Marketing Report for Ms. Janet Bradley Keeping

Marketing Report for Ms. Janet Bradley

Keeping in view the increasing obesity rates in Australia and finding the spicy and high-calorie fast foods as the major reason for it, Ms. Janet Bradley has planned to establish a low-calorie fast food restaurant chain that will serve as an alternative to McDonald's, Red Rooster, KFC, and other fast food chains. This paper presents a comprehensive analysis of the micro and macro environment for the new fast food chain in order to recommend strategies which can help it in becoming successful in the industry. The major micro environmental forces which will impact its business are consumer behaviour, suppliers and intermediaries, publics, and competitors. The buyer behaviour has been analysed using cultural, social, personal, and psychological dimensions -- all having a significant impact on the purchase decisions and preferences of the consumers towards fast food products. The restaurant chain will also take a big impact from its top industry rivals which include both direct and indirect competitors. The macro environment consists of demographic forces (i.e. age group, gender, life preferences, etc.) economic forces (income groups, industry growth, inflation, etc.), technological forces (high-tech machinery and systems), political forces (governmental behaviour and regulations) and cultural forces (eating habits, health consciousness, and choice of foods). All these forces will drive the performance of the new low-calorie fast food restaurant chain in its industry.

Marketing Report for Ms. Janet Bradley

Based on this analysis, the paper recommends marketing strategies to Ms. Bradley which will help her in presenting the products to their potential target customers in the most effective and profitable way. The paper recommends that Ms. Bradley should primarily target the health conscious consumers with age group of 26 and above; belonging to the lower and middle income groups, and residents of urban areas of the country. She can achieve competitive advantage in the industry by adopting an effective positioning strategy; designing unique value proposition; and following product differentiation strategy.

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Table of Contents

Executive Summary i

1 Introduction 1

2 Market Analysis 2

2.1 Buyer Behaviour 2

2.2 Microenvironment 4

2.2.1 Suppliers and Intermediaries 4

2.2.2 Publics 5

2.2.3 Competitors 6

2.3 Macroenvironment 12

3 Marketing Strategy 15

3.1 Target Market 15

3.2 Positioning and Competitive Advantage 17

4 Marketing Mix 18

4.1 Product Strategy 18

4.2 Pricing Strategy 19

4.3 Distribution Strategy 20

5 Summary of Recommendations 21

6 Conclusions 23

Reference List 24

Introduction

The purpose of this report is to recommend marketing strategies to Ms. Bradley for her new fast food restaurant chain on the basis of micro and macro environmental analysis. The analysis of micro environment has been done in the light of buyer behaviour associated with fast food consumption and the impact of suppliers and intermediaries, public groups, and top industry competitors on the new business. The macro environment section discusses how demographic, economic, technological, political, and cultural forces will affect the strategies, business operations, and performance of the new fast food restaurant chain.

The next section of the report presents a couple of core marketing strategies for the new fast food business. These strategies are: identification of the target market (on the basis of geographic, psychographic, demographic, and behavioural segmentation) and positioning and competitive advantage (in the light of positioning theory and value proposition). Section 4 of the report recommends the way Ms. Bradley should design the Marketing Mix (product, price, and distribution strategies) for her fast food business. The final section summarizes all the recommendations from throughout the report. The report concludes by highlighting the major ideas from its important sections.

Market Analysis

The obesity rates are showing an increasing trend in Australia. Considering the excessive use of spicy and high-fat fast food as the major reason for obesity, Ms. Janet Bradley has planned to open a new fast food restaurant chain in the country that would serve as an alternative to the traditional fast food restaurant chains like McDonald's, Hungry Jack's, KFC, Red Rooster, etc.

This section presents a comprehensive analysis of the business environment which the new fast food restaurant chain will observe in the Australian market. It includes buyer behaviour associated with fast food consumption and the analysis of micro and macro environmental forces that will impact the fast food business in a positive or negative way. Market analysis is important for the company in order to understand the business environment and industry before actually becoming its active participant. Failing to understand the market can result in unsuccessful business strategies, negative consumer response, and poor operational and financial performance. An effective market analysis will help the company in offering its products to the most potential customers in the most competitive and efficient fashion.

Buyer Behaviour

Buyer behaviour explains why people consume spicy fast foods, or alternatively, low calorie food products, and what are the cultural, social, personal, and psychological forces that drive this behaviour (Kurtz, MacKenzie, & Snow 2010). The following table explains the different dimensions of buyer behaviour; their definition, and the major characteristics of consumers of fast foods and low calorie food products.

Table 1: Overview of Buyer Behaviour

Influences

Definition

Characteristics of consumers of fast food and/or low calorie food

Cultural

To adopt cultural values

Eating habits

Tendency to adopt modern life style

Finish food quickly and move on Social

To be a part of the society

Social gathering

Share common societal values

Enjoy getting together

Outing with friends and family

Fun and excitement

Personal

To live a modern life style

Save time

Individual food preferences

Fast food lover wants to live a modern life style. They enjoy high-spiced and peppery fast foods.

Others are health conscious and demand low-calorie foods

Psychological

Enjoy delicious foods offered by top quality fast food restaurant chains

Fulfil basic life need (hunger) in a cool and trendy way

Enjoying top quality food

Expect value for the money spent on food

Fast food lovers are generally brand conscious; they only want to spend money for top quality fast foods.

Microenvironment

Microenvironment constitutes all those factors which can impact the operational cycle and profitability of the company (Lamb, Hair, & McDaniel 2012). It primarily deals with the role of supply chain members and intermediaries, public groups, and competitors in influencing the business operations and financial performance of the company in one way or another (Blythe & Megicks 2010). This section explains the microenvironment for the new fast food restaurant chain by discussing the role and impact of abovementioned stakeholders.

Suppliers and Intermediaries

The new fast food restaurant chain will have to find suppliers from the Australian market that will provide all types of raw material and ingredients to produce high quality food products. Irrespective of the interest of Ms. Bradley in introducing low-calorie fast foods, the raw material and ingredients will be the same as they are for McDonald's, KFC, Burger King, and other high-spiced fast food product manufacturers. Therefore, she will not face any difficulty in finding suppliers for her fast food restaurant chain.

The second most important supply chain member is the distributors and business development firms in the fast food industry (Jenny & Scammon 2010). Ms. Bradley will have to take their services in order to promote her business and deliver the products to the ultimate consumers. In addition to hiring product delivery workforce, she will have to make sure that her fast food business has an effective distribution network across all the potential markets in the country. The business development and promotional firms will introduce the business to new investors, supply chain members, and other key stakeholder from the industry -- making it easier for Ms. Janet Bradley in establishing the brand image of her fast food business in the Australian market (Ellwood 2002).

The challenges which this new business may face in regard to supply chain include; high prices for top quality raw material, high commission by large scale distributors, and time period required in building strong relationships with these suppliers and intermediaries (Mu-hlbacher, Dahringer, & Leihs 2006).

Publics

In addition to the suppliers and intermediaries, there are certain other public groups which are likely to impact the new fast food business or get impacted by it. These groups include regulatory authorities, food associations, and the society as a whole. Regulatory authorities include governmental and semi-governmental bodies that regulate the fast food companies, impose laws and regulations, and oversee the fast food industry participants for their ethical and legal business practices. In order to operate in the industry in an ethical and effective way, Ms. Bradley's fast food restaurant chain will have to adhere to the laws and regulations imposed by the local regulatory authorities (Pride & Ferrell 2012).

Secondly, the new fast food restaurant chain will have to become an active member of the local and national food associations which act as a liaison between the Australian government and the domestic and multinational fast food companies operating in Australia. These associations play a vital role in keeping its members on an ethical track in their business practices as well as in dealing and negotiating with the government on different matters.

The biggest impact of this new fast food restaurant chain will be taken by the society members. In contrast to the traditional fast food restaurants that offer spicy and high calorie fast foods, Ms. Janet Bradley's fast food restaurant chain will offer low calorie food for the health conscious people. She will also have to run awareness and promotional campaigns to make the society members realize the importance of low-calorie food for a healthy life style. The society (especially the initial target locations) will find an exact alternative to the high-spiced fast food products that are considered to be one of the biggest reasons for heart diseases and obesity at all age groups (Philipson, Dai, & Helmchen 2004; World Heart Federation 2007).

Competitors

The micro-environment for the new fast food restaurant chain also constitutes the competitive forces that will become the biggest threat for its sales and financial performance in the industry (Birn 2004). The following table presents an analysis of the major direct and indirect competitors for Ms. Bradley's fast food restaurant chain by discussing their major competing offerings, target market, and primary positioning strategies. The direct competitors to this fast food restaurant chain are McDonald's, KFC, Domino's Pizza, Hungry Jack's, Red Rooster, Chicken Treat, and Chooks Fresh & Tasty while indirect competitors include Pizza Hut and other fast food restaurants that are offering alternative or low-calorie fast foods.

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Table 2: Overview of Competitors

Competitor

Overview of their competing offerings

Target market

Positioning

McDonald's hamburgers, cheeseburgers, chicken, sandwiches, French fries, salad, desserts, milk shakes, soft drinks, beverages, smoothies, fish, wraps, and breakfast items.

Most of the fast food products are spicy and high-calorie

Children, teenagers, youngsters, and adults

Age groups: between 5-45 years

Income groups: upper middle and high income

Area: urban

Variety of top quality fast foods offered for all age groups.

Ronald McDonald (Mascot) to attract kids

Happy meals for families

McCafe for teenagers and youngsters

Vegetable sandwiches and burgers for vegetarians

(McDonald's 2013).

KFC

Chicken burgers, French fries, fried chicken, chicken sandwiches, wraps, desserts, soft drinks, salads, and breakfast items

Specialized in chicken products

High spiced and high calorie foods

(KFC 2013).

Children, teenagers, youngsters, and adults

Age groups: between 8-45 years

Income groups: middle, upper middle, and high income groups

Area: urban

Large variety of chicken products

A wide range of deals and packages for families and groups

Also offers low-calorie and vegetable burgers and sandwiches for health conscious people

Domino's Pizza

Chicken wings, Pizza, pasta, submarine sandwiches, wraps, and desserts

Specialized in pizza varieties

Children, teenagers, youngsters, and adults

Age groups: between 5-45 years

Income groups: middle, upper middle, and high income groups

Area: urban

Various flavour variations in pizza and chicken products to cater the needs of different types of customers

Comparatively low-fat products than McDonald's, KFC, etc.

Hungry Jack's (Franchisee of Burger King in Australia)

Chicken products, hamburgers, French fries, salads, breakfast items

Children, teenagers, youngsters, and adults

Age groups: between 8-45 years

Income groups: upper middle and high income groups

Area: urban

Combo meals for families and groups

Deluxe combo meal especially designed for Australian customers

Red Rooster

Chicken and beef burgers, subs, wraps, baguettes, salads, and desserts

Teenagers, youngsters, and adults

Age groups: between 15-45 years

Income groups: middle, upper middle, and high income groups

Area: urban

Variety of top quality fast foods offered for all age groups.

High-spiced products for youngsters

Promotes fun and excitement

Attractive meals for special events

Chicken Treat

Specialized in barbeque chicken products

Teenagers, youngsters, and adults

Age groups: between 15-45 years

Income groups: middle and upper middle

Area: urban

High-spiced fast food products for youngsters

No special offerings for health conscious customers

Chooks Fresh & Tasty

Specialized in barbeque and fried chicken products

Teenagers, youngsters, and adults

Age groups: between 15-45 years

Income groups: middle and upper middle

Area: urban

High-spiced fast food products for youngsters

No special offerings for health conscious customers

Pizza Hut

Specialized in pizza, sandwiches, and chicken products

Indirect competitor to fast food restaurant chains that offer spicy and high-calorie fast foods (e.g. McDonald's, Hungry Jack's, KFC, etc.)

Children, teenagers, youngsters, and adults

Age groups: between 8-45 years

Income groups: upper middle and high income groups

Area: urban

Variety of high-spiced and low-calorie food products to cater the needs of different types and age groups of customers.

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Macro-environment

In contrast to the micro-environment, macro-environment consists of forces that are present in the external business environment of the company. These forces collectively shape the industry behaviour for its participants (Pride & Ferrell 2012). The following table defines and explains these macro-environmental forces for the new fast food restaurant chain which Ms. Janet Bradley aims to establish in the Australian market.

The macro-environment for this low-calorie fast food restaurant chain includes demographic forces (like age group, location, gender, family size, life preferences, etc.) economic forces (e.g. income groups, industry patterns, growth potential, past trends, inflation, costs and benefits, etc.), technological forces (including High-tech machinery and advanced enterprise resource planning and management systems), political forces (like governmental behaviour, political situation, local laws and regulations, health and safety standards, etc.) and cultural forces (including eating habits, love for fast foods, health consciousness, cultural values, choice of foods in different time and occasions, etc.).

Table 3: Macro-environment Analysis

Macro Factor/Trend

Definition of Factor

Explanation of trends / events relevant to fast food or low calorie food

Demographic

Age group

Location

Gender

Family size

Life preferences

This macro-environmental force is directly related to the target market and its behaviour towards fast foods. Keeping in view the type of its product offerings (i.e. low-calorie fast foods), the new fast food restaurant chain will need to observe the behaviour of customers which will drive its performance in the industry. For this purpose, it will have to identify and analyse the most potential age group, geographical locations, and genders which it should make a part of its business level strategies.

Economic

Income groups

Industry patterns (Growth potential, past trends, etc.)

Inflation

Costs and benefits

Economic environment constitutes those forces which affect the earning and spending patterns of the consumers, companies, and governments. This force will directly affect the sales and financial performance of the new fast food restaurant chain. For example, the increasing rate of inflation and high costs of raw material and production will negatively affect the profitability of this low-calorie fast food business.

Similarly, it will have to keep in view the income level of consumers which is largely affected by various economic forces like inflation, unemployment, cost of living, etc.

Technological

High-tech machinery

Advanced enterprise resource planning and management systems

The new fast food restaurant chain will have to install the most advanced machineries and equipments in its production plants in order to produce the highest quality of fast food products under strict hygienic conditions and health standards. Poor technological equipments and machineries can affect its operational efficiency which results in higher production and operational costs.

Moreover, it will have to install advanced systems to manage its customer information, orders, inventory, and employees records. Failing to understand this macro-environmental force can result in poor performance in the industry in all aspects.

Political

Governmental behaviour

Political situation

Local laws and regulations

Health and safety standards

The political situation and governmental behaviour towards food manufacturing and processing businesses will directly impact this low-calorie fast food restaurant chain. In order to avoid criticism and negative impacts, the fast food restaurant chain will have to follow the laws and regulations on health and safety, use of ingredients, employment laws, etc.

Cultural

Eating habits

Love for fast foods

Health consciousness

Cultural values

Choice of foods in different time and occasions

The eating habits of Australian consumers (like food choice at breakfast, lunch, dinner, etc.), love for spicy foods among youngsters and popularity of low-calorie, healthy, and dietary products among aged people -- every cultural aspect will need to be analysed before actually starting operations in the Australian market.

Marketing Strategy

After analysing the business environment from both micro and macro perspectives, Ms. Janet Bradley will need to design marketing strategies for her low-calorie fast food restaurant chain. The marketing strategies proposed in this report include: identification of the most potential target market and its segmentation on different characteristics like geographic, psychographic, demographic, and behavioural; strategies to do effective positioning and achieve competitive advantage; and a set of marketing mix strategies, including product, pricing, and distribution strategies.

Target Market

Table 4: Market Segments for Low Calorie Fast Food

Characteristics

Segment 1

Segment 2

Segment 3

Demographic

Age Group: 4-15

Gender: Both

Family/Individual: Family (small)

Age Group: 16-25

Gender: Both

Family/Individual: Individuals (with friends and colleagues)

Age Group: 26 and above

Gender: Both

Family/Individual: Both (with friends, family, and colleagues)

Geographic

Area: Urban (major cities and towns in Australia)

Location: Well-developed commercial and residential societies; especially near amusement parks, playing grounds, and recreational areas

Area: Urban (major cities and towns in Australia)

Location: Well-developed commercial and residential societies; especially near universities, colleges, and offices

Area: Urban (major cities and towns in Australia)

Location: Well-developed commercial and residential societies; especially near offices, cinemas, theatres, super markets, and malls.

Psychographic

Activities/Interests:

School going children

To have fun and excitement with family members

Activities/Interests:

Social gathering, outing, recreation, etc.

To live a modern life style

Activities/Interests:

Relaxation, enjoyment, and social gathering

To enjoy fast food when far from home

Behavioural

Benefits sought:

Enjoyment

Usage Rate:

Twice-thrice a month

Benefits sought:

Tasty fast food in variety of flavours and ingredient variations

Usage Rate:

1-3 times a week

Benefits sought:

Healthy food without high-calories and spices.

Usage Rate:

5-8 times a month

The three segments discussed above have been evaluated on the basis of geographic, psychographic, demographic, and behavioural aspects. Among these three segments, the third segment consisting of customers with age group of 26 years and above can be the most potential target market for the low-calorie fast food business. Reason being, when people cross their youth, they become more health conscious and tend to seek dietary and healthier food products in order to stay fit and prevent heart diseases and obesity issues. The usage rate, psychographic preferences, and behavioural aspects of Segment 3 are also favourable for low-calorie fast foods.

Positioning and Competitive Advantage

Keeping in view the positioning theory which focuses on creating the image of the product in the minds of consumers instead of marketplace (Pride & Ferrell 2012), Ms. Bradley should position the product offerings of her low-calorie fast food chain in competition with the high-calorie and spicy food products offered by its competitors. She should apply the positioning theory at all levels of competition, i.e. product, category, corporate, and industry level in order to develop a unique value proposition for her products (Jobber 2009; Kotler 2010).

For the new low-calorie fast food chain, value proposition can be created by positioning its products as alternative to the spicy and high-calorie foods (the product level); competing product against other foods (category level); competition against McDonald's, KFC, etc. (corporate level); and fast food industry against traditional restaurants (industry level) (Paley 2006).

Based on this value proposition and the overall objective of eliminating obesity issues among Australians by offering low-calorie foods, Ms. Bradley can define strategies which can give her business a competitive advantage in the industry. Competitive advantage refers to the ability of a firm to produce better products than its industry rivals in any one or all business aspects and product attributes. Ms. Bradley can achieve this advantage by using product differentiation strategy (Hill & Jones 2012). This strategy will enable her to produce products that are acceptable among all fast food lovers; but will have a higher level of acceptability among health conscious people due to their low calories and high quality ingredients.

Marketing Mix

Marketing mix consists of the strategies which a business organization needs to espouse while presenting its products to its most potential target customers in an effective, profitable, and competitive fashion (Kotler 2010). Marketing mix strategies not only help companies in building their brand image in the industry, but also enable them to achieve their strategic objectives which include high market share, strong supply chain relationships, high brand appreciation and customer loyalty, and superior financial performance as compared to their industry rivals (Ellwood 2002; Hitt, Ireland, & Hoskisson 2011; Lancaster & Withey 2007). This section proposes the three core marketing mix strategies which Ms. Janet Bradley should adopt for her low-calorie fast food restaurant chain. These strategies include: product strategies, pricing strategies, and distribution strategies.

Product Strategy

Ms. Janet Bradley aims to establish a fast restaurant chain in Australia that would offer low-calorie food products. The chain will generally target all fast food lovers including kids, teenagers, youngsters, and adults -- but specifically, only those who are more health conscious and take the consequences of spicy and high-calorie products more seriously in their life. In order to cater the needs of these (health conscious) customers, the new fast food restaurant chain will only offer products which are equally healthy and delicious, but contain very low amount of oil and fats, calories, spices, and red peppers.

The low-calorie fast foods offered by this restaurant chain will be produced under strict health and safety standards. The company will purchase the top quality raw material and ingredients from the most reputable suppliers in order to produce fresh, healthy, delicious, and high quality fast foods. Moreover, it will buy the most advanced technological equipments and machineries like ovens, stoves, beaters, mixers, tumblers, cooking and heating tunnels, choppers and cutters, and packaging machines.

The major product offerings of the company will include hamburgers, cheeseburgers, sandwiches, fried chicken, French fries, desserts, salad, milk shakes, smoothes, soft drinks, beverages, wraps, and variety of breakfast items. In order to differentiate its products from those of its competitors, the company will need to introduce augmented products with extra healthy ingredients and special meals for adults.