Importance of Marketing of Fishy Food - Essay Example

 Fishy Foods Executive Summary Fishy Foods is a hypothetical start up company that operates in the fast food takeout and delivery industry. The company is located in the UK and caters to the mass market by offering them a unique food products based on fish. Owing to the uniqueness of the food items the company has gained a competitive advantage over its rivals. Fishy Foods has successfully gauged the environmental influence over its business activities and made necessary amendments to make its business successful. The company has leveraged its strengths and improved over its weaknesses to ensure sustainable growth. Fishy food successfully managed the adverse effects of the recession and efficiently used it finances to complete its business as well as its stake holders. Data Source The data used in this report has been sourced from the given case study. Moreover, the theoretical data has been taken from several relevant books which have been mentioned in the reference list. The market related information has been procured from Mintel and journal articles. Introduction Every start up company needs a proper set of marketing strategies for it to prosper and ensure sustainable growth. This report is based on a hypothetical start up company which started its business in Birmingham by selling specialty fish based food products. The company was started off by two friends John and Gos. They decided to offer a unique food variety to the customers. The company was named Fishy Foods, which gradually expanded over the years and became quite popular among the customers. Despite of the economic crunches caused by the recession, the company managed to sustain its business. This report highlights the marketing strategies taken by the company and how it helped to sustain the business, the internal and external environment and how it influenced the business activities. It also covers the customer behaviour along with the STP (segmentation, targeting, positioning) analysis and how the company leveraged it to their own benefit. Importance of Marketing of Fishy Food Fishy Foods caters to the mass market and specialized in fish based foods. The company started off by selling fish finger sandwiches and other fish products like fish soup, fish and chips with different variants. In order for a new company like Fish foods to run its business successfully, it needs to implement the proper marketing strategies. Before starting a business the company needs to assess the market environments and make any decisions based on the assessment results (Atherton, 2007). In order to make a business successful, the company Fishy Foods needs to analyse the competitive forces in the industry and design the strategies accordingly. The competitive forces define the challenges present in the industry posed. Moreover, the market environment is also a vital aspect that needs to be considered by the company (Forsyth, 2009). The market environment dictates the presence of external influences like political, social or technological factors that affects the business activities of the firm (Kotler and Keller, 2011). In order to ensure a seamless running of the business, the firm needs to create sufficient brand awareness among the customers, so as to create a clear differentiation of their product offerings, which will create top of the mind brand recall (Jevons, C., 2005). In order to do so, the company decided to use leaflet distribution in the high traffic areas. John and Gos have decided to offer a completely new line of food products that is not offered by anyone else. However, there are both advantages and disadvantages in offering a unique food product to the customers. Introducing a new food product do not face much threat from the competitors, as no other company offers the same product. However, offering a new product also comes with a probability of customer rejection (Foxall, 2008). The company cannot be exactly sure if the new products will gain popularity or not. John and Gos took their chance and decided to introduce a new line of fish based food products, which eventually gained high popularity in the market. Thus it can be stated that implementing the proper marketing strategies is imperative to the success of a new start up company (Hollensen, 2015) Internal and External Environmental Analysis The internal analysis of the company has been done by analysing its Strengths and Weakness in terms of its potential and current status in the market (Kotler and Keller, 2011). Strengths: Fishy food offers a completely different line of food products which is rarely found in their current market location. This as a result gives the customers a new choice of food products to choose from. Moreover, the uniqueness of the products has also attracted a lot of customers who are looking forward to try something new. The product line of Fishy Foods offers healthy food products which are appreciated by a lot of customers. Moreover, the low fat content of fish products has also increased its popularity among the UK population. According to the reports of Boseley (2014) the customers have become more conscious about their health and are increasingly avoiding meat products. This as a result has increased the popularity of the fish based food products of Fishy Foods. Weakness: The weakness of the company mostly includes the low financial capacity of the firm. Being a start up firm, Fishy Food has faced some of the financial crunches which have lead to crucial decisions of the company whether to consolidate or to expand its business. Moreover, the company’s product line is only based on a particular genre of food centred on fish, which as a result narrows down the potential to target a broad customer base. Due to lack of the financial capital, the company is unable to offer their products at a lower price than that of the rivals. Fishy Food also lacks the necessary amount of human resources to compensate for the rising demand of the home deliveries. Furthermore, due to lack of financial strength, the company is somehow bound by liabilities to the bank and have to operate as the bank wants. The business activities of the firm are also dependent on the competitive forces in the industry. The competitive forces affecting Fishy Foods’ business has been assessed by the Porter’s five forces (Kotler, Keller and Brady, 2009) Power of Buyers: The buyers’ power can be measured by their switching cost which they need to pay to switch to a different product or company (Porter, 1997). The product offering of Fishy Foods is quite unique and are not offered by any other companies. Therefore the customers are not likely to shift to other food store for the same product. Moreover, owing to the first mover advantage the company has also gained the ability to set their own price and it has also offered the customers a change in their taste palate. Thus offering a new and unique product has reduced the power of buyers. However, the fast food industry continuously welcomes new food recipes (Davies and Smith, 2004), so the customers may switch to a new food product in the near future. Thus the power of buyers has been assessed to be moderate. Power of Suppliers: The suppliers of Fishy Foods are the wholesaler form whom the company procures the raw materials like fresh fish, vegetables, breads, etc. The numbers of suppliers offering these raw materials are abundant thus they do not have any controlling power over the price of the raw materials. This as a result allows the company to have a very low switching cost and can easily switch to suppliers who can provide the best value for money for the company. However, the company maintains a good relationship with its suppliers so that they can have an easy procurement of the raw materials. Thus the overall power of suppliers is assessed to be low. Threat of Substitute: There is no direct substitute of Fishy Foods’ products, as no other firm in the market offers the same fish based products. However, the some of the ‘fish and chips’ store offers nearly identical products but the added diversity of Fishy Foods’ products helps it to gain a competitive advantage over other fast food companies. Another substitute of the company can be home made fish based products that may have identical taste and nutritional value. However, homemade foods come with the effort and time cost, which may not be viable for the busy UK population to bear (Mintel, 2014). Therefore the overall threat of substitute is low. Threat of new entrant: Entering into the fast food restaurant or take out business requires comparatively less capital than any other manufacturing business. Moreover, the rapid growth of the out of home eating has made this industry quite lucrative. Thus any new entrant can easily start their business as the barrier to entry is not so strong. Therefore, Fishy Foods can suddenly find itself facing a competitor who is offering the same products and values to the customer; this as a result may cause major threat to the company. Therefore the threat of new entrant in the industry is high. Rivalry among firms: The fast food restaurant and take out industry is in UK is quite saturated with the presence of several well established companies, who are known for their high financial infrastructure and can prove to be a challenge to a smaller new entrant like Fishy Foods (Shokri, Oglethorpe and Nabhani, 2014). However, the existing firms do not offer the same product line as Fishy Foods. This as a result pacifies the level of competition for the company. Thus the overall rivalry among firms is moderate. The business activities of a firm are also affected by the Legal, social and economic structure of a region (Kotler and Keller, 2011) Legal: The political influences include the food regulations that compelled the company to follow certain rules and regulations which as a result increased effort and cost for the company (Kotler, Keller and Brady, 2009). John and Gos started their business operations in the kitchen of a friend who lived in the outskirts of Birmingham. However, it attracted the local health department which did not allow this operation to be run in a domestic kitchen. Over time, Fishy Foods have procured a licence to serve alcohol but according to the British law, the person who delivers the alcohol needs to be 18 years of age or above. This as a result created a big problem for the company as the delivery boy that Fishy Foods had, was of 17 years old and he could not deliver alcohol still he became 18. Social: The social structure of the UK is quite welcoming to new food products which as a result led to high popularity of Fishy Foods’ products (Cade et al, 2014). Moreover, the customers are always looking for something new to try out, this as a result allowed the company to gain more customer preference (Ali, Kapoor, Moorthy, 2010). However, the people are also sceptical about any unexpected activity in the neighbourhood, this as a result posed as a problem for the company when they were running their operations from a friend’s kitchen. Economic structure: The economic structure of a region dictates the affordability of the customers (Kotler, Keller and Brady, 2009). A stable economic structure of the region suggests that the customers have higher disposable income to spend on luxury goods and alternative food products. However, during the recession in the UK the eating out habit has changed considerably. According to the reports of Mintel (2010), despite of the recession’s adverse effect on all the industries, it has only affected the fast food and eating out market by slight margin. This suggests that the eating out habit is not a leisure activity anymore; it has turned into a necessity. Thus the recession has but slightly affected the profitability of the company. Appraisal of existing customer management process The customer management process employed by the company was primarily based on relationship building with the customers. The promotional activities of the company were mostly based on the customer’s word of mouth. The awareness was done by distributing leaflets to the highly populated and high traffic areas. Since Fishy Foods’ business operation is based only on the food delivery, so the company focuses on delivering all the orders within the promised time (Berkun, 2008). The company tried to offer value to the customers in every way possible. They ensured that the product offered is of highest quality and were served hot. Moreover, in order to increase the existing product line and make it more attractive, the company decided to serve alcohol to the customers and at the same time it has also increased the span of the service by delivering from midday to midnight. Furthermore, Fishy food opened a second outlet in Wolverhampton, which also allowed the company to cater to larger customer base. Thus it can be stated that the company has adopted all the necessary steps to add value to the customers and at the same time it has also helped the company to expand its business (Hutt and Speh, 2012). Proposal for improvements The company has made a good start for their business and has gained a fair amount of customer preference. However, in the near future Fishy Foods needs to take certain strategic measures to ensure sustainable business operations. Fishy Foods operates in market which is characterized by the presence of several well established take out and home delivery fast food stores. Thus these existing stores seek out for new ways to gain their market share and increase their customer base. Although fishy food offers a completely different menu items but it cannot be complacent about their product line. The high popularity of Fishy Foods can also attract the attention of other food outlets in the vicinity that can choose to duplicate their menu and their recipe. Therefore it needs create certain inimitable competencies that will act as a sustainable competitive advantage. Fishy food needs to constantly innovate in terms of food menus and develop new recipes so as to offer the customers something new. The company can position its signature recipe of fish finger sandwich to be its flag bearer item. In the near future, depending on its success it can patent the recipe so that it cannot be copied by any other restaurants. Since all of its products are based on fish, the company can change the aesthetics of their store to be themed on fish. This as a result will help the customers to have an effective brand recall. The company cannot merely rely on the word of mouth and social media for promotional activities (Aaker, 2010). It should opt for other tools for promotions like posters or billboards, etc. In order to increase the customer demand, the company can try to boost the trend of fish based foods by highlighting its taste and benefits on health. In the near future the Fishy Foods can also start a dine–in restaurant, which will allow the company to further expand its business and increase its brand equity. Fishy Foods needs to create a balance combination of human resources, by selecting hourly based staffs for delivery and permanent staffs for cooking and other operational activities. This as a result will streamline the resource utilization resulting in better efficiency. Moreover, the company should not rely only on a single genre of food items, in order to increase its customer base it must increase its product line up to other food products, along side of the existing fish based food products. Thus these strategies will help the company to ensure its future sustainability and growth. Customer Behaviour The behaviour of the consumers is one of the most important factors that suggests whether or not a particular product or service will be accepted by them. It is the response give by the customers towards a particular stimulus in the market. The customers’ behaviour can be triggered or altered by several factors. Although the marketers try their best to anticipate customers’ behaviour so as to properly meet their needs, but according to Finish (2008) the customers’ needs and behaviour are subjective in nature and changes with time. Previously the trend of dining-out or out-of-home eating was considered to be a luxury, but over time there has been a rapid growth in the trend of eating out. According to the report of Mintel (2014) one in every four customers has stated that the reason why they eat out is not due to special occasion but for regular treat. The rise of eating out has turned out to be a necessity for the customers. This can also be justified by the fact that even though the recession has reduced the affordability of the customers, but it has only slightly affected the eating out habit of Fishy Foods’ customer (Mintel, 2010). Moreover, having lunch or breakfast outside no longer bears the leisure factor, so promoting Fast Food Company based on “profit-eating” may not prove to be lucrative, so the firms must focus on innovation and customer experience. According to the reports of Mintel (2014) there has been a drastic change in the eating habits of the customers. Previously, eating was supposed to be a luxury, however, it is now considered as a necessity. This habit has come to surface out of the hectic and busy schedule of the UK population. Therefore, they often look for convenience of having their lunch outside their home without spending much time. It has been predicted that the eating out trend is turning into a daily mainstream food habit. Moreover, according to Reeves, Newling‐Ward, and Gissane (2004) the changing work culture and alternate time shifts has also changed the eating habits of the consumers. This as a result has increased the sales of Fishy Foods. Moreover, the customers who have developed the habit of eating out often looks for new and unique items which is not only good in taste but also have high nutritional value. Thus offering a new item based on fish has attracted the preference of a lot of customers, who were bored with having usual take out foods every day. Moreover, according to the reports of Boseley (2014) it is evident that the obesity has increased drastically over the past few years at an alarming rate. This incident coupled with the growing concerns of the UK population regarding healthy eating has changed the consumption pattern of the customers, which however has acted in favour of Fishy Foods (Roblin, 2007; Kelly and King, 2014). The fish based foods are considered to be healthier owing to its high nutritional content and low fat content than bacon or beef. Thus the health conscious customers are more attracted to the fish based food products of Fishy Foods. Moreover, any new food products like the ones offered by Fishy Foods can be considered to be a trend setter and it has huge potential to become popular on a global scale. It also acts in favour of the brand image of the company. The products of Fishy Foods can create a positive word of mouth owing to its uniqueness and will be discussed among several reference groups, which as a result will help the company to increase its brand preference (Mintel, 2014). Need of Segmentation, Targeting and Positioning The segmentation, targeting and positioning (STP) analysis of a company signifies the market in which it operates the profile of the customers and the perception of the brand that the company wants to portray. The segmentation of a market is done based on the geographic location, convenience for the management, proximity to the target customers and the environmental influences in the industry (Dalrymple, 2008). The market segmentation of Fishy Foods has been done on the grounds of proximity of target customers and convenience to the management. John and Gos resided in Birmingham; therefore it was convenient for them to open up a business in the same location. Moreover, the UK market of fast food and take away outlets has proved to be quite lucrative owing to the rise of the eating out habits of the UK population (Mintel, 2014). Thus the right choice of market segmentation has allowed the company to meet the needs of the customers. Segmentation is also important in terms of sales volume. Fishy Foods have ensured that the chosen market is highly populated with customers who have the tendency of eating out. The first store location in Birmingham is amidst several well established take out outlet. This as a result has increased the foot fall of the customers, owing to the high exposure. The second store location in Wolverhampton has also been selected based on the high traffic exposure and proximity to highly populous area for home deliveries. The target customers of Fishy Foods are mostly the mass market population who lead a busy life and their lifestyle is dependent on the outside foods. The company has also targeted those customers who are conscious about their health and are bored of trying out usual items. The products of the Fishy Foods are targeted at the wide range of target customers based on their age group. Moreover, depending on the affordable price proposition of the company it can be stated that Fishy Foods has targeted the middle and upper middle class of the society. The positioning of company has been designed to be centred on fish based food products. Based on the choice of the company’s name, it can be stated that the company wants its customers to perceive that Fishy Foods is all about fish based food products available at an affordable cost. Conclusion Setting up a start up company needs proper planning and execution. The planning needs to be done while keeping in mind the consumption trends and the needs of the customers. Fishy Foods have recognized the needs of the consumer market and have successfully designed their food products to deliver a uniqueness and value for money proposition to their customers. Fishy food’s products are targeted at the mass market customers who have a habit of out-of-home eating. Moreover, the value proposition of the company also includes the fast home delivery and consistency in their food quality. The company has also managed to create a good relationship with the customers so as to ensure customer loyalty and repeat purchase. Thus it can be stated that Fishy food has successfully designed its marketing strategies to foster growth and sustainability. Table of Contents Introduction 1 Importance of Marketing of Fishy Food 2 Internal and External Environmental Analysis 2 Appraisal of existing customer management process 5 Proposal for improvements 6 Customer Behaviour 7 Need of Segmentation, Targeting and Positioning 8 Conclusion 9 Reference List 11 Reference List Aaker, D., 2010. Strategic Market Management: Global Perspectives. 6th ed. Oxford: Blackwell Publishing. Ali, J, Kapoor, S., Moorthy, J., 2010. Buying behaviour of consumers for food products in an emerging economy, British Food Journal, 112 (2), pp.109 - 124 Atherton, A., 2007. Preparing for business start‐up: “pre‐start” activities in the new venture creation dynamic, Journal of Small Business and Enterprise Development, 14 (3), pp.404 – 417. Berkun, S., 2008. An Easier Path to Your Own Startup Company: Y Combinator. Harvard Business Review. July. Boseley, S., 2014. UK among worst in Western Europe for level of overweight and obese people. 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