Marketing Plan of Shake Shack Inc.

I-EXECUTIVE SUMMARY

The company Shake Shack is an accidental success which started off as a hot dog cart and soon after its popularity converted into a roadside kiosk. The company offers burgers, hot dogs, chicken, frozen custards, shakes, beer and dog food. The reason behind the instant success of the brand can be found lying in the strategy of “enlightened hospitality,” and it’s more than good taste. The company use of only the healthiest produce and a cheerful, cooperative team has built its fan base. The company targets millennial and is very popular among them. The company has targeted to expand to reopening of 200 new shake shacks in the US by 2020, and the likelihood of its success is high. The unique selling proposition or competitive edge of Shake Shack is its “good taste with better hospitality.”                                                                   

II-SITUATION ANALYSIS 

A-Company description  

Shake Shack, Inc which was established in 2014 has the operating license of the shake Shack restaurants which serves hot dogs, hamburgers, crinkle cut fries, chicken, shakes, beer, frozen custard, wine, etc. As of 2017, the company has 159 Shacks of which 90 are based domestically and are company operated in the USA, ten others are also domestically licensed shacks, and there are 59 licensed international shacks. The company went public in 2015.

Shake Shack is contemporary roadside burger stand that started off as a hot dog kiosk. The shack offers classic American options on its menu. The company was founded by the USHG which has a reputation of operating some of the most popular and acclaimed restaurants in fine dining. The company started a hot dog cart at the New York Madison Sq Park, which became an instant success. It led to the formation of a kiosk after three years and officially became a community gathering favorite spot (Shake Shack Inc.).

B-Product Category

The company offers a fine-casual heritage and is committed to offering premium food and sustainable ingredients. The company offers a classic American menu which is offered at accessible prices as compared to the full-service restaurants. The product ranges from:

1. 1. Burgers and Chicken
   2. Crinkle Cut Fries
   3. Hot Dogs
   4. Frozen custard
   5. Wine, Beer, and Beverages
   6. Dogs Food

The company offers innovative additions as per the seasonal and local changes. The company has until now introduced BBQ Lineup, Chili Menu, Trio of featured shakes, Salty Donut Concrete, Seasonal coffee cake, shake Everest, Hot Chicken, Humm Burger and also Patty Shack, Golden State Shake, Smoke Shack Rotolo and Chicken Parm, and Den Shack (Shake Shack Inc.).

C-SWOT analysis

Strengths	Weaknesses
·         The company has a thriving fan base in the millennial. ·         The company offers quality ingredients like all-natural beef and hormone and antibiotic free meat ·         The company has established a socially responsible and sustainable brand image ·         The company has a strong social media presence ·         It can invest in the prime locations ·         Current locations are based in high traffic zones	·         The company has into expanded as rapidly as its competitors. ·         It is also difficult to maintain the same quality across all chains. ·         There is difficulty in finding similar prime locations for the new stores. ·         The limited supplier base, purchase all beef from seven suppliers, , potato buns from one supplier, chicken from one supplier custard from three suppliers, Shroom burgers 95% from one supplier, and shack sauce from one supplier. ·         The company provides no vegan options ·         The company is considered a high price point.
Opportunities	Threats
·         The rise in the number of Millennial ·         Self-order system ·         Increase in popularity with the increase in the use of social media by users ·         The strong trend of the fine-casual industry	·         Increase in rain or storms affect the sales ·         The decline in the social media platform affects the popularity of the company ·         Increase in the minimum wage affecting labor cost ·         High competition among fast-food chains ·         Higher occupancy rates effects operating costs

 

D-Competitive Research    

The competitors of Shake Shack include:

Competitors	Offers
Shake Shack	Modern Roadside Burger
Five Guys	Homemade Simple Menu
In-N-Out	Retro and Re-inventive, Secret Menu
Whataburger	Burgers and add-ons
Smash Burger	Innovative burgers and flavor

 

The market analysis shows that the market of the burger has reached its maturity and the only way a company can increase its sales is through grabbing on the other competitors share. The beef eating in the USA has not been increasing; in fact, it has been declining. The current market share shows that Whataburger has the highest share in the market with 42 percent of all transactions. Second, In-N-out is with 26 percent of market share, and Five Guys is third with 12% of the share. Shake Shack even with a small number of locations has astonished its competitors with its performance.

Growth measures show that Shake Shack had the highest growth with 33% growth in revenue in 2016.Whataburger, In-N-Out experience little or no growth with on expansion, whereas Shake Shack doubled its number of locations (Hagerty).

E-Consumer Analysis

Like any other Fast casuals, Shake Shack attracts the millennial more as compared to other demographics. The consumers of Shake Shack value nutritional ingredients and freshness. Consumers prefer the on-the-go snacking, and the fast-causal usage values shake shack. The Millennials are not like any other demographic group. The millennial prefers the brand which stands out from the competition. The idea marketed by Shake Shack of fresh, quality based simple fast food which is made to order and is served by the addition of a personal touch while keeping in mind the social awareness and humor attracts millennial. The offerings of Shake Shack only range to five burgers while its competitors offer about 10 to 30 options for the customers. It also enables Shake Shack to focus on fewer items and deliver it with excellence.

Psychographic

Health conscious and better lifestyle conscious customers

Demographic

Millennial

F-Competitive analysis 

The company in its annual reports shows that the competitors of Shake Shack compete on factors like price, taste, service, quality, location, ambiance, and restaurant condition. The primary competitors are mentioned by Shake Shack as the ones who include the “better burger” concept in their restaurants. It also shows that other fast-casual restaurant and casual dining and quick service restaurants are also their competitors (Shake Shack Inc.).

The competitors of Shake Shack include:

Competitors	Locations	Offers	Marketing Strategy
Shake Shack	159	Modern Roadside Burger	Word of mouth and digital fan base
Five Guys	1000	Homemade Simple Menu	Word of mouth and digital fan base
In-N-Out	300	Retro and Re-inventive, Secret Menu	Word of mouth and digital fan base
Chipotle Mexican Grill	1700	Mexican Healthy Food	Curates effective content
Smash Burger	300	Innovative burgers and flavor	TV commercials

 

 Positioning of Shake Shack

G-Target Market analysis 

The target market of Shake Shack is Millennial who is health-conscious consumers and experience-oriented diners. The Shake Shack made-to-order, on-the-go burgers are the prime attractors of the millennial. The millennial wants to feel that they are a valued customer and hence often tend to look for brands providing high-level customer service. The demographics of Millennial show that they comprise 24% of the US population. The age group of a Millennial is between 18 to 36 years. The median income of younger millennial is around $25K while the older millennial have about double this salary. Millennial are also the most educated generation, and 23% of them are the graduate or higher qualified (Nielsen.com).

The top millennial markets are Austin, Los Angeles, Salt Lake City, San Diego, Washington and Denver. The psychographics of the target market shows that the Millennial uses the social media most actively. They believe in the healthy diet and use fresh produce in the food.

H-Points of Difference

The Shake Shack is not like another chain of burgers; the CEO Randy addressed its staff and challenged to put them out of business. He said that the generosity of their management to empower their employees and partners converts into hospitality for their customers. The foundation of “Enlightened hospitality” guides and directs the business and operational decisions. It enables them to have sustainable and unique competitive advantage (Brunner).

The Enlightened Hospitality is based on the priorities of the stakeholders of the restaurants. The idea is based on providing a hospitable environment for the employees, and then for the customers, and consequently for suppliers, community and to the investors. The Enlightened Hospitality is based on better compensation with higher entry-level wages, periodic financial incentives, and profit-sharing program known as Shack Buck. It gives its employees importance by calling them the 51%ers (Udland). The company provides health coverage to the employees. It gives them career advancement, and empowerment (Greenhouse and Strom).

The customers are given priority. The employees are always trained to side the customers. The company is focused on creating “community wealth” by giving back to the parks; the suppliers are tested and then trusted for 100% quality. The investors are awarded by the revenue increment and capital gains.

I-Positioning

The company positions itself as “Differentiators.” The restaurant has built a perception of the fast-casual experience of dining with its focus on higher level quality ingredients and fresh, natural produce. The company propagates their no use of processed or frozen produce. The brand positions itself as an average cost- high quality and healthy option for the young millennial who are looking for fine-casual options on-the-go.

III-DATA COLLECTION AND ANALYSIS    

For finding out what is the reason behind the growing popularity of Shake Shack among the people, we have conducted an online survey based on eight questions trying to analyze the decision-making process of the shake shack consumers.

The questions asked in the survey were asked online from 20 respondents. The 20 respondents filled the form, and the results were regressed. Covariance and correlation were found in the answers as well. The results and its analysis are shown hereunder;

A-Data Analysis

Each question and its analysis present the results of the survey. The first question was;

1. I like to prefer Shake Shack on other burgers

The results show that 40% of the people agree and strongly agree that they prefer to shake shack on other burgers. The majority 45% disagrees or strongly disagrees with the preference and 15% are neutral.

2. I choose shake shack burger because of its taste

It shows that about 20% neutral, 35% agree or strongly agree with the idea that they like Shake Shack because of its taste whereas, 45% disagree with it.

3. I prefer to have any other burger than standing in the long queue for Shake Shack

The ratio of respondents of about 40% prefers to agree on having another burger than standing in the queue. Whereas, the other 35% disagree and prefer to stand in a queue then have another burger. 25% are neutral.

4. My decision on choosing a burger is affected by the price

30% agree that price affects their decision of choosing which burger, they should consume whereas, and 45% disagree on the price being an important factor. 25% are neutral on this question.

5. The advertising of Shake Shack is effective and affects my decision process for choosing shake shack

The results of the survey show that 40% disagrees that advertisement of shake shack affects their choice of shake shack, while 30% agrees that advertisement plays a role and 30% were neutral.

6. I choose shake shack because it is 100% pure produce (it is healthier than other burgers)

In this question, the results show that the 40% of the participants agree with the fact that they choose shake shack because it is healthy while the other 50% disagree and 10% remained neutral.

7. I choose shake shack because its staff is very cooperative and friendly

For this question, about 50% agree that the staff is very supportive and friendly while the other 30% disagree and 20% are neutral.

8. I choose Shake Shack because it is near

About 40% of the respondents also claimed that they chose shake Shack because it is near while another 40% did not think they chose shake shack because it is near, and the other 20% have selected neutral opinion.

Compiling all the results show that about less than half of the respondents like shake shack, its staff, taste, and its healthy ingredients.

SUMMARY
Groups	Count	Sum	Average	Variance
1	20	60	3	2.631579
2	20	59	2.95	1.313158
3	20	57	2.85	1.713158
4	20	62	3.1	2.2
5	20	61	3.05	2.155263
6	20	62	3.1	2.2
7	20	49	2.45	2.260526
8	20	58	2.9	2.094737

 

The groups, here shows the eight questions that are asked to the respondents. The count shows the number of respondents for each group/question. The sum is irrelevant to us. The average is a relevant measure here depicting the mean of the results which is near to 3 showing the “neutral” opinion of the respondents in average.

1		2		3		4
Mean	2.904762	Mean	2.904762	Mean	2.857143	Mean	3.142857
Standard Error	0.357936	Standard Error	0.247894	Standard Error	0.27848	Standard Error	0.318372
Median	3	Median	3	Median	3	Median	3
Mode	1	Mode	2	Mode	3	Mode	4
Standard Deviation	1.640267	Standard Deviation	1.135991	Standard Deviation	1.276155	Standard Deviation	1.458962
Sample Variance	2.690476	Sample Variance	1.290476	Sample Variance	1.628571	Sample Variance	2.128571
Kurtosis	-1.68363	Kurtosis	-1.06055	Kurtosis	-0.95082	Kurtosis	-1.15406
Skewness	0.017435	Skewness	-0.02291	Skewness	-0.02605	Skewness	-0.37915
Range	4	Range	4	Range	4	Range	4
Minimum	1	Minimum	1	Minimum	1	Minimum	1
Maximum	5	Maximum	5	Maximum	5	Maximum	5
Sum	61	Sum	61	Sum	60	Sum	66
Count	21	Count	21	Count	21	Count	21
Confidence Level(95.0%)	0.746641	Confidence Level(95.0%)	0.517097	Confidence Level(95.0%)	0.580899	Confidence Level(95.0%)	0.664112

 

5		6		7		8
Mean	3.142857	Mean	3.238095	Mean	2.666667	Mean	3.142857
Standard Error	0.325764	Standard Error	0.344375	Standard Error	0.386272	Standard Error	0.392099
Median	3	Median	4	Median	3	Median	3
Mode	3	Mode	4	Mode	1	Mode	4
Standard Deviation	1.49284	Standard Deviation	1.578124	Standard Deviation	1.770122	Standard Deviation	1.796823
Sample Variance	2.228571	Sample Variance	2.490476	Sample Variance	3.133333	Sample Variance	3.228571
Kurtosis	-1.21354	Kurtosis	-1.23797	Kurtosis	-0.10865	Kurtosis	1.062792
Skewness	-0.26849	Skewness	-0.09648	Skewness	0.741751	Skewness	0.793203
Range	4	Range	5	Range	6	Range	7
Minimum	1	Minimum	1	Minimum	1	Minimum	1
Maximum	5	Maximum	6	Maximum	7	Maximum	8
Sum	66	Sum	68	Sum	56	Sum	66
Count	21	Count	21	Count	21	Count	21
Confidence Level(95.0%)	0.679533	Confidence Level(95.0%)	0.718354	Confidence Level(95.0%)	0.80575	Confidence Level(95.0%)	0.817904

 

The above summary of the various measures computed shows that the mean of the eight questions on the scale is for neutral i.e. 3 showing the neutral opinion. The mode or the highest value shows the level of disagreement on the eight questions. For the question 1, the most recurring opinion is strongly agreed, for Q2, it agree, for Q3, it is neutral, and for Q4 it is disagree. For Q5, it is neutral, for Q6, it is disagree, for Q7 it is strongly agree and for Q7, it is disagree.

B-Social Media Listening

Rausa, Anna. Metter Media Social Report. 2015.” Metter Media. Metter Media, 6 March 2015. http://www.mettermedia.com/metter-media-social-report-march-6-2015/.

Looking at the social presence of Shake Shack, one can say that people love the burgers. The company maintains a constant updated social media presence on Facebook, Instagram, Twitter, etc. The company posts frequently and the likes, and following on the company page are in millions and thousands (Rausa).

IV- SUMMARY OF RESEARCH FINDING

A-Key Facts

1. 1. Shake Shack is an accidental venture which became an instant success because of its enlightened hospitality.
   2. The company focus on few menu items and pure products and only healthy options has made it capable to provide excellence to its customers
   3. The location plays a vital role in its success, as the company follows the prime locations with high foot traffic.

B-Objectives

1. 1. Maintain and capitalize on the outsized brand awareness
   2. Implement the expansion plans to widen the customer base

V-MARKETING PROGRAM   

A. Marketing Mix Strategies and Tactical Implementations  

Product	Place
The product of Shake Shack is never pre-cooked The shake shack is always made fresh on order The Shake Shack offers variety in its menu by offering burgers, drinks, shakes, desserts, custard, and hot dogs. The restaurant provides options for customization of the burgers The menu also includes beer and wine The restaurant also offers Dog food options	The restaurant started with a hot dog cart which converted into a kiosk. The first outlet which was opened was located in the heart of the New York. The company focuses on areas which have more foot traffic. The company has a well managed, and trusted distribution network The restaurant is dependent on a few suppliers for quality supplies The restaurant does not follow the similar theme at each chain. Each chain is customized as per the location, and local culture.
Promotion	Price
The company promotes its brand through participation and hosting of charity events like Shakespeare Shake, Shake Shack x Bombas Community, Wellness in the Schools Mushroom Burger, Annual British Shake Sale. It also provides Free Shack track and field fitness club on a monthly basis. The burgers’n’brews is another initiative in which guests are offered beer pairing dinners. The company promotes its brand by following enlightened hospitability The customers are termed as guests The Shack-wide events, promote annual events and offers. The company collaborates with other chefs to create pop-up concepts offering promotions and brand awareness. The company receives product placement in TV shows, movies, and media channels with and without cost.	The restaurant offers competitive prices as compared to other fast-casual restaurants. The company menu product ranges from $ 10. Whereas average price is $5 per item. The company uses medium pricing to cater wider market. The company has raised its prices after its success.

 

B. Future plan

10K Growth Strategies/trends in our business 2018 outlook/2020 targets

The company is committed to focusing on driving its long-term creation of value by building places in which the guests love to gather. The company looks to the future by investing in digital platforms, strengthening their culture, and innovating menu. The company is planning to expand their business, improve competitive position, increase sales, by following the strategies of opening domestic company operated, innovating digital products, capitalizing on outsized brand awareness, growing same-Shack revenue, and also growing licensed shacks internationally and locally (Shake Shack Inc.).

The 2018 outlook shows that the company is targeting 32 to 35 company-operated domestic openings and 18 licensed openings. The 2020 targets for the company shows that it is committed to open at least 200 domestic company-owned shacks and 120 globally licensed shacks and have revenue of over $700 million (Shake Shack Inc.).

VI-WORKS CITED

Brunner, Rob. “How Shake Shack Leads The Better Burger Revolution.” Fast Company. Fast Company, 22 June 2015. Web 6 April 2018. https://www.fastcompany.com/3046753/shake-shack-leads-the-better-burger-revolution.

Greenhouse, Steve and Stephanie Strom. “Paying Employees to Stay, Not to Go.” The New York Times. The New York Times, 4 July 2014. Web. 5 April 2018. https://www.nytimes.com/2014/07/05/business/economy/boloco-and-shake-shack-offer-above-average-pay.html?_r=0.

Hagerty, Kyle. “Five Guys, In-N-Out, Shake Shack Or Whataburger: Who’s Winning The Burger Wars?” Forbes. Forbes, 8 June 2017. Web. 5 April 2018. https://www.forbes.com/sites/bisnow/2017/06/08/five-guys-in-n-out-shake-shack-or-whataburger-whos-winning-the-burger-wars/2/#2d7ac0f5b8ed.

Nielsen.com. “Millennials: Breaking The Myths.” Nielsen. Nielsen, 24 January 2014. Web. 6 April 2018. http://www.nielsen.com/us/en/insights/reports/2014/millennials-breaking-the-myths.html.

Rausa, Anna. “Metter Media Social Report, March 6, 2015.” Metter Media. Metter Media, 6 Mrch 2015. Web. 6 April 2018. http://www.mettermedia.com/metter-media-social-report-march-6-2015/.

Shake Shack Inc. “Shake Shack Announces Third Quarter 2017 Financial Results.” Shake Shack.  Shake Shack, 2017. Web. 6 April 2018. http://investor.shakeshack.com/investors-overview/news/press-release-details/2017/Shake-Shack-Announces-Third-Quarter-2017-Financial-Results/default.aspx.

Udland, Myles. “Shake Shack Calls Its Employees ‘51%ers.” Business Insider. Business Insider, 29 December 2014. Web. 6 April 2018. http://www.businessinsider.com/shake-shack-employees-51-percent-2014-12.

VII-APPENDIX:

Questionnaire

Name:

Age:

Gender:

 1-Strongly Agree

2-Agree

3-Neutral

4-Disagree

5-Strongly Disagree

	Questions	Strongly Agree	Agree	Neutral	Disagree	Strongly Disagree
1	I like to prefer Shake Shack on other burgers
2	I choose shake shack burger because of its taste
3	I prefer to have any other burger than standing in the long queue for Shake Shack
4	My decision on choosing a burger is affected by the price
5	The advertising of Shake Shack is effective and affects my decision process for choosing shake shack
6	I choose shake shack because it is 100% pure produce (it is healthier than other burgers)
7	I choose shake shack because its staff is very cooperative and friendly
8	I choose Shake Shack because it is near