New Product Marketing Plan: of Star Burgers - Case Study Example

New Product Marketing Plan Executive summary The Fast Food industry is on the rise prompting the existing players to expand their businesses while also offering a rare opportunity to entrepreneurs to start up premises. Foodways is a speculative company that offers fresh, tasty and healthier burgers (Star Burgers). The industry is highly competitive and only companies with aggressive marketing plans coupled with penetrative marketing strategies are able to acquire a competitive edge. This Marketing plan describes how Foodways will capitalize on using its strengths to solidly establish itself while also showing the myriad opportunities that the company can venture into to successfully gain a competitive advantage. The social lifestyle that the American Public leads favors the growth of any fast food premise. The company will segment its markets effectively in order to narrow its target markets. Foodways will use the fresh, tasty and healthier platform to position its Star Burgers. Accordingly, Foodways will use the marketing mix strategy to market its Star Burgers. Company’s promotional activities will seek to position Foodways among the established companies. Table of Contents Executive summary 1 Introduction 4 Situation analysis 5 Market analysis 6 Foodways SWOT Analysis 7 Strengths 8 Weaknesses 8 Opportunities 9 Threats 9 Foodways PEST Analysis 10 Political Factors 10 Economic Factors 11 Social Factors 11 Technological factors 11 Porter’s Five Forces 12 Threat of New Entrants 12 Bargaining power of consumers 12 Bargaining power of Suppliers 13 Threat of Substitutes 13 Rivalry within the industry 13 Marketing Strategy 13 Marketing objective 15 Target Markets 15 Targeting 15 Positioning 15 Marketing Mix Strategy 16 Product 16 Place 16 Price 17 Promotion 17 Marketing Budget 17 Implementation and Control Plan 18 References 19 Introduction Foodways is a newly established fast food company and has prospects of expanding to global environment. The company aims to be identified as the company with tastiest and healthier burgers (Star Burgers) in the US market. The fast food industry across the US is highly competitive and thus Foodways must come up with a marketing plan that comprises of aggressive marketing strategies for it to gain a competitive advantage (Henry et al., 2012). The company believes that its popularity and market penetration will be driven by customers searching for high quality fast food options. The Foodways marketing plan and program seeks to address fresh, health, and custom-made burgers that meet customer expectations using various marketing approaches. The marketing team within the company is rest assured that customized burgers are the best bait for winning the market. This marketing plan is going to discuss and explain how Foodways will successfully market their Star Burgers. For instance, the paper will provide information with regard to the target market segments, identifying the environmental forces that are likely to affect the market of Star Burgers. In this regard SWOT analysis, PEST analysis and the Porter’s five forces analysis will be used to discuss the marketing environment. The competitive analysis will also be discussed. Foodways will use 4P marketing strategy to market the Star Burgers. The marketing budget plan, implementation and control plan together with the contingency plan will also be intensively discussed to provide a clear understanding. Situation analysis This is basically an honest assessment of opportunities and possible stumbling blocks facing an existing or prospective company by deeply evaluating and understanding the industry and competitors (Henry et al., 2012). Foodways is a new entrant into the fast food industry in the US hoping to tap into the huge market readily provided by the greater US population. The company wants to use Star Burgers to establish itself in the market. In this regard, their healthier and tasty burgers are aimed at attracting customers and thus helping the company gain a competitive advantage. However, the industry is highly competitive and Foodways will face competition from the already established fast food chains including Subways, McDonalds, KFC and Burger King. The Fast food industry in the US comprises of many restaurants with combined annual revenue that is beyond reproach. The industry is highly fragmented whereby established companies hold a substantial percentage of the industry’s total sales. As aforementioned, the fast food market is highly dynamic and competitive; Foodways faces potential strategic marketing challenges particularly in deciding on a specific marketing mix for it to establish and sustain its growth (Walker, et al., 2009). Additionally, the company needs to employ successful marketing strategies that will help it compete effectively in the marketplace. The company’s specialization in Star Burgers will automatically help it to gain faster recognition in the industry. The Foodways falls under the Quick Service Restaurants which is the largest segment of the restaurant industry. The growth prospects in this sector are high with regard to the rising population, increase in real disposable income and the busier lifestyle trends that are common among the American public. Foodways will provide consumers with reasonably priced tasty and healthier Burgers thus offering an alternative to cooking at home. Other factors that affect the Quick Service Restaurant Industry include the changing dietary preferences of consumers, the economic conditions that are ever changing, consumer tastes and preferences, the location of competing restaurants with their marketing strategies. Foodways will make sure that their Star Burgers are custom-made, delicious and healthier in order to be in line with consumer preferences. The US Fast food restaurant industry is a growing industry and hence Foodways will successfully establish itself provided it provides value for money by being innovative while also keeping up with the pressure in the market and work hard to surpass their competitors (Walker, et al., 2009). Competitive Analysis The reason for evaluating competitors is to strive and asses what they will do. The results from the analysis are essential in helping the company respond accordingly. As many have observed, a competitive advantage in the marketplace is a relative competitive position where competitors are used as benchmarks (Walker, et al., 2009). Foodways is entering an industry that is faced stiff rivalry and competition that will mainly come from established fast food chains like McDonalds, Subways, Pizza hut, and King Burger. For Foodways to survive this alarming competition, it must employ marketing strategies that will uniquely identify it as the only company offering tasty, fresh, and healthier burgers in the market. Market analysis Successful companies succeed because they undertake an in-depth analysis of the market they are entering in order to create marketing strategies that will favor their products. Marketing is highly sophisticated function and hence should be highly considered during the launching of any product or service (Walker, et al., 2009). In order to understand different internal and external forces that directly affect the product or service being marketed, the company must perform both SWOT and PEST analysis. Foodways SWOT Analysis Strengths Weaknesses Fresh, healthier and tasty brand Custom-Made Partnering with The American Health Association Reasonable burger prices Low Capital needs Quality burgers New in the market and service delivery will be different from others Poor Brand recognition No marketing strategy Opportunities Threats Creating a customer service model Can expand to markets that have not been ventured into Develop partnership with philanthropic organizations Continue offering health burgers Diversification into other fast food products like sandwiches, Coffee, juice and other delicacies Expand into fast food chain stores to global status Poor Economy Stiff competition in the industry Interest costs Criticism from the public Misconception The changing attitude towards fast foods (being associated with obesity) Law suits Sabotage Strengths Foodways has high prospects to be recognized and market and sell their Star Burgers. The fresh, healthier and tasty brand will automatically attract customers who are healthy conscious. Additionally their burgers are custom-made, which will give customers an added advantage to decide on the type of décor and spices. Partnering with the American Health Association will strengthen their brand in the eyes of customers, for instance, the company will be portrayed as a law abiding company and which cares for the health of its customers. The reasonable prices for their burgers are in line with the quality and hence customers will not hesitate to buy and consume Foodways products. The company is still a new company and hence the initial capital needed is low. Foodways should use these strengths to market their Star Burgers and hence developing its customer base. Weaknesses Foodways is a new fast food investment with completely dissimilar products and services. There in-store services are different from all other fast food restaurants like McDonalds, Kings Burger, and Subways, in this regard; the company will have a hard time to establish its customer base. Consequently, Foodways brand is not known nor recognized in the market; for this matter developing a substantial market share will not be an easy task. The company has no market strategy and thus the means for attracting customers are minimal which on the hand will impact negatively on the company’s business operations and thus reducing its competitive advantage. For better marketing development, Foodways must and should critically evaluate the mentioned weaknesses and manage them accordingly to help the success of the latter in the long-run Opportunities Foodways as aforementioned in the table above has various opportunities to become stronger in the market. The company has a better opportunity to create customer service model which is in line with customers’ expectations which will automatically increase the company’s competitive edge. The fast food market in the US is on an expanding trend and hence Foodways has the opportunity to develop and expand its business operations to markets that have not been saturated. As a new entrant into the market, Foodways has the opportunity to partner with philanthropic organizations like community service providers to help strengthen the company’s brand as a socially responsible brand. Furthermore, the company has the opportunity to offer healthy and delicious Burgers. In the same line of argument, the company has a chance to diversify its products; for this matter, Foodways can venture into sandwiches, coffee, juice together with other delicacies. Threats The main threats for Foodways’ Star Burgers might be the escalating economic instability which is as a result of the 2008 recession. The fast food industry in the US has many players and hence competition is highly threatening. Law suits and sabotage are other most likely threats for Foodways. The interest costs, misconception of their business agenda, criticism from the public, and the changing public attitudes towards fast food products are the likely threats to the company. Foodways PEST Analysis Political factors Economic Factors Health Safety Regulations Labeling and GM foods Animal rights campaigns The Economic stabilization act of 2008 Low set up costs The perceived value of money Increasing disposable income The growing market Support from suppliers Reduced bank lending rates Social Factors Technological Factors The busy American life styles Healthy eating and obesity Increasing vegetarianism Homogeneity Social activities Online Marketing Investment in technological innovations Computer Ordering systems Political Factors This describes the political environment within the environment the company is operating in. the main political factors that are likely to impact Foodways marketing operations include the safety and health guidelines as stipulated in the constitution, Labeling of the genetically modified foods and the animal rights campaigns that are mainly organized by the social and environmental friendly groups. Consequently, the Economic Stabilization Act of 2008 gives fast food restaurants two key benefits after the recession. For instance, the Act encourages banks to give capital to existing and prospective restaurants; in fact banks are urged by the government to make loans. The Acts stipulates that restaurants must acquire loans from their bankers to make expansions or for renovation purposes. Accordingly, the accelerated depreciation schedule for new restaurant constructions saves money as provided in the Act. Economic Factors From the table above, the low start/set up costs is one of the key economic factors that will affect Foodways. The perceived value of money, the increasing disposable income among the American public and the reduced bank lending rates are vital factors that Foodways will face. Major suppliers across the US are willing to work with fast food restaurants and thus their support will immensely affect Foodways operations. As discussed, these are the main economic factors that Foodways will be confronted with. For instance Foodways will attain its marketing success by paying a close attention to what the larger American society wants and needs; for instance, it must add value by making their Star Burgers affordable together with consistent quality. Offering healthier Burgers and making their brand a healthier brand will favor the company’s marketing environment. Consequently, making their restaurant to accommodate the American lifestyle will automatically add Foodways competitive edge. Social Factors The busy American life style particularly with regard to the new generation is a huge advantage to the fast food industry and hence Foodways will never lack customers. In the same line of argument, the ever increasing concerns about health eating and obesity, homogeneity, coupled with increasing vegetarianism among the American public are among the key social forces that will affect Foodways marketing operations. Technological factors Current world businesses are driven by technology and it is imperative for Foodways to be technologically sound in order for them to compete effectively in the American dynamic fast food industry. Technology is an essential tool for marketing like in the case of online marketing, general business management like the point of sale systems and the business information systems. The computer ordering systems will also add value particularly by increasing efficiency in service delivery. Porter’s Five Forces With regard to Porter’s five forces analysis the following are the main forces and their effects on Foodways marketing environment. Forces and the magnitude of their effect Threat of new entrants High Bargaining power of consumers Low Bargaining power of Suppliers Low Threats of Substitutes High Rivalry within the industry High Threat of New Entrants Companies in the limited-service restaurant category have advantages to economies of scale; however, these advantages are heavily affected by the ease of establishing quick-service restaurants (Hooley et al., 2008). Private start-ups can easily enter the market. Additionally capital requirement for starting up a fast food restaurant is low and hence many new entrants will ultimately be able to access the market. The threat of new entrant is very high and in order for Foodways to effectively penetrate market in this industry, it must highly differentiate its products. Bargaining power of consumers In the fast food industry customers switching is very low and hence customer loyalty is approximately zero due to the fact that a huge percentage of American public eat in fast food restaurant on daily basis. This large population has kept the consumer bargaining to the minimum. Bargaining power of Suppliers In the US fast food industry there are large volumes of suppliers to choose from while also selecting them through a competitive bid process. And hence firms within the industry can easily change suppliers; this has substantially limited the bargaining power of suppliers keeping it at the lowest (Hooley et al., 2008). Threat of Substitutes The fast food industry has many players offering almost similar products, the low switching costs, and healthier products options, has elevated the threat of substitutes. Other fast food stores like Subways, McDonalds, and Burger Kings together with other convenient stores present in the market and Foodways marketing must cover competition (Hooley et al., 2008). Rivalry within the industry The industry is highly saturated and all players compete for market share (Kotabe et al., 2011). The growth hamburger stores are extremely slow which has culminated into slower customer base growth in the industry. With regard to this, the rivalry among companies within the industry is very high. Marketing Strategy Any marketing strategy usually reflects the company’s best opinion with regard to how it can use its skills and resources to enhance its profitability in the market place (Cravens & Piercy, 2009). A marketing strategy is basically a means by which a company meets its marketing objectives. The Foodways marketing is inclined to addressing fresh, tasty, and custom-made burgers anticipations of customers using the different approaches. Company intend to use different media including television, internet, and print media to propagate there marketing objectives. The marketing strategy will focus on market demand, innovation, consumer trends, and product leveraging (Cravens & Piercy, 2009). This will create a clear product recognition, product and brand association, and market demand which in return position Foodways strategically to develop and advance its market share. Foodways Marketing Mission Company’s mission is its rationale for existing describing its long-term strategic direction and clearly defining its values; it’s fundamental function with regard to products and services the firm produces for its customers (Cravens & Piercy, 2009). Foodways mission states that “to position the company strategically in the fast food industry by consistently offering value to consumers through providing tasty, fresh, and healthier custom-made burgers.” Core Values and Philosophy Foodways will be committed to meeting customer satisfaction through offering high quality, tasty, fresh, and healthier burgers coupled with exceptional services at reasonable prices. The company delights in serving its customers and the society at large. Foodways will position itself as a learning company free to listen to its customers and implement changes suggested in order to retain and acquire attract more customers. Urgency in service delivery will be highly valued by the company. Marketing objective The main Foodways marketing objective is to create and maintain positive and strong growth to achieve a steady increase in market penetration. Target Markets This is basically the process of differentiating the total market of a product or service into distinct segments; each segment is a unique representative of a distinct market that can be accessed using a specific marketing mix (Cravens & Piercy, 2009). Target markets or segments comprise of customer groups that share similar needs. These segments can either be demographic, geographic, psychographic or behavioral. Foodways main target segments are healthy life style, urban area residents, and age group (18-39). Targeting After segmentation marketers select specific segment(s) and use different marketing strategies to target them. For instance, the process can start by targeting a single segment with a single product (Donnelly and Peter, 2009). However, the marketer can as well ignore segment differences and target all segments using one product. Foodways is a new entrant and has one product Star Burgers that it will market to all its segments. With regard to this marketing efforts and resources will be inclined towards markets that offer greatest potential. Positioning This is basically the customer’s perception of a product or service as compared to its competitors. It relates to the effort of making sure that the company’s products occupy a predetermined place with regard to the selected market regardless of the competition in that market (Donnelly and Peter, 2009). Foodways will use the fresh, tasty and healthier platform to position its Star Burgers. The positioning messages will be communicated via effective promotional and advertising campaigns that will make Foodways part of customers’ daily consideration set. Marketing Mix Strategy Foodways will use the 4P marketing mix strategy to market its Star Burgers. The marketing mix consists of Product, Price, Place, and Promotion. These are considered to be the appropriate tools to target customers (Styles & Voola, 2010). Product It should be noted that customers perceive marketing operations in tangible terms of a service or product. The main product that Foodways prides in is the Star Burger. It is considered to be of high quality keeping in mind that it has the fresh, tasty and healthier ingredients (Styles & Voola, 2010). The store also intends not to withhold anything from the customer, for instance, their burgers are custom-made where the customer will be free to choose the type of toppings he/she wants on the burger. Place This includes all the activities and efforts needed to move the product or service from the seller to the buyer. Currently Foodways has a single store located strategically on a major New York street. Pedestrians, motorists, and cyclists can easily access it (Styles & Voola, 2010). The customer will not have to wait for his/her order rather he/she will order it at the counter and watch how the burger will be made by the efficient team of staff. After all preparations and the burger is ready the customer will pay and take it. Foodways will have no queues, no hassles and no bills. Price Price is a critical element of the marketing mix as it has direct effects on customers, the company and the economy at large (Styles & Voola, 2010). Foodways will use reasonable and upscale pricing slightly higher than normal fast food restaurants in the industry. This is mainly due to the differential pricing strategy they have decided on using coupled value pricing. They intend to create value added products through service in terms of quality. Promotion Foodways promotion will cover four key areas which are advertising, self promotions, public relations, and personal selling (Styles & Voola, 2010). The advertising will streamed online, through Television commercials, Newspapers, magazines and flyers will be used in Foodways marketing environment. Media advertising will mainly target adults aged between 18-49 years. TV advertising major objective is to increase its brand presence in particularly in the customer’s consideration set; fast food consumers heavily rely on this when deciding on where to eat. Majority of Foodways advertising will be done through national TV during prime time, on major broadcast networks and cable networks. Consequently, radio advertising and print media advertising will also be used. Marketing Budget Activity Cost Product Launch $ 7,500 TV Advertising $ 50,000 Tradeshows $20,000 Conventions $7,500 Conferences $5,000 Website and Blog $5,000 Magazine and Newspaper advertisement $10,000 TOTAL Cost $105,000 (Kotabe et al., 2011) Implementation and Control Plan The marketing plan will be implemented over one year period as shown in the table below Q1 Q2 Q3 4Q Product launch Tradeshows Web and Blog advertizing TV, Radio, Magazine & Newspaper advertisement Conventions and Conferences TV, Radio, Magazine & Newspaper advertisement References Cravens, D. W., and Piercy, N. F. (2009). Strategic marketing (9th ed.). New York, NY: McGraw-Hill/Irwin. Donnelly, J. H., and Peter, J. P. (2009). Marketing Management: Knowledge and skills (9th ed.). New York, NY: McGraw-Hill/Irwin. Henry, P., Garbarino E., and Voola, R. (2012). Metacognitions about Consumer Protection and Individual Responsibility in the Credit Card Domain. Journal of Public Policy and Marketing Hooley, G., Piercy N. F., and Nicoulaud B.. (2008). Marketing strategy and competitive positioning, 4th ed. Harlow, Essex: Financial Times Press. Jain SC, Haley GT, Voola R. and Wickham M. (2012). Marketing: Planning and Strategy - 1st Asia-Pacific Edition. Cengage Learning, Melbourne, Australia Kotabe M, Ang S.W, Griffiths K, Marshall A, Voola R and Helsen K (2011). International Marketing: Third Asia-Pacific edition. John Wiley & Sons Australia Ltd Web: http://au.wiley.com/WileyCDA/WileyTitle/productCd-1742166032.html Styles C and Voola R (2010). Emerging Markets in Wiley International Encyclopaedia of Marketing, ed. J. Sheth and N. Malhotra, John Wiley & Sons Limited Walker, O. C., Gountas, J. I., Mavondo, F. T., & Mullins, J. W. (2009). Marketing strategy: A decision-focused approach. North Ryde, N.S.W.: McGraw-Hill. Read More