CitySnacks Restaurants - Market Research Program Analysis and Marketing Plan Formulation - Case Study Example

Case Study: CitySnacks Restaurants INTRODUCTION CitySnacks restaurant, being a major retailing division of the Pleasure Food Restaurant Group PLC (PFRGPLC) that is based in Manchester, is an example of a fast food that is very successful and rapidly growing with restaurants in most U.K. city centers.. However, in recent years, the saturation level has been reached by the company and competition has become tougher with other food businesses. Thus, the company felt the need to implement a more stringent and professional marketing strategy in order to retain their growing customers and stay on the lead with competitors. With this situation at hand, the company hired Mr. Tim Cairns as the new Marketing Director to take the lead and manage the company’s marketing programmes. Unfortunately, there are so many current internal organizational and marketing issues or problems that the company is facing, that needs to be addressed before and during the transition period in order to have a clear direction on how to accomplish the goals and objectives of the company. The following presents a detailed analysis and view of the current situation of the company, the strategies that needs to be undertaken and the steps necessary how the strategies will be realized to attain the desired goals and objectives. Situation Analysis (Where are we now) This section will present the current position of the company, recognize the threats, and identify the opportunities that the company can utilize which may lead to new marketing segments that will be beneficial to the growth of the company. In order to best assess the current situation of CitySnacks, the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis will be employed to help in identifying the marketing strategy to take and in the decision making process. The first that will be looked into are the internal factors - the strengths that can be used or build on, and the weaknesses within that needs to be overcome, avoided or minimized. Then, the external factors are determined which are the key opportunities that CitySnacks can exploit and the possible threats that should be overcome or ward off (Stapleton and Thomas, 1998). Strengths At present, CitySnacks have an outlet in most U.K. city centers (Midlands, South and North) selling a wide range of food from simple to high end types that caters to people from all walks of life, and contributes around 65% of the total revenues of Pleasure Food Restaurant Group PLC without having to change or improve much on the quality of the goods and services. As a result, the company is seen to have a good market share or representation in the fast food business and the reputation of being a successful retailer. The company is also backed by a good name being a flourishing division of the Pleasure Food Restaurant Group PLC. The locations of the restaurants are ideal as most are in city centers and through this, they are able to tap their target customers giving them the profit that they need with every store that they open in any area. The company is seen to have the good organizational structure that has sufficient departments which supports each other, and strong management, staffed with people having expertise in their area. The company’s CEO, Ken Jones, is very well equipped with marketing knowledge such as Customer Loyalty, Team Quality Management and developing strong strategic plans; Bill Donahue, the Finance Director which very well know how to maneuver well the budget of CitySnacks; Julia Harris, the Marketing Research Manager, who is very knowledgeable in marketing research; Operations Directors for the Midlands, South and North Scotland areas; HR and IT Directors and not to mention Tim Harris, who will direct marketing of the company. Aside from the top management, the departments of the company are seen to work well with each other. Aside from good structure, the company is staffed with creative people. The IT people have many bright ideas that can help improve company systems such as the EPoS and other wild ideas, sometime futuristic in nature. Furthermore, two staffs from the Marketing Department have come up with innovative marketing research systems that gather customer information and feedback. Through the cost oriented approach of the Finance Department, cut back on overhead is achieved by offering ready-made meals from a reliable supplier which lessens the need for preparation which require staff training and hire expensive chefs. This also gives the company to have consistent quality products for their customers. As a result, they have the lowest staff cost in the market bringing more margin and revenues which gives a great deal of financial reserve that can be used to in other areas for improvement. Although the company needs a better marketing approach and is taking a cost oriented approach, one has to bear in mind that it is backed with good financial resource from its mother company, Pleasure Foods PLC. Weaknesses Even though CitySnacks has many identified strengths, it also has many weaknesses that is detrimental to the business. CitySnacks’ office locations are not centralized making it hard for fast coordination between departments. This may be the reason for the lack of horizontal interdepartmental relationships which is very important for the company. The cost oriented approach is also detrimental to some departmental activities. The company is always experiencing pressure from Pleasure Foods PLC to achieve annual forecast revenues and budgets. The cutbacks by the Finance Department resulted in insufficient funds for marketing, staff recruitment cutbacks, and poor IT systems. The Marketing Department has only £300,000 to utilize for all the new marketing campaigns considering that it needs to make good and effective marketing strategies. On the other hand, the IT Department was not given much attention for investment to improve on its various systems that could make the systems faster and cost effective in the long run. Although a lot of the company’s employees are very talented and knowledgeable in their fields of expertise, there is poor idea implementation. Ken Jones, for example, struggles to have these ideas implemented. Likewise, the IT people have so many ideas but the Finance thinks that the budget is way too high to implement such systems. Moreover, the company seems to have a lack of interest in the marketing research schemes, being implemented - the Saver Card Loyalty Scheme and the Mystery Customer program. Logical Systems is paid to handle data from these marketing schemes, but no firm and relative data has been generated for evaluation. The Mystery Customer Program has only given the staff poor rating as no trained were given and consequently, demotivated employees. Furthermore, employees who scored low in the program were given a hard time by their Operations Managers which resulted in fast staff turnover. This also resulted in the decline of customer satisfaction, especially in the Midlands area. The employees have enthusiasm and creativity but the motivation is lacking due to management’s inability to listen such that findings from the marketing research schemes were largely ignored. Management also has no clear direction or detailed plan and seen as the cause of resignation of two marketing staff. This clearly shows the poor vertical relationship within the organization. On top of these, the company seems to have weak organizational ethical values. It is not clear to employees what the ethical values of the company are which can give the employee clear direction of the company. Excellence in customer satisfaction was not stressed with customer service staff. The goals and objectives of the company is stressed mainly on generating profits. Giving value to one’s work can help motivate employees and result in better work performance. Opportunities There are many opportunities that CitySnacks could exploit for growth and development of the company. The company has a historical growth of around 4% p.a. real terms over the next 5 years and better profit margins other than just the present situation of cost cutting and outlet building could be explored. Having reached outlet saturation level, the company can look into product and services development. The company needs to come up with other services to be offered as customer satisfaction has peaked already. New products need to be developed and introduced to the market. At present, product development is made by the supplier for but no information on how the research and development is done. The company can utilize the marketing research data available from Logical Systems to determine new things that can be best offered. Product developers can be hired to develop the right products that will meet customer’s needs. With no more room for expansion in the local market, the company can look into global expansion or the foreign market. Opening stores to a different kind of market can be done, just like what multinationals like McDonalds, Starbucks and Kentucky Fried Chicken have done. Customer response to new marketing, products and services can be determined and new target market segments that are not tapped before can be sought. Locally, the data from the marketing research schemes can determine the untapped market segments which can be further explored for expansion. Lastly, with this great expansion in mind, the company cannot entirely rely solely on its few suppliers, thus, the concept of co-branding with other food and drink manufacturers could be looked at. Moreover, brand franchising can be carried out to bring in more profit. Threats There are several threats that the company needs to look into that needs to be avoided or overcome. Small entrepreneurial operations such as town center dining are real threat to the business as they also cater to the same kind of customers that the company targets and outlets with competitors in the same area need more attention. Retention of key staff needs attention as this is very critical. The key staff may be pirated by competitors or transfer to competitors just like where the resigned marketing staffs went. Key staff employees need to be well motivated to perform well and feel valued by the company to retain them. Results from the marketing research programmes should be used the same way competitors are using their data effectively as it is handled also by Logical System. Good relation with suppliers needs to be established with not just one or two but to several. Good supplier support is needed to keep the business going. At present, the company seems to have only one supplier for their ready-made meals and this is still threatened by the cost oriented approach by the Finance Department giving them a hard time. If this is lost, the company will suffer tremendously. The company is threatened by the high expectations amongst city analysts such as food critiques and food writers having built a good reputation through the years. Bad publicity or word from these city critiques can be detrimental to the business. Table 1shows the SWOT analysis diagram of CitySnacks Restaurants. Development Strategy In my view, the company needs to have a consumer-oriented marketing approach to meet consumer satisfaction taking into mind the product, advertising, after-sales service, etc.(Foxoll, Goldsmith and Brown, 1998). Based on the issues raised, the three projects that I regard to be the most important issues that require the formation of cross functional teams are: 1) Marketing Research Programme/Scheme Analysis and Formulation; 2) Employee Training and Team Building; and 3) Building up of EPoS System. Table 1. SWOT analysis matrix of CitySnacks Restaurant. Strengths Weaknesses Variety of food offered Cater to all range of people Good market share/consistent outlet growth Good reputation Successful retailer Good organizational structure & management Good cost oriented approach Sound financial revenue/budget Decentralized offices Poor internal organizational communication and coordination Cost oriented approach with affects other departmental activities Pressure from mother company to generate expected revenues Reached outlet saturation level Poor budgeting allocation Lack good, effective marketing strategy/ research Poor idea implementation Lack of interest in marketing programs/ employee ideas Lack customer service staff training Poor service quality Lack employee motivation/no value for workforce No detailed plan More appropriate staff esp. marketing Poor systems (lack EPoS, data generation) Poor product development Weak organizational ethical values Opportunities Threats Market growth of 4% p.a. in next 5 years Better profit margins Seek better supplier deals Use of marketing scheme data Development of new products and services to be retailed Global expansion Customer respond to new marketing and new products Seek new target market segments Co-branding with other food and drink manufacturers and brand franchising Retention of key staff critical Hundred small entrepreneurial operations such as town center dining Marketing data handlers the same as competitors Suppliers weak support High expectation amongst city analysts Market Research Program Analysis and Marketing Plan Formulation The strategy for this project needs to be done immediately and planned well. The data gathered from the two marketing schemes, namely the Saver Loyalty Card and the Mystery Shopper, are very important in many aspects to the company which tackles two different areas in market research. The Saver Loyalty Card encourage loyal buying behavior of consumers which provide identifying information that track consumer purchases and can be analyzed towards more efficient marketing and advertising (Wikipedia, 2008). The data can be used to help other business goals of customer acquisition; satisfying customers with the right location, product assortment, quality, service and friendliness; and help identify inefficient and wasteful areas of spending, particularly expenditure on low yield customers (Hugh, 2005) which can be utilized further for improvements in the different departments of the company. It is only fitting that Marketing Department, headed by Julia Harris, will handle the project in coordination with the Logical Systems in gathering the data. The Finance Department will also be greatly involved as the data retrieval and analysis needs a sound budget for the project to be successful. The expertise of the IT Department will also be needed for program development for fast and effective data analysis. After data analysis, in the formulation of the marketing plan, the Finance Department will also be involved as materials for planning will be needed which needs costs. The Operations Department and Human Resources Department will also need to join the team as suggestions from them will be valuable with staff utilization from the Operations Department and probable recruitment from the HR. Employee Training and Team Building Training and team building are badly needed by the employees and the different departments of the company. Since the main issue is the lack of employee motivation and poor communication within the company, this project is very important. Training will resolve employee performance problems and further assessment can bring training needs within the organization which consequently will increase customer satisfaction and employee retention. Common performance problems crossing department lines or workplace problems such as interpersonal conflicts, poor communications, lack of coordination, and missed deadlines will be addressed by team building. The Human Resource Department will lead this project as it knows very well the tools and process to do training fit for each employee as well as team building methods that the company needs. All the departments of the company will be involved but at the moment, Operations Department staffs will be prioritized as customer satisfaction needs to be improved. Budget for team building and staff training will be coordinated with Finance and training needs of each employee by department will be conveyed by Departmental heads. Electronic Point of Sale System Lastly, the development of the Electronic Point of Sale (EPoS) is also important and needed. The EPoS helps in the efficient processing and recording of products sale which allows faster handling of payments, inventory list updates and provides instant stock formation (EPOS, 2008). Moreover, with an EPoS, the company can focus more on profitable lines, improve demand forecasting and minimize inventory problems. The IT Department will properly direct this project as they will be the ones to make the programs for the efficient EPoS. However, data from the Operations Department will be needed to make the EPoS suited for the company. The HR Department will be involved in staff training and the Finance Department for budget purposes. Performance Measures The performance mea that can be used to monitor in the project are time, error rates, compliance, cost, number of outputs per input. However since the projects are different from each other, varying performance measures can be employed. For market research analysis, the time of data analysis, cost per analysis, manpower involved and percent error in report generation and analysis can be measured. In employee training and team building, percent employee participation, percent training class evaluated excellent or good, percent staff retention and promotion and training costs. In EPoS development, lengths of time, percent error free work, budget cost and number of manpower. Implementation In the implementation of the projects in CitySnacks Restaurant, several barriers will be encountered and need to be overcome in order to be successful. The first barrier would be lack of time and commitment from the persons involved. A great impact on the project will be brought by this, as the project won’t even move or start when no time and commitment is given by the people concerned. Since the projects involve formation of cross-functional teams, the lack of cooperation from the different departments will be detrimental as each section has an important part in the project and it will not succeed if one part is missing and not done properly. Furthermore, if the work is in sequence, the progress of the project will be affected because if one team is delayed or not doing their part, the project may be impaired or delayed altogether which would mean cost to the company. Moreover, studying the project or planning too long without taking action and trying to get everyone’s agreement first will make slow project advancement or may even lead to failure. However, everything should not be tackled at once, as it may only bring confusion to the team, and assume the present condition is ok as this will only result to false judgment and unsound decisions. The steps or areas of the project should be dealt with one at a time and accordingly by the department concerned, and if needed, in coordination with the other departments. Performance should be measured as a gauge of effectiveness of the project. The problem of management or leadership support may again be encountered and can bring demotivation to employees. Having ineffective teams and people that are resistant to change will also be barriers to implementation as each team needs to perform well and not be ineffective and inefficient. Some will resist the change that these projects will bring and thus smooth transition and implementation may not take place. To overcome these barriers, the problem, goals and objectives for each project should be well defined at the start of the project, and made clear to all team players. To have a smooth implementation, effective treatment strategies should be defined and procedural guidelines should be established. This will allow the project staffs do what is needed and do the project their own way. Effective system changes and interventions should be defined in order to overcome resistance to change by people in the company. Lastly, to address lack of management support, leadership and system change strategies will be developed. All these are essential elements for change effort to overcome the barriers and make the project successful. With all these in mind, the projects needed by CitySnacks will be successfully implemented. references EPOS (Electronic Point of Sale). 2008. Online. Available from: http://www.is4profit.com/business-advice/it-telecoms/epos_3.html. [31 July 2008]. FOXALL, G. R., GOLDSMITH, R. E. and BROWN, S. 1998. Consumer Psychology for Marketing. London: Cengage Learning EMEA. HUGH, A.M. 2005. Strategic Database Marketing: The Masterplan for Starting and Managing a Profitable, Customer-Based Marketing Program. New York: McGraw-Hill Professional. Stapleton, J. and Thomas, M. 1998. How to Prepare a Marketing Plan: A Guide to Reaching the Consumer. Hampshire: Gower Publishing. Read More