Service marketing

7P Marketing Mix for Cloud Kitchen

ABIN PHILIP

P19102

PGDM A

Service Marketing (G1)

Cloud Kitchen - This is a delivery-only restaurant that has no room for lunch. It relies entirely
on online orders placed through online food aggregators, an online order support website, or a
mobile application. Cloud kitchen is a place where food is prepared and delivered at the
doorstep, taking orders through calls and online order portals. Unlike other restaurants, they
do not serve dinner and food to your home. They invest only in the preparation and delivery
of food or contact food ordering portals such as Swiggy, Zomato, etc.

The difference between Cloud Kitchen and Dine in

Given the difference between a restaurant lunch and a cloud kitchen, a cloud kitchen or
virtual kitchen serves as a delivery-only kitchen. They thrive on online orders through various
food delivery websites and are unable to dine. Unlike cloud kitchens, restaurants where you
can dine are traditional outlets with their own corporate identity. For example, an upscale
Mexican restaurant can offer exclusively authentic Mexican dishes, which will affect its
atmosphere and service.

Given the location, the restaurant where you can dine should ideally be located in an area
where, among other things, there is high traffic and visibility. In the end, the fate of the new
restaurant, which is fighting for space with other eateries, is likely to be rather bleak. These
restaurants should be easily accessible, have ample parking space and comply with local
zoning laws. This requires a relatively large investment in terms of rent, planning planning,
security approvals, interior decoration and so on. For restaurants where you can dine, it
should be built in accordance with the audience or clientele that they hope to serve, while
there is no need to worry about the interiors of the cloudy kitchen. The cloud kitchen does not
need a parking space or step to generate income. This type of kitchen model thrives on online
orders and is usually located around residential areas.

Another difference is the cost of real estate, since cloud kitchens do not need as much space
as in a regular restaurant. At the same time, given staff costs, fewer staff will be required for
a cloud kitchen, and more staff will be needed for lunch. If the cloud kitchen will outsource
its delivery services, this will mean even less staff.

When it comes to operating costs, a cloud-based kitchen can focus on many kitchens, which
can mean high costs for raw materials, etc., but this is not certain. In addition, a cloud kitchen
will have a website value, but a restaurant does not have to have a website for dinner. So this
cost is also quite uncertain.

The cost of installing a kitchen varies depending on the type of restaurant and the necessary
equipment. As mentioned earlier, multi-cloud cloud kitchens are probably more expensive to
set up because they require a wide range of equipment. It should be noted that the point of
cloud kitchen is not to save on operating costs, or it is not a cheap way to open a restaurant.
7 P's Service Marketing with Cloud Kitchen

A product can be defined in the restaurant industry as “food”, however, services can increase
its value as a representation of food, here I mean the packaging of the food and even its
appearance when opened and quality, which require careful consideration. Management must
ensure that the quality of food and its ingredients are consistent with the needs or needs of
customers.

Price is the value of the product in the amount of money that the client or end user has agreed
to pay for their product or service. In restaurants, when a guide creates a menu, it contains not
only color, taste or other attractions, but also a price. Setting the price of dishes in the
restaurant menu is the most important strategy, since the manager needs to consider the cost,
raw materials, labor and other costs. So, in the case of cloudy cuisine, the difference is only
in the skills of the staff and attractions such as atmosphere and hospitality.

Promotion here in most cases is carried out through social networks and advertising through
online platforms, but this does not mean that promotion is not through word of mouth. WOM
can affect customers when making any purchase decision, as it is very difficult for the
customer to measure and evaluate before actual purchases. Therefore, WOM made a positive
impression and guaranteed to customers.

Place I think this is where there can be a marked difference from dining in. The place is very
important for cloud kitchens because its easy access to remote areas as well as towns and
more populated areas is important. It is important for a restaurant dinner to be in a place
where people pass by and can be easily accessed, as well as for people to see where they are
and judge the place. It doesn't require parking space and doesn't need to be a mall, nor does it
need area to create a better ambience.

For a regular restaurant, physical evidence would be menus, dinning halls, designs, plates
and all the factors related to the dining. Though the actual proof for cloud kitchens will be the
kitchen that could be available to a third party. It can also be the distribution services for
cloud kitchens which is a big proof and reminder. The food packaging is yet another physical
proof.

People are playing a very important role particularly as chefs are the back bone of the
business. Studies show that many restaurants are becoming famous because of unique taste
and restaurant called on their names as chef.

Management needs professional workers who are sweaty and qualified according to
restaurant policies and procedures to deliver the best food. Anyone who approaches the
customer impresses that it can be negative or positive depends on customer satisfaction, and
that is just the delivery person. So, if the person delivering the food from the cloud kitchen
does a good job it would improve the overall image of the cloud kitchen industry.

The process also plays an important role in cloud kitchens such as delivery time, overall
operations and information. There are many types of processes that should look mainly at the
system used to deliver the food in the cloud kitchen. Food delivery times, for example.
Another example of how customers pay online and how to manage all records and bills in
place.

The Future of Cloud Kitchens

One aspect that explains the future of cloud kitchens is that you can expand your kitchen
point in different areas of your city. Basically, one kitchen serves delivery within a radius of
2 or 3 miles. In the future, you can open a new store in another place where, as you think, you
will get good traction. A step ahead, if you think that you cannot manage all our kitchen
operations in different places, you can invest in a large outlet, which serves as the main
kitchen. From there, you can deliver the semi-finished products to various small retail outlets
in order to properly prepare them and deliver them to the final consumer. Cloud-based
cuisines depend on platforms such as Swiggy and Zomato in terms of delivery, awareness,
reach and customer service. Major operating expenses, such as marketing, discovery, and
delivery, are covered by these platforms. This is not necessarily a good thing, as it increases
the dependence of cloud kitchens on aggregator platforms.

Although reaching a wide audience and reaching the last mile is great, cloud kitchen suffers
from a lack of meaningful customer interactions, and this affects customer retention in cloud
kitchens. Cloud kitchens cannot use their brand and vision to create a loyal customer base,
despite the fact that this is a popular option for new age customers in India.

Then there is the problem of long-term margin. Due to lower operating costs, cloud-based
kitchens as a business model seem more viable than restaurants, especially given the huge
growth in online orders. However, platforms such as Zomato and Swiggy do not even have
operating breakeven. For aggregator enterprises, the cost of serving restaurants and cloud
kitchens must constantly increase in order to meet break-even levels. And as soon as the cost
of the platform increases, in the future, cloud kitchens will see a decrease in margin. The low
installation cost, low maintenance and growing attractiveness of home delivery made the
Indian cloud kitchen market really very crowded. The acquisition of customers is due to
discounting and mainly offers, which means high acquisition costs. This discount sales model
will ultimately lead to higher profits.

Career Opportunities and Challenges

This is true compared to lunch in that cloud kitchens will reduce employment. For a cloudy
kitchen, waiters or someone who directly interacted with a client will not be required.
Instead, the number of cooks may increase depending on the level of demand. At the same
time, the number of people required for delivery will increase depending on the scale of the
business, not only for one cloud kitchen, but also for others. A cloud kitchen business will
definitely affect the number of delivery employees in the entire sector. You can also create
jobs for working with websites, for advertising on social networks, etc. Creative work will
still be high, because without creativity nothing will work. The best thing about cloud
kitchens is that you don’t need a big investment to get started. You can start small but expand
quickly. After you create a brand and get regular customers, it will be easier for you to move
to new places and even diversify the menu.