“There is no sincerer love than the love of food.” – This famous
quote by George Bernard Shaw has been the bedrock of my existence all these
years. When the opportunity presented itself to conduct a marketing study, I
thought there could be no subject better than the food service industry. On the 22nd
of May, I left for Mahabalipuram searching for restaurants & dhabas.
(FT13418)
The first one that I encountered was Aigen’s Chinese Dhaba. The
owner Mr Aigen seemed well educated and was able to converse in english
fluently. I asked Aigen a few open ended questions and the answers gave me an
insight into how a bottom of the pyramid food business works.
Aigen is the owner and also the head cook. The 100sq ft room
that he runs his enterprise from has been rented along with the furniture. The
daily rent is Rs 150. The shop has no signboard. Infact, if it had not been for
the typical cut vegetables and cooking wok placed at the entrance, it would have
been difficult to figure out the exact nature of the business!
When I asked Aigen for menu, he quickly recited names of 4
dishes that sold the most which were Beef Noodles (Rs 50), Chicken Noodles (Rs
60), Chicken Fried Rice (Rs 55) and Egg Fried Rice (Rs 40). According to him,
people who frequented his place didn’t prefer looking through long menus and
hence it was most prudent to have only about 4-5 dishes on the menu at any
given time. This also saved the time to place orders.
Aigen works as a day worker at Kalpakkam. He returns by 2 PM
and starts his preparation which includes buying the vegetables, beef ,chicken etc
and cutting, boiling and pre-cooking the necessary ingredients. Since he does
not own a deep freezer, this method of buying as per his daily needs makes
sense. His daily expenses towards raw materials is about Rs 1200 – Rs 1500. He opens his restaurant to customers at about
7PM and keeps it open till 11PM in the night. The customer segments that Aigen
targets are low wage workers, nearby shop-keepers and locals from
Mahabalipuram. He usually has about 40 -60 patrons coming in every evening. Using
all the information, I estimate that Aigen must make a profit of about Rs 900 –
Rs 1500 daily during the 5 hours that he runs his restaurant.
I am intrigued by the fact that a BOP business can make
profits comparable to the salaries of some junior software engineers in
multi-nationals! Aigen’s keen sense of how to keep running costs low and most
importantly how to target the correct population are the key ingredients of his
success. In a candid chat I proposed that he put up a flex banner for his shop
and put up details on a free website to attract more customers. In an effort to
understanding marketing strategies in a BOP scenario, I have decided to help
Aigen throughout this year by handling his branding & marketing work
(pro-bono). It will be interesting to see this pans out!
Next time we’ll see how bigger Hotels (Hotel Mammala and
Hotel Bhavan) & food chains like KFC operate.
Bhavik Kaul
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