Marketing Strategies by Garcia Pizza free essay sample

Rationale: Garcia is a new pizza company that has recently opened in Mumbai. Although its pizza is affordable and of superior quality, it has not been able to capture a large percentage of the market share. Hence, it is genuine problem faced by ‘Garcia’ and as I am interested in marketing, I want to test my ability to devise appropriate marketing strategies and resolve the issue at hand. It will be interesting to carry out research to see what marketing strategies ‘Garcia’ can use to increase sales. Theoretical framework:- Section 2: The External Environment Competition Consumer tastes SWOT analysis Section 3: Marketing Market Research Marketing Mix with the 7 P’s Promotion Techniques Marketing Strategies Methodology Primary Research:- 1. Interview the owner of Garcia to find out the marketing objective of the firm, marketing strategies already implemented by Garcia and the target market. 2. Give the customers questionnaires to find out their perception of the company 3. Survey potential customers to understand their likes and dislikes Secondary Research:- 1. Use web based research to find marketing strategies adopted by competitors and other pizza companies. 2. Read books on the marketing strategies used by companies to increase their sales. Limitations 1. There maybe statistical inaccuracies while collecting data. 2. It will be difficult to collect data from customers as ‘Garcia’ home delivers its pizzas’. 3. The owner may not cooperate and give all the financial and operational details required. 4. The recommendations given do not take into account the financial constraints on the business Action Plan July – Submit research proposal August – Finish data collection. Interview the director and carry out the surveys September – Main results and findings October – Analysis and discussion of results December – 1st draft February – Final draft Word Count 300 Executive Summary:- Garcia is a private limited pizza company that opened in 2004. It has been growing rapidly and currently has 9 outlets in Mumbai. The Kemps Corner outlet, located in a central and easily accessible area of Mumbai, has the greatest budgeted variance and lowest sales. Hence, it is genuine problem faced by ‘Garcia’ and as I am interested in marketing, I wanted to test my ability to devise appropriate marketing strategies to resolve the issue at hand. Primary research such as interviewing the marketing manager and owner and conducting surveys of potential and regular customers as well as secondary research helped me discover weaknesses in their marketing strategy. After analysing the results of the market research, I was able to make suitable recommendations i. e. changes that have to be made to the marketing mix especially process, people, physical evidence and promotion in order to increase sales. However, there are limitations as the report does not take into account the financial feasibility of the recommendations. There was also a time lag between when the survey was carried out and the final recommendations made. Therefore, there may have been changes in the external environment which have not been taken into account. Word Count 199 Introduction: Introduction to the company- Garcia’s Famous Pizza is a fairly new local pizza company. It is a private limited company that was established in January 2004. Over a period of two years, Garcia’s Famous Pizza has already opened more than 9 outlets situated in different parts of Mumbai . Introduction to the problem- Garcia sells good quality pizzas’ at affordable prices. However, it is a new relatively unknown company and faces intense competition from established brands like Dominoes and Pizza Hut. I thought it would be interesting to see what marketing strategies Garcia can use to increase its sales and capture greater market share in a highly competitive market. There are currently nine outlets in Mumbai but I decided to focus my research on the Kemps Corner outlet. This is because it is a new outlet, opened ten months ago, in a central location in Mumbai and is easily accessible. However, the budgeted variance shows the greatest adverse in this outlet. Kemps Corner is a central location in Mumbai and four rival companies are located in the same area. Market Research (Procedure): For primary research, I took an interview with the marketing manager and the managing director of Garcia. Since Garcia’s target market is consumers between the ages 15-25 years and 60% of its customers fall within that age group , I used the quota sampling method to conduct the survey. 60% of those surveyed were within the age group 15-25 and 40% were from all the other age groups. Customers from the Garcia database who had eaten at the Kemps Corner outlet were surveyed. The sample size was 40. Since Garcia’s main business is home delivery, market research was carried out in the form of telephone interviews to regular customers. The purpose of the research was to ascertain the customers’ perception of Garcia’s pizza so that I could make appropriate recommendations. This would help Garcia provide a better all round experience to customers which would help them to generate greater sales. The survey helped me discover weaknesses in Garcia’s marketing strategies and analyse the areas in which there is scope for improvement. Potential customers were also surveyed in order to determine how Garcia can increase sales by increasing their customer base. Questionnaires were handed out outside the outlets of Garcia’s competitors located nearby. A random stratified sampling technique was used. Main results and findings: These results were collected from interviewing current and potential Garcia customers 60% of the regular customers were between 16 – 25 years as a quota sample was taken97. 50% of the potential customers were between 16 to 25 years. Hence, the target market for pizza companies is the age group of 16 – 25 . More than 70% of those surveyed spent less than Rs 10000/- per month on entertainment. 80% of the regular customers ordered pizza from Garcia’s at least once a month and 12. 5% rarely ordered pizza from Garcia. 72. 5% of the potential customers (those ordering from places other than Garcia) ordered pizza at least once a month; only 7. 5% ordered rarely. Majority of the sample usually ordered from Dominoes. This shows that Dominoes has a clear edge in the market followed by Pizza Hut and Smokin Joes. Regular customers were surveyed in order to ascertain their perception. 5% said the quality of food and taste was good/ excellent and majority thought that Garcia was excellent value for money. However, 25% thought variety was fair. Garcia did not fare well on quality of service; 27. 50% said the service was fair while 5% said it was poor. This is one area that is a weakness that Garcia has to focus on because in the food industry good service is required to increase sales. Slow de livery was another weakness as 25% said speed of delivery was fair. Customers surveyed thought that the pizzas’ were not hot when delivered with 25% rating it fair and 7. 0% rating it poor. Half of the regular customers had heard about Garcia through their friends. Only 25% had heard about Garcia through the fliers which are the main method of promotion . Only 10% of the potential customers surveyed heard about Garcia through fliers. Hence, their promotional strategy does not appear to be effective as 45% had heard about Garcia through their friends and17. 50% of those surveyed had not heard of Garcia. 95% of those interviewed ordered from Garcia as well as other places. Only 5% said they only order from Garcia. Since, it is a new firm Garcia has not developed brand loyalty. Majority of those surveyed would be willing to try a new pizza company. As the results show, 70% of the customers think taste of the pizza is the most important while for 12. 50% value for money is most important while ordering pizza. However, 15% said that fast delivery was the most important. This question was asked as Garcia is deliberating advertising on radio. The survey showed that 47. 50% of those sampled usually heard Go F. M. Hence, if considering advertising through radio, Garcia should advertise on Go F. M. In this way they will be able to reach out to a large percentage of their target market. Analysis and Discussion: On analyzing the data, I have determined that – †¢The target market is customers between 16 – 25 years who do not have high disposable incomes to spend on entertainment. Therefore, demand is relatively price elastic . Since Garcia is a new brand, they price their products 10- 15% lower than established brands which helped them capture some of their competitors’ market share. †¢In the pizza industry, there are many well-established firms. Therefore, Garcia is a follower in the market. The product positioning map shows how the three major competitors that Garcia has to compete with are placed based on quality and price. Product Positioning Map (PPM) of the four main competitors in the pizza industry The positioning map shows that Dominoes and Pizza Hut have high quality. However, their pizzas’ are priced higher than those of their competitors. Smokin Joes and Garcia were placed close together in the PPM. However, Garcia’s prices were slightly lower than Smokin Joes and the quality was slightly better. †¢Delivery time was one of Garcia’s weaknesses. Since Dominoes introduced a delivery time of 30 minutes or a free pizza, fast delivery has become a factor people consider while placing their orders. This is one area that Garcia needs to concentrate on as their pizzas’ takes between 35 – 40 minutes to be delivered. †¢Their main promotional strategy is distribution of fliers. However, a small percentage of both potential and regular customers have heard about Garcia through fliers. Therefore, this strategy has not been effective and other methods of promotion need to be considered. †¢Garcia’s position in the Product Life Cycle The Kemps Corner branch has been open for one year. It is now at the growth stage of the product life cycle characterized by a rapid increase in sales. Although it is at the growth stage, Garcia’s share in the market remains relatively low as it a new firm that potential customers are unaware about. It also has some weaknesses such as fair service and insufficient variety. Therefore, according to the Boston Matrix it can be classified as a Question Mark. Garcia’s position in the Boston Matrix With persuasive advertising and marketing techniques, Garcia can increase its market share and become a star. Since Garcia is a new firm, it has to work hard to develop customer awareness and brand loyalty by introducing schemes and other promotional offers. †¢Garcia is currently expanding their product range rapidly. They are not developing new markets or products. Therefore, according to the Ansoff matrix, they are aiming for market penetration. By analyzing the data collected by the market research, weaknesses can be analyzed in order to find ways to increase sales. Recommendations and Conclusion:- Product:- 1. Garcia can introduce low calorie pizzas’ or healthy side-orders like salads since people are becoming more health conscious. . Garcia can serve beverages such as iced tea and beer. These changes are not difficult to introduce and will lead to a better overall experience for their customers. Price: Garcia is perceived as excellent value for money as its goods are priced 10 – 15% below those of its competitors. No changes should be made to this pricing strategy as it has helped Garcia gain market share and increase sales. Promotion: 1. Florentina and Californian pizzas’ were unpopular . These products with low market share and low market growth can be classified as ‘dogs’ according to the Boston Matrix. Garcia can market unpopular products by using promotional offers such as a free portion of garlic bread with a 12 inch pizza or market the pizza so that with every Chicken Tikka there is a discount if purchased with a Californian pizza. This will encourage people to try these pizzas’. Garcia can discontinue these pizzas’ and introduce more popular new items. 2. To increase customer loyalty Garcia can introduce schemes frequent customers can enjoy. For instance, when a customer orders from Garcia, they can send discount coupons that can be used in the next purchase. Garcia can inform regular customers of new offers or new items on the menu through emails and text messages as it has a database of all its customers with their mobile numbers and email addresses. 3. They can email only ‘lazy’ customers redeemable coupons that can be used to avail of exciting new offers. 4. Since Garcia is a new company, informative and persuasive advertising is needed to promote its pizzas’. Currently Garcia is using only fliers to advertise and is relying heavily on word of mouth to attract new customers. They need to consider above the line promotional strategies such as the radio. They should advertise on GO F. M. as majority of the sample preferred listening to it. Since it has outlets only in Mumbai, advertising on national TV or hoardings is not feasible due to the high costs involved. Advertising in the newspaper can also be considered. 5. Garcia donates a significant part of its profits to charity . Its packaging is also eco-friendly. People are unaware that Garcia is a socially responsible firm. It can advertise itself as a local company contributing to the well being of its community. This could become Garcia’s Unique Selling Point (USP). 6. Garcia can introduce special schemes during the Cricket World Cup. For instance, there maybe a lucky draw when people order and the grand prize can be two tickets to the world cup final. Place: It is not feasible to make any changes to the location of the outlet. People: The quality of the service needs to be improved as this is one of the business’ weaknesses. They have to work on human resource management so that the staff is polite and prompt while attending to orders. Process:- Garcia does not have a delivery time. Orders take between 35-40 minutes to be delivered. Pizza delivery in Mumbai is expected to take only 30 minutes. As Garcia is focusing on home delivery, they need to become more efficient and deliver within 30 minutes to increase sales. Physical Evidence: Garcia currently uses eco-friendly packaging. They need to make changes so that the packaging is not only attractive but also insulates the pizza and keeps it hot till it is delivered. Hence, my making appropriate changes to Garcia’s marketing mix especially in weak areas such as process, physical evidence and promotion, it an increase sales and gain market share. Limitations:- †¢The situation may not be accurately reflected as only a small percentage of the population was surveyed. There was also a time lag between when the survey was carried out and the final recommendations made. Therefore, there may have been changes in the external environment which have not been taken into account. †¢This report does not consider financial constraints on the business. Acknowledgements: 1. Ms. Sonali Bajaj – my business and manag ement teacher without who assisted me throughout this process 2. Mr. Anil Malani the Managing Director who provided invaluable information and help and gave me permission to go ahead with this project. 3. Ms.