Analysis of marketing brand
Question 1
Marketing, being a very important function in any company, has to be carried out systematically to ensure that the company marketing campaigns can be successful. As such, a series of steps must be taken by the marketing department in order to come up with a proper plan on how to market themselves. In this case, Chick-fil-A, an international fast-food company, needs to follow a certain guideline for its marketing campaign to be successful. The first step in this guideline is always the marketing audit, which is also known as the situation analysis. According to Brnjas & Tripunoski (2016), a situational analysis involves the scanning and assessment of an organization’s context, its external environment (macro), and the internal environment (micro) of the company. Vrontis & Thrassou (2006), state that the situational analysis is important for companies as it gives the management a clear picture of ‘where they are now’. A situational analysis would help Chick-fil-A identify its strengths and weaknesses in regards to the opportunities and threats that exist in the environment. It also helps the company identify challenges that lay ahead hence equip management with important information for decision making.
Chick-fil-A, while carrying out a situational analysis, must carry out a macro environment analysis as well as an internal environment analysis. According to Brnjas & Tripunoski (2016), a company can become aware of its macro-environment through four processes. First is environment scanning, which is important as it enables Chick-fil-A to anticipate environmental changes and trends before its competitors notice them. Second is environment monitoring, which helps Chick-fil-A to evaluate the extent to which trends in the environment will change the market. The third is the awareness of competition, which helps Chick-fil-A to understand the industry in which it operates as well as become aware of the strengths and weaknesses of its competitors. Fourth is environmental forecasting, which helps Chick-fil-A predict future changes in terms of the intensity, direction, and speed in which these changes take place. This is significant as it helps companies come up with long-term strategies to ensure that their market position is not compromised. On the other hand, Chick-fil-A’s microenvironment consists of its resources, capacities, and key competencies and distinctive changes (Brnjas & Tripunoski, 2016). Chick-fil-A’s resources are the assets it uses in order to carry out its core business operations. This includes financial resources, human resources, structural-cultural resources, human resources, and physical resources. The company’s capacities are the everyday routines and processes that they engage in to turn inputs into outputs. Chick-fil-A’s key competencies are the important capacities that contribute to the generation of value that is critical for the organization. Chick-fil-A ought to evaluate these three areas within the organization in order to reveal an opportunity to become more efficient hence more competitive.
Chick-fil-A can utilize various models to help the organization evaluate its micro and macro environments. These include PESTEL analysis and SWOT analysis. According to Shatskaya, Samarina & Nekhorosheva (2016), PESTEL analysis helps companies to identify factors that are not within their control but have an impact on their business operations. This tool helps identify and analyze important factors that cause changes within the business environment. These factors include political, economic, legal, social, environmental, and technological factors. Chick-Fil-A should always consider the political factors in any country they set up shop in. This relates to the country’s tax laws, regulations, and policies. The company should also monitor and be conversant with changes in the governments’ policies that may have implications for the organization. Finally, the political climate in the countries that they operate. This is in regards to the level of security in the country (war, elections, corruption, terrorism, government stability, etc). Increased insecurity levels in a country result in reduced sales and profits hence a company ought to know the country’s political climate. It helps Chick-Fil-A plan accordingly in case the political climate results in an increased insecurity level.
PESTEL analysis ensures Chick-Fil-A analyses the economic situation in a country while planning its strategies. A good economy guarantees more sales and profits since people have more disposable income while a bad economy may prove to be bad for business for Chick-Fil-A. PESTEL analysis forces Chick-Fil-A to investigate the current technology being used in the market by its competitors or future innovative trends that might revolutionize the industry. This helps Chick-Fil-A stay ahead of the competition and improve its business processes through new technology. This tool allows Chick-Fil-A to know the culture of the people in different countries that they operate in hence; they are able to connect well with their customers. Chick-Fil-A ought to be conversant and comply with a country’s legislation in regard to employment, health, and safety. Finally, this tool would ensure Chick-Fil-A analyzes the environmental factors in a country before even setting up shop. This will help the company to plan for specific climatic conditions that may affect its business operations.
On the other hand, a SWOT analysis helps Chick-Fil-A evaluate both the micro and macro environments. According to Sammut-Bonnici & Galea (2015), this tool evaluates the company’s internal strengths and weaknesses, as well as its external opportunities and threats. The internal audit identifies the organization’s core competencies, resources, and its capabilities. This helps the management to identify the company’s source of competitive advantage and to develop strategies to maintain this advantage. Finally, the tool allows Chick-Fil-A to analyze the competitive environment in order to identify the opportunities and threats in the market. This helps the management to formulate strategies that will enable Chick-Fil-A to take advantage of the opportunities as well as overcome the threats facing it in the market.
Question 2
When formulating a marketing strategy, Chick-Fil-A ought to keep in mind the tried and tested approaches to marketing strategies. These include Ansoff’s Growth Matrix, Porter’s Generic Strategies, etc. Following these approaches when formulating the organization’s marketing strategy will help give Chick-Fil-A’s management as well as the marketing team a clear picture of the market and how to approach it using the various marketing techniques at its disposal. According to Evangelia (2017), applying the Ansoff Growth Matrix is always helpful for companies as it enables them to solve the dilemma of growing or not growing. It helps organizations to choose their long-term strategies for future growth. The tool divides the growth strategies into four parts namely market penetration, market development, product development, and diversification (Hussain, Khattak, Rizwan & Latif, 2013).
Market penetration would involve Chick-Fil-A increasing the sales of the products that they already produce for the same target market. This strategy allows Chick-Fil-A to take more advantage of the products that they already offer without necessarily changing them. The organization can achieve this through actions such as allocating the products in more places, that is, open more restaurants or through adjusting the price levels. This will help attract even more customers. This strategy usually brings with it a little risk to the business. This is because the organization is already aware of the product’s characteristics, advantages, and disadvantages. Apart from that, the organization already knows the reception that the product will receive from the market.
The other strategy in the Ansoff Growth Matrix is product development. Unlike market penetration, this strategy involves introducing new products into already established markets. It is important to note that the product does not have to be necessarily new. According to Evangelia (2017), product development also involves improving products that already exist in the market. Hussain et al (2013) state that developing new products or improving existing ones helps to boost an organization’s market share as compared to its competitors. New or improved products are targeted at solving customers’ needs. As such, if the new product meets the customers’ criteria and satisfies the needs that the old product could not, then the organization reaps huge rewards. However, this strategy does pose a huge risk to organizations. The new or improved product may not meet the needs of the existing customers.
Market development (market extension) is also a known strategy within the Ansoff Growth Matrix. Here, the organization (Chick-Fil-A) expands its operations to new markets. The organization offers an existing product into an entirely new market. The organization does this by venturing into new market segments. This is often achieved by finding a new use for the product. For example, Chick-Fil-A could market some of their sandwiches as an option for breakfast as opposed to only a snack that people consume later in the day or at night. Evangelia (2017) also suggests that adding new features and benefits to an existing product is a great way of penetrating a new market.
Finally, there is diversification. This involves introducing a new product to a new market (Evangelia, 2017). Resources are allocated to Research and development (R&D) to ensure that the new product will capture the imaginations of the consumers and become a success. This strategy bears the most risk, as there is no way to tell whether the product will give the organization a competitive advantage or the kind of reception it will receive from the consumers.
On the other hand, Porter’s generic strategy introduces competitive strategies that help organizations gain a competitive advantage over their competitors (Arshed, Mcfarlane, and Macintosh, 2016). The strategy consists of competitive strategies that include differentiation, cost leadership, and focus. The cost leadership strategy involves an organization offering its products at a cheaper rate compared to its competitors consistently. To adopt this strategy, Chick-Fil-A sources its raw materials domestically or from low-wage foreign markets (Ouma, 2015). This allows Chick-Fil-A to sell their items at low prices hence they profit from thin margins. Chick-Fil-A could also reduce its expenses by hiring and training inexperienced employees as opposed to professional cooks. Chick-Fil-A could invest in process innovation where they develop cheap ways to produce existing products. Finally, the organization should make continued capital investments to maintain its cost advantage through economies of scale. This strategy is usually very competitive since it hinders new entrants from entering the market.
According to Ouma (2015), the differentiation strategy involves a company building a competitive advantage by having its products “different” from other products in the market. The products are different in terms of their features and performance. For the product to be competitive using this strategy, its features of performance abilities are hard to create or difficult to copy. The unique benefits that consumers derive from the product are what keeps them buying the product as they cannot derive the benefits from any other product. For example, Chick-Fil-A could introduce a new sauce with ingredients that are not readily available. This would give their food a unique taste that other fast food restaurants cannot replicate.
Finally, there is a focus strategy. It involves a company choosing to focus on a narrow scope within an industry. This ensures that the company’s resources are focused on one thing. For example, Chick-Fil-A could focus their resources on solely making chicken meals. According to Ouma (2015), companies could combine these strategies to a form a hybrid strategy that seeks to achieve both low prices, compared to competitors, and differentiation. This is achieved in several ways. Chick-Fil-A, for example, can create separate strategic business units that purse different generic strategies as well as different cost structures. The company could also invest in technological or managerial innovations to improve both quality and efficiency.
Question 3
According to Kemppainen (2015), SOSTAC is an acronym for a six-step procedure that is used when coming up with a marketing plan. The six components in the procedure are situational analysis, objectives, strategy, tactics, actions, and control. Cowley-Cunningham (2016) states that for the successful marketing planning, implementation & review, it is important for the management to treat each step with equal importance. This tool is widely considered an extension of the SWOT analysis tool.
The first stage is the situational analysis. In this stage, the organization should try to establish its current position in the market. This is by asking, “Where are we now?” The organization, Chick-Fil-A, should analyze its macro environment, its microenvironment, and its internal environment. The macro-environment includes the factors that are beyond Chick-Fil-A’s control but still affect the company’s operations. The organization’s microenvironment includes the factors that affect the company’s business processes and are closely connected to the organization and that Chick-Fil-A has some control over. Chick-Fil-A’s internal environment, on the other hand, are factors that are within the organizations and the company has full control over them. Various tools are used to determine a company’s position in these environments. To determine the company’s position within the macro-environment tools such as Porter’s Five Forces and PESTEL analysis can be used. Tools to determine the company’s position within the micro and internal environments, tools such as the SWOT analysis, competitor analysis, etc. are used.
Once the organization knows its position within the different environments, Chick-Fil-A can then set the objectives that it wishes to achieve. The question that the organization ought to ask itself is “What do we want to achieve in order to improve our position in the market?” This could be short-term, medium-term, or even long-term objectives. The objectives that Chick-Fil-A comes up with should be SMART. This is an acronym that stands for specific, measurable, achievable, realistic, and time-bound. The company’s objectives should not be vague. They should be specific and easy for employees to understand. For example, Chick-Fil-A’s objectives could be increasing their owner’s returns or improving their operational efficiency. The objectives should be easily quantifiable as well as achievable. They should also be realistic given the organization’s current position in the various environments. Finally, the objectives should be given a certain period to materialize.
After coming up with and setting objectives, Chick-Fil-A’s management should then come up with strategies that will help the organization achieve them. In this case, Chick-Fil-A’s objectives include increasing their owners’ returns and improving their operational efficiency. The organization’s management should set strategies that seek to bring these objectives to fruition. Strategies tend to be general. For example, to achieve the objective of increasing the owners’ returns, the set strategy could be reducing the company’s expenses or increase its sales. Strategies do not provide the actual steps that ought to be followed to achieve the set objectives.
According to Kemppainen (2015), the next step is important as it helps implement the set strategies. They are specific action plans of the strategy that define which tools to use in order to bring the set objectives to fruition. The marketing mix is a very useful tool in this case. The marketing mix consists of 7P’s. They include product, price, promotion, place, people, process, and physical evidence. In the case of Chick-Fil-A, the product that the company offers are fast foods. The company should continually improve the quality of its food to ensure the consumers are always coming back to purchase more. The company should constantly review its prices to stay competitive in the market. The place (restaurants) where Chick-Fil-A offers its products should meet health standards. There should also be ample space to contain as many customers as possible. The company’s drive-throughs should have ample space as well to hold many cars at once without blocking traffic on the road. Chick-Fil-A should come up with clever and fun promotional activities on various platforms, especially social media, in order to attract many customers. Chick-Fil-A’s employees ought to be trained to serve customers professionally. They should also be competent and be able to make good and high-quality food. Chick-Fil-A’s business process ought to be efficient with little to no wastage of resources.
The next step for Chick-Fil-A is to put in place specific actions that will see its objectives fulfilled. The question that management should ask its self is “Exactly when will we do what?” In this case, Chick-Fil-A’s objectives include increasing their owners’ returns and improving their operational efficiency. As such, measures that the company can take include, introducing new flavors and varieties of fast food in order to attract more customers. They can also start promotional campaigns that will seek to increase their sales. An increase in sales will lead to an increase in the owners’ returns. In addition, they can choose to reduce costs by reducing the number of employees, getting cheaper raw materials, or even improving their operational efficiency. This is achieved by ensuring resources are fully utilized with minimal wastage. Finally, the organization should put in place milestones that will measure whether they are on course to achieve its objectives. These controls help measure the organization’s targets with its current performance to evaluate whether the organization is on the right path to achieve its goals. In case of any deviations, Chick-Fil-A’s management should ensure they know why that is and how to fix it.
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