- Pizza Hut- specialize in pizza
- KFC- specialize in chicken
- McDonalds- specialize in burgers
KFC have a range of services and goods. They sell a wide range of meals for a family. They also have a range of single meals. KFC is more of a place for a family.
It has a drive through so you wouldn’t have to go and queue up if you wanted to have a take away.
KFC advertise by having adds in the shop window and other places. They also advertise by putting an advert on the T.V. When KFC advertise, it’s normally on special offers or a new product.
KFC is a franchise business, like McDonalds
Marketing Report
1.1 The Company
The company that I will be running will be organised as a sole trader. This is the best form of business ownership for my business as you get to make all decisions and have limited liability.
Advantages
- Easy to set up
- Owner gets to control the business so decisions can be made more quickly.
- Very flexible and can adapt to customer needs
- Owner does not have to share profits
Disadvantages
- Unlimited liability places all of my personal possessions at risk if the business should fail and I have to pay company debts.
- Shortage of capital makes expansion difficult.
- The owner is often working for long hours.
I considered setting up, as a partnership because all the costs and tasks are shared so it is cheaper and easier to work with. But there could have been a problem finding a partner to work with. There could have also been arguments on making the right decision, as your partner would have to agree.
1.2 Marketing the business
Marketing departments are essential. Their functions include:
- Market Research- the information collected by firm about existing and potential markets. This includes desk and field research to find out customers likes, dislikes, lifestyles and attitudes. It will find out a lot about its competitors.
- Marketing mix- the four P’s
-Place, where goods are going to be sold
-Promotion, how a product should be marketed or sold.
-Price, money paid when goods and services are exchanged
-Product, design, quality and size of the product being marketed. This also includes packaging and guarantees.
In my business, (place) location is very important as I found from my questionnaire.
1.3 Target Market
The target market for my small business would be teenagers and young adults. This is because the food that the company will be selling e.g. chips and burgers is the type of food teenagers go for.
1.4 Effects on the Local Community
The advantages for the local community if my restaurant was to be opened:
- More jobs would be available, more employment will be available
- Offering more choice to the community, a much wider range of choice to choose from
- Buy local food to help farmers e.g. beef and milk
The disadvantages for the local community if my restaurant was to be opened:
- Litter issues- can cause a lot of litter around the premises. This can be sorted by having bins in the premises
- Traffic issues- more cars trying to get to the fast food restaurant means more traffic
- Ethical issues like meat recovery in burgers
My business can sort out these problems.
- The litter issues- can be sorted by sponsoring bins around the area.
Meat recovery- I will use meat from local farmers.
1.5 Sources
- “GCSE A-Z Business Studies” book by Arthur Jenkins
- Exercise book
- “Business Studies for you” text book by David Needham and Robert Dransfield
2.0: Objectives
Objectives
An objective is a goal that organisations set out to achieve. The most important objective is to make a profit in order to survive. If the business does not make a profit it will go bankrupt and have to close down.
Some business would try and be the biggest in their market. Others may try to get the best quality product as possible. Some business may try to limit the environmental damage they cause.
Objectives are effective if the are ‘SMART’
-
Specific
-
Measurable
-
Achievable
-
Realistic
-
Timed
Business objectives
- Survival
- Make a profit
- Expansion
- Market share
My objectives for my business are:
- Have a market share in range 4%-11% in the Reading area
Market share is the proportion of the total sales of a product. Market share is usually measured as a percentage of the total number sold in the market.
- Make a profit of 7%-20%
- Target -age of teenagers and adults
-Gender: Male and Female
-Price: £1 onwards
-Location: Reading, Town centre
3.1 Purpose of the questionnaire
I decided to do Primary research, the process of gathering new information about the market by going into the “field”. Field research of three types, these are:
- Questionnaires- List of questions that are asked to a number of people. This can be done “face-to-face”, over the phone or through the post.
- Test Marketing- When the product is marketed to just a small part of the total market.
- Consumer panels- where selected groups of people are given a product and are asked to comment on it.
I am using a questionnaire to find out what customers expect a fast food restaurant to have. A questionnaire is especially important for a small company because they will know exactly what customers want
- Food
- Location
- What it should look like
If there wasn’t a questionnaire the small company wouldn’t do as well, this is because the company wouldn’t know what to sell customers and at what price. The small company would most probably do well to start off as it is something new, but if people don’t like it, they therefore will not go back.
I have chosen to do a questionnaire because it gives a much better result than any other method. I did not choose to do secondary research, as it is information that already exists. As I'm only just starting to do a small business, I don’t know about any information. This is why I chose to do a questionnaire. I chose to do a questionnaire as it is easy to record the results and is much easer to get the public to fill it in.
I could have done secondary research, which involves using existing sources of information to research market. This is called desk research.
Desk research has two advantages over field research:
- Cheaper
- The information already exists, so it is quicker and easier to obtain. However, when I looked into this, I found the information you get is very general and not so useful for my small business. So I wont use this.
Section 3.3 Analysis of Results
From the questionnaire I did from section 3.2, I found answers that are vital to my fast food restaurant. I asked a total of 49 people with a mix of sexes. From my results I chose 4 questions from the questionnaire, which I found was the most important. I made bar charts and pie charts to show the result more clearly.
I have found out that most people would prefer to go to a fast food restaurant in the afternoon and would go with their friends to McDonalds.
I found out that when customers go to a fast food restaurant, they usually buy burgers or a value meal. This result shows that in my restaurant I will be building will have to sell a range of burgers and value meals. But, I found out that customers want a much wider choice of food.
In my questionnaire I asked what customers would be interested in buying. I gave a range of answers:
Seafood
Spicy food
Burgers
Chicken
Salad
Pizza
Chips
Steak
Hotdog
Ice cream
Sandwich
Doughnuts
Vegetarian
Pasta
Vegan
Oriental
12
17
17
21
21
15
23
15
12
25
16
16
6
21
5
14
From this result (see pie chart) it shows that customers prefer a mixture of food. So for my fast food restaurant I will do a bit everything. I will not do Vegan as this had a low result. Offering a wide range of food will attract more customers, as there is band to be something there the customers like. It will also make my business different from the competition. There can be problems making a much wider range of food, will there be enough space?
I will have more staff working in the afternoons and evenings as that is when a higher numbers of customers visit.
I will have to make sure that all the food sold is at the right price, not too expensive. If it is sold at a good price, you get much more customers. From my results, the questionnaire showed that most people would spend £2-£3 per visit.
Location
From my results, I found that the best place to build my fast food restaurant would be in the town centre. This result surprised me as I thought the best place would be near the motorway in a shopping centre. I thought this, as people like to get food when they have been shopping or have had a long drive on the motorway and decided to get something to eat. I know people prefer the town centre, I must find out how much it would cost to rent a space. This can be a very high price as it is in town. Also I would have to find somewhere where there isn’t much competition near by. The main problem is finding somewhere in the town centre that is renting and it in the right place where there isn’t much competition.
When I build the fast food restaurant, I will build it somewhere in the town centre where no other food places are near. I will have to include:
- Toilets
- Disabled toilets
- Recycling
Another option is to have a drive through, but I thought this wouldn’t work out in town. Not many people drive through town in the daytime. Also the company wouldn’t have enough money, as it is only a small company.
My questionnaire showed that the customers would rather sit in a booth and tables. For the seating arrangement I will have mainly booths. I will have some tables. I won’t be able to have picnic tables out side. There will be a load of people about and will not have the space to have them outside the restaurant.
I will occasionally do offers like “buy one, get one free”. I’m sure this will attract new customers as the results showed that customers like to have offers.
I found from my questionnaire that the best way to advertise would be by T.V. McDonalds advertise a lot this way by advertising what new foods they have for sale. KFC don’t advertise as much as McDonalds but KFC advertise for the same reason, which is advertising a new food for sale. My business wouldn’t be able to afford this; it’s only a small business. The only way I would be able to advertise by T.V is to take out a bank loan. I reckon it’s not worth it as the company could go bankrupt. The way my business can advertise is to use posters and leaflets. I’m sure this will work.
There is a great effectiveness what the questionnaire has given me. These are:
- Location
- Prices
- Promotion
- Products
- Target market
Location
Somewhere in the town centre where no fast food restaurant is near. This would help competition.
Prices
Nothing above £5-7’s for a value meal
Promotion
Customers would rather it would be advertised by T.V. As this is a small company, we wouldn’t be able to afford it. Instead we are going to advertise by putting up posters and handing out leaflets.
Target Market
Based for teenagers between 14-18, adults and family.
From my overall result from the questionnaire I found it was a great success and found out a lot from it. I found out where the best location is, and a lot about the products to sell, the right pricing and the right promotion.
Section 3.4 Evaluation of questionnaire
From questionnaire I have found out a lot about a fast food restaurant. From the results of the questionnaire, all information will be taken into account for the small business.
There was a bad side for doing a questionnaire, this was some questions gave a close result in the questionnaire e.g. the question “Which of these would you be interested in buying?” The answers were:
Seafood
Spicy food
Burgers
Chicken
Salad
Pizza
Chips
Steak
Hotdog
Ice cream
Sandwich
Doughnuts
Vegetarian
Pasta
Vegan
Oriental
12
17
17
21
21
15
23
15
12
25
16
16
6
21
5
14
As all the answers were nearly the same, this made it very difficult for me to decide what to sell at my fast food restaurant.
To improve the questionnaire I would change the questions that gave me a close result. To do this, if it was a tick as many question, I would change it so you would only tick one.
I could also have changed the way I set out the questionnaire. Maybe I could have printed of a questionnaire for each individual. This would have shown what each individual would have wanted.
Another way I could have improved the questionnaire would be to ask more people, this would then give a much more clear result from the questionnaire.
A real business would have asked a much wider range of people e.g. asked more people. A real business may have rung people instead of asking face to face. I think this because much more people would do the questionnaire. Sometimes if you were up town and someone tried to ask you a questionnaire, most people would say no as the haven’t got the time whereas if it was by phone, there is a better chance that will do it as there is a higher chance they wont be busy.
4.1 Marketing Campaign
If no one knows about my fast food restaurant I will have to make sure customers find out about it. I also have to persuade them to come to my restaurant. This is called “promotion”
Types of promotion:
- Informative advertising- the highest spender, this is the Government. Most of this advertising is aimed at giving information to the public. New businesses like mine also have to inform customers that a new business wants to serve them.
- Persuasive advertising- Designed to persuade the public to buy a particular product, like my new restaurant.
- Sales promotion- this is including discounts coupons, free offers competitions, demonstrations and displays.
- Direct marketing- addressed mailing and telephone
Ways I can advertise my fast food restaurant include:
- Television
- Posters/leaflets
- Local radio station
- Back of bus tickets
- Internet
- Teletext
- Shop windows
- Local papers
- Offers/vouchers
My questionnaire results showed actually what the public wanted. My questionnaire showed that the public wanted my small fast food restaurant to be advertised on T.V but can I afford it? I’m only a small business that would have only just opened.
I can think about advertising by putting up posters but I’m not sure if the public would take any notice of them. I don’t think posters would be very effective.
The best method I think is best is to use the local papers. This way I know that the public will at least have a glance at the advertisement.
The methods I could probably afford and what I think would be the most effective are:
- Local paper
- Local Radio
- Bus ticket
- Leaflets/flyers
- Poster
- Vouchers
I would like to give out free samples to help attract the public though I would have to watch out for Food Safety. The Food Safety Act (1990), states that Environmental Health Officers have powers to shut down premises where food is not being prepared in a hygienic way. Regulations cover such things as refrigeration temperatures, so I would have to be really careful if I were handing out samples in the street.
If I use advertising, I must be careful that the advert is suitable for all ages by keeping my advert up to certain standards.
These standards are supervised by the Advertising Standards Authority (ASA) ads must be:
- Legal
- Decent
- Honest
- Truthful
Advertising Standards Authority (ASA) is responsible for supervising the British code of Advertising Practice, except for Independent Television. If there were any complaints about my adverts in the paper, people could write to the ASA, who will take up their complaint and force me to makes changes. No businesses don’t like a bad publicity; it can lead to consumers boycotting their products. This reduces the sales and profits. But complying with the demands of pressure groups can increase costs, which reduce profits as well; this courses problems for the company.
Example of a complaint
Product: Food & Beverages (Confectionery)
Advertiser: Mars Ireland
Agency: Irish International BBDO
Medium: Television
Complaint:
A television commercial for “Skittles” was the subject of an objection. The complainant said that as a pharmacist who has been deeply involved with helping many young drug addicts over many years to recover from drug addiction, he has studied how addiction to drugs starts. He was convinced that this advertisement was undesirable unnecessary and very wrong at a time when our society was cursed with the ever-increasing problem of drug addiction, ecstasy taking and dangerous and/or illegal ‘pill popping’ for ‘kicks’. He specifically objected on the grounds that the advertisement was not prepared with a sense of responsibility to consumers and to society, it brings advertising into disrepute, it encourages dangerous behaviour, particularly so, as it is directed at children, it is likely to result in physical, mental, or moral harm to children, it exploits the vulnerability of children and it exaggerated what is attainable by an ordinary child using the product.
Response:
The advertisers said they were sorry that the complainant had taken offence at the advertisement. The advertisement had been on air in Ireland since July and they were not aware of it attracting any other complaints. They were satisfied that there were no drugs references in the advertisement, the product was clearly a sweet (which is shown clearly been taken from its sweet packet – and devoured a handful at a time) and the experience is of a fruity taste sensation – “taste the rainbow”. The action in the advertisement was clearly fantastic and part of a fantasy – e.g. electrical disturbances caused by the vibrant taste of Skittles, rainbows bursting from manhole covers and the sky raining sweets. There is a long history of fantasy and magic for the Skittles brand through commercials such as Rainbow Grower (old man plants skittles and a rainbow grows), Merlin etc. The advertisers were certain that children would not believe that these things would really happen if they eat Skittles and in fact there has never been any suggestion to this effect.
4.2: The Costs of the Market Campaign
Local Radio
I have looked up the costs on 2 ten Fm Radio station for advertising. (Campaign Summery-97FM only) The prices are split up into 3options.
There is a choice of:
- 50x30 seconds reaching 164,700 adults 15+ with an average of 5.3 times over ONE week. Cost=£2,813 +VAT= £3,305
- 42x30 seconds reaching 151,700 adults 15+ with an average of 5.2 times over ONE week. Cost=£2,363 +VAT= £2,777
- 36x30 seconds reaching 142,400 adults 15+ with an average of 4.8 times over ONE week. Cost=£2,025 +VAT= £2,379
I found this option is very expensive and would cost too much. Also the advert would be shown on 97FM. Most people listen to 102FM. If I could afford to advertise here, If I could afford to advertise here I would choose the second option as it has a high average of 5.2 times over one week.
Local Cinema
I have found some costs on advertising at Warner Village Multiscreen, The Oracle, Reading. To advertise for still ads for a small local business it costs £98 per week + £200 per slide.
- It has a total of 30 seconds per showing. Options: 1 slide shown for 30 seconds up to 4 slides each shown for 7.5 seconds.
- Showings: before every feature in every screen. 10 seconds x 4 showing daily = 40 showing per day = 280
This sounds like a very ideal way to advertise for my fast food restaurant as it is in a very good price range and would be the most effective. There is a slight catch. That is you have to pay in advance for 52 weeks.
Cinema Adds £
Warner Village
Production costs
4 slides x £200 800
Showing costs
£98/week x 52weeks 5096
5896
VAT 17.5 % 1032
6928
Total cost = £6,928
National Newspapers
Advertising by The Sun and News of the World TV Mag
These are all the costs for advertising in the TV Mag for News of the World and The Sun. These are the costs per day. Theses prices include VAT and the cost for colour.
For my small business I have decided not to go for this option for advertising, as it is too expensive for a small company to spend out. Also these are national papers so it wouldn’t be useful as it goes all over the country, this therefore means that people wouldn’t want to travel miles just to get there. If I would want to advertise by the newspapers I would go by the local paper. Local customers would much more prefer to visit my fast food restaurant as it is near by.
Printed Leaflets
I have done some research on “flyers” for 1/3 A4 flyers (99 x 210mm), which are printed out in full colour. All the flyers are printed out in 250gsm gloss card. The printing company have different options to choose from e.g. Quantity.
All of the above prices do not include VAT.
From the research on flyers I found that the prices are reasonably cheap. If I were going to choose this option to advertise, I would have to think of a very good way in how to make the flyer interesting. Maybe putting a voucher on the back of the flyer offering “half price food at first visit when you bring this voucher”. The disadvantage of this is that it can cost my business a lot of money loss to give out half price food. I would change the offer to “half price meal”. I have decided to do this is because with a half price meal, it’s a meal, a range of food to try. This gives a better chance they will like something. Doing this voucher offer should hopefully stop people from chucking the flyer in the bin. I also thought using big bold and bright colours to get the readers attention.
Ways I can use the flyers:
- Post them through doors
- Put them into the local papers
- Hand them out when people walk past in town
- Putting them in a little box inside shops and pubs so people can take them if they want to.
If I do choose this option to use flyers, I would post them into local papers. The reason why is that quite a lot of people look at the papers. Hopefully they will read it, as it would stand out.
I would also put them into shops by putting them into shops and pubs where you can pick them up whenever you want to. The main problem with this idea is how much will it cost to put them into the local paper and will I get permission to put the flyers into pubs and shops, if so, how much will it cost?
Advertising by Reading Evening Post
¼ Page Black and white ad for 1 week = £510 Plus VAT per day
4.3 Conclusion of marketing plan
I have chosen to advertise my fast food restaurant by using:
- Cinema at Warner Village
- 1/3 A4 flyers (99 x 210mm) printed on 250gsm gloss card
- Evening Post (public notices)
I intend to use these because they are reasonably cheap and will attract the people’s eye.
Cinema at Warner Village
Cost = £98 per week + £200 per slide.
I have decided to use 4 slides that will cost:
Cinema Adds £
Warner Village
Production costs
4 slides x £200 800
Showing costs
£98/week x 52weeks 5096
5896
VAT 17.5 % 1032
6928
Total cost for one year = £6,928
The reason why I have chosen to advertise by cinema ads is because there is a load of advertisements before the film starts. It is very effective, because every one gets to see it, unless they are late into the film. They also will notice the advertisement as it is on a big screen so they are bound to see it. It is also good as it advertises to all ages. For my small business it is affordable to pay this as it is for the whole year. Whereas “The News of the World” paper charged £11,500 for ¼ of a page for one day. Cinema ads cost £6,928 for the whole year.
Printed Leaflets
For my small business I will chose a quantity of 10,000 in full colour font and back which will have a total cost of £249
All flyers are printed on 1/3 A4 (99 x 210mm) printed on 250gsm gloss card. When I design the flyer I will have big bold bright colours with a voucher on the back offering “bring the voucher with you and get a free meal” This should hopefully get the readers attention and look at the flyer.
The way I would hand out the flyers would be to put them through doors. This way the owners will have to pick the flyer up, this was if it is in bold and bright colours, it should catch their eye. I was also thinking putting the flyers inside the papers but I would have thought you would have to pay the company to allow you to do this.
Reading Evening Post (public notices)
¼ Page Black and white ad for 1 week = £510 Plus VAT per day
I have also chosen to advertise by using the Reading Evening Post. I will advertise my business for 2 weeks that will cost.
Newspaper Adds £
Reading Evening Post
Production Cost
2 weeks x £510 1020
VAT x 2 358
1378
Total cost for 2 weeks = £1,378
Advertising by the newspaper will be a good idea as a lot of people read it and also it’s a local paper. It would not be no good if I advertised in a paper that is not local as the public would not want to go out of their way just for something to eat.
Things that I could have done better would be to do much more research on different methods of advertising. For example, I didn’t do any research on the cost for advertising on T.V. This might have been a very good way to advertise the business as every one watches T.V. Also from my questionnaire, most of the public said that it is best to advertise by T.V.
If I were setting up a real business I would have sent emails to confirm the costs shown on the web sites I found the information from.
McDonalds would have most probably advertised by using T.V and using posters at bus stops.
I am pleased with all the research that I have collected with all the costs. I was surprised what the prices were just for advertising. It was interesting comparing different ways and costs for local paper advertisements.
5.0 Bibliography
All the sources of information that I have used to do this piece of coursework are:
- Internet to find costs on
-2-TEN
-Cinema Market Place
-Sunday Mag for News of the World and The Sun
-T.V Mag for News of the World and The Sun
-News of the World
-The Sun
-Reading Evening Post
-Online rates
-Leaflets
-McDonalds
-KFC
- “GCSE A-Z Business Studies” book by Arthur Jenkins
- Exercise book
- “Business Studies for you” text book by David Needham and Robert Dransfield
- Questionnaire
6.0 Appendices
I have attached all the original promotional material, draft advertisements in this section.
