Brazillia Market Concept - Assignment Example

Brasilia concept Task a. Overall market metrics In order to evaluate the potential strength of the particular scheme inside the UK market we shouldprimarily examine the country’s metrics in all sectors involved, mostly the social, the health and the finance ones. In accordance with a report published by National Statistics online ‘the population of the United Kingdom on Census Day 2001 was 58,789,194 as it has been revealed by the Registrars General for England and Wales, for Scotland and for Northern Ireland; the UK population has grown by 17 per cent overall since 1951, but compared with many other developed countries over the same period, the UK population is growing more slowly. The UK population is projected to increase by 7.2 million over the period 2004 to 2031’. The reference to the specific year (2001) is being made because that was the latest available metrics regarding the population of UK as a total. It should be noticed that the retrieval of the relevant data is not an easy task and this fact could possible explain the absence of relevant reports for the years that followed. Apart from the data involved in the population of UK as a total, there are also other data available which present elements of this population at least up to the point that such estimation has been feasible. In this context, it has been found that ‘married couples make up 50.7 per cent of the population of adults (aged 16 and over) and occupy around 45 per cent of households; just under one in ten households in England and Wales are lone-parent (9.6 per cent) and more than nine out of ten of these are headed by a woman; Two thirds of lone-parent households have dependent children and the remaining third contain only grown up children’ (National Statistics Online, 2001). The reference in the above data has been considered as necessary because family patterns have been proved to be factors of influence for the diet habits of people (family’s members) around the world. In the particular case, the above described family patterns can influence the marketing strategy followed by the entrepreneur regarding the presentation of Brasilia concept to the public. Other data that should be characterized as of major importance are those involved in the spending potentials of citizens in UK. More specifically, in accordance with a report of National Statistics Online (2006) ‘UK households spent an average of £443 a week in 2005-06; Food and non-alcoholic drink purchases contributed £45 to weekly household expenditure, £10.10 of which went on meat, £3.40 on fresh vegetables and £2.80 on fresh fruit; Non-alcoholic drinks accounted for £3.80 and £1.80 was spent on chocolate and confectionery per week; Average weekly household expenditure was highest among households consisting of three or more adults and children, £744 a week’. The above data are also valuable for the marketing strategy that will be followed for the specific scheme but also for the financial planning that will take place regarding the Brasilian concept. The reason is that the above data present not only the financial strength of the vast majority of population (a factor that will influence the price of the product offered) but also the food consumption habits and the out of home consumption habits as they have been observed in citizens of UK the relevant periods. The reference to the Gross Domestic Product (GDP) is also considered as necessary as it can describe the financial strength of people in UK and as a result the potential profits of the entrepreneur – if aligning his targets with the trends of UK market. Moreover, regarding the GDP in UK, a report of National Statistics Online showed that ‘the chained volume measure ofgross domestic product (GDP) increased by 0.8 per cent in the fourth quarter of 2006 compared with the previous quarter; this is the same growth as for gross value added; for the year 2006 as a whole, GDP increased by 2.7 per cent over 2005’. The above growth of GDP in UK for the years 2001-2006 is presented in Figure 1. Figure 1 - UK Gross Domestic Product (National Statistics online, 2007) b. Potential market size, trends within the market, level of confidence, competitors – market concentration, marketing activity and new product development The implementation of Brasilia concept in UK if based on the appropriate basis, will offer to the entrepreneur a significant profit. More specifically, a significant part of the British population supports all types of ‘eating out’ schemes, although there are trends for a healthy diet observed throughout the country. In a relevant report of National Statistics Online (2006) it has been found that ‘in 2004, 14 per cent of men and 27 per cent of women in England consumed five or more portions a day (following the general recommendation for a healthy diet which includes at least five portions of a variety of fruit and vegetables), while 8 per cent of men and 6 per cent of women consumed no fruit or vegetables; there has been a marked change in the British diet since the early 1970s; there has been a long-term rise in the consumption of poultry and a fall in red meat (such as beef); In addition, the use of convenience food – both frozen and ready meals and snacks – has increased’ (National Statistics Online, 2006). Despite the above statistics, the Brasilia concept if implemented will be profitable because of its structure which includes provisions for salad the amount of which is decided by the consumer. Brasilia concept does not opposite to the trends for healthy eating – on the contrary it supports the relevant trends offering at the same time the chance to consume as many portions as possible (unrestricted consumption of salad apart from meat and potatoes). The above assumption is also supported by a series of statistics revealed by Mintel in 2005 (March) in accordance with which ‘only one in six consumers (16%) are not too concerned about following a healthy diet and 15% rely on convenience food because they would rather be doing other things than cooking; only one in 14 respondents tend to eat fast food or takeaways because they do not like cooking, suggesting that, of those who do buy takeaways, it is done more so as a special treat perhaps at the weekend, or that they enjoy cooking but prefer the convenience of fast food or takeaways’ (Spend on food, drink and tobacco, March 2005, Mintel). Another issue that should be examined is the level of confidence regarding the ‘eating out’ schemes. The confidence of people for schemes of such type can be assumed to be at high levels since there are many rules that ensure the quality of products and services offered in the relevant schemes. More specifically, the application of international standards of quality which are represented mostly by the ISO 9000 series ‘of international quality management and quality assurance standards’ can guarantee the protection of consumers’ health. Towards this direction it has been found that ‘ISO 9002 ensures that a lab controls all aspects of the production process that impact quality; to receive ISO 9002 certification, a lab must establish, implement and maintain a documented quality management system under the supervision of an external certified auditor; many people assume that ISO 9002s documentation of processes is its primary benefit, but actually its real advantages are the thoroughness, attention to detail and verification that help to give you complete confidence in your test results’ [1]. In other words, the above documentation if received by the restaurant which will implement the Brasilia concept, will ensure the quality of products offered to the public which is furthermore a significant element towards the profitable performance of the restaurant on a long term basis. However, as from the aspect of the existed ‘chains’ of restaurants, UK market should be regarded as a high competitive one. One of the most important competitors in the area is Burger King which has 740 stores around UK. The differentiation of this restaurant from its competitors is based on the innovative children’s menu which ‘features a fruit ‘Grapple‘ bag and it offers healthier drink options such as milk, ‘Five Alive’ and water; this menu includes chicken bites, strips or a burger with fries, fruit and a choice of drinks’ (Catering for the Family - UK - August 2005, Mintel Reports). On the other hand, the Greene King restaurant has currently more than 2,100 pubs around UK and shows a continuous growth supporting by the acquisitions of local pubs in various regions of Britain (Catering for the Family - UK - August 2005, Mintel Reports). Another competitor in the area is KFC which entered UK in 1965 and currently has over 700 restaurants in the country (Catering for the Family - UK - August 2005, Mintel Reports). In the same context, McDonald’s Restaurants Limited is ‘the UK division of the US giant, McDonald’s Corporation; the company opened its first UK outlet in 1974 and the number of openings has increased steadily before peaking at 1,244 in 2002; there are currently 1,235 outlets within the UK’ (Catering for the Family - UK - August 2005, Mintel Reports). Finally, Pizza Hut is also a significant competitor in the ‘eating out’ sector of UK market. The company is the ‘largest pizza restaurant company in the world, with 12,000 outlets in 90 countries, employing more than 300,000 people; the company started in America in 1958 but it only made its UK debut in 1973, with the first home delivery unit not opening until 1988; In the UK, the Pizza Hut brand is part owned by Whitbread in a 50:50 partnership with Yum! Brands’ (Catering for the Family - UK - August 2005, Mintel Reports). The existence and the successful operation of the above restaurants in the UK market prove that this market has a positive trend towards the ‘eating out’ schemes. At the same time, the competition in the specific sector is hard and every potential new scheme of such type should be examined carefully before implemented as of its chances for profit. The most significant point which should be highlighted regarding the existence and operation of several competitors in the British ‘eating out’ sector, is that the above competitors do not provide to the consumers a scheme of ‘eating out’ similar to Brasilia concept which can be characterized as unique and for this reason it has many chances to succeed. Task 2 a) Criteria for potential franchisees The most important criterion for potential franchisees is the level of acceptance of the British market regarding the eating out schemes. A report published by Mintel in 2005 (August) showed that ‘the eating out market is anticipated to grow significantly between 2000 and 2005, rising by 25% to reach £28 billion. However, when allowances are made for inflation this growth is expected to be much more modest (6%)’ (The family catering market, August 2005, Mintel). In accordance with another report published by Mintel in 2005 (June) ‘between 2000 and 2004, the eating out market grew by 19% to £26 billion; however, it had actually only gained 5% when inflation is taken into account; in contrast, the combined value of the RFRC, organic and functional food markets reached £4 billion in 2004, a rise of 59% since 2000; when inflation is factored in, this sector still achieved a growth rate of 50%; the future performance of all these food sectors is anticipated to remain strong owing to rising concerns regarding health food quality, food safety, nutrition and diet’ (Effects of Healthy Eating on the Eating Out Market - UK - June 2005, Mintel Reports). In other words, current market’s preferences are favourable for Brasilia concept; however the trends of the above market for the future should be examined thoroughly by the potential franchisees in order to ensure the viability of the project on a long term basis. As of the criteria ‘imposed’ by the project to its franchisees, these refer mostly to the following issues: prices should remain at the level suggested by the company, water and ice is provided free in all outlets, soft and alcoholic are extra while there can be no variation to the project which can only be ‘meat based’. b) Factors and influences that are important in a franchisee committing - Sheth’s model of Industrial Buying Behaviour Sheth’s theory on buying behaviour distinguish ‘three main elements in the buying process: product requirements, supplier accessibility and customers ideal and actual choice’ (Sheth 1973, 1981). Moreover, in accordance with the views of Weidema (2003, ch.2) ‘the following sections are structured according to the necessary conditions for a product substitution to take place, namely that: the products are substitutable, i.e. that the products have the obligatory properties ("must have" properties) required by the customer in the market segment in question, the products are available to the customer, i.e. that their supply is not constrained by market failures, declining markets, regulations, or shortages in supply of raw materials or other necessary production factors, and a decision is made so that the potential product substitution is actually realised’. In the case of the particular concept all the requirements set by Seth’s model as presented above are met regarding specifically the British market. Therefore the implementation of Brasilia concept in this market should be expected to be successful even if facing difficulties during the initial period of its application. Task 3 a) Identification of part of the population that is more likely to be ready to accept the new concept A significant part of the British population is expected to welcome the Brasilia concept. More specifically, the research made by Ashley et al. (2004) showed that eating out is a popular phenomenon in UK since 1950s. Moreover, 1980s has been the decade that the relevant schemes achieved a significant expansion. Other important findings from the study of the above researchers are the following ones: ‘between the mid-1980s and the mid-1990s it is estimated that the number of cafés and restaurants in London doubled from around 3,000 to around 6,000; during the late 1990s around 50 new outlets were opening each week, and some 33 per cent more meals were served in 1995 than in 1985’ (Ashley et al., 2004, 12). To a more specific approach, the part of population which is expected to react positively to Brasilia concept is significant covering all ages from 10+ until 70+, i.e. the ages that are most likely to consume the type of food offered by the specific scheme. It should also be noticed that although vegetarians are excluded from the above concept, still the part of population that would enjoy this ‘eating out’ scheme remains significant. b) Marketing processes and techniques to speed up adoption In order to identify the most appropriate marketing processes that could help the promotion of Brasilia concept in the British market, we should primarily examine a few general characteristics of consumers as they can be observed in most societies around the world. In this context, it has been found by Kuran et al. (1999, 712) that ‘the typical citizen has no time to investigate whether a story about an environmental hazard or an industrial safety matter has come from a trade association, a fundraising operation, or a regional group that stands to benefit disproportionately from resources allocated to solving the problem’. The use of ‘intensive’ advertising could therefore help to speed up adoption of Brasilia concept by the British market. Coulter et al. (2001, 2) supports that ‘because of its prevalent, intrusive, and repetitive nature, advertising can be viewed as an omnipresent being, a nosy neighbour, and a broken record’. In other words, the use of all types of advertising (media and press) could be the most appropriate method to speed up adoption of the specific scheme by the market of UK. The use of significant offers to the consumers at least for the initial period of the scheme’s entrance in the British market would be also another helpful marketing tool towards the achievement of the target described above. Task 4 a) Needs and motivations associated with fast food/ added value eating out experiences The needs of consumers are usually within specific borders. The high quality of food and services offered can ensure that these needs will be served effectively. In this context, it has been stated that ‘the term food quality has three dimensions: 1. the food is safe to eat; 2. the food meets the expectations of the consumer (e.g. organoleptic, nutritional characteristics and resulting benefits and 3. the food has other, not directly food related characteristics e.g. organic farming, fair trade, culture; food quality is an important food manufacturing requirement, because the end consumers of food are highly vulnerable to any form of contamination that may occur during the manufacturing process; traceability of the source of ingredients and processes used to manufacture food are key techniques, as is the implementation of food labelling standards coupled with best-before dates’ [2]. Apart from the above requirements of quality related with the food offered to the public, the needs of the public can be influenced by personal demands under specific circumstances. For example the style of life can influence the preferences and the needs of people while the working hours and the demands of the family can also formulate specific ‘needs’ that have to be served in order for an ‘eating out’ scheme to succeed. In this context, the provision of facilities addressed to children can be a useful feature towards the promotion of the specific eating out scheme to the public. b) Brasilia concept and provision of additional satisfactions Brasilia concept offers to customers a series of additional satisfactions regarding the similar schemes of the ‘eating out’ sector. More specifically, the above concept offers to consumers the chance to consume as much food as they like without restrictions – which is a unique feature of the ‘eating out’ schemes. This ‘unrestricted’ consumption refers to all products offered in the specific scheme apart from soft and alcoholic drinks which are extra. On the other hand, there is a reduction to the price specifically for the children (also an innovative idea in the particular sector). These two additional features should be regarded as the most significant parts of Brasilia concept as this concept has been implemented and operate around the world. Task 5 Outline of Consumer Research Plan A consumer research Plan regarding the Brasilia concept would be based on a questionnaire available to the consumers visiting the restaurant where this concept will be applied. The questionnaire will be placed near a central point of the restaurant (preferably the entrance/ exit) and will have to include a series of questions referring to the quality of products and services offered by the restaurant and the evaluation of the whole environment. On the other hand, there should be space for mentioning any personal comments on the whole concept as well as any possible suggestions for improvements. The questionnaire would be left in the area provided for this purpose (near the box that will contain the questionnaires). Another suggestion could be to give the questionnaire to each customer when ordering and advice him/ her to fill it and leave it in the area provided for this reason. It would be preferable if the questionnaire contained just few questions (only essential ones) avoiding to ask for personal data (or at least only for those that do not reveal important personal details). Task 6 a) Influence of customer behaviour using Brasilia concept – position of product The influence of customer behaviour regarding the Brasilia concept can be achieved only if following the trends of the market. Specifically for Britain, it has been found that eating habits are changing while ‘a government survey found that total fat consumption had actually decreased by 9% between 1999 and 2003’ (Effects of Healthy Eating on the Eating Out Market - UK - June 2005, Mintel Reports). Other surveys and studies presented above also prove the preference of public in Britain for healthier eating. Towards this direction, the promotion of the products used in Brasilia concept should highlight their nutritional value regarding the daily needs of human body. Although the specific products are not addressed to vegetarians, there is always chance for influencing the rest of population. The appropriate positioning of products could be also helpful towards the achievement of this target. Products (and their ingredients) should be clearly presented to the public while it could be good if the ‘preparation area’ were visible to the consumers. b) Attraction of customers – measures for more effective promotion In order to identify the measures that could help towards the attraction of customers regarding the particular concept we should primarily examine certain aspects of the consumers’ preferences as they have been formulated through the modern style of life. In this context, Hermann et al. (1990, 314) supported that ‘a substantial portion of the consumer public does not regularly employ the food shopping practices consumer educators have recommended most frequently’ which can be possibly explained by ‘the lack of interest coupled with time and physical energy constraints’. On the other hand, it has been found that ‘the awareness level of consumers with regard to health issues and food quality in general has risen remarkably and its impact on eating out habits is and will continue to be considerable; in an environment of choice, consumers can afford to allow themselves to enjoy eating out as well as to address the needs of their conscience’ (Eating Out Habits - UK - April 2004, Mintel). It should also be noticed that there are restaurants that do not follow the guidelines set by the government regarding the hygiene applied in the areas where food is provided to the public. In a relevant report published in Evening Standard (10/4/2006) it has been revealed that ‘according to council enforcement officers across London, more than 20,000 London restaurants, cafés and food shops were caught breaking Food Standards Agency (FSA) rules in one year; officers uncovered a litany of wrong-doings, including grime-encrusted equipment being used to prepare and serve meals, restaurant kitchens infested with rats and food on sale well past its sell-by date’. The application of the hygiene measures is a primary stage towards the development of a project which is food-related within any market around the world. The marketing campaigns no matter how successful they are, they cannot help towards the increase of a firm’s performance in the particular sector if the appropriate hygiene measures are not followed by the staff. References Ashley, B., Hollows, J., Jones, S., Taylor, B. (2004). Food and Cultural Studies. Routledge, New York Coulter, R., Zaltman, G., Coulter, K.S. (2001). Interpreting consumer perceptions of advertising: An application of the Zaltman Metaphor Elicitation Technique. Journal of Advertising, 30(4), 1-24 Hermann, R.Ol, Warland, R.H. (1990). Consumers’ Use of Recommended Food Buying Practices. Journal of Consumer Affairs, 24(2), 307-315 Kuran, T., Sunstein, C.R. (1999). Availability Cascades and Risk Regulation. Stanford Law Review, 51(4), 683-744 Mintel (2005) Spend on food, drink and tobacco, March 2005, available at www.mintel.co.uk Mintel (2005) Catering for the family, August 2005, available at www.mintel.co.uk Mintel (2005) The family catering market, August 2005, available at www.mintel.co.uk Mintel (2005) Effects of Healthy Eating on the Eating Out Market, June 2005, available at www.mintel.co.uk Mintel (2004) Eating Out Habits, April 2004, available at www.mintel.co.uk National Statistics Online, available at www.statistics.gov.uk National Statistics Online, First Release (2007), available at http://www.statistics.gov.uk/pdfdir/gdp0107.pdf Sheth, J. N. (1973). A model of industrial buying behavior. Journal of Marketing 37:50-56 Weidema, B. (2003) Market information in life cycle assessment. Environmental Project, 863. Miljøstyrelsen. Institute for Product Development; Danish Building and Urban Research Institute http://www.foodstandards.gov.uk [1] http://en.wikipedia.org/wiki/Food_quality [2] Read More