Contemporary Marketing Issues - Essay Example

arketing report based on industrial analysis Introduction The growth of firms in the international market is highly related to their ability to effectively promote their products/ services. In this context, the marketing plan of an organization can be critical for the organization’s survival. In this paper, the marketing process employed by Burger King in India is explained. The various challenges that the specific organization had to face while implementing its marketing plan in India are presented. In general, the prospects for the organization’s success in India seem to be many. Still, there is the following issue that needs to be addressed: due to the high competition in local market managers in Burger King should have alternative marketing tools available. This means that if the positioning of the firm’s products/ services in India is not successful then the re-positioning of the firm should be attempted by emphasizing on different market segments, as explained analytically below. 2. Burger King in India - Marketing Process 2.1 Marketing process and elements Marketing, as a process, is rather complex. In the literature, emphasis is given to three elements of this process: ‘a) the marketing mix; these are the elements of each firm’s marketing plan; b) the market forces and c) the matching process’ (Payne & Frow 2013, p.12). The above elements of the marketing process interact in the following way: in the context of the marketing mix each organization identifies the criteria that its marketing plan has to meet. Then, the marketing plan is structured accordingly, i.e. it is designed in such way that these criteria can be met. At the next level, the forces that the organization has to face in each market are identified; emphasis is given to those forces that can affect the organization’s marketing plan. Finally, using the matching process the managers of the organization are able to align the marketing plan with the market forces, so that the success of the plan is secured, as possible. 2.2 Benefits and costs of a marketing orientation for Burger King in India Marketing orientation is a term used for showing the alignment of ‘all the activities of each organization with the needs of its customers’ (McCabe 2010, p.117). According to Palmer (2012) in order for a business to promote marketing orientation the following term needs to be met: the business should be fully aware of the needs of its customers, of the performance of its competitors and of the capabilities of its employees. By focusing on marketing orientation Burger King would be able to attract many customers and to set the basis for significant growth in the Indian market. Moreover, the costs of marketing orientation for Burger King could be at average level: in fact, using appropriate planned marketing research the marketing managers of the business could gather the information related to the three elements mentioned above. 2.3 Analysis of macro environment The most common tool for analyzing a firm’s macro environment is the PESTEL analysis (Donnelly & Harrison 2009). Using this tool, the macro environment of Burger King in India could be analyzed as follows: a) Political; the political conditions in India are rather standardized; the country’s government tries to secure the economic reform of the country by emphasizing on FDI but also on the promotion of local production; b) Economic; the economy of India faces turbulences (Figure 1) but its promises for future growth are significant; c) Social; people in India seem to highly value ready meals; in this context, the risks for the firm by entering India would not be high (The Economist 2013); d) Technological; in terms of its technological development India can be characterized as being at average level; although technology is available for supporting various business processes, still infrastructure across the country is of rather low quality; e) Environmental; as in all developing markets in India also the concerns over the environmental effects of business operations are important. Burger King has already a framework for aligning its operations with sustainability (Burger King 2014); and f) Legal; the legal framework related to business activities in India is not fully supportive towards foreign firms; in any case, the firm enters India through a Joint Venture so that problems related to the country’s legal rules could be managed easier (Burger King 2013). Figure 1 – GDP Growth Rate in India (source: Trading Economics 2014) 2.4 Analysis of micro environment The micro environment of each organization refers to specific elements of the organization, such as: ‘customers, suppliers and the public’ (Donnelly & Harrison 2009, p.79). Moreover, the micro environment of an organization can be extended incorporating organizational elements such as the mission of the organization, its resources and the communication tools used in the organization’s marketing initiatives (Strydom 2005). The micro environment of Burger King could be analyzed using the SWOT analysis tool (Faarup 2010): a) Strengths; the firm has a quite popular brand name, a fact that would attract the interest of local consumers; Burger King is also known for the quality of its food products, another fact that would enhance its growth in India (Burger King 2013); b) Weaknesses; competitors in the fast food industry of India are quite strong; it could be difficult for the firm to establish its position in the local market (The Economist 2013); the c) Opportunities; consumers in India highly value fast-food products (The Times Hindu 2013); also, the population of India is high, about 1233.0 millions (Figure 2); the chances for high profits are higher in a country with the demographic characteristics of India; and d) Threats; the employees of the firm in India should be appropriately trained so that they can understand the firm’s culture and objectives; otherwise, Burger King would have to face low employee performance, a fact that could severely threaten the firm’s presence in India. Figure 2 – Population in India, from 2004 to 2014 (source: Trading Economics, 2014b) 2.5 Segmentation criteria for Burger King in India In order for segmentation to be successfully developed, in regard to a marketing plan, it is necessary for the relevant plan to have certain characteristics. This means that the segmented market needs to be ‘identifiable, substantial, accessible and responsible’ (Ferrell and Hartline 2012, p.134). For Burger King in India market segmentation should focus on a specific part of the population: young people who seem to be the highest part of the local population. More specifically, in 2011 the young people, aged from 15 to 34, in India were estimated to ‘430 million and they are expected to reach the 464 million by 2021’ (The Hindu 2013). Thus, age would be the most appropriate criterion that Burger King could use for the segmentation of Indian market. 2.6 Target strategy and positioning options for selected services The target marketing strategy that Burger King should choose is depended on the criteria of market segmentation that the firm has employed (Ferrell & Hartline 2012). As noted above, the firm should segment the market based on a particular criterion: age. In this context, the firm’s target strategy would be described as ‘single segment targeting’ (Ferrell & Hartline 2012, p.142) at the level that the firm should focus on a particular segment of the market, i.e. the young people. In the context of marketing, positioning is used for showing the strategies/ techniques that a firm uses for ‘placing its services/ products in a particular position in consumers’ minds’ (Boone & Kurtz 2011, p.301). Burger King could use the following positioning strategy: it could set certain of its products at lower prices specifically for the target group, i.e. for young people. In this context, the organization could increase its competitiveness towards its rivals in the Indian fast food industry. 2.7 How buyer behaviour affects marketing activities in different buying situations The behaviour of buyers can be differentiated under different situations. In fact, it has been proved that the decisions of buyers can be affected by different facts/ issues ‘before the purchase, in regard to the purchase and after the purchase’ (Panda 2007, p.182). This means that a firm has to develop its marketing plan focusing on the issues related to its products/ services at different phases of the purchase, as described above. In general, buying behaviour can be analyzed by focusing on the following question: ‘which is the element/ fact that can attract the customer’s attention and keep this attention up to the end of the purchase?’ (Varey 2002, p.47). This means, for example, that the appearance of the product’s package is innovative, compared to the packaging of other products of similar characteristics, so that the interest of the target group is secured. 2.8 How products are developed to sustain competitive advantage In marketing, sustainable competitive advantage is related to characteristics that make a product/ service unique compared to those of competitors (Lamb et al. 2011). An additional characteristic of the above advantage is that ‘competitors cannot copy it’ (Lamb et al. 2011, p.42). For Burger King the development of such products would be a rather difficult task since competition in the fast food industry of India is high, and a high range of products is already available to the industry’s customers. Still, Burger King could possibly introduce a unique way for distributing its products to its customers, a fact that could result to a sustainable competitive advantage for the firm, as analyzed also below. 2.9 How distribution is arranged to provide customer convenience In practice, customer convenience is provided by firms by employing distribution channels that most address the relevant needs of customers (Dent 2011). In the particular case, Burger King would choose a ‘direct distribution method’ (Dent 2011, p.11) which would be developed both through the firm’s stores and online (Dent 2011). In this way, the firm would be able to secure customer convenience in regard to consumers in Indian market. 2.10 How prices are set to reflect an organization’s objectives and market conditions The pricing strategy of firms is depended on a series of factors, including the objectives of the organization, the similar strategies of competitors and the performance of the local market (Pride & Ferrell 2010, p.272). The offer to customers of products of high quality is among the objectives of Burger King (Burger King 2014). However, the organization needs also to secure its profits. The limitation of costs, in various parts of business operations, has been considered by managers of Burger King as the most appropriate strategy for the achievement of the above target (Jargon & Stynes 2014). Through this strategy the firm is able to keep its competitiveness high even if its prices worldwide, including India, are higher than those of competitors, as proved through the graphs in Figures 3 & 4, where the menu of Burger King is presented, as compared to that of a strong rival, McDonald’s. Figure 3 - Burger King menu prices (source: Malaysia Personal Finance, 2014) Big Mac $3.99 Big Mac - Meal $5.69 2 Cheeseburgers $2.58 2 Cheeseburgers - Meal $4.69 Quarter Pounder with Cheese $3.79 Quarter Pounder with Cheese - Meal $5.49 Double Quarter Pounder with Cheese $4.79 Double Quarter Pounder with Cheese - Meal $6.49 Bacon Habanero Ranch Quarter Pounder $4.09 Bacon Habanero Ranch Quarter Pounder - Meal $5.79 Figure 4 – McDonald’s menu prices (source: Fast Food Menu Prices 2014) 2.11 How promotional activity is integrated to achieve marketing objectives If referring to a firm’s marketing plan marketing objectives can be achieved easier in case of the use of an integrated promotional activity (Fifield 2012). In the context of such activity, the identification of the target audience should be set as a priority, so that the success of the marketing plan is secured (Fifield 2013). In Burger King a similar approach has been used: the target audience, i.e. young people, has been identified so that the various parts of the firm’s marketing plan are aligned with the needs of the target audience. 2.12 Analysis of the additional elements of the extended marketing mix The extended marketing mix has three additional elements compared to common marketing mix: ‘people, physical evidence and processes’ (Leadley & Forsyth 2004, p.402). In regard to Burger King the above elements could be analyzed as follows: a) People: the employees of the firm should be trained so that they can understand the objectives of the business and the rules that need to be applied in the workplace, b) Physical evidence: the restaurants of Burger King in India should have the same design/ layout with the firm’s restaurants worldwide so that customers are able to recognize the brand and c) Process; the potential of the customers to order online should be available for the firm’s restaurants in India, at the level that this process is already used by competitors and has been proved to be quite popular in the local market. 3.0 Conclusion The success of a marketing plan is depended on many factors. Usually, by emphasizing on specific techniques, such as the analysis of micro and macro environment or positioning, a firm can secure the success of its marketing plan depending on the level of local competition. Burger King is a firm that already operates globally. However, in India the organization had to face certain difficulties, mostly because of the high bureaucracy related to the establishment of foreign firms. The use of a Joint Venture scheme has helped the firm to overcome this problem. Still, the success of Burger King in Indian market would require the review of the firm’s pricing strategy and the higher emphasis on younger customers, who represent the highest percentage of population. In any case, the continuous review and update of the marketing plan of Burger King in India would be a prerequisite for the firm’s successful positioning in the particular market. References Boone, L. & Kurtz, D. (2011) Contemporary Marketing. Belmont: Cengage Learning. Burger King (2014) Organizational website. Retrieved from http://www.bk.com/ Burger King (2013) “BURGER KING WORLDWIDE, INC. ENTERS JOINT VENTURE WITH EVERSTONE GROUP IN INDIA.” Press Releases. Nov 19, 2013. 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London: Kogan Page Publishers. Malaysia Personal Finance (2014) Burger King menu prices. Retrieved from http://malaysiapersonalfinance.blogspot.gr/2009/04/another-food-price-analysis-obsession.html McCabe, S. (2010) Marketing Communications in Tourism and Hospitality. London: Routledge. Palmer, A. (2012) Introduction to Marketing: Theory and Practice. Oxford: Oxford University Press. Panda, T. (2007) Marketing Management. New Delhi: Excel Books India. Payne, A. & Frow, P. (2013) Strategic Customer Management: Integrating Relationship Marketing and CRM. Cambridge: Cambridge University Press. Pride, W. & Ferrell, O. (2010) Marketing Express. Belmont: Cengage Learning. Strydom, J. (2005) Introduction to Marketing. Cape Town: Juta and Company Ltd. The Economist (2013) “India food: Fast growth for cheap eats.” Oct 3, 2013. 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