Task 2: Applying strategic marketing

management to a market situation

About Organization:
Kebabish Original Restaurant was established for more than 20 years with 60 restaurants situated in
various cities in U.K. All the restaurants of Kebabish Original are listed online for customers’
convenience to locate them with contact numbers and opening timings. Kebabish Restaurant food is
inspired by the traditions. The restaurant is largely famous for its Punjabi and Indian cuisines. Their
speciality lies in the mouth-watering curries and the thrill of the grill. Every Kebabish restaurant has a
visible flame grill and open kitchen view which poses a live theatre by the cooks. This adds to the
exciting experience of the restaurant. Disabled are also welcomed and arrangements are made for
their convenience. The restaurants are air-conditioned and have a welcoming and relaxed
atmosphere.

Internal SWOT Analysis of Sam’s Chicken

(AC.4.2):
SWOT analysis provides a detail illustration about current situation of the business. It particularly will
help to make further marketing strategies.

The details analyses are given below:

Strength:
Food is cheaper than other competitor.

This brand has a strong image.

The service style is new.

Very strong trademarks recipes

It gains the highest rank among all chicken restaurant chain convenience and different menu
varieties of items.

It generates £30 million every year.

Weakness:
Its rank failed to be in top 20 in growth rate in 2000 in UK.

Due to lack of knowledge about their values of customer.

Due to the question of over franchising it leads to loss of quality and control.

Opportunities:
Restaurant is located in excellent location.

Competitor is not performing well around those areas where they are operation.

Threats:
The more growth in dinner house was come from new unit construction in small towns and suburban
market.

Steak n shake and cracker Barrel expend its restaurant by more than 10% in family restaurant.

Impact of changes in the external environment

(AC 4.1):
Political factors: Political factors include laws, agencies and groups that influence and limit
organisations and individuals in a given society. The dimensions being evaluated include the
government attitude to foreign markets, the stability and financial policies of a country and
government bureaucracy.

Economic factor: Economic factors include factors that affect consumer purchasing power and
spending patterns. Economic trends are again, to a large extent, bound up in government policy and
area crucial issue to businesses and marketers because of the way they affect consumer spending
power. In periods of relative prosperity, a consumer’s disposable incomes will be relatively high and,
therefore, there is a willingness to spend more money. Price becomes less sensitive issue and this
affects marketing strategy itself. During a recession, however, spending power decreases making
price more relevant. The differences that exist between countries in different stages of economic and
industrial development have a profound influence on price setting. Differences in income levels may
suggest the desirability of systematic price variations. It is, therefore, important for Kebabish
management to understand that, in countries with a lower stage of economic development, it is
necessary to set a lower price.

Technological Factors: Technological developments have made international travel and

communication more accessible to consumers and led to a situation in which social habits and
fashions change much quicker. Moreover, lifestyles and attitude changes cause changes in product
demand and how products can be sold to customers. Technological factors include forces that
create new technologies, creating new product and market opportunities. It is based on
considerations as to whether the local market has sufficiently developed technologies to take full
advantage of the product. It should be noted that high technologies are required to make full use of
the variety of promotional methods using alternative advertising media such as television or websites
(Vrontis and Vronti, 2004). Kebabish’s successful internationalisation can be partly attributed to the
way the company has overcome technological problems. The systematic substitution of equipment
for people and the carefully planned use and positioning of technology have helped each franchise
to be of the same high standard.

Social Factors: Shifts in spending power are also affected by sociological demographic trends.
Analysis of population fluctuation suggests to marketers in which age groups there is going to be the
largest demand for particular goods. A baby boom, for example, will increase the need for baby
products initially then, in following years, a greater demand for toys, educational products and
children’s clothes etc. Another emerging trend is the changing family, with the traditional family unit
of mother, father and two children in decline. The increase in one person households creates
different needs in home products as homes require smaller products and money is spent due to
more frequent home movement. Changes in demographics can, therefore, affect things such as the
development, designing, packaging and promotion of products. It could also shape the
organisational setting of strategies and strategic planning for Kebabish future product planning.

Environmental factors: The climate and physical terrain of a country are important environmental
conditions which have a significant effect on the demand and the type of product made available.
Prior to entry into a new market, it is very important for Kebabish’s to consider the physical terrain
and climate in the appraisal. Altitude, relative temperatures and humidity are some of the climatic
conditions that can affect products in foreign markets.

Appropriate Marketing techniques to ascertain

growth opportunities (AC 3.1):
As long as environmental forces remain constant position can remain constant. Positional advantage
can take the form of size or scale, differentiation from competitors and successful trading names. To
be successful, a company needs to get both its strategy and tactics working in harmony to provide
the optimum return bounded by efficiency (McDonald and Leppard, 1993). Both strategy and tactics
should be designed after a careful consideration of the situational environment.

The firm has to consider more than the industry structure, it also has to take an appropriate position
within the industry. This positioning will determine the competitive advantage a firm can have,
namely low cost or differentiation against competitive scope at the broad or narrow market (see
Figure 1)

http://www.mindtools.com/media/Diagrams/GenericStrategies.jpg

The Kebabish’s positioning in the cost leadership quadrant is achieved not only through economies
of scale in research, development and promotion but also through learning, knowledge and
experience in production and operational processes as well as the way it manages its franchises.
Vignali (2001) provides an explanation of the pricing decisions of Kebabish’s.

Strategic marketing planning makes use of a number of analytical models that help to develop a
strategic view of the business and, thus, can be used as decision-making aids. The Boston
Consulting Group (BCG) matrix (see Figure 2) is one of these models:

http://www.valuebasedmanagement.net/images/picture_bcg_matrix.gif

Figure: The Boston Consulting Group matrix

If the correct decision is made and the product selected achieves a high market share, it becomes a
BCG matrix star. Stars have high market share in high-growth markets. Stars generate large cash
flows for the business but also require large infusions of money to sustain their growth. Stars are
often the targets of large expenditures for advertising and research and development to improve the
product and to enable it to establish a dominant position in the industry. Cash cows are business
units that have high market share in a low-growth market. These are often products in the maturity
stage of the product life cycle. They are usually well-established products with wide consumer
acceptance, so sales revenues are usually high. The strategy for such products is to invest little
money into maintaining the product and divert the large profits generated into products with more
long-term earnings potential, i.e. question marks and stars. Dogs are businesses with low market
share in low-growth markets. These are often cash cows that have lost their market share or
question marks the company has elected not to develop. The recommended strategy for these
businesses is to dispose of them for whatever revenue they will generate and reinvest the money in
more attractive businesses (question marks or stars).Having used the Boston Consulting Group
matrix above, it should also be noted that the BCG matrix suffers from limited variables on which to
base resource allocation decisions among the businesses making up the corporate portfolio. The
BCG matrix is best used, then, as a beginning point but certainly not as the final determination for
resource allocation decisions as it was perhaps originally intended for Kebabish market position

Appropriate strategic marketing objectives for

a market (AC 3.3):
Markides (1999) further states that behind every successful company there is superior strategy. The
company may have developed this strategy through formal analysis, trial and error, intuition or even
pure luck. No matter how it was developed, it is the strategy that underpins the success of the
company. Strategists have a tremendous amount of both latitude and responsibility in developing
and balancing the strategic options of an organisation. The countless decisions required of these
managers can be overwhelming considering the potential consequences of incorrect decisions. One
way to deal with this complexity is through categorisation; one categorisation scheme is to classify
corporate-level strategy decisions into three different types or grand strategies (Porter, 1985). These
grand strategies involve efforts to expand business operations (growth strategies), decrease the
scope of business operations (retrenchment strategies) or maintain the status quo (stability
strategies).

More specifically, growth strategies are designed to expand an organisation’s performance, usually
as measured by sales, profits, product mix, market coverage, market share or other accounting and
market-based variables. Typical growth strategies involve one or more of the following:

With a concentration strategy the firm attempts to achieve greater market penetration by becoming
highly efficient at servicing its market with a limited product line (e.g. Kebabish in fast foods).

By using a vertical integration strategy, the firm attempts to expand the scope of its current
operations by undertaking business activities formerly performed by one of its suppliers (backward
integration) or by undertaking business activities performed by a business in its channel of
distribution (forward integration).

A diversification strategy entails moving into different markets or adding different products to its mix.
If the products or markets are related to existing product or service offerings, the strategy is called
concentric diversification. If expansion is into products or services unrelated to the firm’s existing
business, the diversification is called conglomerate diversification.

Use marketing strategy options in a market by developing suitable marketing mix (AC. 3.2): The
concept of the 4 P's of the marketing mix is a timeless technique of categorizing the various
strategies. By keeping these 4 P's in mind any marketer can adopt and reap the benefits. Failure to
adhere to these can result in disaster and failure for the organization.

Product: The most important thing is the product. It has to be useful, and innovative. There has to be
a need for this specific type of product in the minds of the customer. Product engineering focuses on
making the best possible products in order to satisfy the customer. Kebabish has got some unique
food that may stand out from other competitors. Management of Kebabish should additionally
continue their innovative product invention which may give them a unique place in the market.

Price: The next most important thing is the price of the product. If a product is overpriced, customers
will search and opt for cheaper alternatives. The quality of the product should be worth the price and
vice versa. Kebabish should be aware of pricing their foods.

Place: This refers to the channels of distribution of the product, and developing channel partners and
reliable suppliers so as to make the product reach the customer as quickly and as easily as possible.
As we have seen earlier that Kebabish is located in most of the public transit place that already gave
them strength for their business.

Promotion: Lastly, the promotional activities that are undertaken by the Kebabish will make their
presence felt in the market and using various means to do this is a key element of the most
strategies.

Proposed strategic marketing responses for

Kebabish (AC.4.3):
When developing a marketing plan for Kebabish stability, it should evaluate the dynamics of your
overall business. This includes identifying potential market, comparing competitor, defining your
customer base, exploring other customer based opportunities, implementing focused marketing
efforts for new and repeat business, identifying your competitive edge, determining menu price
points, and implementing up-sell strategies. Kebabish can introduce new technology and more
options for online order and delivery service for their customers at their door step. In case of
inventing new food items the food nutrition ingredients should keep as a prime consideration.
Healthy options should include all types of required food options from child menu to adult menu. The
trade policy should be relative to the local law and it should not breach the local law of that particular
state.

Conclusion:
Finally it can be said that effective marketing strategy involves studying the market elements and
thus devising a proper marketing solution which will help an organisation to reach its desired position
in time. At present all the food business organisations specially the restaurants that are able to keep
growing their profit margin above the line knows that there is no alternative to the appropriate
marketing strategies for the growth of business and profitability, besides Kebabish has proven in
certain sector with their potentiality. However the company has failed to achieve it target profit
margin. This is because they have to adjust their decision of selling costly quality food at different
location. The managers of different outlets has to study the market first and then the ability of the
target customer as well to adjust their price and products. Besides this, the particular restaurant
need to identify why it losing customers and downturn in the profit as well.