households of single and

family status preferable. About 20 percent or greater of the trade area should be college

educated (Wing Zone). Because Wing Zone is a “carryout or delivery” establishment the

customers are only willing to travel a short distance. Blacksburg has a "captive" commercial

audience with students at the university as well as local residents patronizing the local

establishments.  This population has a disposable income that matches the local required

salary as stated by Wing Zone.

The preferred location for Wing Zone in the Blacksburg area is 109 College Avenue.

This site is located in the beautiful downtown area, and is within walking distance of Virginia

Tech, as well as a number of local dwellings. There are a number of established shops and

businesses in the area, and there is an ATM close by. Main Street is perpendicular to College

Avenue, which is intersected by a traffic light, making business on College Avenue visible to

heavy traffic. This area around the site is populated year round and is located in a heavy

business district. This particular location offers 1125 square feet of space, which would be

ideal for a restaurant that focuses strictly on carryout. The lease payments per month would

be approximately $2300 with a low overhead. Also, this location has the option to include a

small waiting area where chairs and tables could be added. Wing Zone would benefit from the

high density population this location has to offer. However, parking in the downtown

Blacksburg area is not abundant, or free in most cases. Also, Wing Zone’s competition is

higher due to the surrounding food establishments.

An alternative site chosen is 860 University City Blvd NW in Blacksburg. This

location is 1300 square feet and would provide room for a small waiting are where chairs and

tables could be added in order to offer a very limited sit down establishment. The lease

payments per month would be approximately $1840 with low. This site is within walking

distance of many apartment complexes and the food emporium of Virginia Tech. This spot

will give the residents a refreshing change and alternative to their existing options. Parking is

not a problem for this site, and the area is populated all year round. Traffic is not as busy as

downtown so additional advertising would be necessary.

Marketing Strategy

Wing Zone is a national chain of restaurants that has had great success in the cities in

which it has opened. Wing Zone should definitely conduct detailed marketing research in this

region to see if its success can be continued. Research should be conducted on a variety of

issues, one of which is whether or not the restaurant will be well received by those outside of

the target market. For example, while our target market is college students, the company

needs to find out how successful the restaurant would be during the summer when the student

population drops off considerably. Also, research needs to be undertaken to see if the demand

in the area is high enough from college students to justify building the franchise. The study

needs to show how often and where college students eat wings, how much money they spend

on an average visit, and what the students like about Wing Zone’s competition.

Research also needs to be conducted to see how much people are willing to pay for the

menu items that the restaurant will offer. While Wing Zone is trying to portray itself as a

more upscale fast food establishment, there is a limit to which people will pay to purchase the

items we are offering. If the restaurant prices items too high people will not visit, also if

prices are too low people may feel the quality of the food is compromised and may not

patronize the establishment.

Place is another very important consideration when undertaking marketing research.

It should be determined whether people would visit the establishment more if it were located

downtown or in a more residential area of the city. It should also be determined how much

patrons would be willing to pay to park to pick up food, or if they would pay at all, and how

far of a drive they would be willing to consider to patronize the establishment.

Wing Zone is going to be a very different experience for the residents in the

Blacksburg area. While there are a number of sports bars and “wing” restaurants in the area,

Wing Zone will establish itself uniquely as a more upscale, fast, and high quality take-out

restaurant. This will be accomplished through the restaurant’s advertising and sales

promotions. Also, in order to bring patrons into the restaurant to place orders, the building

should have bright colors on the outside, with a number of lights and a large sign in order to

draw attention to the facility. The restaurant should also put a great deal of focus on customer

service in order to stand out from the competition. This can also be accomplished through

media and demonstrations, as well as mouth-to-mouth advertising. For example, Wing Zone

could have servers stand out on the sidewalk in front of the building from time to time and

hand out free samples of items from the menu. This should be undertaken when there are

large crowds anticipated in the area, such as during rush hour, sporting events, etc. As the

employees converse the passerby’s will notice the friendly staff and good food and will want

to give the restaurant a try. With the restaurant serving a broad selection of food and friendly

staff, this passerby will become a regular patron of the facility.

The main target market for Wing Zone is definitely going to be the college crowd, and

this is where the focus of the advertising and promotion should go. One of the best ways to

reach this crowd is by advertising on the campus of Virginia Tech. This can be accomplished

in several ways, all of which would reach thousands of students. While the cost may be high

this more direct method of marketing would reach more students. One way that direct

marketing could be undertaken would be to simply set up a small display on the campus,

preferably somewhere near the Drill Field or other high volume foot-traffic areas. This could

coincide with holding special events on campus that bring out large numbers of students, such

as club fairs. Setting up a display could be very simple, such as a banner from the restaurant,

a table, a number of wings, and maybe a stack of menus and/or coupons to show what else the

restaurant has to offer. The largest expense in this example would actually be the cost of the

wings, which would run in the hundreds of dollars depending on the bulk cost of cartons of

wings. The cost of the banners would be high also, running into the hundreds of dollars, but

the table, banner and other decorations could cost as little or as much as a person were willing

to spend. Despite the cost, if giving away 1,000 wings would result in just 200 people

becoming loyal customers then the display would pay off.

Wing Zone could also go around to the apartments and place brochures on the door

knobs of the individual units, and also hand out fliers on campus during busy times of the day.

Brochures could be created by the company, and could be printed at Staples for $.99 per color

copy, or $.10 for a black and white page (Lucas). Hundreds of fliers would have to be printed

which would result in a large expense; however these fliers would be viewed by thousands of

students. By placing coupons on these fliers it would entice students to visit the restaurant.

This method of advertising could be used to promote specials in the restaurant, as well as

special occasions. It would be expensive and time consuming to undertake this task and that

is why it should not be undertaken very often. The fliers and displays should be set up at a

number of strategic times during the year, such as move-in day at Tech, just before football

games, and during exam weeks.

Another potentially valuable marketing tool in the New River Valley would be to

advertise on the radio. The two most popular radio stations in the region for college students

are 94.9, which plays country music, and K92, which plays modern music, according to Kathy

Rilee who is the Director for Research and Marketing for most radio stations in this region

(Rilee). While these stations do reach a vast geographic area they have a huge number of

devoted listeners in the New River Valley. The best time to advertise on these stations would

be during the evening drive time – which runs from around 3:00-7:00 in the evening, when

more students listen to these stations – and avoid morning advertising due to most students

being either in bed or in class. The prices are a little high, yet the reach would be huge. For

example, drive time rates for K92 are around $110, and for 94.9 the are $200. Also, the

average reach for both stations in the New River Valley area is nearly 1000 people every

hour, with more people listening during drive time (See Table 1 in the Appendix). However,

due to the high prices, radio advertisements should be limited to times when high feedback

would be received, such as when Virginia Tech hosts a home football game or other major

sporting event. While the main focus of our promotion would be on the Blacksburg area,

advertising on the radio could possibly draw people from Christiansburg and Radford as well.

If people from outlying areas are in Blacksburg for business or pleasure and they hear the

advertisement on the radio then they may want to patronize Wing Zone. Also, because there

is no other Wing Zone in Virginia outside of Arlington, the curiosity factor could bring people

to the restaurant from outside of the Blacksburg area. However, it should be realized that

because this is a take-out establishment it would be exceptionally difficult to get people to

visit from too far outside of Blacksburg. Unless there is a big game at Virginia Tech and

people from outside the region visit Wing Zone to pick up a meal, visitation to the restaurant

will be local, and advertising should take that into consideration.

Another possible medium in which to market would be The Collegiate Times, which

is the newspaper for Virginia Tech. There is tremendous potential to reach a vast number of

students through taking out an ad in this paper. According to Nathan Jones, the Business-

Manager for the paper, the daily circulation for Tuesday through Sunday is nearly 14,000

papers (Jones). The price for ads is relative inexpensive considering the number of students

reached, with an ad taking up one-eighth of a page costing $96.25 and ads taking up one-

fourth of a page costing $201.60. Special discounts could be given if Wing Zone decided to

advertise on a regular basis, which would further reduce costs. The company should

definitely advertise in The Collegiate Times when the restaurant opens, and should also

advertise before any major sporting events. It would be advised to offer coupons and special

offers in the ad in order to increase the flow of customers into Wing Zone. Because rates

would add up, it is advisable not to advertise in the paper no more than twice a month, and

only use the larger advertisements when large events are being held in the Blacksburg area.

Recommendation

Wing Zone has the potential to be very successful in the New River Valley. The

restaurant will establish itself as a very unique dining experience, offering consumers the

ability the convenience of great chicken wings from a take-out establishment. The restaurant

would best serve the area by being located in downtown Blacksburg. Wing Zone should try

to convince the town to dedicate some parking near the area to “10-minute” spaces that would

allow customers to run in the restaurant and pick up food and not have to worry about paying

for parking.

There seems to be a high demand for this type of establishment in the Blacksburg area,

thanks in part to its healthy economy and high quality of living. These factors are

contributing to the growth of the town’s population, which will help increase demand for

Wing Zone’s product in the future. Other contributions to demand will also come from

Virginia Tech, which is constantly expanding its overall student population. Also, as Tech

becomes an even more popular destination for sporting events, there will be great growth in

the demand for enough establishments to feed the people when they file into town. The

football team at Tech alone could be the source for much of the revenue of the store, as

thousands enter town for each game, and tailgating continues to grow as a popular activity

before the games.

Wing Zone should definitely plan to establish a franchise in the New River Valley.

The demand already exists, and will continue to grow in the coming years. Careful marketing

and advertising campaigns must be undertaken at strategic times of the year in order to make

the restaurant a huge, well known success.

Appendix

Table 1 – Advertising on Local RadioRadio Station 94.9 Star Country K92 FMCost (Mon-Fri) $200 = 6:00AM – 7:00PM $110 = 6:00AM – 7:00PM

Cost (Weekend)$200 = 10:00AM – 3:00PM (Sat)$60 = Rest of weekend

$110 = 10:00AM – 3:00PM (Sat)$55 = Rest of weekend

Listeners per hour (Average)

900 1,100

Courtesy of: Kathy Rilee

TABLE 2 CURRENT POPULATION AND PROJECTIONS

2000-2040

JURISDICTION 2000 2010 2020 2030 2040

Floyd County 13,874 14,609 15,826 17,043 18,260

Giles County 16,657 17,098 17,405 17,712 18,019

Montgomery County 83,629 83,397 87,997 92,597 97,197

Pulaski County 35,127 35,501 35,999 36,497 39,995

City of Radford 15,859 17,305 17,809 18,313 18,817

New River Valley 165,146 167,910 175,036 182,162 189,288

Virginia 7,078,515 7,737,597 8,483,149 9,228,701 9,974,253

Sources: U.S. Census Bureau, 2000.

Virginia Employment Commission, 2010-2040.

Courtesy of: http://www.nrvalliance.org/demographics/data04.php#pop1

TABLE 3 POPULATION BY AGE

JURISDICTION 2000 CENSUS POPULATION

18 AND UNDER

%(PERCENTAGE)

18-64 YEARS

%(PERCENTAGE)

65 AND

OVER

%(PERCENTAGE)

Floyd County 13,874 3,080 22.2 8,588 61.9 2,206 15.9

Giles County 16,657 3,665 22.0 10,210 61.3 2,782 16.7

Montgomery County

83,629 14,301 17.1 62,136 74.3 7,192 8.6

Pulaski County 35,127 7,236 20.6 22,552 64.2 5,339 15.2

City of Radford 15,859 2,046 12.9 12,354 77.9 1,459 9.2

New River Valley

165,146 30,328 18.4 115,840 70.1 18,978 11.5

Virginia7,078,515 1,741,315 24.6 4,544,406 64.2 792,794 11.2

Source: U.S. Bureau of the Census, 2000

Courtesy of: http://www.nrvalliance.org/demographics/data04.php#pop1

TABLE 4KEY ECONOMIC INDICATORS

JURISDICTION PROJECTED 1995 MEDIAN

1997 DEC. 1999 1999 1997/98

2000 MEDIAN

HOUSEHOLD PER CAPITA

UNEMPLOY. BANK FISCAL

FAMILY INCOME

INCOME INCOME RATE DEPOSITS STRESS

        (thousands)  

Floyd County $37,800 $28,519 $15,575 3.60% $159,438 86

Giles County 43,300 30,059 18,383 5.00% 171,871 69

Montgomery County

45,500 30,421 17,676* 1.80% 794,439 63

Pulaski County 38,500 28,885 18,036 6.20% 232,580 58

City of Radford N/A 28,092 17,676* 2.30% 244,934 27

New River Valley

N/A N/A N/A 3.40% 1,603,262 N/A

Virginia $56,900 $36,367 $26,109 2.60% ######## N/ASources: Virginia Statistical Abstract, 1996-97 Edition: Weldon Cooper Center for Public Service, University of Virginia, Charlottesville, VA, 1996.U.S. Department of Housing and Urban Development.Estimated Labor Force Components, December 1999: Virginia Employment Commission.Taxable Sales Annual Report, 1999: Virginia Department of Taxation.First National Bank (Christiansburg)Report on the Comparative Revenue Capacity, Revenue Effort, and Fiscal Stress of Virginia's Counties and Cities 1997-98. Commission on Local Government, Commonwealth of Virginia, 2000.

U.S. Department of Commerce: 1999 Bureau of Economic Analysis, Regional Accounts Data* Montgomery County and the City of Radford are combined.

Courtesy of: http://www.nrvalliance.org/demographics/data05.php#inc1

References

“Business Center”. VDOT – Virginia Department of Transportation. 2005. 5 April 2005. Online: http://www.virginiadot.org/business/default.asp

Cole, Patricia. “High” Restaurant Business. 15 April 2005.

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“Franchise Info.” Buffalo Wild Wings. 2005. 5 April 2005. http://www.buffalowildwings.com/franchise_info/index.asp

Jones, Nathan. “Questions about Advertising Rates.” E-mail to Brandon Turner. 20 April 2005.

Lynn Lucas, interviewed by Brandon Turner, Radford, Virginia, 20 April 2005.

“New River Valley Economic Development Authority.” Online: 2 April 2005. http://www.nrvalliance.org/demographics/data05.php#inc1.

Rilee, Kathy. “Radio Station Information.” E-mail to Brandon Turner. 13 April 2005.

“Wing Zone Soars with Winning Combination of Best Products, Best Practices”. 24 April 2005. Online: http://www.worldfranchising.com/articles/wingzone.htm.

“Franchise Information.” 31 March 2005. Online: http://www.wingzone.com/corporate/franchise/franchise02.html Franchise info.

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