Gourmet Burger Kitchen - a Popular Brand in the UK, Dubai, Oman, Turkey, and Greece - Case Study Example

EXECUTIVE SUMMARY This project highlights how Gourmet Burger chicken has maintained its increasing market share since last eight years. It started its operations in London in 2001 by three kiwis but today this company has become international and has opened more than 50 franchises. We have adopted a complete marketing plan on the current Gourmet Burger kitchen operations, emphasizing on its target market, and the seven P’s. We have also analyzed on why marketers need to determine the market situation when they operate globally and further what factors are needed by the business to gain competitive edge. Finally in the last section we have suggested Gourmet Burger Kitchen to open its franchise in a new country Switzerland. CONTENT PAGE Introduction Marketing Mix Product Price Place Promotion Place Physical Evidence Process Global Economic Factors Country Of Destination: Switzerland Recommendations Conclusion GOURMET BURGER KITCHEN INTRODUCTION Gourmet burger kitchen is a casual dining and a high market restaurant chain in United Kingdom. They deal with the wide variety of delicious burgers served with salads, and fresh chips which itself is a complete package. They also deal with vegetarian demand as they deal with delicious side salads and dinner salads. Apart from providing quality food, they are also providing an illustrious and non smoking environment which acts as a perfect blend with their casual eating (Dow, 2006). In 2001, three Kiwis came together and opened their first restaurant in Battersea, London, where they served the best burgers in town. Since last eight years this food chain has expanded to over 50 restaurants alone in UK. In November 2009, the gourmet burger kitchen 50th U.K. restaurant opened at Soho Wharf Clink Street, London (Rose-Day, 2009). But this food chain has not only set its business in the boundaries of U.K. but it has also established internationally and has opened its branches in four main countries; Greece, Ireland, Turkey, Dubai and Oman (Gourmet Burger Kitchen, 2009). Currently there are 5 branches of gourmet burger kitchen in Dubai and 1 branch in Turkey but it plans to operate and expand its operations in further countries. They have boasts its sales but is regarded as the London’s best burger for the last two years, further it is also considered as leader burger themed concepts. Not alone in London but they have spread their charm among the food lovers of Dubai as well (Hassan, 2008). Gourmet kitchen burger provides quality, unique and tasty burgers to its customers. They have specialized themselves in mainly burgers and due to this today they have 28 different yet delicious burgers on their menu card (Rose-day, 2009). Gourmet burger kitchen is operating successfully in all the countries from UK to other international franchising. They are not only successfully operating because of their delicious, tasty and tempting burgers but also because with every new location they have launched a successful marketing mix strategy. MARKETING MIX Marketing mix is generally known in using and specifying the main four P’s; i.e. product, price, place and promotion because these four P’s helps the positioning of the product in the market place. But as Gourmet burger kitchen has a more concentration towards service sector thus it is adopting even the extended P’s in targeting its potential customers; i.e. processes, physical evidence and people. Target Customers Customers are the base in every business, and it is due to the customers that businesses operate effectively and efficiently and thus create a market share in the market. Due to this one of the main strategies of businesses is to identify their target customers; those customers which can contribute in making their business competitive. After targeting potential customers, businesses segment the market according to the customer needs, demands and most importantly on the basis of the targeted customer. Targeting and segmenting is a process to identify the customers while positioning is a tool to grasp potential customers and make them loyal customers to the business. Thus businesses are reaching their potential customers by adopting different methods and tools; they are using geographical, demographical or psycho-graphical segmentation (Etzel, Walker & Stanton, 2000). Similarly, Gourmet Burger Kitchen have also targeted the burger lovers, these people demand quality, tasty burgers according to the geographical needs of the customer. Due to this they have opened up more than 50 restaurants in UK alone because they want to provide the reach to their customers. Demographic segmentation consists of division of market on the basis of age, gender, family size, occupation, religion, race and nationality (Lovelock, Wirtz & Chatterjee, 2008). Thus Gourmet burgers are targeting both genders of the population, i.e. the males and females. Further they are targeting the population who have a normal income, but yet have craving for burgers. They have targeted two types of age group: teenagers and elders, i.e. people who belong to the age group of 13-45. Psychographic segmentation is dividing a market into those groups based on social class, lifestyle and personality (Lovelock, Wirtz & Chatterjee, 2008). Gourmet burger kitchen is targeting both the upper class and the middle class. While for other psychographic factors they are focusing on specially that population that believes eating burgers is a style and a different way of life. Thus concluding all those people from the population that has a taste developed for quality burgers, demand Gourmet Burger Kitchen. Product The important thing to remember when offering menu items to customers is that they have a choice. Customers spending patterns may vary; they may spend their limited income in purchasing a wide variety of goods. Thus it is the work of the business to attract the customer and convince them in spending their money in the business’ product line and then their product. Gourmet Burger Kitchen is somewhat adopting the same strategy in all over its franchise locations, thus it is creating standardized set of items that taste the same whether in UK, Turkey, Oman, Dubai or any other place. Gourmet deals with a range of product offerings to its customers; they are serving burgers, salads, shakes and other drinks, sharers and sides, and other junior deals for the children. Thus they have attained a competitive edge in their product line because of diversification, uniqueness and quality level. They are targeting customers of all ages, from the children to the elder population. Among its burgers, Gourmet Burger Kitchen does not only provide chicken in its menu but it also deals with beef, buffalo, lamb, and boar as well as caters to vegetarian burgers. Not only are they unique in their quality but the burgers they innovate are highly different from the other cuisines. Due to this they have revolutionized the food industry by providing quality and unique burgers. It is because of their high quality, new and innovative burgers that Gourmet Burger Kitchen was awarded as the best burger in town, in London. Price Pricing is the only mix that generates a turnover for the organization. It costs to produce and design a product; it costs to distribute a product, and costs to promote it. Pricing is difficult and must reflect supply and demand relationship. Among the different pricing strategies Gourmet is using the price skimming strategy because Customer’s perception of value is an important determinant of the price charged. The danger of using a low price as a marketing tool is that the customer may feel that the quality is being compromised. The company has always tried to provide classy meals while keeping in mind that it should be affordable for the consumers. The price that a company should charge in a specific country depends on many factors, including economic conditions, competitive situations, laws and regulations, and development of the wholesaling and retailing system. Apart from price skimming, it can also be stated that Gourmet burger Kitchen is suing competitive pricing, i.e. even though its price is high but when comparing with its competitors its somewhat same yet competitive. Gourmet is also using different pricing strategies for different customers in different countries, i.e. it is adopting flexibility in pricing. Further there are range of price is seen as products are of all types, low to high price range, there are special treat burgers like Buffalo and Wild Boar burger which is costing more than 9$, but on the other hand, there are also Small Burgers in Beef & Chicken which cost only 3-4 $. Place It refers to how an organization will distribute the product or service they are offering to the end user. Gourmet Burger Kitchen distributes the product to the user at the right place at the right time. Efficient and effective distribution is important if the organization is to meet its overall marketing objectives. Thus whenever Gourmet has to open its franchise they look for the best location where they can attract most of its customers and most importantly where the demand is greater. Thus they cater and capture a larger target market. They are always constantly striving to add value to the firm for their customers, and in doing so, this franchise cuisine has created efficiency in getting the products to the customers as quickly and as fresh as possible. Further, they are using a direct distribution channel, as this channel type is very convenient and does not involve large and complex channels. Promotion A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. The promotional aspect of the marketing mix covers all types of marketing communications. The methods include advertising, also known as ‘above the line activity’. Advertising is conducted on TV, radio, online, poster sites and in the press (newspaper, magazines). Gourmet Burger Kitchen is not only using the normal advertising and promotional mix strategies such as eye catching and impressive advertising on television, radio, billboards but one of its most successful marketing mix strategy is its sales promotion. It is selling and giving vouchers to its customers with discount offers on different events and situations, thus attracting customers and thus creating brand loyalty among them. It is also conducting e-marketing to for targeting a larger segment and increase the market share. They have a separate website for four main countries; UK, turkey, Greece and Ireland and in Dubai and Oman their web sites are under construction. Their website is continuously updated, it is easy to navigate, gives a lot of information and it odes not bore the customer as it does not take much time in loading. People People are the most important part in a marketing mix; people include employees, suppliers and customers. Gourmet Burger Kitchen values all the three in their position. Customers are the profit generators for a business but according to Gourmet employees are the asset of a business. Thus, they value both their customers and employees together. The employees are treated more like a family where all care is taken regarding their health, social and family issues. They want their employees to be happy and motivated. Yet they do not want unsatisfied customers thus they train their employees and emphasis on building friendly customer relations in training sessions of the employees. Because if a bad word of mouth is spread then businesses face real bad turmoil and generally it has been seen through research that an unsatisfied customer is most destructive and critical to the business. Thus workers are constantly reminded to live up to the reputations of the franchise and provide consistent service which is very crucial for the firm’s image. Employees are also communicated about the culture, traditions and values. Gourmet has always catered well to the demands of the customers and due to this whenever a launch has occurred; it is always according to the demand and choice of the customer. Further, Gourmet has adopted a decentralized structure, where neither its chain of command is complex nor its span of control very wide. But the only problem Gourmet is facing is its limited staff. This is because they are only providing services so no technical staff or employees from other departments are present at the franchise at all the times except for ones who are preparing the meals and the operational managers who supervise the activities. But still these few staff members cater well to the situation and meet the demands and orders of the customers on time. Psychical Evidence The physical evidence factor of all the Gourmet Burger Kitchen centers are the signboards, golden arches, buildings, interior, colors combination, clean facilities, visible food preparation section etc A proper seating arrangement is made for the customers, which provides sound and healthy environment to its customers. Both indoor and outdoor arrangement is made where the customers’ satisfaction level is met. In some areas Gourmet has also provided its customers with the parking area where all the security issues are considered, from the entering of the vehicle to its parking in the area. While in most of the areas it is located in the main market where people would just drop by to have fun with the food. Food processing equipment, deep fryers, microwave ovens, physical food items and utensils and delivery vans are some equipment that Gourmet is using to carry out its daily activities. Employees of Gourmet are also advised to be dresses up and for this they have to follow a uniform, which symbolizes their professionalism and their uniformity in their management and operations. Processes Gourmet is known to have an efficient process system as it consists of simple line of activities and there are less number of tires which do not frustrate the customer. It is also known to have an efficient and effective process where both the customers and employees are satisfied because they both are being clearly communicated about the process. Further it involves high level of customer involvement not only during the process but even after the process has finished because feedback is taken from the customers. GLOBAL ECONOMIC FACTORS Whenever a company has to go global it has to cater to a lot of economic, political, social factors because now they are operating in a global competitive world where they would be facing competition from all sides. Not only does the competition heightens in terms of competitors but the company itself has to remain update and has to make all possible ways to survive in the global hemisphere. Similarly, customer demands changes very quickly in the global world because even the customers demand innovative products. They need customized goods and for that they are also ready to charge high price. Since the world has become a global village through internet technology, customers have increased because now the customers are not only national but now they are international and global. Furthermore, e-marketing and now mobile marketing is further enhancing the market share of the company; similarly it is also raising fierce competition. Due to this, marketers have to face and deal with customers of different cultures, subcultures, reference groups and different social classes. The international culture is causing a wide effect on the purchasing and buying behavior. The individuals are faced with family, society, gender and work roles while the society faces media, fashion, technology, marketing and advertising roles. All these play a major role in determining the market for the businesses. At times it may help and complement a business while sometimes it may cause problems. For business to compete effectively in the global market they need to first analyze themselves and their product in the market. And they perform such a study through implementing product life cycle first, thus this would help them analyze the position where their product stands in the market. If its product life cycle is at the introductory level then they need to create more awareness among the general public about their product and they would need growth in their business. Further if their business is in growth stage then they need to keep up with the same pace. But if their product has reached either maturity or decline stage then they would have to make changes in their operations. Either they would need to adopt a new product, retain and maintain an existing product, modify or adapt an existing product, delete old products or introduce flow of new products. They could either introduce a new product or a new location (Johansson, 2008). But whatever strategy they adopt they should maintain their quality standards and believe in TQM, i.e. Total Quality Management. This way they would not only be able to maintain their quality but their standards would increase and become more competitive. Marketers when enter the global market, not only have to consider the global competitors and customers but they also have to deal with global suppliers, publics and marketing intermediates. The global publics are the local, general, internal, media, government, citizen and financial publics while the marketing intermediates include financial intermediates, marketing service agencies, physical distribution firm and resellers. Due to this most of the businesses conduct PEST and SWOT analysis. PEST analysis consists of political, economic, social and technological factors, while SWOT identifies the company’s strengths, weaknesses, opportunities and threats (Johansson, 2008). COUNTRY OF DESTINATION: SWITZERLAND Economy of Switzerland To expand our market, we are now targeting Switzerland for a new franchise of Gourmet burger Kitchen. Switzerland is a part of the European nation where it is located in the central Europe, east of France and north of Italy. According to world economic forum 2009, Switzerland is ranked no. 1 in terms of its competitiveness as compared to the whole world. This concludes that Switzerland even took over United Kingdom in terms of competitive economy. According to the report, Switzerland performance did not even remain stable, but nonetheless its economy was ranked as the second in terms for capacity for innovation, ranked third in terms of sophisticated business culture and there was high amount of investment seen in research and development sector. Further, it is known to have an excellent infrastructure, well functioned good market and is ranked 5th as compared to the world in both the above cases. But it terms of labor market it of ranked as 2nd which is just below Singapore. Likewise any other developed country, Switzerland also has the most high percent value added share of the GDP in the service sector, i.e. 71 %, while agriculture is only 1%, manufacturing industry is 20% and non-manufacturing industry accounts to only 8%; this further proves Switzerland high economic Growth. (World Economic Forum, 2009). According to the CIA World Fact Book, enjoys a stable market economy with low unemployment, low skilled labor force and has the highest GDP per capita in the world. Further, its GDP (purchasing Power Parity) is ranked as 39 as compared to the world and reached $318.1 billion. Further its GDP per capita PPP was ranked as 18th, i.e. $ 42,000 (World Fact Book, 2009). Demand of Swiss Thus viewing the general economy of Switzerland, it can be stated that any company who would want to set its franchise, or any brand who would want to expand its operations would be successful, because not only the general economy of Switzerland but people in Switzerland would also welcome new products and this could be estimated on the basis of their high purchasing power parity. People of Switzerland have high spending patterns and they like spending on luxurious commodities. Swiss people have knowledge about the market, since more than half of its population is urbanized, i.e. approximately 73% of the total population (2008 figure) (World Fact Book, 2009). Swiss also have a high demand in food eatables and they demand good quality food products. Zurich and Geneva are the two most dining restaurants in Switzerland; due to this we are suggesting that Gourmet Burger Kitchen should open its franchise in Zurich. People of Zurich have a high class for food and due to this they also are also willing to charge a high price for it. Some of the fine dining in Zurich is Rigiblick/spice, Kaiser’s Rebalude, Kronenhalle, Florhof, Dezeley, Zunfthaus and Alpenrose are Swiss cuisine, LaSalle and Seerose are the trendy cuisine, casa Ferlin and Gandria are Italian cuisine. Apart from these there are also Asian, Moroccan, vegetarian and dining outside cuisines as well (Zurich Dining Overview, 2009). Gourmet burger chicken is a casual dining cuisine but as its main emphasis is alone on the burgers then it also applies some of the attributes of being a fast food restaurant. According to the 2006 figure Switzerland was ranked 10th in terms of demanding burgers. High developed countries have a high level of per capita consumption thus their demand for fast food and other dining is greater because it is part of their lifestyle (Hoffman, 2006). Further Swiss have a high degree of buyer sophistication where buyers purchasing decisions are based on the sophisticated analysis of performance attributes. Thus, as compared to the world Switzerland is ranked as second with the mean score of 5.2 which is only one point below Japan, i.e. 5.3 (World Economic Forum, 2009). RECOMMENDATION To become more competitive in the market, Gourmet Burger Kitchen should introduce more diversification in its menu and its product line. Even though their has been only eight years since it has established itself but still to cater a wider market they need to make certain changes. They should add other items of interest of the customers, and especially add desert section. Further they should introduce steaks and other drinks and enhance the product range for the customers. CONCLUSION Gourmet Burger Kitchen has positioned itself as a popular brand not only among the UK citizens but also among other countries such as Dubai, Oman, Turkey and Greece. Within the pace of eight years it has become the best burger in Town in London. It has achieved this success because of maintaining quality standards, unique taste in burgers and yet competitive pricing. Customers in UK and even in Dubai are crazy about Gourmet Burger Kitchen because population their have a high demand for cuisine and burgers. Thus if Gourmet would open its new franchise in Switzerland it would face the same demand and thus it sales would rise and the company would earn high revenues. REFERENCES Rose-day, Christian, November 2009, Gourmet Burger Kitchen Opens 50th UK Restaurant. Accessed January 9, 2010 from http://www.fluidfoundation.com/Gourmet_Burger_Kitchen_Opens_50th_UK_Restaurant.fluidnews Dow, Ashley, November 2006, Gourmet Burger Kitchen, Accessed January 9, 2010 from http://trifter.com/europe/united-kingdom/gourmet-burger-kitchen/ Hassan, Emaan, August 2004, Gourmet Burger Kitchen Whips up delight in Dubai Festival City, Accessed January 9, 2010 from http://www.ameinfo.com/165381.html Hoffman, Olivier, August 2006, Who eats the most fast food? 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