Reference no: EM133201745

Assignment: Market Evaluation for a Pizzeria Restaurant

Background

As a marketing manager of an Italian food company, you have been asked by senior management to explore opening up a new Pizzeria in the town of Oakland, New Jersey. I have deemed this market as the Pizza Capital of Oakland, New Jersey because currently there are the following:

1. Luca's Trattoria
2. Juniors Pizza and Subs
3. Pizza Hut
4. Café L'Amore
5. Cucina 347 (formerly Oakland Pizza)
6. W's Grill
7. Frank's Pizza

Task

I. Evaluate the current market (Oakland, NJ) following the 4 K'sKnow your Market,Know your Product, Know your Customers and Know your Competition to determine the feasibility for your new restaurant

1. This means: you need to research the market ie. Size, demo graphics (people, income, education etc.)

2. Develop a "Market Analysis"

3. Develop a "Competitor Analysis

4. Develop a "Enviornmental Analysis

II. Following is an over view of the task to complete

1. Brief Description of the Need and the Product (Service) Concept

a. Is the need a new need? If so, why/how was it created?

b. If not a new need, how has this need been satisfied thus far? What are the problems?

c. How will the proposed product/service solve the problem?

2. Industry Analysis

Describe the Industry & Background: Market size, growth, trends.

3. Environmental Analysis:

What are the major external influences and how they affect consumers and/or your choice of market strategy elements, e.g., whether & how technological, political/legal &, economic factors influence your marketing strategy? How have the companies in this industry adapted to these factors? Can you provide concrete examples?

4. Competitor Analysis

Identify direct and indirect competitors and compare in terms of size, goals, market share, growth, trends, products offered, positions, strengths/weaknesses of brands, success/failure of recent marketing strategies. You must also address how your product concept will meet the market's needs better than the competition.

5. The Marketing Strategy

a. The Target Market

Who are your customers? Describe consumers' purchase behaviors/patterns, what is important to them? You must provide relevant Economic, Social, Cultural, Demographic and Geographic information and identify whether and how these factors influence the choice of marketing strategy. How will consumers perceive your product relative to the competitors' products?

b. Product Positioning

What is the basis on which you intend to position your product? How does this compare with existing competitors? Is the differentiation meaningful? Will it sustain you in the long run?

c. Placement (Distribution)

Describe how you intend to make your product available to the target market. How does this compare with that of the competition?

d. Pricing

Describe the basis of your overall pricing strategy. How does this compare with the competition?

e. Promotion

Describe how you intend to promote your product/service? How does this compare with the competition?

i. Market analysis will require you to do some basic research on the available secondary information which can be obtain via the internet. The size of the market, the growth trends either positive or negative the opportunities and threats.

ii. The analysis should begin with a simple summary. You should generally describe the different groups of target customers included in your market. Make sure to explain and define the different segments, particularly since you refer to them and they are the basis of your marketed strategy

iii. What distinguishes small business from large business, if this is part of your segmentation? Do you classify them by sales, number of employees, or some other factor? Can you define which segment and why?

iv. Explain why your business is focusing on these specific target market groups.

v. What makes these groups more interesting than the other groups that you have ruled out?

vi. Why are the characteristics you specify important? For example a clothing boutique, might focus on one set of upper-income customers instead or another for strategic reasons. Or an office equipment store might focus on certain business types whose needs match the firm's expertise. Some fast food restaurants focus on families with children under driving age.

vii. Explain Market Need, Growth, and Trends

• All marketing should be based on underlying needs. Did the need exist before the business was there? Are there other products or services or stores that offer different ways to satisfy the same need?

• For example: As a shoe store are you selling shoes or are you satisfying the customer needs for covered feet? Are there really underlying needs , such as style and prestige for fashion footwear, or padding for runners, or jumping for basketball players, that relate to selling shoes?

• Understand and explain market trends. What factors seem to be changing the market or changing the business? What developing trends can make a difference?

• Market trends could be changes in demographics, changes in customer needs, a new sense of style or fashion, or something else

• For example:

o A building supply store might note the trend toward remodeling older homes instead of buying new homes, or a trend toward more rooms in larger houses despite smaller families, because of home offices, dens, and exercise rooms.

o A grocery store might note a trend toward Asian foods or spicier foods, or toward fresher, healthier foods, or development of a new shopping area in a different part of town.

o A medical supplies store might note demographic trend, as baby boomers age, leading toward more need for estate planning and retirement planning.

o Look to market trends as a way to get ahead of the market; to know where it is going before it gets there.

• In summary, the more information you can collect about the market you plan on offering your product/service, the better equipped you will be as the marketer and the greater chance of succeeding rather than failing because you overlook some element i.e. current trends are they lasting or faddish or the effects of technology, changing government regulations etc.

Competitor Analysis

1. One of the critical 4K's is to "Know your Competition" if you want to remain competitive or a market leader. This is a key part of any marketing plan to identify who are the major players which will impact your business's current and future success in generating revenues (profits) and maintaining market share within your market/category.

2. Competitor analysis basically is an assessment of the strengths and weaknesses of current and potential competitors. By conducting this type of analysis a marketer can plan both an offensive and defensive strategy when dealing with one's competitor(s).

3. The analysis should describe your major competitor in terms that have a direct influence on revenues - some of these factors include the following:

a. organization size
b. market share
c. comparative product quality
d. growth
e. available capital and resources
f. image
g. marketing strategy
h. target markets
i. and any attributes you consider important.

4. If your competitors are privately held companies this type of information would not be readily available within standard secondary data sources; and may be difficult to obtain.

Why bother to analyze competitors?

Some businesses think it is best to get on with their own plans and ignore the competition. Others become obsessed with tracking the actions of competitors (often using underhand or illegal methods). Many businesses are happy simply to track the competition, copying their moves and reacting to changes.

Competitor analysis has several important roles in strategic planning:

1. To help management understand their competitive advantages/disadvantages relative to competitors

2. To generate understanding of competitors' past, present (and most importantly) future strategies

3. To provide an informed basis to develop strategies to achieve competitive advantage in the future

4. To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy?

Questions to ask

What questions should be asked when undertaking competitor analysis? The following is a useful list to bear in mind:

1. Who are our competitors?

2. What threats do they pose?

3. What is the profile of our competitors?

4. What are the objectives of our competitors?

5. What strategies are our competitors pursuing and how successful are these strategies?

6. What are the strengths and weaknesses of our competitors?

7. How are our competitors likely to respond to any changes to the way we do business?

Environmental Analysis Summary

1. Are factors outside the control of both the firm and its industry but can impact a business if not identified by the marketer when developing a marketing plan

2. These factors can be summarize by the following areas:

a. Technology
b. Political
c. Economic
d. Regulatory
e. Social Factor

3. Technology = understanding the current impact technology has within any given industry needs to be identified by the marketer. Product categories that are weaker on the technology dimension are particularly vulnerable to competition both from new products and from foreign competitors that have made the necessary investment. Some of these areas:

a. Energy
b. Materials
c. Transportation
d. Information
e. Bioengineering

4. Political = usually involve goods/services that are exported or imported from foreign countries is a significant area of vulnerability marketers face if they do not appropriate identify the issues/problems dealing with different kinds of political structures. If your product/services that operates domestically the political factors are not as great but it is still important to understand the current political climate.
 
6. Economic= conditions involving the economy is not a static dimension but is always changing. Analyzing the current economic conditions and its impact on your product/services is very important. Attention to inflation, interest rates, availability of credit is required. Similarly, current labor demands, be it highly skilled or semi-skilled has, to impact any business. For example: when unemployment rates are low, it is harder to find minimum wage employees because more higher-paying jobs are available.

7. Regulatory= government and other agencies have an impact on category attractiveness through regulations. Some product categories have become less attractive over time because of recent laws that restrict managers' abilities to market or that raise the overall cost of doing business. For example: government regulations deny the tobacco industry from advertising, the drug industry (FDA) highly regulates the way drug companies develop their products. It is not possible to generalize about the sources of regulation impact because each product category is affected by different regulatory bodies. As a result, this part of the analysis must be highly category specific.

8. Social Factors= trends in demographic, lifestyles, attitudes and personal values among the general population are of particular concern for consumer product manufacturers and services. What is important for the marketer is to recognize and understand trends in lifestyles and demographic changes that my affect their product/services. For example:

a. The aging of the baby-boom generation will create more goods/service required by this group

b. Increase in the growth of older adults (85+)represents another change in demographics probably impacting more in the health care services than in luxury items

c. The importance of children as consumerswho are more tech-savvy will impact immensely in goods/services that will be developed for this demographic sector of our society.