Strategies for Developing Sustainable Restaurants Brands in Market - Example

MARKETING PLAN Name: Abdulhakeem Alfaleh Course: Foundation of Marketing Theory Executive Summary The organizations that produce and market products and services are performing their basic functions primarily to satisfy their commitments to the society, the customers and other relevant stakeholders. From an economic-point of view, they create a benefit, called utility such as form, time, place and ownership utilities (Boone and Kurtz, 2009, p. 5) and they are the want-satisfying power of the goods or service. But in today’s highly complex marketing contexts, no business would be able to survive unless it plans effectively for the future. The contemporary marketing is largely influenced by technology, competition, globalization and customers’ ever-changing specific requirements. Therefore, a marketer has to foresee how these significant variables can impact its marketing domain and how they can effectively be managed in order its marketing activities to be successful and to help it create long-term sustainable competitive advantage. This paper presents a marketing plan for ‘Green Pizza Restaurant’ in Riyadh, Saudi Arabia, comprising of major marketing and situational analysis and relevant description of marketing objectives and marketing strategies. This paper uses SWOT analysis and PEST for analyzing both internal and external environmental factors to the business. With relation to marketing objective, segmentation, target market and positioning strategy (STP) and marketing mix strategy including its sub-elements of product, price, promotion and place are detailed in this paper. TABLE OF CONTENTS Introduction ………………………………………………………… 4 Purpose of the report……………………………………………….. 4 Situation Analysis (Internal to the company) ………………………… 5 Background of Green Pizza Restaurant………………………. 5 Company’s mission, objectives and growth strategies ……….. 5 Past Performance………………………………………………. 6 Marketing Mix elements ……………………………………… 6 The customers …………………………………………………. 9 Unique Value Proposition ……………………………………… 12 External Analysis ………………………………………………………. 12 The Market Extent …………………………………………….. 12 Competitor Analysis ………………………………………….. 13 The Economic Environment ………………………………….. 14 SWOT Analysis ………………………………………………………. 18 Objectives……………………………………………………………… 19 Supply Chain Analysis………………………………………………… 19 Implementation & Control……………………………………………. 19 Conclusion ……………………………………………………………. 20 References ……………………………………………………………. 21 Introduction For Green Pizza Restaurant, exchange of foods and services is not mere the core idea behind its marketing, but rather, sincere efforts to create, communicate and deliver reasonable values (Kerin et al, 2005, ) to its customers will be of greater focuses and major concerns. As Armstrong and Kotler (2005, p. 6) stressed, marketing deals with customers more than any other business function and therefore building customer relationship based on customer value and satisfaction is at the very heart of modern marketing. This paper presents a brief report based on the marketing analysis of the Green Pizza Restaurant, to be located in Riyadh, Saudi Arabia. This piece of paper relates to various marketing concepts and principles such as marketing vision, marketing mix, customer analysis, internal and external analysis and marketing strategies with regard to Pizza Restaurant. Purpose of the report To look into the internal analysis of Green Pizza restaurant which will help to understand the marketing strategies used by the organization To identify the effects of external environment on the working of Green Pizza restaurant To find out the marketing plan for Green Pizza restaurant along with the time schedule To identify the SWOT analysis which will help to find out the growth alternatives which will help Green Pizza restaurant Situation Analysis (Internal to the company) Background of Green Pizza Restaurant The restaurant is located in Eastern Riyadh. The restaurant has an advantage as there are shops and eating centres surrounding the restaurant. This provides an opportunity for Green Pizza Restaurant to tap and will ensure that there business grows. Added to it is the variety of offering made by the restaurant. Green Pizza Restaurant has a lot of options when it comes to pizzas which will ensure that the restaurant does well and attracts customers of all types. Company’s mission, objectives and growth strategies The Green Pizza Restaurant aims to contribute to human needs by delivering quality pizza-foods and drinks and to enhance healthier food with joyful environment to help its customers find their entertainment needs to be satisfied. Armstrong and Kotler (2005, p. 42) emphasized that a statement of an organization’s purpose- a mission statement- must be able to define the business in terms of satisfying basic customer needs. For Pizza Restaurant, its customers are rich people to be specific the Saudi Community income considered higher than the other communities for instance the individual adult make SR 4000 to SR 10000 monthly. All these numbers for the normal workers, business men make more than these numbers, and regular customers or other professionals from Riyadh who comes to meet their needs of hunger, thirst, and joy and leisure entertainment. Company will value their needs, their responses and their varying requirements and thus it will design different services and quality multi-cultural organic food items in order to satisfy its customers. To differentiated pizza-foods considering different tastes and preferences of customers is one the methods that Green Pizza restaurant use to seek higher opportunities Main objectives of the company are establishing customer focus strategy, maintaining customer loyalty, ensuring long-term profitability and thus achieving sustainable competitive advantages. In order these objectives to be achieved, the Restaurant plans to give greater emphasis on strategies like mass-marketing strategy, customer focus strategy, customer relationship and CRM strategies etc. Past Performance Green Pizza Restaurant has been performing well from the single outlet that they have in the city. The restaurant looks to serve around 170 customers each day which ensures that the restaurant is flooded with customers all the time. Presently the restaurant is performing well and is expected to grow with their strategies in the future. Marketing Mix elements As far as four Ps of the marketing are concerned, Pizza restaurant takes an integrated approach to these elements, namely products, price, place and promotion. According to Wilson and Gilligan (2005, p. 536), although the effective management of each of the individual element of the mix is largely self-evident, many marketing strategists have stressed the need to pay attention to the ways in which the mix elements as a whole can be managed well and integrated so that a high degree synergy can be achieved. Green Pizza foods and drinks is priced based on penetration pricing policy and hence the price is relatively cheaper in the beginning and later will be priced reasonably. Its foods and drinks are delivered directly to the customers as they visit the Restaurant, but with an extreme focus on maintaining outstanding quality in services. Various sales promotions and related packages will be designed at different times and seasons. A detailed analysis of the marketing mix elements are as follows Product The restaurant sector is divided into restaurant and lodging section depending on the income level in the country. This has made the provider differentiate their product. It is a seen phenomenon that Green Pizza Restaurant looks towards highlighting the benefit of their products and showing that it is also fit for health conscious people. The service plays a huge role but “the socio-cultural factor affects the number of people eating in restaurants and this gets altered due to services being offered by the restaurant”. (Pobari, 2009) Thus, Green Pizza Restaurant has a mix of services and providers differentiate themselves on some basis. Price The hospitality sector is Riyadh has multiple price mechanism working according to the living standard. The restaurant industry in “Riyadh offers premium pricing for the high class restaurants, value for money for frequent eaters and cheap value pricing for the price conscious customers”. (Justin, 2008) The mix of different pricing gives the service provider to tap the market in different cities as per the living standard. By providing such a variation it also ensures that Riyadh offers different service provider to choose their competencies. Promotion The restaurant sector in Riyadh provides an integrated marketing communication to make the customer aware of the services and ensure that they remain loyal. The restaurant industry offers “advertising on television, radio, billboards, newspaper, hoardings, and public relations, personal selling, direct mail and internet”. (Justin, 2008) The technological advancement has allowed companies to use the marketing communication according to their requirements. Thus, Riyadh presents a wide avenue to choose to sell the services and also have loyalty programs to retain customers. Place The restaurant industry in Riyadh offers a variety of means to sell their food. Riyadh has also developed channel management which has ensured that selling is easy. The restaurant offers “direct selling over the phone or personally at the counter and other means”. (Justin, 2008) Thus, companies get a variety of option and using all they can get a good grasp of the Riyadh market. Understanding the marketing mix that companies can use in Riyadh will help to better frame strategies and also decide the course and steps to be taken. People People in the restaurant industry comprises of employees, customer and the company itself. Companies need to ensure that all this are under control so that proper management is possible. The buyer behaviour in Riyadh “plays a huge role due to the socio-cultural influence so companies need to ensure that segmentation and targeting is sound”. (Kalyani & Babu, 2006) This makes it important that airlines identify it properly. The services offered should also be good to retain those. The restaurant industry in Riyadh also ensures that the “employees are well trained and versed according to the culture and also given continuous motivation talks to keep their high spirits”. (Kalyani & Babu, 2006) This makes it possible for the service provider to ensure that they are able to provide continuous service without disruptions. Physical Evidence Since, services can’t be seen but only realized by those who have been a part of it so the restaurant industry in Riyadh ensures that the services offered are as per the cultural requirements. (Chawla, 2003) The provider so ensure that “services offered are differentiated by offering something else from the others so that satisfaction is high”. (Chawla, 2003) Thus the restaurant industry has a lot of offer and based on the different cities the provider mould their services. This helps to provide good service. The customers In a better marketing planning, the first logical step is to analyze the customers (McLoughlin and Aaker 2010, p. 26). Customer analysis can be easily done by analyzing the segments and recognizing the strengths of each of the segments and other factors like specific requirements etc (Luther, 2011, p. 55). Pizza Restaurant’s customers are expected to be from rich people and middle class people who desire organic food, mainly pizza-contained food and drinks for fulfilling their need of hunger and joy. In other word, Green pizza restaurant targeted all kind of people, relying on their widespread menu, also attracting healthy food fans since it is a fat free Pizza. To be more specific this is a quotation from a survey and statistics about the income and the average age.( Per capita income in Saudi Arabia is around $15,500 (Peskin, 2009, Para. 7) which equals 55125 SR; that means that monthly average of individual income around 4593 SR. Therefore, the majority of the participants belonged to the middle or above income level with 38.2% receiving 5,000SR to 8,999SR, followed by the group whose monthly income was between 2,000SR to 4,999SR. In figures 2 shows the average age categories in Saudi Arabia) (Al-ghaith, 2010). Also shown is the majority from youth which is basically the main target market. Moreover, there are massive trend towards organic food globally and the chart below explain the reasons and the percentage. Though the whole targeted market can be segmented in to different categories, all these customers are served while they visit the restaurant and therefore the segmentation strategy to be implemented will be mass-marketing strategy. One of very significant factors that the company considers as critical element to its success is continuous assessment, analysis and extensive research on customer preferences and their tastes so that company will be able to design, develop and make changes its pizza-food and drinks accordingly. Since all of the above statistics declares that most of the Saudi population from youth age so basically that is the main target for Green Pizza restaurant. Unique Value Proposition Customers always make purchase decision based on perceived value, or the degree to which their needs and expectations about the quality, usability, utility and features can be satisfied (Duchessi, 2002, p. 81). Customers prefer one brand to another based on the value propositions they expect from the preferred one. Green Pizza restaurant proposes to deliver foods and drinks that will be able to satisfy customer needs and wants by differentiating it from foods and drinks of its competitors and by positioning the brand equity. Green Pizza Restaurant is looking towards marketing themselves by highlighting their benefits. The restaurant uses a strategy where they highlight their pizza which has less oil content. This has helped the restaurant to ensure that it attracts the health conscious people and has helped the restaurant to grow with this strategy. This is a unique selling point which Green Pizza Restaurant targets at and looks towards attracting customers by using it. External Analysis The Market Extent Green Pizza Restaurant is not going to be a global or national-level marketer of Pizza foods and drinks, but merely to focus on local people from around Riyadh and those who come to Riyadh as visitors. Though it doesn’t have any significant role in global marketing, its local or domestic marketing is relatively big because the buyers of pizza-products will be from all different kinds of people. Pizza Restaurant’s customers are both rich people as well as middle and college student or other people who desire pizza food at different times of events or occasions and thus the customers are not just few segments or groups of people, and this opportunity will be seized by the company by making different foods items to attract different groups of people. Competitor Analysis A competitor analysis is always the first step a firm takes to be able to predict the extent and nature or its competitive rivalry and to measure how strong they are in the market (Ireland, Hoskisson and Hitt, 2007, P. 162). Competitor analysis becomes a highly important strategic tool because knowing the values being provided by the competitors will help the company design its market accordingly. As Bangs (2002) suggested, studying competitors’ plan, strategies and customer attitudes to them will be of greater help to a company (p. 61). Main competitors of Green Pizza restaurant are four large restaurants, namely Eat-Fresh, Zigzag, Al-raid and Hill-View. Though all these restaurants together attract around 400 to 600 people a day, Green Pizza Restaurant will be able to attract around 220 visitors from its second year onwards by facilitating various amenities, by delivering supreme quality services and by providing quite different fat free food items to different groups of people. In the chart below there is information on competitors and weakness point compared to Green Pizza restaurant. Eat-Fresh Zigzag Al-raid Hill-View Green Pizza Target high income people Target only youth Target low wages only Target high income people Target all kind of people Their menu include other food beside Pizza Specialized in Pizza, without paying attention to healthy food All kind of fast food, and Pizza Pizza and other food Specialized in Pizza, fat free Pizza. Customer rate around 165 a day Customer rate around 160 a day Customer rate around 150 a day Customer rate around 150 a day Customer rate around 170 a day to 180 Strengths points the customer rang stable Strengths points Very popular for youth Strengths points Low income keep coming back Strengths points Very old in the market build reputation Strengths points Large base of customers, from every kind of people Weakness Focus on specific people Weakness Only pizza served so if someone want to have something else, there will be no chance Weakness Focus on specific category Weakness Focus on specific category Weakness Only Pizza served so if someone want to have something else, there will be no chance No delivery service No healthy food served No delivery service No delivery service Complexity in menu and other preparatory activities The Economic Environment When it comes to Saudi Arabia’s, especially Riyadh’s, business opportunity and economic environment, it always shows a positive up-ward sloping graph due to a number of reasons like oil industry and growing business contexts. A business can grown only where business are growing or already grown. Saudi’s business and economic environments show that they are robust and any business, with effective strategies can yield better outcomes than what can be expected of many other countries. And I quote from Jodie R the main author of (CIA The world Fact Book) from the culture and communication skills consultancy web site she said(1953 transformed the Kingdom of Saudi Arabia from a purely trade-based economy to the largest exporter of petroleum in the world. This economical revolution paved the way for a greater industrial base and opened up the country to the business world). Apart from these, real state decisions regarding the economic explosion which was a result with doubling the rent which happened recently in Saudi Arabia , availability and expansion financing, economic policies of the country, economic crisis from other countries that is likely to impact on its economy are some of the factors that can affect the economic environment of Green Pizza Restaurant, also there will be no laws or political influence that might affect Green Pizza restaurant, because it is only a food place with no involvement to the politics. Political Political situation plays a very important role for any industry and more for a developing country. Riyadh has a very high influence of “political factors and any changes in decision affect the overall bearing in the sector”. (OPpapers, 2010) The restaurant industry is “heavily influenced by the political scenario and the person visiting the restaurant gets affected due to change in policies or unstable government”. (OPpapers, 2010) This calls for an understanding of the scenario. The Riyadh political system has been stable. (OPpapers, 2010) This has affected the policy changes though still the government has reforms supporting growth. The political situation has been such which has helped the restaurant industry to flourish in Riyadh. Green Pizza Restaurant can use it as Riyadh has good trade relations. Economic The economic situation affects the number of visitors to a restaurant. The restaurant industry for a developing country like Riyadh gets affected by “the growth rate and the business cycle as during recession people consider it a luxury but during boom a necessity”. (Justin, 2009) This is also affected by the price of food grains. An increase in price reduces the consumption as it becomes expensive. Riyadh, slowly coming out of recession provides an opportunity. The number of people visiting restaurants has increased due to this. The income level and the growth rate also affect people visiting the restaurants. The economic situation has also improved for people as the living standards have risen. “The present GDP (per capita) is calculated at $1600 which is low compared to developed countries but the growth of IT and BPO is giving a push and with younger population on the side the per capita GDP is bound to grow”. (OPpapers, 2010) This is a boost and with the economy reviving has seen a jump in visitors visiting restaurants. Social The Riyadh culture is strongly influenced by culture prevalent is social environment. Riyadh being a diverse country this plays a prominent role. “With different people from different backgrounds, religion, income level, and habits affect the way a person stays and brings a change in a social outlook”. (Justin, 2008) The social culture affects the way a client can be satisfied. This makes companies use a mix of different culture and ways to satisfy people especially while operating in service industry. (Justin, 2008) Thus, the social factor is greatly influenced by religion. Service industry ensures that such an environment is created. This helps to ensure that customers are high on satisfaction and remain loyal. This is a common phenomenon seen in Riyadh that “they remain loyal to the services which satisfy them and don’t switch easily even for a price”. (Justin, 2008) Thus, social factors have a huge role in India Technology Environment Technology plays relatively less significant roles in hospitality industry and same is the case with Pizza restaurant too. But still, a hostel or restaurant business also will be able to make use of some of the recent technology like induction cooker, electronic ovens, electronically timing system etc. The restaurant has facilitated computer and networking to help customers perform billing and other tasks conveniently and also to get updated with news and other important information through LAN and WIFI. For any business, adapting to newer technologies and getting adjusted with them are of extremely important factors that a firm will be able to get rid of socio-political and economic backwardness (Joseph, 2005). Environment The Riyadh government has also framed laws for the environment. A cap has been put and steps taken to keep it within limits. The government has also taken steps for cleaning the rivers and companies are also helping in it. The restaurant industry has also contributed to it by domestic players taking steps to reduce wastage in the environment. This is a step in the right direction and the restaurant industry can bank on it. The restaurants which ensure that steps are taken to ensure that there is less wastage and dumping in the environment will be able to grow and survive. Those companies are favoured and are a boom for the service providers. Cultural Trend In regard to cultural trend, most old people prefer traditional food rather than other kind of food, and that won't be a problem because the percentage of the elderly is 1.8% from the overall population as the previous statistics shows. Most of the Saudi society welcomed other food from other menu to their table as part of entertainment to them. SWOT Analysis Strengths Weaknesses Greater emphasis on value creation and customer satisfaction Integrated approach to marketing-mix elements Customers’ strong desire for organic pizza foods Strong desire to deliver value to customers based on value propositions. Complexity in menu and other preparatory activities Restaurant provides only pizza-products, so customers who desire to get others organic foods along with pizza foods may not satisfied. A good portion of the people still don’t like pizza-items Opportunities Threats Advantages of local market Growing trends of customers towards joy and entertainment Differentiated pizza-foods by considering different tastes and preferences of customers Convenience with newer technologies like electronic oven High competition from four restaurants Readily available food in other shops near to the restaurants . Objectives For marketing objectives; SMART is the proper way to evaluate it (Lipe, 2002, p.115). After executing these plans, the number of the customers should increase within four months from the range of 150-170 to 220-250 in one day. Moreover, these numbers might increase to some point so the restaurant will have the capacity to receive them. Expansion is one of the core objectives for Green pizza restaurant and that will be accomplished through the next following three years, by opening other branches in Riyadh. Jeddah is the next target for Green Pizza restaurant because it is the second largest city. Supply Chain Analysis Green Pizza restaurant is looking to satisfy customers by developing a supply chain which will help to serve the customers with fresh pizza. The restaurant on this direction is looking towards different tie ups so that they are able to evaluate the mechanism which will ensure that they are able to deliver quality products. Green Pizza in this direction is looking towards tie ups which provide regular pizzas and the stale ones are replaced with the fresh ones. Implementation & Control Green Pizza restaurant needs to devise a strategy by looking at the time frame and the manner they will achieve the objectives of the business. Green Pizza needs to look towards improving the brand name, market share and penetration into different markets. For this Green Pizza needs to evaluate their strategy regularly so that they are able to identify the areas they need to work on. Green Pizza by having a time frame will be able to ensure that they take all steps which helps to bring the entire functioning into one. This will help the restaurant to develop their market model better and the strategies used by the restaurant will pay the required results. It will at the same time ensure that timely changes are being made to the required strategy to ensure that their plan is according to their desire. Conclusion The restaurant industry in on an upswing as “the income levels have raised and the entry of many low cost providers have changed the mindset of the population to use restaurants of all kind”. (Ajay, 2006) The opening of the sector and the growth rate is attracting many new service providers. The strong government regulation and the legal aspect ensure that the reforms are in favour of the industry. The growth rate thus will act as an impetus for growth. The restaurant industry in Riyadh also offers good technological advancement. Service providers who are able to ensure that the same culture is prevalent in their service are able to retain customer. Thus, Riyadh has a huge market potential and many new foreign players are eyeing the vast market. This piece of paper has presented internal and external analysis of Pizza Restaurant and the major findings have been summarized in the SWOT analysis. This paper has reviewed many literatures regarding various marketing concepts like mission, strategy, competitor and customer analysis etc. References Armstrong, G. and Kotler, P. (2005). 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