Marketing Plan of Dinner in the Sky - Coursework Example

Dinner in the Sky Export in Pakistan from the UK Mahdi Al-Nawab 14/03/12 Written For Stephen O’Regan Table of Contents Introduction 3 Selected Product 3 Country and Market Segment Selection 4 Business and Marketing Objectives 9 Entry Mode Selection 9 International Marketing Mix 13 International Marketing Budget 17 Recommendations 18 Conclusions 19 Bibliography 20 Appendices 22 Appendix I: BCG Matrix 22 Appendix II: Product Life Cycle 23 Appendix III: Marketing Budget 24 International Marketing Plan Introduction To prosper in a world of changes where every entity is under the influence of unpredicted opportunities, firms need to adapt and develop active responses to gain these opportunities as they arise. There are new strategies to be designed and new ways of doing business to be adjusted so that the companies can broaden their vision to take as much possible advantage as possible. The global business activities open doors to various opportunities that a company can benefit. By transferring knowledge and gaining perspective a company can strengthen its position as an international firm and increase its competitive advantage all over the globe (Czinkota and Ronkainen, 2007 p 21-23). The process of development, executing the commencement, pricing, promotion and distribution of ideas, goods and services all over the globe, anywhere in the world, to create exchanges that can suit and satisfy the organisational objectives is called the concept of international marketing. Through effective marketing a company can expand its operations anywhere in the world (Srinivasan, 2005 p 3-5). The company would follow the concept of BRIC and would incorporate theories related to these advancing economies. It would also put forward as to if the business is business to business (B2B) or business to consumer). Selected Product The product introduced is Dinner in the Sky. This unique idea will take the experience of dining to a whole new level. The restaurant itself will be suspended on cables and the customers will enjoy their food literally in sky. The mission of the restaurant is not only to concentrate on the food quality but also to have an environment providing well-organised and friendly entertainment and to ensure maximum level of customer satisfaction at the Dinner in the Sky. Dinner in the Sky has its head office in Guildford UK. Each event will be available for a session of 8 hours which can be planned and personalised according to the customer’s requirements. The service provides the accommodation capacity of 350 people per session. The beauty of this service is that it can be arranged anywhere as long as the venue provides support for the restaurant structure. The main purpose of the service is to provide exclusivity and unique enjoyment with utmost measures of safety (Dinnerinthesky.com). After the initial response provided by the market it is the intention to provide various other services through this service as well, like organising events related to marriage or showbiz activities. This service is currently being provided in more than 15 countries and through this service the advertisements promoted by the company are providing many other organisations benefits as well. Country and Market Segment Selection The opportunity of growing the business globally is always a value addition to the shareholder’s equity, but for that purpose it is essential that the decisions relating to global expansion should be made carefully. Just selecting the market segment is not everything, it has to be ensured that that market segment will also generate profits for the company that would in turn increase the value of the investments for the shareholders of the company. The target for the launch of this service after being launched successfully in more than 15 countries is India. India is counted as one of the growing economies in the world today. The BRIC and CIVET are two groups which prove this claim. India can be a potential investment as it is counted as one of the growing economies by both CIVET and BRIC. Though the cultural difference between the home market and the target market can be measured to be great as the cultural norms between the two countries differ on a lot of levels, still it is the perception of the managers of the company that leads to their conclusion that the psychic distance between the two countries is achievable. Even though the psychic distance is not measureable as the cultural distance; which one can measure by comparing the factual statistics of education, language and religion among others, and is just a highly subjective interpretation of reality by the managers, still the company believes that after its experience in more than 15 countries it has the ability to transform its marketing strategy in a way that it will not only prove to be successful in the country of India but it will also increase its shareholders’ value. It’s the company plan to introduce it into the market by emphasising on the uniqueness of the service that will make it a whole new attraction to the people of India. Through this service, the local customers will see this product different and eye-catching. As Dinner in the Sky is Belgium based when it comes to origins, so its franchise in India will be owned by the Dinner in the Sky that is based in UK. The Indian economy has been a target of high level of foreign investments lately mainly because of the continuous high growth rates. According to a report by Ernst and Young, India is the second most preferable target for foreign investment as despite of the economic dips in UK and USA the Indian market is still expected to grow. In the year 2011 Indian government approved Foreign Direct Investments worth approximately $393 million, thus opening the country to foreign markets. This proves that the rules and regulations designed by the government are to facilitate FDIs, thus the company can expect to face less problems (Ibef.org, 2012). Socially, Indian culture is highly hierarchical in its basis. People define and differentiate themselves on the basis of their origins and the places they belong to. Such norms leads to strong family ties either the family is directly related or extended. Indians mainly diversify themselves on the basis of their religions; the most obvious among them in the ascending order of their respective proportions are Hindus, Muslims, Christians and Sikhs along with a few minorities. Their table manners are reasonably formal, but they entertain themselves in their homes, restaurants, private clubs, or other public venues depending on the occasion. The people in India are very particular about their eating habits because of their religious beliefs, Hindus and Sikhs do not eat beef, Muslims do not eat pork or drink alcohol. Lamb, chicken and fish are the most common items for the main courses for the non-vegetarians (Kwintessential.co.uk, 2012). The most suitable location for the organisation as a starting point for their operations would be the city of Mumbai in India. Mumbai is considered to be the country’s financial powerhouse and the fashion centre of the country as it is the home to almost all the fashion industry of India (Lonelyplanet.com). With its population of over 12 million (Populationindia.wordpress.com, 2011) and high density of fashion and business entrepreneurs, Mumbai will be an ideal place to start as it will provide a target rich environment which will appreciate the high quality of services and the extraordinary experience that the company will provide. The adventurous crowd of Mumbai will be right away attracted to the restaurants unique experience, as the company will be targeting Mumbai, so as the sales will grow, the profits will grow. And the growth in sales will ensure that the shareholders of the company will be enjoying a steady growth in their investments. So in a gist, the main segment of the target country that will be focused on Initially will be the city of Mumbai, it will be the focus because of the adventurous nature of the crowd, and the restaurant’s structure will be positioned in an area that will attract the most customer base leading to an instant growth in the market share of the company in the country. It is very important for an organisation to assess if it is fit for an environment, especially when it is foreign to its origins, by assessing their strengths and weaknesses against the opportunities or threats the market will be providing the company with. Firstly the analysis should be independent of the market conditions to analyse the company’s potential to gain opportunities or to determine where the company lacks the capacity to respond, and after that it should be conducted with respect to the market to see where the company stands with or without the market’s influence (Bohm, 2009 p. 3-9 ). This way it can be determined if the company’s strengths can make the best of the opportunities that the Indian market will be providing or not, but a single analysis would not do. It might provide the company the false sense of achievement but practically a series of these analyses should be produced to generate a combination of product/market outcomes (Ferrell and Heartline, 2011 p. 30-35 ). India provides a target rich environment which the company has the capacity to satisfy through its extraordinary services. The major competitors in the Mumbai market like Café Zoe, Mangiamo, Golden Dragon, Thai Pavilion, Dakshin and many more (Timescity.com) are good but none of them will provide the innovative experience that Dinner in the Sky will be providing through the excitement of dinning literally in the sky. Even though the cultural and religious barriers to the cuisine choices, with their caster systems that are not only reflected in their social cultures but their food selections too (Indiahotel-link.com), will be new to the company, but still they are not that challenging that the company cannot overcome. With the help of the bests of the local chefs the company will be able to design a menu that will fulfil every customer’s preferences. None of the requirements will be a problem to the service, as in over 15 countries the service is deemed to be a lead in the industry, furthermore, for safety regulations all the concepts of the restaurant are designed according to the German norm DIN4112, and the products are built in Belgium under the control of Rheinland TUV, so the safety of the structure will not be an issue as well (Dinnerinthesky.com, 2010). According to the BCG-matrix, while the restaurant will be in the growing estate it will be a star of the market and with the steady growth it is highly expected that the company will be able to categorise it as one of its cash cows and will thus eventually contribute in the shareholder’s value (Hollensen 2004 p. 438-439) (Appendix I). Business and Marketing Objectives The mission statement of the company clarifies the company’s direction, its values and its objectives, as to what does it wants to achieve from its operations and where is it planning to be in the future. It is also a tool through which the company communicates with its stakeholders so that they could be informed of the company’s strategic direction (Lymbersky, 2008 p. 34-40). The main business objective of this service will be to expand the operations of the company worldwide in order to ensure maximum return to the stakeholders of the company by establishing strong customer services and by ensuring innovation in the industry of food and technology (dinnerinthesky.com). Entry Mode Selection Foreign Investments provide the companies with a challenge of complying with the environments of the target markets which are usually far more different to the company’s home environments. The companies have to consider the fact that how flexible can they be to comply with the policies and practices of the target markets. According to the Uppsala model, companies tend to move towards globalisation rather careful, as one wrong decision of invading a market that is a lot different to the company’s home market can severely influence the profits and reputation of the company (Anderson et al, 2012 p. 47-50) because the stakes of the company will be higher than the target country’s government. That’s the reason why the companies first try and move towards the markets that are more familiar as compared to their home markets, and once they are established there they try the challenge of moving into the markets that are more foreign and dissimilar in culture and geography to their home country (Hollensen 2004 p. 27-30). As in the case of Dinner in the Sky, it is evident that the company first invaded cities like USA, Australia and Canada, which even though were quite distant geography yet was a lot similar on cultural basis. Once the company has selected the target market and has negotiated its terms and conditions, it should start researching for the most effective mode of entry into the target market. There are various modes of entry into the market. The best mode should be selected by keeping in mind the nature of the selected service or product. (Andexer, 2008 p. 24-30 ). As the company has a market based approach, thus the flow of information for better quality management will be downstream. As the company is based in UK but it will be providing services in India from now onwards, so it must have an office centre that will be based in India along with all the arrangements associated with its services will have a foothold in India. Thus the activities will be conducted in association with the fact as to where the customer base is located. Such activities are categorised as downstream activities (Hollensen, 2004 p. 30-40). The main modes of entry include exporting, joint ventures and direct investments. Direct investment is a more serious mode of entry as it has long lasting consequences in case the operations fail. Through direct investment an organisation can either acquire an entirely owned subsidiary or enter the market through merger or gaining of a local organisation (Tielmann, 2010 p.1-5 ). Franchising happens when a business model is developed and its rights to operate in another physical location are sold to another entrepreneur known as the franchisee (Spinelli et al, 2004 p.1-16 ). Franchise is an excellent example of a hierarchal mode of entry, where the firm owns and controls the foreign entry mode or organisation (Hollensen, 2004 p. 45). Though, the international franchisors chose between equity and non-equity or limited equity franchising options rather than considering the usual approach of direct and indirect modes of entries into a global market (Windsperger et al, 2004). Entering the local food market of India through franchises is the soundest option, as the country is already a host to many other well-known franchises like Pizza Hut, McDonalds and Dominos among many others. The distribution channels that are spread all over the country are very compatible to the needs of franchise operations, it will be very easy for the company to deploy its strengths to the channel’s benefits and reach an optimal way of providing advantage to both the entities (Dent, 2008 p. 27-34 ). Thus it is a proof that the local market conditions are supportive to such mode of entry and through franchising its operations the company will be able to maintain individuality in its operations while adapting to the local food customs. It will be able to easily adapt the local food preferences while maintaining its uniqueness. International Marketing Mix Maximum profitability can only be achieved by providing the target market with something new that could efficiently meet the market’s requirements. In order to do that it is very crucial that the marketing strategy planned by the company is capable of providing the company with that edge but the way in which the organisation responds to the market needs greatly depends upon the company’s own beliefs and norms and according to the EPRG framework there are four main orientations on these basis; the company can view itself from the cultural view of the country itself, where it believes that the home country is superior in all manners and the individuality that the company was able to maintain there should succeed despite of the fact where the company’s global operations exist, or it can view itself from the cultural point of view of other countries in which it realises the importance of every country and believes in targeting it by giving priority to the needs of the target country, it can also view its global operations by categorising the global markets as regions where it focuses on every region and not across them and last but not the least it can also lead its operations as a geocentric entity that operates under the concept of thinking globally but acting locally with respect to every market. So keeping in mind the nature of the product and the environment of the target market, it is necessary that the company should acquire a mix of standardise and adaptive approach to its services. As far as the structure it concerned it should be standardised according to the company’s policy and structural specifications, as compromising the structure by availing the cheap local resources will be risky and also will affect the global image of the company. The food services provided by the company should be adaptive to the local traditional cuisines of India to ensure that the company can attract maximum customers without challenging any of their beliefs to ensure relative advantage with the cultural norms (Onkvisit and Shaw, 2009 p. 181-190 ). So the company is planning to make amends to their menu by adjusting to the no-beef policy. The main courses will comprise of a variety of dishes consisting chicken, fish and lamb. This way ‘globalisation’ will achieve a balance between adaptive and standardised approaches to marketing and will achieve an optimum international marketing strategy that will highly benefit the company, by maintaining their individuality while appreciating the local cultural trends (Hollensen, 2004 p.40-45). Pricing its services is a very crucial aspect while designing the marketing mix for India. The importance of setting the right price cannot be understated as setting the wrong price will directly affect the profits of the company (Smith, 2012 p. 10-20). The services provided by the company cannot come cheap, that is why the company is targeting the highly rich class of the city. But on the offset if the prices will be set too high, perhaps even those customers will not consider the prices worth the experience. The company’s services are more about the experience than the food but still the company will have to reach a balance between its prices and its services to make sure that the customers can find the experience worth their money. To be successful it is very necessary for the company to fit comfortably into the target market’s environment (Eastman et al, 2006), so its prices should be compatible when it comes to the food element but they should also reflect the importance of the unique experience that only Dinner in the Sky will be providing in the local market. The ideal location for the company will be establishing its structure in Mumbai; it is an ideal location, which is a hub for all the elite cream of the company’s economy. When the company’s services are initially launched it is very important that the brand should be widely promoted, the aid of local media channels, audio and visual aids in the drive ways and traffic signals will be very helpful in achieving that goal. Complying with the culture of the city, the bigger the product will be, the larger number of customers will be attracted to the service. The platform should be so noticeable that it could be spotted from afar. The high stature of the place and the service will give the selective clientele the sense of dignity that they will require to go with their status quo. Such means will assist in building the brand value of the services in India, as how the brands develop, depend highly on how the social interactions in the cultural environment of these brands take place. The uniqueness associated with the brand of this service will provide the service with the necessary stature. The level of expenditures sustained regarding promotional activities will start to decrease once the service has been launched and will be maintained at an average level so that the awareness of the services provided by the company persists (Appendix III). As any product life cycle can illustrate, every product and service undergoes a curve that is special to every specific product/service, Initially in the stages of introduction of the services, because of the uniqueness of the experience, Dinner in the sky will attract a large number of customers, ensuring ever growing rates of profits but as the services mature the company will reach its peak of income. (Pride et al, 2012 p. 333-338) So once the service of Dinner in the Sky is launched it will be necessary to promote it as much as possible to attain high level of profits, once it will enter its maturity phase the company has to introduce new features to keep the enigma of the service mysterious and interesting. That time will be ideal to launch services like Lounge in the Sky and Showbiz in the Sky. As the target market in Mumbai is rich in that aspect it will keep on attracting customers with the promise of new experiences. Every product or service enters a phase where it has to suffer the unavoidable consequences of sales loss when the competitors catch up, even though Dinner in the Sky is a whole new experience in the food industry, and the competitors will definitely take some time to measure up, still the company will try to delay that conclusion for as long as possible through reduction in prices, repositions and introducing loyalty schemes (Appendix II). International Marketing Budget The structure and design of the budget required for the international marketing of the product will be accounting for the local as well as home techniques of marketing. The budget will be designed in a way that it can be able to provide the company with the competitive edge against the local competitors by exploiting the most economical resources of the target market as well as the home market. Furthermore it will account for the change in the foreign exchange rates so that the budget could be adjusted for accordingly. For that purpose first of all the company must set an estimate on the purchase or lease of the location. In Mumbai the selected location should be one that is the centre of the fashion activities in the area. Besides the budget estimates for food and structure the company will have to account for the level of entertainment that it will be providing onboard. As it is an international brand the company should not forget to account for the changes in the foreign exchange rates. The current exchange rates for UK Pound varies within the ranges of Indian RS.75 to Indian RS.85 (x-rates.com), thus it is safe to say that the home countries will not be facing any adverse reaction on their foreign exchange rates. Besides the usual budget for the product and its placement the company will have to focus on the promotion of the brand. Mumbai is the most happening city of India, where if something is launched without a bang, it gets lost in the outskirts of the city. High attention will be paid to the promotion of the brand. Big logos on the billboards highly advanced visual and audio aids, promotion through media, brand recognition through sponsoring the new fashion shows and new movies will be the best way to get the attention of the target market in a city like Mumbai. Recommendations It will be most advisable that the restaurant should operate between the hours of early to late night as at that time it will be able to attract the biggest share of the customer base. Initially it should ensure that all the customers should have pre appointed reservations to maintain a steady stream with no hassle or disturbances as its image will be very important. Safety measures should be implemented with care and caution in order to avoid any sort of scandal, as negative publicity in a city like Mumbai can ruin the impression of the company. Competing on the basis of prices will not be an option for the company, as the services provided by the company will be unique, thus it should focus on maintaining a high quality in its services so that it can become a leader of the company on the basis of its eccentricity. Conclusion The creation of a unique dining experience will distinguish the company from the whole lot of existing players in the food market of India. The unique design, level of service and hospitality will provide the company with a distinguished competitive advantage as the local companies will have to increase their technical knowledge by a hundred folds if they will wish to acquire the same level of uniqueness in their operations. The company will be providing a fine dining experience in a pleasant atmosphere which will be complaint with the cultural needs of the country. Its main focus will not only be to provide high quality food but to provide great service as well. It will be international with an exciting and unexpected twist, thus it will give the company a unique control, being the pioneer in bringing the innovative approach into the food industry. Bibliography CZINKOTA, M. R., & RONKAINEN, I. A. (2007).International marketing. Mason [Ohio], Thomson/South-Western. SRINIVASAN, R. (2005). 2nd Edition,  International Marketing. New Delhi, Prentice-Hall of India Pvt.Ltd MILLS, J., CLAY, J. M., PARSA, H. G., & ISMAIL, J. (2003). Restaurants in the Sky. Journal of Foodservice Business Research. Volume, P6, 45-65 Dinner in the Sky.Com (2010), Dinner in the Sky, [Online Resource], Avaialble at: http://www.dinnerinthesky.com/dits_dinner/dinner.php, [Accessed Feb 2012] LORAT, N. (2009). Market audit and analysis. München, GRIN Verlag GmbH. http://nbn-resolving.de/urn:nbn:de:101:1-2010081518476. SVEND, HOLLENSEN. (2004). Global Marketing. Pearson Education UK. http://www.myilibrary.com?id=60094. IBEF.ORG, INDIAN BRAND EQUITY FOUNDATION, Indian Economy Overview, [Online], Available at: http://www.ibef.org/india/economy/economyoverview.aspx, [Accessed Feb 2012] KWINTESSENTIAL.CO.UK, India- Language, Culture, Customs, and Etiquette, [Online], Available at: http://www.kwintessential.co.uk/resources/global-etiquette/india-country-profile.html, [Accessed: Feb 2012] LONELYPLANET.COM, Introducing Mumbai (Bombay), [Online] Available at: http://www.lonelyplanet.com/india/mumbai-bombay, [Accessed Feb 2012] POPULATIONINDIA.WORDPRESS.COM, Population of Mumbai, [Online], Available at: http://populationindia.wordpress.com/2011/04/24/population-of-mumbai/, [Accessed Feb 2012] BÖHM, A. (2009). The SWOT Analysis. München, GRIN Verlag FERRELL, O. C., & HARTLINE, M. D. (2011). Marketing strategy. Mason, OH, South-Western Cengage Learning. TIMESCITY.COM, Restaurants in Mumbai, Available at: http://timescity.com/mumbai/restaurant/search/byexplore=Editor+Ratings, [Accessed Feb 2012] INDIAHOTEL-LINK.COM, Food and Cuisine in India, [Online], Available at: http://www.indiahotel-link.com/india-restaurants, [Accessed Feb 2012] LYMBERSKY, C. (2008). Market entry strategies text, cases and readings in market entry management. Hamburg, Management Laboratory Press. ANDERSON, J. C., NARUS, J. A., DAS NARAYANDAS, & SESHADRI, D. (2012). Business market management ( B2B) understanding , creating and delivering value. New Delhi, Pearson. ANDEXER, T. (2008). Analysis and Evaluation of Market Entry Modes into the Asia-Pacific Region Based on the Example of a German SME in the Industrial Goods Business. München, GRIN Verlag GmbH. http://nbn-resolving.de/urn:nbn:de:101:1-2010090241714. TIELMANN, V. (2010). Market Entry Strategies International Marketing Management. München, GRIN Verlag GmbH. http://nbn-resolving.de/urn:nbn:de:101:1-201011221310. SPINELLI, S., ROSENBERG, R., & BIRLEY, S. (2004).Franchising pathway to wealth creation. London, Prentice Hall PTR WINDSPERGER, J. Cliquet, G. Hendrikse, G. Tuunanen, M. (2004). Economics and management of franchising networks. Heidelberg, Physica-Verlag. DENT, J. (2008). Distribution channels understanding and managing channels to market. London, Kogan Page. SMITH, T. J. (2012). Pricing strategy: setting price levels, managing price discounts, & establishing price structures. Mason, Oh, South-Western Cengage Learning. EASTMAN, S. T., FERGUSON, D. A., & KLEIN, R. A. (2006).Media promotion and marketing for broadcasting, cable, and the Internet. Amsterdam, Elsevier/Focal Press. ONKVISIT, S., & SHAW, J. J. (2009). International marketing: strategy and theory. London, Routledge. MÜHLBACHER, H., LEIHS, H., & DAHRINGER, L. D. (2006).International marketing: a global perspective. London, Thomson Learning PRIDE, W. M., HUGHES, R. J., & KAPOOR, J. R. (2012).Business. Mason, OH, South-Western Cengage Learning. X-RATES.Com, Exchange rates for UK Pound, [Online], Available at: http://www.x-rates.com/d/INR/table.html, [Accessed Feb 2012] Appendices Appendix I: BCG Matrix: Perspective position of ‘Dinner in the Sky’ in the Indian Market as Stars and then Cash Cows. Appendix II: Product Life Cycle: The Product Life Cycle illustrates the respective stages of the model and the profitability at each stage. Appendix III: Marketing Budget: This graph illustrates the cumulative level of expenditures incurred for promotion and placement activities, distributed over time. Read More