Hog's Breath Cafe: Online Shopping in the Market - Case Study Example

Online Shopping in the Market Table of Contents I. Abstract II. Introduction III. Industry Analysis IV. Hog’s Breath Company V. Marketing Models VI. Marketing Tactics VII. Hog’s Breath Company Competitive Strategies VIII. Online Shopping Trends IX. Hybrid Stores X. Conclusion XI. References Abstract Currently, consumers are gradually becoming inundated with several choices in the market. Apart from ever mushrooming product brands, consumers are increasing getting exposed to diverse retail channels and formats. Examples of these include the development of specialty stores, departmental stores, catalogue retailers and online electronic shopping modes. These have been enhanced by the rapidly growing communication system and technological developments. In the list, online shopping shows a rapid development across the world. Its significant can be seen the influence it is impacting over tradition shopping modes (Alice & Bobby 2010, p. 211). In Australia, many most companies are forced to adopt online shopping system to meet their customers’ needs. As a result, some companies, which have not included online shopping in their marketing channel, are negatively affected by this situation. In the United States, over 70 million shoppers relied on online channel by 2005. This trend is ever in a constant increase that it is expected that almost a half of the population are online shoppers by now (Kotler1996, p.251). Whiles some researchers believes that internet shopping will overhaul the traditional ‘brick and mortar’ marketing channel, others proposes that online shopping is another retail channel in the market. Nevertheless, the rate at which online shopping is carried through and the consumer behaviour towards the new shopping trends raise an alarm over channel competition in the marketplace. The question that should worry many people is, “What is the impact of electronic shopping over the traditional distribution. The next quest is whether the two distributions will complement each other. The answers to these questions will be a pillar to players in this field in the lately challenging moments (Rosenbloom 2007, 112-123). Introduction This paper is focused on current market distribution across the world. The study was carried out through literature materials based on a case study of Hogs Breath Café in Australia. An industrial and company analysis was carried out to underscore the impact of consumers behavioural shift to online shopping to the traditional distribution methods. Consequently, the paper draws strategies of online marketing in cooperation in a tradition industry. It addresses the issues pertaining to the new channel management and evaluation. The study is aimed at building a strategic plan for incorporation of online shopping in a traditional company for competitive strength. Industry Analysis Hog’s Breath Café is majors in food industry. However, hogs as well markets training services in food industry, salons, tourism and hospitality. It also provides entertainment services through musical products and tour services. In the market there is a stiff competition in the food products and services. However, Hogs has maintained the market lead due to its knowledgeable staff and technological strength that enable it produce quality products and diversify easily (Kotler1996, p.251). Challenges There several challenges facing the industry today due to dynamic nature of food industry Stiff competitions from other more organized operators like Doughnut King. Dynamics of food industry Regulations governing private operators Shortages of supplies especially in lean seasons High competition for highly skilled employees especially in the locals who can work effectively. Management of distribution channels The constant changes in shopping and purchasing behaviour in the industry. Hog’s Breath Company Hogs Breath Company was started in 1987 in Airlie Beach by Don Algie. The original company was located in North Queensland. It was set to provide beverages and quality food in a very casual environment. Its main product is Prime Rib, which is unbelievable tender steak that melts in the mouth. The organization has outgrown several franchises to 68 branches internationally. The target market segment of Hog’s Breath Café is tourist towns in New Zealand, Australia and Singapore. Other product found in the Café’s offices is music products, salons, design and graphics financial control, beverages, store development trainings and operations. Hog’s Breath Cafés are similar design and marketing strategies across all their retail points. They offer similar products and services directly to their customers in all their branches in Australia, Singapore and New Zealand (Elisabeth, 2011, 66). The strength of this organization is based on its highly skilled manpower and quality products and services in an enjoyable environment. Hog’s Breath Cafe has a well-developed direct marketing channel that has seen it gain substantially in the market. The company has utilized several modes to accomplish this. The company has carried out large promotions and advertisements that has enable it to get recognition in whole of Australia. This can be seen by constant reflection in the Australian and New Zealand papers (Elisabeth, 2011, 112). Apart from these, there are community support and participations by Hog’s Breath Café especially to children. Finally, Hog’s Breath Cafe has emerged cultural icon on its products and services. It has represented the lives of tourism community and identity. Hog’s Breath Cafe corporate strategy is aimed at maximizing its growth especially in the Australia. This they carry out by focusing on the human resource investment and market capital since they offer direct services. Direct marketing has enable it survive strong competitors and market challenges with companies like Chicken Treat, Harry's Cafe de Wheels and Dunkin’ Donuts. The operation of the company in new markets is aimed at delivering superior quality products and services for guest and communities through leadership, innovation and partnership and the mission of being quality leader on everything the company does. All Hogs chains have their supplies made by local supplies which are contacted directly by the firm managers. This was necessary due to the nature of the product s and the quality standards to be met (Chernev 2009, p. 87). Hog’s Breath Cafes have a well-defined marketing strategy which is aimed at giving quality product and services. It carries out this through direct marketing to enable its customers experience its value and benefits. It is commitment to providing quality unique product in its chains. This is in line with its vision of giving quality products to the customers. As a result, the company has created a brand loyalty to the customers by the direct marketing meeting Australian and New Zealand taste of cleanliness, neighbourly, trustworthy and frugal. The company also has strong quality standards for its products that follow their values across its chains (Rogers, 2003, p. 111). Marketing Models Hog’s Breath Cafe Company has applied two models in its strategic marketing. These are the embedded and historical data model and no measurement and marketing model in developing its strategic marketing (Husting, 2010, p. 124). The Embedded Marketing Model No Measurement, No Marketing Model For direct marketing, the two modes have been found to be the simplest to understand and application in the organization. In addition, they fit the needs of Hog’s Breath Cafe whose aim is to create more market into the Australia and other franchising zones. It has been seen that the application has been useful in handling the products and meeting customers’ needs (Hakan, 2004, p.78). The models allows the company to gather enough information with the use of no marketing, no measurement model. The company uses these information to evaluate potentiality of the market their size, purchasing power, competitors’ analysis and the available niches. Hog’s Breath Cafe has applied this strategy to open its segments and make decisions regarding implementation of the plans. The data gathered using the embedded marketing model is used in product positioning especially in the new segments and high competitive grounds. The process is continual to make necessary adjustments in the respective segments (Kotler1996, p.251). Marketing Tactics Hog’s Breath Cafe organization has developed different tactics to service in its direct marketing despite stiff competition from the pioneers and other followers. The company has a high focus on customers unsatisfied needs. This is carried out through close market monitoring as well as creating brand loyalty. The company also has greatly focused on customers benefits of close accessibility, product and pricing to cover more market opportunities (Kotler, 1996, p.64). The company’s promotion tactics are aimed at meeting the consumers’ demands on time price and quality. In the past, buying has been simpler for the consumers since the company carries out home with some few online shopping. Hog’s Breath Cafe’s has created customer loyalty from their direct contact and its close follow-ups to the customers to note their satisfaction and make adjustments accordingly. The tactics applied by Hog’s Breath Cafes have met some of its strategies of developing customer’s loyalty as well as widening the market share (Husting 2010, p.87). Hog’s Breath Cafe Competitive Strategy Hog’s Breath Cafe chosen competitive strategy is niche penetration due to the fact that the company has unique products have not been applied by the competitors. The quality of its products has also not been met by any of the competitors. In addition, Hog’s Breath Cafe has strong competitive structures and processes to gain the customers loyalty as well as wining others. The company maintains it competitive advantage analysis through carrying out competitors’ intelligence: (i). Liaising secretly with the employees of the competitors for more information. (ii). Using competitors clients to get the information (iii). Sending loyal customers to the competitors to get the relevant data. (iv). Taking observation on competitors operation system (v). Studying their web site for more information This strategy has enable the organization maintain its market segment through creating customers loyalty in the food industry. Advancement is also very easy through penetration, as it enjoy the monopoly of its limited and unique and diversified products. Through this, Hog’s Breath Cafe has easily met its goal of market expansion (Husting, 2010, p.46). Online Shopping Trends Despite its fast past growth, from 2005 Hogs has been experiencing a lot of competition crisis and channel conflicts. This follows with the changes in consumers’ behaviour in e commerce. The customers’ online shopping demand has been higher than Hogs can provide. At the same time, incorporating internet marketing will substantial affect the organization marketing strategies that are functioning presently. Hog’s conception of online shopping hence has been so slow that many competitors in the food industry have gained competitive advantages over it. As a result the company is laying a strategy that will see it recapture its online market as was with the mortar and brick in the past. Channel conflicts and management are the most pressing issues that the company faces while drawing its online shopping plan. Additionally, since Hog’s major products are perishables developing the shortest channel system in the e marketing offers some added challenges (Chernev 2009, p. 87). Hybrid Stores Hogs have been forced to strategize its market to meet its consumers’ needs or it risks losing its market. As a result the company is working on developing hybrid store-warehouse. These mega stores will have aisles and shelves for strategic packing and picking duration. Due to its developed market, this will enable it maintain its normal in store keeping as well as setting some central picking canters in the major cities. Despite the financial costs that are involved, centralized distribution channels are easier to manage and serve different types of customers at the same type. It was also found as the best strategy following the types of goods and services that Hog’s Breath Café offers (General Management Technologies 2000, p.43). The model employs a format that meets demands either larger or smaller markets. This can be achieved by freestanding stores and other smaller fast pick centres depending on the customers purchase capacity. The central stores will be fulfilled with all products of Hogs Central ware houses that the employees in the customer in any given can easily fill the orders. Hogs aim at combining both the fulfilment centres and its traditional stores to enhance its supervision of the channel system. As a result, spending on new structures and facilities will be reduced during the expansions. The strategy aims at developing web front to the existing Hog’s Breath Cafes in the first phase before moving to develop pure picking centres in its expansions (Hakan & Harrison 2004, p. 145). There are several advantages are tied to this strategy as compared to complete restructuring by Hogs. It is more cost effective building on existing facilities than total overhaul on the structures. Adding web front to the tradition channel will allow the company experiment the functioning of the system and make adjustment. Consequently, Hogs will be able to expand its centres more rapidly following its current strategic plan. It is advantageous that more stores across Hogs chains will reduce delivery transportation costs or international commercial barriers. The system offers risk pooling over inventory, cost incurred as a result of inbound transportation and stock-outs (Alice & Bobby 2010, p. 248). To solve the problem of handling both the traditional distribution and online shopping strategy, Hogs is rolling massive training programs partnered with experts to its employees. Recruitment services are also carried out on some management levels. It aims to develop and integrated inventory and storage system for both of the facilities. However, the challenge of meeting suppliers transportation cost remains a critical issues since every centre creates a millage from the distribution point. With success in online marketing in Hog’s Breath Cafes, it sales volumes and competitive advantage with shoot rapidly (Coughlan 2006, p.147). With conception of this strategy, the company annually evaluation projects an annual increase in marketing by 25%. In a five year period, the company expects to retain its lead in the marketing in Australia. Hogs expect sales increase in Australia by 18 per cent annually and 21 per cent across its branches across the continent. The goal of expansion will easily be met since developing online marketing strategy was one of the let downs in venturing in some markets such as in Europe and United States of America. Generally, implementation of this strategy will enable Hogs to gain its market power and profiting across all its chains. The company expects a 15 per cent capture in the market in Australia and 11 per cent across its international branches in Singapore and New Zealand. Tourism industry is the major target for target for Hogs that his new marketing strategy will satisfy (Kotler1996, p.311). Conclusion Changes in technology have resulted into shift in several behaviours in the market. Since customers and suppliers’ behaviour significantly manipulates marketing field. Market operators, such as retailers and manufactures are constantly monitoring their customers’ trends. Marketing hence becomes a very volatile and dynamic in nature. Today, the shift toward electronic marketing has caused a lot of changes in many companies. Online shopping has not only affected organization marketing but as well as their thinking and distribution. Hogs are an example of the organizations that is embracing changes to meet their customers’ needs. The hybrid store-warehousing in conjunction with the traditional marketing is seen as the best approach in meeting the customer needs by the managers of this organization. References Alice M, & Bobby, J 2010, Kellogg on Marketing, 2nd Edition, London, John Wiley & Sons, p 247-252 Coughlan, A 2006, Marketing Channels, 7th Edition, London, Pearson/Prentice Hall Chernev, A 2009, Strategic Marketing Management, Toronto, Bright Star Media. Elisabeth, E 2011, Wanderlust: A Love Affair with Five Continents, ReadHowYouWant.com,, European International Business, 1998, International Business Review: The Official journal of the European International Business Academy, Amsterdam, Elsevier General Management Technologies, 2000, Channel Confflict: Minimizing the Risk: Seizing E- Bussiness Opportunities while Maitaining Existing Relationships. Retreaved on 3th June, 2012 from htt/:www.gmtconsulting.com/publication/ideas/conflict Hakan A, & Harrison, D 2004, Rethinking Marketing: Developing a New Understanding of Markets. Southern Gates, John Wyllie’s. Husting, H, & Saperstings, H 2010, Improve Your Marketing to Grow Your Business: Insights and Innovations that Drive Business and Brand Growth, New Jersey, FT Press. Kotler, P 1996, Outlines & Highlights of Marketing by Kotler, Ventura, Academic Internet Publishers. Rogers, E 2003, Diffusion of Innovation,New York, Simon and Schuster. Rosenbloom, B 2007, Multichannel Strategy in Bussiness-to- Bussiness Markets,Prospects and Problems. Industrial Marketing Management, New York, Willies. 36. 4-9 Read More