AMB359- Strategic Marketing Audit

Tutor: Husain Akareem

Yuen Kai Keith Chan

N9218556

Table of Contents

1. Overview of product and context ................................................................................................... 2

2.0 External and Customer Analysis ........................................................................................................ 3

2.1 Defining the market segments ...................................................................................................... 3

2.2 Customer Value Proposition ......................................................................................................... 3

3.0 Competitor analysis .......................................................................................................................... 4

3.1 Direct Competitors ........................................................................................................................ 4

3.2 Indirect competitors ..................................................................................................................... 4

3.3 Competencies and assets of key competitors .............................................................................. 5

4. Market/Submarket analysis ................................................................................................................ 6

4.1 Market Analysis ............................................................................................................................. 6

4.2 Developing Submarkets ................................................................................................................ 6

4.3 Key Success Factors ....................................................................................................................... 6

5. Environmental Analysis and Strategic Uncertainty ............................................................................. 7

5.1 Technological trends ..................................................................................................................... 7

5.2 Consumer trends ........................................................................................................................... 7

5.3 Environmental trends ................................................................................................................... 7

6. Preliminary strategic options .............................................................................................................. 8

6.1 Strategic competitive advantage .................................................................................................. 8

6.2 Functional strategy ....................................................................................................................... 8

6.3 Measuring success ........................................................................................................................ 8

7. Reference List ...................................................................................................................................... 9

Appendix 1 ............................................................................................................................................ 11

1. Overview of product and context

Consumer demand for healthy foods is emerging at a rate like never before, due to the increase in

people being educated about healthy eating and how it nourishes their bodies. Since 2014, All Real

Food has launched nine vending machines across universities and hospitals with the aim of providing

an easier way for people to maintain a healthy diet, even if they struggle with time. Food in the

vending machine include a wide selection of salads, wraps, yoghurt and protein balls. A deep

analysis of the healthy fast food market has been undertaken to evaluate consumer behaviour, the

competitive market and potential customers. With these findings, preliminary strategic options

could be formed.

2.0 External and Customer Analysis

2.1 Defining the market segments To discover the most appropriate customers to target for All Real Food, a combination of the

consumer’s demographic, geographic, behaviour and psychographic must be investigated. According

to Hegedus and Mullan (2015), raw foods and fresh vegetables are beginning to replace sugary

doughnuts and high-cholesterol burgers on the Australian market, with recent findings that both

genders in the country are becoming more health conscious at a younger age, therefore presenting

All Real Food an immense opportunity to capture these individuals. Cullen (2016), states that the

modern, health conscious Australian have a strong demand for organic, natural and low-fat food,

preferring healthy and nutritious food over high-fat processed food. On the other hand, ready to eat

food have become increasingly popular due to busier lifestyles (Fish, 2016).

2.2 Customer Value Proposition The most appropriate customer value proposition for All Real Food’s is that low-fat, healthy food

such as salads and wraps are made fresh daily at specific University and Hospital locations, and is

available to be purchased through the vending machine. Therefore, also allowing consumers with

busy lifestyles to easily access healthy food anytime during throughout the day. By allowing

consumers to easily access healthy food will benefit All Real Food in helping individuals reach their

desired goal or to simply maintain a healthy diet, creating a distinctive customer value proposition

(Maras, 2016).

3.0 Competitor analysis It is crucial for a business to analyse their key competitors when entering a market with a high

potential growth. According to Albayrak (2015), the analysis of key players can provide the business

a clear understanding of the marketplace, revealing strengths and weaknesses of key competitors,

therefore playing a vital role in shaping the marketing strategies for the business.

3.1 Direct Competitors Youfoodz, Lite n’ Easy and Sumo Salad are the major competitors within the Brisbane healthy fast

food industry. With Sumo Salads opening their 11th store in 2017 here in Brisbane and Youfoodz and

Lite n’ Easy delivering up to 15-28 meals and snacks to a customer per week accordingly to their

meal plan requirements.

Figure 1: Key Competitors comparison

Youfoodz Lite n’ Easy Sumo Salad

Points of difference •Convenient and fast •Delivery of fresh not frozen meals •Aims to help customers reach or maintain their nutritional goals. •New meal added to menu every day giving customers another choice on their next order.

•Assists clients to lose weight through portioned meal plans. •Fresh meals are delivered to customers in one big esky. •Renown brand awareness- established in 1986.

•Over 100 stores across the globe, with the claim to be the healthiest fast food franchise. •Catering people who look for a healthy option in the food court. •Purchased over the counter with many salads on display for the customer. •Customer can purchase up to five salads

3.2 Indirect competitors

According to Porters Five Forces theory, business viability is reduced if customers can easily choose

an alternative product to satisfy their need (Aaker, 2014). Competitors outside the healthy fast food

industry will also be an issue for All Real Food, as they are essentially able to satisfy the same

consumers need of hunger (Brjis 2016). Those that offer relatively cheap and convenient meals will

impact All Real Food the most, especially fast food giants McDonalds and Subway who are currently

leading the industry respectively, with both already having a large customer base (Mathe-Soulek,

Krawczyk and Harrington, 2016).

3.3 Competencies and assets of key competitors Current key competitors within the industry have adopted similar competencies and assets to

compete in this competitive and emerging industry. As the emphasis for modern day healthy fast

food is to be fast, fresh, friendly to all kinds of diets including vegan and gluten free, and most

importantly for sale at a reasonable price (Wellard, Koukoumas, Watson and Hughes, 2016). With

these being the key success factors for the industry, a SWOT analysis has been established for All

Real Food to overview their current status.

Figure 2 – All Real Food SWOT analysis

Strengths

• 24-hour access through vending machine

• Low wages cost

• Natural and organic ingredients

• Supplies from local farmers

• Fresh produce sourced only from Australia and New Zealand

Weaknesses

• Chance for potential overcrowding in the growing market

• Weak/moderate online and offline presence

Opportunities

• Emerging market with the potential for sales still to grow

• Unique and innovative idea which can potentially be a market leader

• Increase in health-conscious individuals

Threats

• Direct competitors offering healthy meals

• Threat from local competitors in various locations (eg- café’s, sushi and sandwich bars)

• Ease of customer switching

4. Market/Submarket analysis

4.1 Market Analysis For a firm to succeed when entering a competitive market, they must analyse their competitive

vitality. Although All Real Food’s brand image has not reached its full potential and is far behind key

competitors, entry and exit barriers for the firm is still rather weak due to them operating through

vending machines rather than stores, meaning they are able to enter without wasting time and

money on renovation and exit by simply removing the vending machine. Also, by selling healthy food

rather than junk food, it eases entry to places such as universities and hospitals as it aligns with their

values and principles of encouraging healthy eating (Piercy and Smith, 2011).

4.2 Developing Submarkets The emergence of the health eating movement has allowed entrepreneurs to incorporate

alternatives for healthy eaters even at popular fast-food chains and traditional cuisines, making the

hospitality sector extremely competitive and challenging for small businesses like All Real Food

(Montandon and Colli, 2016).

4.3 Key Success Factors By analysing All Real Food and their key competitor’s current assets and competencies in the

extremely competitive industry, allows the firm to exploit the current successful factors within the

market (Philpott, 2016). The successful factors found within the competitive market involves the

increasing amount of businesses using technology and information systems to attract repeat

purchases from customers, which is proving to be successful for many of All Real Food’s competitors.

For All Real Food’s to compete or gain a competitive advantage against competitors, their “strategic

strength” should aim to attract repeat purchases through innovative technology such as a mobile

application acting as a menu and loyalty program, as seen from competitors such as Sumo Salad (see

appendix 1) as these modern-day applications have a significant impact on the business’s revenue

(Tang, 2016).

Figure 3 - Key success factors in the market

Success factors Competitors

Mobile loyalty application Sumo Salad, Guzman Y Gomez

Free Wifi at store location McDonalds

Web order and delivery Youfoodz, Lite n’ Easy

Loyalty cards Subway, certain café’s

5. Environmental Analysis and Strategic Uncertainty

5.1 Technological trends The idea of offering healthy meals and snacks from a vending machine is truly innovative as it offers

customers café and salad bar like quality food through a click of the button and tap of a credit card

(Maras, 2016). However, to dominate the market, this is not enough as All Real Foods must take

advantage of the latest technology and information systems in creating a mobile application that can

include a loyalty scheme, nutritional information on meals and updated stock list on available food

at specific locations. That is due to online activity shifting to mobile, and the fact that the percentage

of smart phone owners in Australia is at its highest percentage to date at 82.6% (Biddle, 2017).

5.2 Consumer trends The most relevant consumer trend for All Real Food’s market right now is “fit is the new skinny”,

where consumers are becoming more health conscious at a younger age due to increase in dietary

education and social media influencers such as models and athletes (Boepple, Ata and Thompson,

2016) Combining this social trend with convenience and organic packaging, All Real Food can

capitalise on these trends by supplying food to these health conscious individuals, helping them to

stay healthy and to achieve their desired nutritional goal.

5.3 Environmental trends More and more businesses are beginning to use environmentally friendly packaging as it’s not only

beneficial for the environment, but also their brand image (Fish, 2016). When customers learn that

eco-friendly materials are used in packaging, they generally feel better about their purchase and

therefore increasing the chance of a repeat purchase (Hoek, Pearson and Friel, 2017). Therefore, All

Real Food should consider environmentally friendly packaging for their products.

Figure 4- Pestle analysis for the healthy fast food industry

Political Economic Social technological Legal Environmental

• Stable political environment

•Growing market for healthy fast food • Property prices increasing

• Increasing amount of health-conscious individuals •Busier lifestyles and working hours •More consumers favouring environmentally friendly products

• Use of web technology and applications from businesses •Online customer reviews can be seen by anyone •Mobile payments

• Health and safety laws •Anti-competitive behaviour

• Trend towards environmentally friendly products • Seasonal change: can impact suppliers (farmers)

6. Preliminary strategic options

6.1 Strategic competitive advantage In the emerging and competitive industry of healthy fast food, differentiation is vital to stand out

from competitors, incorporating a mobile application may help improve customer experience and

increase the chance of a repeat purchase (Dolan, 2015). On the other hand, bio-degradable

packaging will have less of an impact on the environment and will meet the growing consumer

demand for environmentally friendly products (Boon, 2016).

6.2 Functional strategy With the introduction of the mobile application, All Real Food should implement a penetration

pricing strategy for a brief period where customers receive discounts through their first purchase on

the application, which will help increase brand awareness (Dowling, 2016). Once brand awareness

has increased through penetration pricing, All Real Food may then alter the pricing strategy back to

premium pricing, focusing deeply on organic meals and bio-degradable packaging, cutting back on

the number of discounts distributed on the mobile application. This way, the business would have

increased their customer base and brand awareness and may shift to a more premium brand,

differentiating themselves from key competitors.

6.3 Measuring success Observing success factors for the business must be done frequently to be align with competitors

(Mahoney and Tang, 2016). Besides from total revenue, the firm should observe the mobile

application for repeat purchases from customers, customer satisfaction and indicators of best and

worst sellers, which are all key indicators of success and positive signs for productive strategic

implementation (Klubeck, 2017).

7. Reference List Aaker, D. A. (2014). Strategic market management (Tenth ed.). Hoboken, NJ: Wiley.

Albayrak, T. (2015). Importance performance competitor analysis (IPCA): A study of hospitality

companies. International Journal of Hospitality Management, 48, 135-142.

doi:10.1016/j.ijhm.2015.04.013

Biddle, C. (2017). Increasing the online presence of the AANA journal. AANA Journal, 85(1), 6-7.

Boepple, L., Ata, R. N., & Thompson, J. K. (2016). Strong is the new skinny: A content analysis of

fitspiration websites. Body Image, 17, 132-135. doi:10.1016/j.bodyim.2016.03.001

Boon, R. (2016, ). Environmentally friendly packaging a super idea. The Straits Times, 12(3), 9

Brijs, B. (2013). Business analysis for business intelligence. Boca Raton, FL: CRC Press.

Cullen, J (2016). Australian Institute of Food Safety: Food and consumer trends 2016 [EBL version].

Doi: 10.4240/976-1-60669-778-4

Dolan, A. (2015). Is your business ready for mobile applications? Central Penn Business Journal,

31(48), 25.

Dowling, G. R. (2016). Winning the reputation game: Creating stakeholder value and competitive

advantage. Cambridge, Massachusetts: The MIT Press.

Fish, E. (2016). flexible packaging: Convenient and (becoming more) environmentally-friendly.

Flexible Packaging, 19(7), 8

Hoek, A., Pearson, D., & Friel, S. (2017). Shrinking the food-print: A qualitative study into consumer

perceptions, experiences and attitudes towards healthy and environmentally friendly food

behaviours. Appetite, 108, 117-131. doi:10.1016/j.appet.2016.09.030

Hegedus, J., & Mullan, J. (2015). Are we adequately providing support services for optimal infant

nutrition in australia? A study in regional NSW. Australian Journal of Primary Health, 21(3), 293-298.

doi:10.1071/PY14044

Klubeck, M. (2017). Success metrics : A multidimensional framework for measuring organizational

success (1st ed.). Berkeley, CA: Apress.

Mahoney, L. M., & Tang, T. (2016). Strategic social media: From marketing to social change.

Chichester, United Kingdom: Wiley-Blackwell.

Maras, E. (2016). Top kiosk stories for october: Food and convenience dominates reader interest.

Kiosk Marketplace. News Features

Mathe-Soulek, K., Krawczyk, M., & Harrington, R. J, (2016). The impact of price-based and new

product promotions on fast food restaurant sales and stock prices. Journal of Food Products

Marketing, 22(1), 100-117. doi:10.1080/10454446.2014.94999

Montandon, A., & Colli, C. (2016). Effective nutrition labels for fast food consumers. British Food

Journal, 118(10), 2534-2549. doi:10.1108/BFJ-03-2016-0111

Philpott, L. (2014). Marketing and merchandising: Strategies for successful marketing. AJP: The

Australian Journal of Pharmacy, 95(1129), 46-48.

Piercy, A., & Smith, S. (2011). Effect of menu labeling and suggestive selling on sales of healthy food

options in a university setting. Journal of the American Dietetic Association, 110(9), A76-A76.

doi:10.1016/j.jada.2010.06.289

Tang, K. Y. (2016). Mobile app monetization: App business models in the digital era. International

Journal of Innovation, Management and Technology, 7(5), 224. doi:10.18178/ijimt.2016.7.5.677

Wellard, L., Koukoumas, A., Watson, W. L., & Hughes, C. (2016). Health and nutrition content claims

on australian fast-food websites. Public Health Nutrition, 20(4), 1-7.

doi:10.1017/S1368980016002561

Appendix 1 Sumo Salad mobile application allowing customers to order and collect their food as well as

collecting points and rewards.