This case study to see how marketing theory applies to organizational practice. As Caf de Coral Group continues to expand its business locally and internationally, which eventually becomes the largest Chinese restaurant group in the world

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INTRODUCTION

        This case study to see how marketing theory applies to organizational practice. As Café de Coral Group continues to expand its business locally and internationally, which eventually becomes the largest Chinese restaurant group in the world, it is chosen to be the case company. Here is a brief summary of Café de Coral:-

Name: Café de Coral Holdings Limited (it will be called “The Group” afterwards. Throughout the case study, a particular focus will be on its household brand “Café de Coral” for simplicity)

Principle business: developing and managing quick service restaurants chain.

Corporate mission: To establish the Group as a distinguished corporation in the food and catering industry as the world's largest Chinese quick service restaurant group, maintaining a publicly recognized leadership position in the mass-market.

Corporate structure: 


Size: the largest publicly listed Chinese Fast Food restaurant group in the world with over 330 outlets in Asia Pacific region, and over 200 quick service restaurants in North America. Under the household name of Café de Coral, there are 120 restaurants, serving over 300,000 customers daily. It has 25 % of Hong Kong's fast-food market share as stated in the Standard Sing Tao Newspaper.

 

Indication of success: The continuous business growth records over the years, with multiple growth in terms of market capitalization, turnover, profits, employees and net assets value.


MARKETING-EFFECTIVENESS REVIEW

        To review the marketing effectiveness of the Group, the degree to which it exhibits the following five major attributes of marketing orientation is being viewed. In the instrument, the Group scores 23 out of 30, which is very good. The result is summarized as follows:

(i)        Customer philosophy

         The Group has developed different strategic business unit to target at different segment with different offerings and marketing plan. For example, Ah Yee Leng Tong, which is specialized in home-made soup and Chinese cooking targets at tourists from the Southeast Asian region. The restaurants are mainly located in the tourist, commercial and shopping districts. Where Café de Coral, the fast food catering chain, targets nearby residents and young executives and students. Restaurant locations are found in mixed use district, business core, shopping centers, industrial areas, private and public housing estates. From the planning of location of different units, it can view that the management has recognized the importance of designing the company to serve the needs and wants of chosen markets.

(ii)        Integrated marketing organization

        Café de Coral was awarded the Bronze prize in HKMA/TVB Award for Marketing Excellence in 2002. The judges recognized the success of the marketing programme is based on the contribution from the effectively integrated departments including all front line staff, management and marketing teams and marketing catalyst. Thus, it is estimated that the departments cooperate effectively and resolve issues in the best interest of the company as a whole.

(iii)        Adequate marketing information

        The Group first set up outlets in Beijing and Shanghai 10 years ago but failed because it soon found that it was not ready for the mainland - and that the market was not ready for its services. "This time, with the benefit of that experience, plus detailed market research and better understanding of the culture, we know our target and are ready to resume the fight," said Albert Wan, the group's assistant director for administrative logistics. The Group has done latest and detailed marketing research studies on the sales potential and profitability of different market segments. With the research, it established a presence in east China by opening a new Café de Coral outlet in Shanghai late last year.

(iv) Strategic orientation

        “The objectives were clearly presented and well addressed to the current market situation and well intended got the business operation.” From the judges report of HKMA/TVB Award. The current strategy is clear, innovative and well reasoned. Take an example, the Group's target in the medium term is to have 100 outlets, and promote the western-style Spaghetti House chain as a trendy option for the younger people in Shenzhen. It is well-known that the mainland is a new market, so the plan to enter this market is reasonable and it is a strategic long-range plan.

(v) Operational efficiency

        From the high sustainability of profit of the Group under the poor economy in the past few years and price-consciousness of consumers, it can conclude that the group has installed systems yielding highly current information and fast reaction tome. The marketing resources are adequate and are employed efficiently.


MARKETING ENVIRONMENT AUDIT

        Environmental analysis is important for marketing strategy setting. For simplicity, the household of the Group, Café de Coral, will be chosen to analyze the marketing environment as follows:

External Environment (Opportunity and Threat) Analysis

        Macro environment - P.E.S.T.

        Political

        “The government will introduce its long-delayed smoking ban early next year but a proposed timetable will give a four- year grace period to some facilities that claim the ban will harm their business” The ban in smoking in restaurant is a threat towards Café de Coral as customers who smoke may choose not to enter the restaurant leading to a decline in revenue. However, Café de Coral has turned the threat into an opportunity using appropriate strategies. For the non-smokers, some of the Café de Coral branches are completely smoke-free. And for the smokers, they can enjoy their meals in the exclusive smoking VIP lounges in some of the branches.

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        Environmental

        As there is a rise in environmental protection concern, this implies threat on Café de Coral. The enormous dumping of disposable items by fast-food restaurants is driving Hong Kong's landfills to saturation point, a green group has warned. It is urged that operators of fast- food restaurants should replace disposable items with reusable ones. In the trend, Café de Coral may need to put effort to reduce dumping like setting up dining utensils area as the green group suggests, which may increase the cost.

        Social/ Cultural

        The cultural environment provides opportunities to Café de Coral. Seasonal products and ...

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