Nandos Domestic Marketing Strategy - Case Study Example

NANDO’S DOMESTIC MARKETING STRATEGY The Nando’s domestic marketing strategy was based upon the product life stage and the competitive situation, basic socio-economics, and the level of sophistication of the customers in South Africa. The greatest challenge faced by Nando’s was to transfer the understanding of the brand to its people (Hofstede, 1993). The beneficial aspect of the flexible and powerful management style of Nando’s was to encourage innovation which extracted creativity out of the management team in many areas, especially in decor and design of the restaurant. This approach was very successful as it changed the customer perceptions and the encouraging feedback from the customers also promoted the idea of paying more attention towards the implementation of positioning (Horwitz et al., 2002). Nando’s also aspired to establish a culture, a tradition, a way of life and most importantly a fabulous eating place for the people where they can savor the quality ambience and experience along with the delicious food. The idea was to draw the customers to the magic and warm hospitality that constituted the Nando’s Way. The Nando’s strategy in restaurants constituted an evident 80 percent service and 20 percent product, which was adapted in other countries as well. The challenge for the Nando’s was to determine the specific elements that would lead towards having more control over the consumers’ eating experience. The Nando’s team identified that location is the most critical element of the marketing mix. The core communication of Nando’s was concerned with the design and aesthetics of the stores as perceived by the walk-in customer. The pricing strategy of Nando’s was determined by the domestic market, the competitive activity and the location. Nando’s established itself as an aspirational brand based on the store decor, group’s location strategy and menu offering. This positioning was acquired through various ways. The menu had to emphasize over the chain’s main product that is the flame grilled chicken in a variety of mild, hot, extra hot, lemon and herb peri peri sauce. Any addition in to the menu had to augment the Nando’s experience and correspond to the Nando’s core brand. Anything related to the store and the customer’s experience adds value to the overall branding. For instance, natural packaging by Nando’s enhanced the brand value since it was created with bio-degradable food quality paper that bore the brand identity, Nando’s emblems and Escudo promise. The aspirational image of the brand was conceived through its store design and decor, advertising and staff uniform complying with the Nando’s specifications. The stores were conveniently located in up-market premises. Lastly, the service quality should be persistently high and was evaluated with the help of mystery shopper and customer care programs (Rowley and Benson, 2002). NANDO’S MARKETING STRATEGY IN UK Nando’s employed a mix of standardization and adaptation in its marketing strategy in UK. As per standards, Nando’s followed its strategy of word of mouth and local marketing in order to achieve the target organic growth for its chain of restaurants in UK. However, in the beginning of the year 2005, it planned a strategy of brand development that emphasized over the increase of market share. Nando’s acquired the services of Rocket and Hooper Galton to devise a communication strategy that would help them to achieve their objective with a relatively modest budget. The agencies were required to increase the awareness and understanding about the Nando’s brand amongst a family audience. It was observed through the qualitative research on the subject that men are quite authoritative in determining family restaurant destinations, particularly if it involves fiery foods. It is also commonly known that this audience is grouped together due its collective passion for humor and sports. Thus, the Ashes provided a huge opportunity for the quirky brand of Nando’s since the ashes turns out to be the biggest sporting event during the summer. The basic concept was to entertain and engage the cricket fans who are the potential customers of the Nando’s brand. EXECUTION Television constituted the basis of this marketing campaign for Nando’s brand. Hooper Galton produced 9-10 seconds long TV spots which were played exclusively during live action series of Ashes at Channel 4. This advertisement of short length was broadcasted frequently during the cricket series and thus, was proven to be more effective in comparison to the standard 30 second cricket package. This also, formed a sense of virtual sponsorship on television for the cricket series. This creative concept of marketing was carried out such that it portrayed Nando’s sponsorship of the Portuguese cricket team, basically representing a fictional conglomeration of no-hoper enthusiasts, with the tag line ‘Portuguese cricket forever!’ attached to every advert. Rocket and Hooper Galton also formed a battle bus with its top open and Portuguese music blaring out for the marketing campaign. The bus travelled to all the Test venues every morning when they were filling up. The above mentioned strap line for the campaign emblazoned over the site while the local staff members of Nando’s were singing and dancing on the upper deck of the bus as they were dressed in cricket white uniform kit. Also, the staff members being dressed as cricketers themselves gave away caps, restaurant vouchers and even fake Graham Gooch moustaches, as they were put on by the Portuguese character in one of TV spots, to the cricket fans when they were being seated at the stadium. The fans love the giveaways and the local media of UK regularly featured the bus in their news programs. It was important part of the campaign to create the ambience for the cricket mania in the restaurants as well. Rocket and Hooper Galton created the Graham Gooch moustache stickers for the Nando’s customers to put on and T-shirts for the Nando’s staff members which have the text: ‘We’ve never lost the Ashes’ written on them. The walls of the restaurant had the mock reverential portraits that featured fictional Portuguese cricket stars hung on them. All the staff members warmly received the entire stuff for the campaign and played their highly important role very well as the brand ambassadors of Nando’s. RESULTS The Nando’s marketing campaign during July, August and September based on the Nandos Portuguese Cricket Forever activity was very successful and contributed to an average sales uplift of about 5 per cent for its every restaurant in comparison to the average sales per restaurant in the previous year. COMPETITIVE LANDSCAPE IN UK FOR NANDO’S Among chained fast food brands in the UK market, Mc Donald’s is the dominant and number one fast food company on the basis of its value sales. McDonald’s has gone through a stellar 18 months and retrieved full advantage of its strategic master plan installed early so as to hinder its falling sales in UK. It successfully shut down all its unprofitable stores and rejuvenated its prime restaurants with improved dining furniture, interior design and new options in the menu keeping in view the taste and liking of the people in UK. Greggs Plc also tops fast food operators in UK on the basis of its number of outlets that is 1,419 branches as of 2009 which is just ahead of 1,409 outlets (in 2009) of Subway (Doctor’s Associates Inc.). Subway is regarded as the UK’s fastest growing fast food brand in the last decade as it had just 147 stores in 2001. Subway generally has less dine-in space as it operates in smaller retail outlets that is why it lags behind the sales, transactions and likes of McDonald’s, Greggs and KFC. KFC also leads the UK’s fast food market as it ranks number 2 by sales and number 4 by number of outlets. Burger King and Pret a Manger are other leading fast food brands in UK. Pret a Manger ranked number 1 in 2009 as fast casual dining brand due to its value sales and high number of transactions per store. In UK’s fast casual dining brand category, Nando’s Group Holdings Ltd. was number 1 on the basis of its 218 outlets in 2009. The marketing success of Nando’s lies in its high quality and relatively inexpensive food with out the economy positioning and unhealthy stigma that is conventionally attached with the chicken fast food. Moreover, Nando’s has adopted an effective strategy of uniting new outlet growth with the UK’s redevelopment schemes. McDonald’s and KFC reinvigorated franchising in UK. Since advertising to children was prohibited on British TV and due to the regulatory antipathy towards fast food advertising, the operators of this industry had to employ marketing strategies suitable for such a constrained environment. The three fast food giants in UK- McDonald’s, Burger King and KFC significantly contributed to in-store toy and movie promotions with their connections to Hollywood had been a hit to increase sales. Healthy food has become the vogue in UK due to which the fast food operators are competing to promote this shift towards low-salt-low-fat food. References Hofstede, G. (1993). 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