Food Trucks breaking down the barriers of distribution strategies

The ‘Place’ part of the marketing mix is all about having the right products, available in the right place, at the right time. Food Trucks are striking gold with this concept however going about it in unconventional ways.

Food trucks do away with the traditions of brick-and-mortar restaurants opting instead for a kitchen on wheels that is able to set up in their chosen high traffic spot.

In review of the Food Truck’s ‘Place’ mix (Iacobucci 2013) advises the first step in designing a distribution system is to determine distribution intensity. Intensive distribution systems are typically for highly consumed goods and services that organisations want available in as many locations as possible. At the other end of the scale, exclusive distribution systems are often associated with more complex and relatively expensive purchases (Iacobucci 2013). The purchase of fast food would not often be considered a complex or expensive purchase (however have you seen the prices at Nando’s?! I don’t know who they think they are kidding but in terms of fast food I think they missed the mark on a few of the key components) however Bojanic & Reid (2010 p.319) claim “exclusive distribution is common among independent providers in the hospitality industry”.

The distribution channel of food trucks is quite simple as the food truck is both the ‘manufacturer’ as such and the retailer, this is referred to as a Direct Channel (Bojanic & Reid 2010 p. 321). This lack of channel partners mean that food trucks need to employ a Pull strategy to ensure that their consumers seek them out and ‘pull’ their goods as such. This is especially necessary for food trucks as their constant movement from place to place means that their loyal customers need to constantly seek out their current location. Food trucks employ strong social media presences to keep their consumers up-to-date on their whereabouts.

You could assume this simple distribution channel also avoids any conflicts however in the case of a food truck or any restaurant, they are also a consumer of bulk food items they incorporate into their meals and are effectively a channel partner of many larger distribution channels (Bojanic & Reid 2010 p. 327). Therefore, they are still susceptible to power conflicts in the distribution channels and would need to take care to ensure conflicts don’t arise.

Location, Location, Location

This is where food trucks hit gold. We all know nothing stays the same, trends change. The hot spot one week may be somewhere else the next. A company’s target market may move from place to place based on what is happening that weekend, what event is on. The food truck goes where their customers go. So if there is a big festival in Fitzroy they all set up camp there for the day, when there is a new art exhibition opening they can set up in front of the gallery or there is international DJ in town they’ll set up close by at the wee hours of the morning. Recent studies show that 61% of consumers found out about the food trucks by just happening upon them (Column Five Media).

2012-10-25-foodtruck2

Food trucks also carry to opportunity for franchising, indeed some in the U.S. have already started down that path however Daley (2011) claims it may not be a worthwhile venture. Franchising, while having many positives such as expanding without the capital expenditure (Iacobucci 2013), adds a layer of margins to the price mix. In dealing with low cost items already this could take away one of the competitive edge’s that food trucks have.

 

References:

Bojanic, D.C. & Reid, R.D. 2010 Hospitality Marketing Management, 5th edn, Wiley, Hoboken, New Jersey

Column Five Media, Infographic: Good Luck, Truck the Realities of Starting a Mobile Restaurant, Intuit, retrieved 16 May, 2016 < http://www.columnfivemedia.com/work-items/infographic-good-luck-truck-the-realities-of-starting-a-mobile-restaurant&gt;

Daley, J 2011 ‘Franchises Hop on the Food Truck Trend’, Entrepreneur, 26 July, retrieved 16 May, 2016 < https://www.entrepreneur.com/article/220017&gt;

Iacobucci, D 2013, MM4, Student edition, South Western, Mason.

Image Credit: Column Five Media

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