The macro-environment consists of a wide range of forces, which affect the business (which is more commonly known as the PEST Factors), includes politics, economy, society and technology also demographic, which includes age, work, race, religion, beliefs and education. The total environment could be shown as a diagram such as;
Politics and technology do not have a direct impact on the buffet service but the society we live in and our huge range of cultures may influence the business in respect of social standing and ‘keeping up with the Jones’ mentality of people. Some cultures entertain at home where some do not. The size of our homes also dictates whether we entertain at home or not. More people prefer to hold events at home or book a room somewhere; the Bridge offers the client the service of free delivery and set up. The clients may wish the Bridge to serve the buffet on their own crockery or on the salvers that the Bridge provides. The Bridge is capable of catering for a dinner party and delivering the food to the client with instructions of re-heating and serving techniques. The economy is important, as with out money people cannot afford to have in the caterers. The Bridge offers a range of buffets to cater for the less affluent through to the more affluent. The micro-environment consists of elements, which are closely connected to the business such as the business itself, the suppliers, the distribution network, customers and competitors as well as the public. The business has been described previously as part of the Christ Church. The Bridge supports local suppliers and businesses when they can. Only one of their suppliers is not a local concern. Either by the chef or the Bridge manager delivers buffets. This ensures that there are no mistakes and the food is delivered in the best condition. Customers have included the Church itself as well as churchgoers and their families. The business is just starting to filter out to their friends and families. A number of customers from the Bridge café have shown an interest in the buffet service by taking the leaflets and cards, which are on display in the café. There are a number of competitors but through research done the Bridge is very competitively priced and offer a larger range of menus and services.
The five competitive forces are;
The threat of new entrants to the industry which does not seem to be a major threat to the Bridge as they rely on customers from within the church and as they church has a huge client base for christenings, weddings, funerals and other religious ceremonies as well as conference and external functions the business is guaranteed all internal catering and a majority of external catering. The barriers to entry are expensive with the cost of the catering equipment and the health and safety standards. This may discourage new entrants.
The threat of substitute products or services. Catering for buffets will never be substituted for another service until food can be produced in the home by the press of a button!
The bargaining power of the customers is not an issue at the moment. Menus are pre-priced and per-defined, the customer has the option to design their own menu and the cost is based upon the contents of the menu. The customers will always require this type of service as long as people entertain at home and hire rooms for functions and as the market changes the Bridge will try to change with it.
The bargaining power of suppliers is the main area of concern with the fluctuation of ingredient costs and the increase of the cost of meat and the seasonal variation of fruit and vegetables makes the constant re-costing an issue. Costs are kept to a minimum to be competitive but the profits vary depending on the time of year and on the level of service required. Suppliers will always have the upper hand in supplying the ingredients.
The rivalry amongst current competitors in the industry is low at the current time as there is only a small number of competitors on the market and each of them concentrate on a slightly different market segments including a daily sandwich delivery business and the other delivers meals to old age pensioners and the ill.
The management expects the buffet business to expand from its current level of out put. The church is expanding its services by building an education centre and expanding its music school. With the size of its already busy rooms and halls it see’s the Bridge doing all the catering for the church functions. There are no stakeholders but the buffet service is expected to make enough profit to cover the wages of the staff it employees and the running cost.
Buyer behaviour is a mainly seasonal cycle. As the Bridge is connected to the church obvious religious festivals are very busy periods such as Christmas time where the buffet service is booked to cater for a large number of events both within the church and externally. Weddings and christenings happen all year round and therefore are fairly constant. Funerals tend to be more during the colder time of the year and therefore in the wintertime the buffets are booked to be delivered to the client’s home. During the summer months the church hosts a number of conferences, meetings and gatherings. Clubs, which meet at the church rooms, use thee buffet service for their parties.
The segmentation of this market is quite small as it is food preparation, delivery, service and clearing away by the collection afterwards. The segmentation is client based with their needs. (See pie chart).
These services are developed by customer demands. Depending on the customer requirements and trends sets the standard and the service the Bridge will provide. If customers require a small dinner party that is per-prepared and just needs to be re-heated at the customers home the food will be freshly prepared and delivered to the customer with full instructions of how to heat and serve the food along with the temperatures the food should be stored at and heated to which will comply with food safety standards.
Further segmentations in to the catering business, which could be offered by the Bridge, is catering for children’s parties including cakes. Children’s tastes vary greatly and so this gives the possibility for a menu expansion and variation.
The Bridge is entering into the area of sweet and chocolate making. At this point in time hand make sweets and chocolate is very popular and people love the idea of their sweets being hand made in a place where they can see and watch the process if they so desire. Sweets can be made personalised and exclusively for the customer.
The current marketing mix for the Bridge Buffet service includes the seven P’s, which are;
Price, this is not only the cost to the customer but also the cost to the business. If the cost of the service is too low the customer may see it as a reflection of the standard of quality where as competitors may see it as a challenge for them to compete with. Price can be both flexible and dangerous to be tampered with as it is easy to lower the cost but this can be dangerous as it affects profits.
Product, this includes the creation, development and management of the service. What, where, when and how to proceed with the service and other elements such as customer care which will help to set the Bridge apart form its competitors.
Place, as this is a service that is mostly taken to the customer then the place is chosen by the customer. All the food is produced at either the Bridge café or the church kitchen and transported to the customers home, hired room or served directly to the customer.
Promotion, this is done by advertising in local publications and through the church and café, personal selling is the best way as there is nothing better than the word being passed about the high standard and quality from previous customers to their friends and relations.
People, the chef for the buffet service is employed by the church and works in the Bridge café. She works to a high standard and has worked previously in the catering business. She is approachable by customers and other members of staff, which creates a friendly working environment and a more personal service. The Bridge feels that this adds to the service.
Processes, with one person being responsible for the service this creates the ability to remove any faults with the service at route. Consistency of quality is one of the main areas, which concerns the chef as all the food is home made it is relied upon that the quality of the ingredients plays an important factor.
Physical Evidence is the fact that there has been no complaints and only praise. Customers return to the Bridge and the food id consumed.
The organisation has set up this service to offer to the churchgoers and to expand from there. The ability to offer catering internally to conference clients as well as for church functions. There is part of the Bridge, which is designed to feed the homeless people in Bridlington and help support families how need some extra help. Prices are set to be low as it is not seen as a profit making business but to be there to offer a service at a reasonable cost for all. This is the reason the Bridge buffet service can be highly competitive.
BUSINESS TO BUSINESS MARKETING
Some of the main differences between marketing products or services to organisations rather than consumers are that the product may be to be used in the production of other products either directly or indirectly. Industrial products can be divided into seven segments;
Raw materials.
Major Equipment.
Accessory Equipment.
Component Parts.
Process Materials.
Consumable Supplies.
Industrial Services.
The business to business market is made up of individuals or groups who buy specific products for one of three reasons;
Resale.
Direct Use.
General Daily Operation.
Business marketing is different also as it is the buyers decision making process, the characteristics of the product market and the nature of the environmental differences aid the development and the implementation of business to business marketing mix.
Market research is more important in selecting and analysing target markets. Market information is more readily available in such places as industrial publications and governmental publications.
The marketing follows a pattern;
Determine who and how many potential customers there are.
Where are they?
Estimation of their purchasing potential.
Standard Industrial Classification System (SIC) is the basis for a lot of information about industrial customers. It was developed to classify selected economic characteristics of industrial commercial, financial and service organisations. In the United Kingdom, the Central Statistics Office is responsible for its administration.
Kompass and Kellp produce a directory of businesses. This contains information such as the company name, SIC number, the company address, telephone number and their annual sales. These will allow business-to-business marketers to find potential customers.
A second way of finding potential customers which is more thorough but more expensive is to use one of the many market research agencies.
The marketing mix must satisfy the customer in the desired target market, product, distribution, promotion and price, also a greater emphasis is put on service both before and after sales.
Before sales, a business-to-business marketer must give the potential customer the technical advice regarding the specifications, application and installation of the product. On time delivery is very important to customers and so is included in the marketing mix as they may incur costly production delays.
Business to business marketers must not only concentrate on the selling of their products but also act as a consultant with the ability to solve any customer problems.
Promotion and packaging are much lower on the marketing list.
INTERNATIONAL MARKETING
Some of the issues involved in the consideration of international market for a product are;
Socoicultural Factors.
Difference in cultures may affect the way in which a product is marketed to the consumer market. Negotiations may not follow the same procedure as in the UK. Some cultural differences may include social structures, language, religion, attitudes and values.
Technological Factors.
Some international markets may have a different level of technology at their disposal. Some countries suffer a lack of basic services such as water, electric, roads, fuel or even a home. This would make the marketing of some products impossible.
Economical and Competitive Factors.
The marketer must be interested in the market size of the foreign market. Per capita disposable income, unemployment trends, consumption patterns, inflation rates and the stability of exchange rates and if the country has any regulations on exchange control. Local taxes and import duties may add to the cost or cause a problem. Competitive analysis follows the same pattern as a domestic market.
Research should be done into other exporters into if they have entered the foreign market and any problems they experienced.
Political and Legal Factors.
Some countries and governments restrict the import of goods from certain countries.
Advertising, sales promotion, pricing regulations, direct marketing constraints, contract law and consumer protection legislation must be thoroughly investigated to ensure the product is well received by all.
Market Selection.
Once the product is selected the marketer must examine the opportunities and threats within the marketing environment of their own organisations strengths, weaknesses, skills, assets and goals.
Market Entry Methods.
The entry method will depend on a number of factors. Paliwoda cites six main factors which are;
Speed – What time scale does the organisation foresee entry into the market? Some methods may be achieved within months while others may take years.
Cost – How much will it cost the organisation to enter the market? Do the benefits from using one method instead of another justify its higher cost?
Flexibility – How mush flexibility does the organisation want to retain? Some entry methods allow the organisation to leave the market or expand. Some may require long-term contractual agreements or long term financial commitments, which could restrict the organisations future options.
Risk Factor – These cover all aspects of the marketing environment but mainly competitive and political risk. Some entry methods can help reduce certain types of risks.
Pay Back Period – Pressure from within the organisation to produce a fast return on their investment in a foreign market.
Long Term Profit Objectives – The organisation has to look forward to what it wants to achieve in the future and how it can exploit the opportunities available in the foreign market
Principles of Marketing. Brassington and Pettitt. Page 1016.
The above diagram shows the market entry methods.
Bibliography
Brassington F and Pettitt S Principles of Marketing 2nd Edition Pitman 2000 Italy
British Library Cataloguing-in Publication Data HND HNC BTEC Business Course Book Core Unit 1 Marketing BPP Publishing 2000 Walsall
Dibb, Simkin, Pride, Ferrell Marketing concepts and strategies 2nd Edition Houghton Mifflin Company 1994 USA