Examining Marketing Strategies for the Mauritius Fast Food Market

Examining Marketing Strategies for the Mauritius Fast Food Market INTRODUCTION It is the beginning of a new era that the fast food industry has gradually breakthrough the Mauritius lifestyle. Due to the globalisation process, many fast food franchises are now available in Mauritius. Whether these fast foods have revolutionised Mauritius, today these products form part of our lifestyle and culture. People rely on their convenience to enhance their lives and productivity. But in the fast and increasing competitive business environment of today, the right marketing approach is necessary to compete with competitors. The ability to develop effective marketing strategy which enable the firm to become more responsive and adaptable to the market will perhaps more than ever before, differentiate the winners from the losers The rational of developing marketing strategies is to respond to the increasing high demand in fast food and to eventually increase the market share of chicken Delight Ltd. The answer lies in the fact that Chicken Delight Ltd franchise is in the fast food industry, selling fried chicken, chips and burgers, and its main and direct competitor is Kentucky Fried Chicken. Chicken Delight Ltd is relatively new on the Mauritian market and Kentucky Fried Chicken has already position itself in the mind of customers since it (KFC) was launched in Mauritius in the year 1983. Chapter 1: Chicken Delight Ltd Company and Product Profile Chicken Delight Ltd was incorporated on the 22nd March 2001. The company is a franchise, offering five product lines; it sells fried chicken, chips, burgers, salads and soft drinks. In the early 2000s, with the globalisation and the growth of fast foods in Mauritius, the company has introduced the brand name of Chicken Delight in Mauritius. To cater for customer needs, Chicken Delight Ltd has set up one retail shop situated at Royal Road, Port-Louis (under the trade name of Chicken Delight. Chicken Delight Ltd is also an extremely innovative company with unique menu items, and to adapt the products more to the local Mauritian market, Chicken Delight has introduced 30 products in Mauritius. Chicken Delight Mission As stated by the manager, Chicken Delights mission is To provide fast foods that exceed customer expectations in terms of service, price and quality Chicken Delight Vision To be present throughout the island, and to be the market leader in the fast food industry(as stated by the manager) Product Profile In Mauritius, Chicken Delight products are manufactured within international norms and quality to provide the maximum satisfaction to its customers. The products sold are Halal guaranteed. Thus whatever someones belief and culture, he or she can eat Chicken Delights products. Thorough study of the product line has been conducted to meet up the different tastes and habits of different people in Mauritius. In Mauritius, Chicken Delights product mix consists of five product lines, namely fried chicken, Chips, burgers, salads and soft drinks. Chapter 2: Regaining competitive advantage 2.0 Introduction This chapter will aim at assessing Chicken Delights strengths and weaknesses, its opportunities and threats through an analysis of its external general environment also called macro environment, its specific external, also called micro environment and conducting an organisational audit. It will conclude with a SWOT analysis model The critical objective of Chicken Delight is to achieve competitive advantage. Competitive advantage is an advantage that a firm has over its competitors, allowing it to generate greater sales or margins and retains more customers than its competitors. It is all about profitability, and this can be achieved by either lowering costs (comparative advantage) or differentiate its product/service (differential advantage) or by doing both simultaneously, so that it creates more value and can charge a higher price (Hill Jones, 2008, p104). There are 4 competitive advantages: Efficiency Quality Innovation Customer responsiveness All these factors are key success to competitive advantage. Focusing on efficiency allows Chicken Delight to keeps close control of costs, and dealing with the quality, customer responsiveness and innovation allows the company to maintain its customer loyalty and charge premium prices, thereby gaining competitive advantage. 2.1 Chicken Delight internal and external analysis Chicken Delight to generate future alternative strategies and decide which strategic alternative to pursue to regain competitive advantage and improve profitability, it is vital to assess Chicken Delights strengths and weaknesses, opportunities and threats. Strengths and weaknesses are internal to a company. They determine strategic capabilities of an organization, which rely on its resources and competences. The objective of Chicken Delights internal analysis is to identify its tangible and intangible threshold resources, unique resources, threshold and core competences, which allow them to compete effectively and stay ahead. On the other hand opportunities and threats are part of an organisations industry and macro environment. Identifying and analysing opportunities and threats in Chicken Delights working environment allow the company to determine how best to build on opportunities and avoid threats. It helps deciding in which areas resources need to be committed or diverted. Assessing Chicken Delights strengths and weaknesses; opportunities and threats will entail analyzing their general external environment (macro environment); its specific external environment (micro environment) and conducting an organizational audit. 2.1.1 SWOT Analysis The swot analysis summarizes key issues from the business environment and the strategic capabilities of an organization that are most likely to impact on strategy development. The aim is to identify the extent to which the strengths and weaknesses of an organization are capable of dealing with changes taking place in the environment. SWOT provides a guide to management action and provides an excellent framework for decision-making. The main purpose of a swot analysis is to identify the strategies that will best fit Chicken Delights resources and capabilities to opportunities and threats of Chicken Delights environment, play down weaknesses, avoid threats or use creativity and innovation to turn them into opportunities. It further helps identify and align a set of strategies at functional level, at business level and at corporate level. (Hill, Jones, 2008, Pg 9). SWOT Analysis for Chicken Delight Strengths Has high seating capacity, more than its main competitor KFC Has good customer service, staffs are well trained for dealing with customers Uses fresh raw materials obtained from the local market for maximum quality Clean and tidy environment and air-conditioned seating space Strong brand name as Chicken Delight is well known around the place Weaknesses Weak balance sheet showing losses No customers after 17.00 as all the shops are already closed at that time No variety of vegetarian foods available No product innovation since its opening No kids meal available No home delivery service available Slow service to customers during peak time due to lack of staffs Narrow product line, as have only chicken chips and burgers. No beef or fish dishes Opportunities Being a franchise, it can expand easily to other location as Chicken Delight has a good reputation Can introduce other products available at the Chicken Delights Head Office and thus increases the range of products Can introduce new products for vegetarians and for kids and introduce fish and beef products Selling company shares to the existing staffs to increase staff belongings to the company Can try to increase market share rapidly due to strong brand name and excellent location of fast food Threats Increase in price of raw materials Decrease in purchasing power of customers, customers will prefer cheaper foods despite less quality Possible entry of competitors selling same kind of products at cheaper price and at a better quality Severe laws about food production in Mauritius may interfere with the existence of Chicken Delight Franchiser imposes new law upon its franchisees Customers prefer healthy foods to fried oily foods Customer find another way of spending money and stop purchasing at Chicken Delight 2.2 Analysis of Chicken Delights general external environment The changing environmental factors have a high impact on the success or failure of business strategy. PESTEL model are used for analyzing the general external environment (macro environment) of organization such as Chicken Delight. It allows scenarios to be developed about the future. The macro environmental factors influencing Chicken Delight are as follows: 2.2.1 PESTEL Analysis of Chicken Delight Political The operations of chicken Delights are highly influenced by the individual state policies. Chicken Delight is affected by government policies on the regulations of fast food operation. Government is controlling the marketing of fast food restaurant because of health issue such as cholesterol issue, cardiovascular and obesity among the young children. Government control the license given for opening the fast food Good relationship with government in giving benefits such as employment and tax for the company success. Economic Fast food industry do have their individual concerns involving economic factors such as branches of fast food chains like Chicken delight is hit by inflation and changes in the exchange rate. Social/Cultural Chicken Delight indulges a particular variety of consumers with definite types of personalities. Young urban consumers want technology in their life and facilities such as credit card payment wireless Internet, cosy and relaxing ambient place and other attraction for their hangout and eating. The Mauritian population is becoming more and more health conscious and about how and what to eat. They are eating foods that are more healthier and less food with lots of oils, fat and spicy. Chicken Delight is thinking about how to offer the customer with healthier foods and also vegetarians foods. Hindu people do not take beef, and Muslim people do not eat pork. So far Chicken Delight has shown good effects in localization of its menu to suit local taste and had constantly survey and learns about local culture to better understand and design the best product for them. Technological For a fast food restaurant, technology does not give high impact on the company and it is not a significant macro environment variables. Chicken Delight is looking to competitors innovation and improved itself in term of integrating technology in managing its operation. Chicken Delight is looking in inventory system, supply chain management system to manage its supply. Easy payment and ordering systems for its customers and wireless Internet technology. Legal factors As a certified fast food operator, Chicken Delight should follow many regulations and procedures. Chicken Delight has to take into consideration legal concepts like tax obligations, employment standards and quality requirement. Chicken Delight requires conforming their meat to the Halal requirement of the law. The legal requirement is important so that the company do not get a fine or their business prohibited from operating. Environment Vegetarian environmentalist criticizes the fast food giant for cruelty to animals and slaughtering. Chicken Delight used paper packaging, and Chicken Delight was criticized for being insensitive to pollution and this was having a high impact on the environment by throwing away those hard to recycle packaging. Mauritius is getting concerned for environment issues and business operating should emphasise on careful usage of world resources for sustainable development and should care for environment safely and health for our future generation. 2.3 Analysis of Chicken Delights specific external environment The common models used for analysing the specific external environment of organisations, also known as the micro environment of organisation such as Chicken Delight is the use of the Porters 5 forces model and analysis of the competitive market structure. Porter has suggested that it is the collective strength of these forces that determine the attractiveness of the industry. Organisation should tend to find a position in the industry where it can either defend itself against these forces or influence them in its favour. Analysis of the specific environment along Porters 5 forces model reveals the micro environmental factors that affect Chicken Delight as follows: The Structural analysis of small enterprise Porters 5 forces model of competition Source: Porter 1980 Porter (1980) claims, There are five forces which determine competitiveness. Porters 5 forces model would be useful to analyse the impact of structural forces upon the fast food (which is a small enterprise) Barriers to Entry In the fast food industry, the barriers to entry are relatively low. Only a small investment is required to see up a fast food outlet and it is not difficult to obtain a franchise from an international company. There are many marchand ambulants (street Hawkins) who can easily sell their snacks in the streets of Port Louis or even infront of Chicken Delight outlet. Buyers If buyers are powerful vis-Ã  -vis small firms, there are more opportunities to obtain discounts, supplementary services, products of superior quality and other benefits, that could only add to the costs of small firms. At Chicken Delight, buyers can very easily shift to other fast food, since they have a wide choice of products at relatively lower costs than Chicken Delight Products. Some of the fast foods available are roti, doll pouri, samoussa, gato piment, and pain fourre among others. Suppliers Large suppliers produce an impact on small firms by the way they price the raw materials. Concerning the suppliers, raw materials such as chicken, potatoes, cheese, lettuces and bread are easily obtained on the Mauritian market. Rivalry The intensity of rivalry among existing firms can remain high if there are high exit barriers. As highlighted by Stokes (1995), exit barriers that prevent small firms from quitting the industry, are:- Economic constraint such as costs of liquidation or sales or loss of income Psychological attachment to the enterprise Loyalty to employees Prides that comes from ownership Concerning the competitive rivalry, there are lots of competitors in the fast food industry. Some of the direct competitors that also sell fried chicken are KFC and Rodeo Fried Chicken. Other rivals that also offer fast food are Pizza Hut, McDonald, Debonnais and other Mauritian snacks (roti, doll pourri, samoussa) and restaurants. Threats of Substitute Stokes (1995) stresses upon two ways through which substitutes might represent a real danger to a small firms products. A substitute which performs the same function, but in a different way. A substitute way of spreading money. There is really a real threat for Chicken Delight as there are many substitutes of fast foods on the Mauritian market. These substitutes are the local foods as gato-piment, samoussa, roti, doll-pourri, the brianis, the restaurants, and also foods that can be easily cooked using a microwave. Also, people may find a better way of spending, rather than spending their money on fast foods, they may turn towards more healthy foods.