International Marketing Report for Pinkberry. This International Marketing Report establishes the plan for the expansion of Pinkberry into the UK marketplace. Market analysis, entry strategies, marketing objectives and the implementation of Pinkberry

        

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These SWOT factors have been derived from the joint analysis of Pinkberry’s internal operations and the external British frozen yogurt market. Areas of strength, weakness and potential threats and opportunities have been identified to help develop the market entry strategy and marketing mix.

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• Establish strong brand name in UK market; differentiating from competitors.

• Increase brand awareness by 50% during the first year, through promotional activities and online advertising using social networking sites.

• Expand product portfolio to include augmented Frozen Yogurt products, such as smoothies, and frozen yogurt on cones
• Achieve gross sales of at least £550,000 within 12 months.
• Increase service quality through continuous training, control, and monitoring of performance.
• Target to capture 6-10% of the UK frozen yogurt market. 

The trend of eating healthy and frozen yogurt has created an industry worth $2 billion in the US. Similar lifestyles mean that such trends can also be seen in the UK market.  

The table below shows the various options Pinkberry UK has considered for market entry, along with the advantages and disadvantages of each method.

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In the USA, there are regulations that impose substantial disclosure obligations in certain states relating to franchising. In the UK, aside from the general company law, there isn’t as much regulation. The UK system is self regulated by The British Franchise Association, to which membership is optional. All its members are required to abide by the European Code of Ethics for franchising as part of their membership agreement.

                                                                                           

Pinkberry has a team of experienced and effective executives ready to help with market planning, store design, and launch of the brand. The team consists of leaders from Coca-Cola, Walt Disney, Starbucks, The Cheesecake Factory and many more.

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The primary customers of Pinkberry will be those aged 16-34. This includes: students, graduates, young professionals, and young families. This age group accounts for 26% of the entire UK population7. These customers are concerned about brand and product attributes such as lifestyle; following new trends, eating out with friends, trying new things and healthy-living. Pinkberry’s current ‘groupie-like’ following will aid the penetration into the UK target market, allowing for brand associations and personification through the brand identity and culture of Pinkberry.

Pinkberry positions itself in the market for trendsetters who embrace fun, sophistication and creativity, Pinkberry is one-of-a-kind experience that satisfies like no other because of its health aspects, fresh toppings, and trendy atmosphere.

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Pinkberry must consider the extended marketing mix for it to be able to meet customers’ needs effectively. There are seven aspects to the marketing mix, all of which need to be considered equally as each element supports the other.

The frozen yogurt industry is in the UK is in the beginning of the growth phase whereby sales and competition are both increasing. The public has become more aware of the product (frozen yogurt) and the market. In this stage Pinkberry seeks to build brand preference and increase its market share.  

Pinkberry’s first outlet will be in central London using a direct sales channel distribution as it:

• Allows for high levels of service to be delivered to customer
• Enables Pinkberry to directly deal with producers, rather than intermediaries. This allows active market learning, key to expansion around UK
• Gives greater control over distribution channel; improves communication & consistency.
• Offers more flexibility to Pinkberry’s distribution/procurement channels

• Pinkberry plans to source dairy/fruit products from local farmers, whilst tapping into the distribution channel of local supermarkets to procure exotic fruits.
• The flavoured powder will be sourced from America to ensure consistency of Pinkberry’s yogurt taste.

Pinkberry’s distribution channel is chosen in order to meet both Pinkberry’s (the seller’s) objectives and the needs of the customer. A shorter distribution channel (with few intermediares is appropriate as the produce is perishable and must be provided fresh. Also, Pinkberry will be ordering medium-sized orders, twice a week to ensure freshness. Finally, short channels allow Pinkberry to have more control over their distribution channel which will be beneficial for when Pinkberry expands.

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Pinkberry will have a standardised approach to delivery of service as it wants to ensure consistency across all its outlets.

Training  ---  To support a standardised approach, a comprehensive training programme is offered at Pinkberry College in southern California for up to three individuals. The programme consists of in-class and hands on in-store training at an existing Pinkberry outlet. These sessions are designed to suit individual needs, so they will vary depending on each person’s relevant store experience, current position, and knowledge of the business. The licensee will have a training session for two weeks whilst the general manager and assistant general manager will have one for three weeks. These training programmes will be held as needed which is approximately thrice a year. Pinkberry’s training team will also be available to support staff during the opening of the store. The cost of training is included in the initial franchise fee, any additional costs such as lodging, transportation and dining will have to be covered individually.

Employee manner-- Pinkberry’s employees are trained to provide customer oriented service in order to enhance their Pinkberry experience. All staff is trained to interact with customers in an enthusiastic, positive manner and provide the “service with a smile.”

Employee motivation-- Rewarding and motivating staff is essential as employee attitudes are highly correlated with customer satisfaction. Customers interact with employees and a few bad experiences could cost Pinkberry potential customers and its reputation. Ways of motivating employees primarily include: negotiating hours, paying them well, commending, empowering and challenging them.

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Given the nature of the Pinkberry as a franchise, the ideal organizational structure for both the US headquarters and UK branch can be demonstrated with a geographical structure (shown below). Here the individual regional outlets are single entities which have their own goals and are responsible for the management of their business units. However, their goals are tied into the overall vision of the organisation.

Pinkberry, as a new business in the UK will be relying mainly on word of mouth promotion. According to Peter Golder, a marketing professor from New York University, there are numerous benefits to this: (1) It’s inexpensive (2) it’s extremely credible to people, they become more likely to try the new product-We trust those we know Emphasis will also be on online marketing through social networking websites. Reasons for social media marketing: (1) Easily accessible to customers (2) Inexpensive (3) Fosters brand awareness (4) Way of engaging with brand (5) Better platform for customer retention

Promotional strategy

Pinkberry will be incorporating both push and pull strategies. Initially, a pull strategy will be used. With heavy advertising and sales promotions directly aimed at the customers, Pinkberry hopes to attract as many individuals as possible.

Online promotion will be a key focus before the start of the outlet; this will be done to generate consumer demand. Social media will be used to build up popularity of the brand and its product. This is done to “pull” demand from customers and encourage them to buy the product from the retailer (Pinkberry outlet).

In the future, however, Pinkberry will aim to expand to different cities and offer its frozen yogurt via different channels (ie supermarkets, cinemas, etc) hence a push strategy will be used. Here, the product will be promoted to other retailers in order for them stock it in their outlet. A key aspect here is to enhance retailer demand so the consumer can get frozen yogurt via several channels.  

Pinkberry, should approach the UK market with the intention of building market share over a period of years, maintaining a competitive yet premium price, establishing the product, the brand name, and setting up effective supply channels.

Pinkberry should focus its initial effort on marketing strategies, encompassing promotional tools and utilising brand name and current value obtained through channels such as the Pinkberry Celebrity Blog online.

Strategic Pricing Decisions

(Price positioning and value for money)

The characteristics of Pinkberry’s product will lead to the UK franchise adopting a local pricing strategy which is broadly similar for individual markets, so that positioning of specific products remains consistent from country to country. Price role in product differentiation enhances perceived value of the product and helps consumers to distinguish between competitors. Placing the base frozen yogurt product price just below competitors (i.e Snog), yet maintaining the high quality consumers perceive allows for a higher level of value-for-money for this premium product.

Developing pricing strategies

According to Davidson (1987), in developing pricing strategies Pinkberry should be aware of the price dynamic of frozen yogurt and its augmented products within the UK market. Two key product characteristics outlined below are important for the pricing of Pinkberry’s products:

• Frequency of Purchase – Since Pinkberry’s product is discretionary, it is up to the customer how frequently they wish to purchase frozen yogurt. Due to this, the customers are moderately sensitive to the price. If there are minimal changes (ie £0.30), customers would still be willing to purchase it. However if Pinkberry decides to hike the prices by more than £0.80 and sells their product for more than that of competitors, customers may  not be as likely to buy it.
• Degree of fashion or status; Pinkberry’s premium priced product is affiliated with high quality and a positive brand image. The ‘trendy’ and hip aspect of Pinkberry’s brand, means customers will be willing to pay a premium price for it. However, once again, they will only pay for it up to a certain limit. Once the price is considerably higher than that of competitors’, customers may not purchase Pinkberry.

Process refers to the methods of providing a service. It is essential to have thorough knowledge of each element contributing to the process to see whether it adds value towards enhancing customer experience. A blueprint of a customer’s entire experience will enable Pinkberry’s management to see the flow of activities involved in providing the service and will help to identify potential points of improvement and/or failure.

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Costs mentioned in the table above are the estimated costs for the franchisee when opening and operating during the initial phase of the business

The franchisee will have to have a budget between £200,000 to £250,000 to cover the basic commencement costs. Specialised skills and expertise will be provided through varied training courses to the franchisee, manager, and general manager by Pinkberry.

Projected Financial Performance-- Pinkberry will receive 4% royalty fee from the gross revenue, this is to be paid on 10th of each month. The following is a projection of potential earnings from UK one outlet

The Gantt chart has been used to plan out the stages of Pinkberry’s launch into the UK. It illustrates the necessary sub-projects and their relationship with one another allowing for a continuous time scale to best utilise resources effectively. This plan gives a strict timescale of when each sub-project should be started/completed by.

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Control

SERVQUAL (Parasuraman, Zeithalm and Berry) is a widely used instrument within the service industry to provide measurement of the service quality an organisation provides against perceived service level of consumers. Service quality is measured using five dimensions by a 22 item questionnaire containing two sections regarding the expectations and perceptions of the customer. The five dimensions include reliability, assurance, tangibles, empathy and responsiveness. Based upon service received and expected at Pinkberry, the reliability of service depends upon accurate performance; assurance is based on competence, courtesy, credibility and security; tangibles encompass the appearance of physical elements; empathy includes the easy access, good communications and customer understanding; finally, responsiveness highlights the promptness and helpfulness of the staff.

A comprehensive investigation of service needs provides an invaluable tool to give insight into improving service quality. The SERVQUAL measurement provides detailed information about customer perceptions of service, comments and suggestions, and service performance levels as perceived by the consumer in terms of expectation and satisfaction.

Point Based Loyalty Cards

Pinkberry loyalty card is used to store points when a customer make a purchase.  This will promote the brand loyalty of the customers and make them visit more often to pinkberry. Studies have shown that it is easier to increase the sales of existing customers than to attract new ones. Loyalty program help Pinkberry to attract and retain customers, provide valuable marketing opportunities, and influence consumer behaviour.

Customer Feedback

Customer feedback will be taken regularly to maintain the quality of service. Further Customer Feedback gained can be used in training activities to help employees to address customer-related grievances more competently and resolve queries and complaints more quickly. Analysis of detailed customer feedbacks provides pinkberry customer intelligence that can be used to spur innovation efforts, research and development of various and new product development initiatives.

Gap model of Service quality

Gap model is essential for organizations to measure management and minimize their problems. Customers' expectations have been shaped by word of mouth, their personal needs and their own past experiences. Gap will be increase if there are large distances between customer's perception of the experience and the customer's expectation. Routine  after delivering the customer experience are important for an organization to measure customer perceptions of service. Therefore, Pinkberry have feedback from to get the dates and evaluate their comments. Moreover, online feedback ( e.g. facebook, twitter )also is one of the methods to measure the customers satisfaction of their services and decrease the opportunity of gap enhanced.

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