Marketing and Trasforming Business in Porcini's Company - Case Study Example

BUSINESS Background. Porcini’s company started in the 1969 as a family-owned restaurant in Boston’s North End. The company has grown steadily in two decades opening new Porcini’s restaurants in Hyannis, Providence, Massachusetts, and Newport. The company has been doing well in its human resource by recruiting competent and skilled personnel to run the restaurant. However the company has undergone various problems such having problems with winning customers to the company and problems with the targeting a segment. This is because the different industry segments have different growth rates. The company has also suffered stiff competition from Unos, Bertucci’s, and Buca di Beppo which try to offer the same products Porcini offers. Problem statement. This paper will therefore explore the marketing strategies that the company lacks in relation to customer focus and the 4P, Market target and expansion, and competition so as to be on the competitive advantage. Analysis The company has difficulties in choosing the right option for restaurant expansion to either undertake franchising or syndication. Ordinarily, majority of the restaurant chains are considering new franchise agreements in their main avenue for growth where Porcini is not an exception.However,the restaurant has limited capital from restaurant-level operations to system wide marketing and brand building. It should be noted that when the restaurant has no capital, it will be unwise for the business to go for a loan for expanding the business. This is because it will take time for the business to stabilize. Therefore, the cost of construction and leasing is normally shifted to franchisees which would likely bringing outlets into operation more rapidly. This leads to expansion of the company. The restaurant is not vast with enforcing franchise standards. Normally, the franchise has 20-year term with renewal at the franchisor’s option a 5% to 6% royalty on gross revenues, and an upfront fee during franchising.Additionaly, each franchisee is usually accountable for his own financing and this saves the finances of the company. Some franchisors often handle all expansion, including feasibility studies, market analysis, site selection, and construction themselves. Porcini does not have a construction department and this makes it had for the company to avoid franchising. Therefore this is the best option of the company for it will increase the company profitabity On the other hand, in syndication, the chain identifies purchases a number of sites, builds and furnishes a facility on each, then sells the portfolio of properties to an investor group thereby recouping and recycling its capital. The chain then operates the properties on behalf of The owner in return for a percent of revenues plus an incentive fee based on profitability. The company has insufficient capital and thus syndication for Porcini company needs extra sources of financing including retained earnings, members and shares contributions. The competition is stiff in the company. The domestic market for full-service chain is saturated in-city and shopping mall locations. The big chains of the company looking overseas for growth due to the competition. In the view of 4P’s, the product of the Porcini restaurant spans from Italian cuisine to other local foods and drinks. The restaurant is keen on the food quality. The price of the foods is to meet the customers demand and needs at an affordable price. Porcini’s has neither the resources nor brand power to pursue that option. This means that the company has no promotional activities and this is the reason why the brand of the restaurant stands low. (Michael, 2010) Ordinarily, most competitors serving the market offer fast-food or low-end outlets. Porcini’s competitors like Olive Garden, Unos, Bertucci’s, and Buca di Beppo have became more strategic interms of competition.Therefore,Porcini’s has created the atmosphere of a unique, family-owned restaurant unlike the “Italian theme park” environment of many competitors. Most customers have valued the disparity and made Porcini’s a powerful regional brand. The company market segment is wide and this includes fast foods, full service chain restaurants and Single location full-service restaurants segments. The fast foods is a mature segment with low revenue growth projection of 2% per year between 2011–2015.This is because of market saturation and increasing consumer awareness of health issues associated with fast foods. The fear for these diseases has made the sale of the company to turn out to be low. Full service chain and single location full-service restaurants segments contain only one firm controlling more than10%; the top seven firms in 2010 accounted for only 35% of sales. The major competitors like Red Lobster and Olive Garden featured seafood and Italian cuisine respectively. Others include Cracker Barrel and Bob Evans Farms offers American traditional cooking.This competition is stiff and the company should offer a mixture of the two to be on the competitive advantage. (Godin, 2010) The company can also be analyzed in terms of the SWOT, that is its strengths, weakness, opportunities and threats are scruitinized.The strength of the company is that it has a strong employee relation and motivation. By the usage of software, performance scorecard for individual employees is produced through ratings. The management then uses the scores to recognize weakness and recompense employee performance.Normally, with these software employees are able to earn quarterly bonuses up to 10% of wages for high performance. The Company has a weakness in the brand recognition which makes it a competitive factor, particularly with out-of-region travelers. Its competitors have very strong brand that keeps them in the competitive advantage. For example, Denny has 97% brand recognition nationwide as compared to the Porcini Company. On the other hand the opportunities of the company are the usage of technology. The company has endeavored to study numerous U.S. chain restaurants that use wireless order-taking devices and credit/debit card payment terminals that are brought to the table by waiters. The company will experiment this technology since it is fast enabling accurate orders to the kitchen and also it allows the customers to pay by swiping their cards.Lastly, the company suffers competition from the Unos, Bertucci’s Buca di Beppo and Olive Garden. This offer the same product as Porcini Company. Recommendation and conclusion In conclusion, it can be noticed that the company will do very well if the marketing strategies are considered. I recommend that the company stick to these discussed views for it to increase its productivity. Since company has insufficient funds and capital and thus syndication for Porcini company needs extra sources of financing including retained earnings, member’s contributions and donations. In my view, the company should increase the promotional activities. This involves performing CSR to the vicinity of the hotel and offering branded T-shirts during special events. Due to the changing consumer trends where the customers do not need a lot of fats, the company should also engineer the products that suite the taste and preference of the customers. It should contain acceptable level of fats so as to meet a wider market. Due to stiff competition the company should offer a mixture of seafood, Italian cuisine and also American tradition foods. Works cited Godin, S. (2010). Marketing: Trasforming business. Mc Gill Hall. Michael, P. (2010). Competitive Advatage. Mc-Gill Hall. Read More