Marketing Theories
Following "Market Orientation" concept is not enough to attain growth, but carefully formulated marketing theories and strategies must be implemented. The organization, after selecting a theory on the basis of thorough research, must ensure proper strategies are devised and duly put into action. Some of the theories used in marketing are defined below:
- Value Innovation and the Value Curve: Identifying what customers value the most and innovating change accordingly.
- Porter's Five Forces of Competition Framework: Understanding industry competitiveness and market-entry strategy.
-
Market-Oriented Ethnography: Understanding consumers by observing their behaviour rather than by researching their attitudes.
- Brand Personality Dimensions Framework: Measuring and comparing brand personality.
Action plan
After the arrival of these international food chains in areas where “Juada Balta” was already operating, started exploring the varieties offering by other international chains.
Strategic managers have changed their strategy methods and created an action plan to save their business:
- Dropping prices
- Bringing more variety in the menu
- Advertising in the local newspaper, internet, radio
- Spread the word among the clients
Case Study
A very unique case that can be considered as a solution to this problem is of Mr. Zubair Kazi. Why we’ve chosen the case of Kazi Food Corp. USA is because the owner Mr. Zubair Kazi began his livelihood washing dishes in a US restaurant in 1969.
Today Mr. Kazi owns more than 250 restaurants of KFC and Burger King in USA. He is also the second largest owner of KFC restaurants in USA and employs more than 5,000 people. Zubair Kazi is not a born citizen of USA. He was actually born in a sub-urban area southwest India. The poor Zubair Kazi moved to the USA at the age of 23. After struggling for a few years, he got a job at a restaurant as a cook’s helper before being promoted to the post of a manager. Under Mr. Kazi’s management, the restaurant started churning out profits.
Some years later, Mr. Kazi bought a deteriorating KFC restaurant with the help of a few loans, and fixed and cleaned the interior and exterior and improved the cooking standards. Working with extreme dedication and commitment, very soon, the restaurant was generating revenue. A year later, Mr. Kazi sold his restaurant for a profit. With the money he got, he bought three more restaurants that were losing money. Again, he cleaned them up, improved the food, and trained the people again working in the restaurants. After some time these restaurants were making a profit, too. Then he continued to set-up new KFC and Burger King Restaurants under the Kazi Food Corp. Today, Mr. Kazi owns more than 250 restaurants which employ 5,000 people and make a US Dollars 80 million in per annum profits.
Mr. Zubair Kazi is a true example of how he did not let his status overcome his passion. Just because the local food chains are small or weak doesn’t mean that the local food business will lose money or the economy will suffer.
People have a habit of changing what they eat every time. Also, no one person can happily eat one specific food for even ten days. Can anyone eat a Zinger burger for ten specific days? The answer is obviously no. Variety is therefore positive and not negative. If someone goes to a KFC restaurant in Saddar Karachi and finds a “Juada Balta” nearby, there will be a day when he will go to that “Juada Balta” to explore what’s being offered.
Zubair Kazi didn’t hit a jackpot. He played a very intelligent game through his skills, strategy and efforts. If a dishwasher in an ordinary restaurant can do it, then “Juada Balta” already has enough money to do a lot more than one can expect from it.
Literature review
Thousands of firms and millions of people work outside their countries of citizenship, while millions of more people work at home for companies having foreign ownership. Competition is international in scope, meaning businesses of all types face real or potential competition from foreign products or services, or from foreign-owned subsidiaries, as well as from U.S. firms that are now owned by an international entity. (Kak Anjana, 2002)
What this means is that there is "no place to hide" for business – local or multinational. Even the old assumptions, that only the biggest of firms from the most developed countries can be involved with international business, no longer hold true. No more can business "pretend" that it doesn’t have to understand and react to the global marketplace. (Kak Anjana, 2002)
Two seemingly conflicting results happen because of this, although both reinforce the point that business today is international in scope. The first is that every organization – regardless of its size, location, or scope of activity – is impacted by the varying attitudes, values, and behaviors that come from the many countries and cultures that provide its inputs, markets, and employees; and the second is that customers (individuals or businesses) and employees world-wide also now expect the same world-class products, services and treatment available in the best firms and in the most-developed countries, making firms everywhere compete on the basis of world-class speed, quality, service, and management. (Kak Anjana, 2002)
The potential of an organization's sustainable competitive advantage depends on the rareness and imitability of its resources and capabilities. The less imitable a competitive advantage is, the more cost disadvantage is faced by the competitor in imitating these competencies. (DENNIS R. BRISCOE, Ph.D. )
As (Adam Patrick said) "We've taken over a lot of distressed businesses; this is nothing we can't handle." (Sacha Mendelsohn, 2002)
In order to enhance the competitive advantages of a global firm, its human resource professionals need to focus on developing their own international competencies. The HR function needs to shift from a purely administrative orientation to one that places primary attention on the processes of internationalization so that it can help the firm reconcile the many paradoxes that are inherent in the activities of global firms. This creates new demands on how specific HR activities are performed and sets a new agenda for HR professionals. (DENNIS R. BRISCOE, Ph.D.)
As (Chris Scanlan said) “There is a culture in the Foods system that is very hands-on and customer-oriented; that leadership starts at the top”. (Susan Sunderland, 2007)
As (Steve Johnson, said),”It's hard to get people to apply. It's real, real tough and very competitive. We're doing this to just give a little added bump to have people come out and give us a try”. (PBN Staff, 2006)
It is essential that fast-food restaurants ensure a constant supply of high-quality basic ingredients to meet uniformity, taste and quality requirements. Ingredients usually include beef, chicken patties, french fries, orange juice and fish fillets. These form the basic menu of most fast-food restaurants. Products are imported in containers, distributed to warehouses by the restaurant chain or its importer and then processed and prepared by the restaurant into finished food products.
.
Theory Formulation
The independent variable is the foreign competition faced by the participants of the local markets into which the foreign businesses are entering, which is the prime issue to be addressed in this case. The dependant variables are the local fast-food businesses and the buying behaviour of the local customers in the fast-food market.
Globalisation has had a profound impact on businesses as well, among almost every factor in the walk of life. Due to it, an insurgence of businesses into foreign markets has been seen with increasing frequency. Due to this, undeclared wars have erupted everywhere to gain competitive advantage over other actors in every industrial sector and different markets. Businesses are increasingly facing competition and managers has to think harder not only from other local players but from foreign entrants as well, which is making it ever more difficult to win over customers and market share from competitors, resulting in low revenues, losses, or even outright closure of local businesses in face of the foreign competitors.
In order to influence the locally based fast-food franchises, the foreign competitors need to gain a competitive edge over them by winning over market share from them. The only possible way to do this is to attract local buyers towards their offers. If they can influence the local customers enough to be able to convince them to switch from their existing brands to the new offers, the foreigners will be able to win over market share, and consequently the market, from the local competitors and hence achieve their target; i.e., influence the local market in the intended way.
Research methods and design
The purpose of research
It is a Descriptive research method because I am trying to describe the strategic managers aspects of phenomenon interest of an organization based on the customer preference.
The type of investigation
It is a Correlation research method because strategic manager showing the association between the independent and the dependent variable that when foreign competition rises what factors are associated for the declining sales of the local business.
The extent of researcher interference
This research is conducted view in the natural environment with minimum interference to strategic manager with the normal flow of work and collecting data through questionnaires and literature review.
Research analysis
As it is a correlation research and it is always being conducted in the contrived setting so it is a field study because I am identifying the different variables through questionnaire that affect our problem
“Juad Balta” organization or fast-food chain is my research analysis
The time horizon for the study
It is a cross-sectional study. The reason is that I will gather data once in order to answer research question.
Research data collection
Interview
I took a sample size 50 to know the customers’ perception about preferring the international food chains over the local ones. The result came out to be that mostly Lithuanians prefer to have variations in food and basically they are more class conscious as compared to the working class. The main purpose of taking interview was to know different aspects in switching to different food chains besides that I have also asked what should be done by the local food chains to have a strong stand in the food industry when any international food chain comes in the competition.
- How do you think the local fast food chains should face others?
Food has attracted all strata’s of society, The international fast food chains like Pizza Hut, KFC and Mc Donald’s targeting well and their growing fascination fast..
The local food chains including “Juoda balta” expected to be in a strong competition with the global chains to keep their market shares or grow it. I feel that local chains have become more cautious about maintaining the standard of the food after global competitors entered into market almost a decade ago.
- What other factors should the local fast food chains look into?
Waking from a brief nap during weekends last Friday, I was hungry and knew what to do about it. “Juoda balta” is near my home but it shut downs a bit past midnight, but the late-night drive-through window at a nearby Mc Donald was easier. It is quicker to get up and come here than to make something myself. In today’s times everything is about comfort and accessibility.
- So is late-night opening the main factor?
Of course the main factor is making money, when consumers' have late-night options, and customers from the local food chain can easily be stolen by providing them convenience and traditional all-night dining facilities. Still, as more chains join the ranks of the sleep-deprived, the holdouts risk looking like they're asleep at the switch.
Now what's driving it? The international chains have realized that their competition is making money. Opening up late is just the next frontier to make more money.
- So what should the final resolution be to expand the local chains?
I’ve seen in many countries I’ve visited, where you almost feel like cities are copy pasted all around the world, with the same restaurants, malls, clothes shops …etc. But this is where the government and people should kick in, it’s our responsibility to keep these businesses alive, to support them and encourage their existence.
I went to Majorca with my boyfriend I was shocked! There were no McDonald’s, no Burger King, no KFC, no Domino’s, no Popeye’s, nothing. Even the couple of Pizza Huts they had were asked to close down and have been shut down. This was good for local food chains and a very good move towards anti-globalization.
“Juada Balta” should also take the responsibility to enhance their quality and bring their food and services to a level where they can compete by providing a decent and delicious meal at a competitive price.
Research findings
The random survey of “Juoda Balta” consumer indicated that most of them disagree on the fact that its service is good and also it may be the reason of its decline. Other than that a high percentage of people believe that it offers variety, taste, quality and freshness but the only area that is lacking importance is service and accessibility of the restaurant.
Strategic managers of restaurant “Juoda Balta” is not only aiming at producing valid and qualified empirical material that can be used at local restaurants but also become engaged in contributing to the transformation of organizations. For the strategic manager, the object of study is not a passive entity that one can gain access to, but is rather a continuously changing and dynamic social system that can be positively affected through interventions.
In the this research setting (Mode 2 research for Gibbons et al., 1994), such detached position is neither possible, nor desirable. In problem oriented research (Astley, 1985), bridging theoretical frameworks and practicing managers' puzzles and concerns, the author function is eroding because there are no longer any clear roles of agency in relation to the text.
Finally. Out of a total sample size of 50, 83% of the respondents opined that “Juoda Balta” had, indeed, lost popularity in face of foreign competition. According to my research, the majority of them thought that better image and quality from foreign brands are the major causes of the decline in “Juoda Balta” popularity. Other major factors, as rated by our respondents, include better service and innovation by foreign competitors. Societal mindset turned out to be the least probable factor.
Conclusion and recommendations
From this research methods, it can be concluded that even though the foreign chain maintain an impressive presence in the local markets, and have done so ever since their entry into these markets, our local fast-food restaurants still have a chance of regaining their lost glory, along with the lost customers. Our local fast-food chains, a very classic example of the downfall of which is seen in “Juoda Balta”, deteriorated in terms of both business and goodwill when the foreign competition decided to expand its operations in Beckton, because of the already excellent image maintained by the foreign chains in the international markets, and the success of their increased efforts to maintain it in our local markets as well. “Juoda Balta” failed, initially, to keep up with the dynamic pace of competition in the business.
The strategic managers were not competent, the promotional campaigns became non-existent, and consumers drifted away in large numbers. Unfortunately, the situation still hasn’t changed. According to our consumer research “Juoda Balta” needs to learn from its mistakes, and it needs to do it quick. 63% of the respondents of my research replied that they hadn’t ever tried “Juoda Balta” food, which is a major setback for a brand which has been in business in its home turf for as long as “Juoda Balta”. Service and accessibility also play an important part in the decline of the restaurant’s profits and image both.
“Juoda Balta” needs to take advantage of the leverage factors and identify and compete with, and possibly eliminate, prospective threats to its growth along with finding ways to rebut threats from extraneous factors.
Recommendations
Through this research, I have found quite diverse recommendations which our respondents had to give for “Juoda Balta” for it to be able to gain a competitive advantage over the foreign players in the local markets.
A vast majority of our respondents were of the opinion that “Juoda Balta” should pay close attention towards its promotional campaigns. Promotion of “Juoda Balta” seemed to be the foremost in people’s minds when they compare “Juoda Balta” with its foreign competitors. According to our respondents, “Juoda Balta” should focus on the way it seeks to gain the uppermost position in people’s minds and rethink its advertising strategies. Redefining the way it promotes itself will certainly pave the way for “Juoda Balta” towards market leadership.
The foreign entrants have, since the start of their set-up in our local market, have been bombarding consumers with innovative and eye-catching promotional gimmicks, which was something that “Juoda Balta” lready seemed to be lacking even before their entry, and their presence made the absence of such gimmicks in “Juoda Balta” case even more prominent, which played an immense part in driving customers away from it and towards the new and attractive offers.
“Juoda Balta” needs to re-devise its advertising campaigns and increase its advertisements in the numeric sense as well. It should increase the number of mediums used for promotional purposes, because in this age of media dynamism, everything rests on grabbing the consumers’ attention in the shortest time possible. Strategic managers should make use of the extreme variety of mediums available for this purpose in this era, such as hoardings and billboards, radio ads, print media, personalized advertising, and most important and prominent of all, the electronic visual media, i.e. television ads. A relevant factor is change in its marketing strategies. Hiring a good marketing consultancy firm in this regard can surely turn the situation around for “Juoda Balta” in terms of the quality of its advertisement campaign.
The second most important factor in consumers’ minds for “Juoda Balta” situational turnaround turned out to be the pricing. Since it is a locally based chain, consumers tend to think that it should be priced lower than the foreign chains, as is our society’s mindset everywhere the foreign vs. local debate arises.
Literature
Young, K. E., (2003). An Exploration of the Use of Graphic Facilitative Methods
within the Strategic Change Process
Trochim, W. M.K. (2005). Research Methods Knowledge Base, http://www.socialresearchmethods.net/kb/
Savenye, W. C. and Robinson, R. S. (2003). Qualitative Research Issues And Methods: An Introduction For Educational Technologists
Johnson, P., Buehring A., Cassell, C. and Symon, G. (2003). Evaluating Qualitative Management Research: Towards a Contingent Criteriology
Tom Bolt, November 1, 2006, Kazi Foods Closes Buccaneer Mall Restuarant, http://lawblog.vilaw.com/2006/11/articles/labor-employment/kazi-foods-closes-buccaneer-mall-restuarant/; 19th March, 2009
Appendix
Questionnaire
This survey is being conducted to determine the effect of foreign fast food chains on the local ones already existing in Beckton. It will help us determine what factors drive people away from the local fast-food chains and towards foreign ones, and what the local franchises can do to win these customers back.
Age: _____
Gender: Male Female
Occupation: Student Other__________
1. How many times do you eat out in a month?
* Once
* Twice
* Thrice
2. Do you visit fast food restaurants frequently?
o Yes
o No
3. Which one do you visit most frequently/usually? (Choose one)
o KFC
o McDonald’s
o Pizza Hut
o Other (Please specify) ______________
4. Please rate the most likely reasons for preferring this particular fast-food chain on a scale of 1-6 (1 being the most likely reason)
Taste ________
Quality ________
Price ________
Menu ________
Service ________
Restaurant’s environment ________
5. Do you think your preferred fast-food chain’s branches (the one mentioned in question 3) are conveniently located for people from all over the city?
Yes
No
6. Please evaluate your preferred fast-food chain on the following criteria (circle the most appropriate number for each factor).
| Strongly Disagree | Somewhat Disagree | Neutral | Somewhat Agree | Strongly Agree |
The food is served hot and fresh | 1 | 2 | 3 | 4 | 5 |
The menu has a good variety of items | 1 | 2 | 3 | 4 | 5 |
The quality of food is excellent | 1 | 2 | 3 | 4 | 5 |
The food is tasty and flavourful | 1 | 2 | 3 | 4 | 5 |
The restaurant’s environment | | | | | |
Is comfortable | 1 | 2 | 3 | 4 | 5 |
The service is good | 1 | 2 | 3 | 4 | 5 |
The pricing is satisfactory | 1 | 2 | 3 | 4 | 5 |
The restaurants are easily accessible | | | | | |
From all areas of the city | 1 | 2 | 3 | 4 | 5 |
You would recommend this restaurant | | | | | |
To other people | 1 | 2 | 3 | 4 | 5 |
7. Overall, how satisfied are you with preferred fast-food chain (the one mentioned in question 3)?
| | | | | | | |
|
Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied
1 2 3 4 5
8. How likely would you be to recommend this fast-food chain to your friends or colleagues?
Very likely Likely Neutral Unlikely Very unlikely
1 2 3 4 5
9. Have you ever eaten at Mr. Burger or a Mr. Burger product? (If not, skip next three questions)
Yes
No
10. Please rate “Juoda Balta” on the following criteria on a scale of 1-6. (1 being the best). More than one option can be given the same number or rating.
Taste ________
Quality ________
Price ________
Menu ________
Service ________
Restaurant’s environment ________
11. Please evaluate “Juoda Balta” on the following criteria (circle the most appropriate number for each factor).
| Strongly Disagree | Somewhat Disagree | Neutral | Somewhat Agree | Strongly Agree |
The food is served hot and fresh | 1 | 2 | 3 | 4 | 5 |
The menu has a good variety of items | 1 | 2 | 3 | 4 | 5 |
The quality of food is excellent | 1 | 2 | 3 | 4 | 5 |
The food is tasty and flavourful | 1 | 2 | 3 | 4 | 5 |
The restaurant’s environment | | | | | |
Is comfortable | 1 | 2 | 3 | 4 | 5 |
The service is good | 1 | 2 | 3 | 4 | 5 |
The pricing is satisfactory | 1 | 2 | 3 | 4 | 5 |
The restaurants are easily accessible | | | | | |
From all areas of the city | 1 | 2 | 3 | 4 | 5 |
You would recommend this restaurant | | | | | |
To other people | 1 | 2 | 3 | 4 | 5 |
12. Do you think “Juoda Balta” restaurants are conveniently located for people from all over the city?
Yes
No
13. What do you think has happened to “Juoda Balta” popularity since foreign fast-food restaurants like KFC and McDonald’s have been introduced in Pakistan?
it has lost popularity
it has gained popularity
Its popularity has remained same
(If you don’t think it has lost popularity, please skip the next question)
14. Please rate the most probable factors in your opinion, of “Juoda Balta” decreasing popularity on a scale of 1-7 (1 being the most probable)
Better brand images of foreign brands ________
Societal mindset of preferring foreign things over local ones ________
Better service from competitors ________
Better quality of food from competitors ________
Innovative food products being offered by competitors ________
Better pricing by competitors ________
Easy availability of foreign brands in terms of location ________
15. What do you think “Juoda Balta” can do to win back customers from competing foreign fast food chains?
____________________________________________________________
__________________
____________________________________________________________
__________________
____________________________________________________________
__________________
16. Our questionnaire was: (Choose one)
Interesting Boring So-So Insightful Excellent Not good at all