Market and company overview of pret a manger

Market and company overview of pret a manger Prà ªt a Manger established in 1986 by two college friends Sinclair Beecham and Julian Metcalfe (who also is the founder of Itsu sushi bar/restaurant). It is a UK based sandwich retailer, which now is an international business (Prà ªt). They named the company Prà ªt a Manger, which in French means ready to eat (see Appendix 1.0) Rix (2004) states, a product is a set of tangible attributes in an identifiable form and he adds, each product is identified by a commonly understood descriptive (p. 199). Prà ªt produces sandwiches, filled baguettes, soup, salad and coffee. It also prepares desserts, muffins (the American variety), cakes, and croissants. Some locations also serve sushi and noodles. Prà ªt has a range of vegetarian options including roasted vegetable sandwiches and hummus wraps. In marketing though, customers seek to purchase its quality and benefits (Rix, 2004). Prà ªt essentially provides fresh fast food made with natural ingredients. They are passionate about freshness all food is made fresh in the shop on the day of purchase. Sandwiches are packaged in paperboard rather than sealed plastic, to emphasise that they are fresh and cannot be kept overnight. Some packaging contains recipes for some of their products; these are for people who want to make sandwiches like Prà ªts for themselves. Mor eover, Prà ªt also provides a delivery service for orders over  £30 minimum. Service can be identified as activities that meet customers needs or wants solely on intangible benefits (Rix, 2004). Their services are excellent; the staff are friendly, always greet with civility, approachable and enthusiastic, which makes their customers feel welcome (ref). Rix (2004) states Marketers are increasingly being faced with a choice between profitably satisfying the wants of their customers and complying with the wishes of various other groups in the community (p. 5). Prà ªt is aimed at the middle to upper class including white-collar workers and businessmen and women who use it regularly to have a coffee before work, especially the City type customers (ref). Therefore, Prà ªt stores are normally found near the train or tube stations, affluent places such as Canary Wharf, and cities such as Central London. These are places where will be more consumers that they are targeting at. Prets competitors include Starbucks, Costa, Nero and Eat. Relatively speaking, Starbucks is the biggest competitor since it is the largest coffeehouse business in the world. Companies that anticipate changes in consumer behaviour and respond with new gods and services are likely to achieve long-term health and profitability. But companies that change consumer behaviour have the opportunity to make major breakthroughs in new markets and industries (Hoffman et al. 2005) Already there are about 240 Prà ªt shops, which are mainly based in the UK. Statistically, their yearly turnover is approximately  £270 million a year (see Appendix 1.1) Task 1 P 1.1 Situation Analysis A thorough analysis of the situation in which the firm finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs (City of London Academy, Edition 1). Need to be changed One of procedures of the marketing planning is the marketing audit, which plays a huge part that constantly is being conducted throughout the whole process. It is to study internal factors, while also anticipates stakeholders and external factors. The Chartered Institute of Marketing says: Carrying out the marketing audit provides the opportunity to review and appraise your whole marketing activity, enabling you to assess past and present performance as well as to provide the basis for evaluating possible future courses of action. (year) Marketing audit breaks down into two categories: The microenvironment is the forces close to the company that affect its ability to serve its customers (Kotler et al. 1998, pp. 885-886). This is focusing on the internal business experiences, where an organization has a complete control, giving this opportunity to improve the business. The macro-environment is the larger societal forces that affect the whole microenvironment (Kotler et al. 1998, pp. 885-886). This is the external factors, where a business barely or has absolute no control on, that changes may adversely affect the organisation. (ref) SWOT analysis is a method, which came from the research conducted at Stanford Research Institute. It draws all the evidence from several analytical techniques used, provides basic useful information of developing the business, marketing objectives or aims and new products into the market. Prà ªt undertakes a SWOT analysis, which its abbreviation is Strengths, the strong features and positions of the company, Weaknesses, where the company needs to improve in order to maintain the best image of the business as possible internal issues, Opportunities, where the company can grab chances to better themselves and to expand their reputation, and Threats, where the company relish challenges that may affect the business external issues (Rix, 2004). Example of SWOT analysis is shown below: Table 1: (1.1 Explanation of SWOT analysis) Strengths Non-stop producing new products. Often do offers. Prices are cheap and affordable. Always create new advertisements. Services are fast and easy. Weaknesses Products are not healthy. Advertise unhealthy products i.e. burgers Contributes to obesity. Loaded with sugar. Opportunities Exploitation of interest in healthier eating. Sponsoring could help the business their sales. Home deliveries service Threats International exchange rate Increasing labours wages Competitors pricing Competitors invent similar products, might be better. Source: The researcher PEST is an analysis of external factors, generally considered to be outside the control of a business. The PEST analysis is to identify both presents and futures opportunities and threats. PEST stands for Political; Economic; Social and Technology (ref). Clear explanation of each of these are shown in the following: Table 2: (1.1 Explanation of PEST) Political These are factors that are controlled by the government policies. Economic These factors are related to political and are concerned about interest rates, exchange rate, economic growth and income levels. Social Concerning the factors of age, size of families, healthy lifestyle and religions. Technology Factors concern such as computers, machineries, motor vehicles etc. Source: The researcher P 1.2 A mission or vision statement is a statement that provides a signpost of where your business aims to be in the future (Chartered Institute of Marketing, ). Choose better one A mission statement has to be concise and explicitly explain that provides a clear view of Prà ªts intention to customers and stakeholders, what is their business and who their customers are. It also provides motivation within the organization, helps them to focus on accomplishing their objectives (ref). This helps marketer to make informed decisions of suitable strategies and programs. Here are the two mission statements of Prà ªt: Turnover currently  £270 million: to increase 9% within 2 years time. To expand wider and open new stores this year: 3 new stores to be opened in Birmingham, (BBC News, 2010). According to media sources, Prà ªts turnover is constantly increased in the recent years. Although economic crisis has just ended, nonetheless the business somehow managed to make profits. This shows that the businesss financial situation is stable and secure. Table 3: (1.2 Marketing Mix for Prà ªt a Manager) Product Hoi sin Duck Wrap is a Cantonese style of wrap Prà ªt does. Inside the wrap has shredded roast duck, hoisin sauce, red onions, cucumber, leaf spinach and a touch of mayo in a tortilla wrap. The wrap contains nuts, sesame free, dairy free, GM free and high protein, which keeps customers full longer. Every single Pret store has its own kitchen, they make the product every single purchase day, to make sure it is fresh and healthy. Those left unsold at the end of the day, they will not be re-sold, but will be collected by the charities, and then given to those are homeless. Price This product quite pricey due to the qualities it contains, which cost  £2.95 each. This can be cost plus pricing, average cost of the product and service plus a profit margin; it has a high mark-up. Place The channels of distribution of this product will be service providers to consumers, as well as direct marketing through the website so the consumers can shop at home, but minimum of  £30. This product sells in a clean and pleasant environment, affluent places like the city, where the market targets will perform the desire behaviour. Usually during lunchtime, when this product can be purchased the most. Promotion Prà ªt promotes the product through word of mouth by informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth. This promotion also includes leaflets, shop windows, and its own website, targeting at older group, middle and upper class groups. Source: wesite SWOT analysis is used to get something in the right position in the market and help in companys strategic planning. It must be done before Prà ªts product (Hoi Sin Duck Wrap) is launched and at regular intervals after that, also needs to spend resources to maximize profit and minimise potential threat (ref). The following table shows the SWOT analysis of Prà ªt that may influence their sales of the new product. Table 4: (1.2 SWOT Analysis for Prà ªt a Manager) Strengths Prà ªt is well known for handmade sandwiches, which are made with natural ingredients, and immaculate service, which the quality of products and customers are the companys priorities. The business also does delivery service that other sandwich bars do not provide, as well as online order. Thus, these advantages may aid to gain repeat sales of Hoi Sin Duck Wrap. Weaknesses Prà ªt is considerably to be one of the most expensive sandwich bars in the world. This also means that the business only has certain target audience and stores can be found in affluent areas only. Prà ªt stores are generally small that unable to provide sufficient seats for customers to eat in. Thus, the sales of Hoi Sin Duck Wrap will not be expectedly high. Opportunities Prà ªt does not franchise. The business could take this opportunity to franchise out; not only Prà ªt can gain popularity, the business can also earn some fees from franchising! Prà ªt does not involve a lot of advertisements. Advertising plays a major part in every organization Prà ªt should seriously think about advertisements on television and newspapers etc. Thus, Hoi Sin Duck Wrap is highly unreachable. Threats The risk of competitors entering the market. Competitors such as Starbucks often distribute discount vouchers. Customers are aware of the price and generally; they tend to go for cheaper options. Thus, Hoi Sin Duck Wraps product life cycle is predictably short. Source: website Prà ªt must consider on the external environment influences, which may have impact on its product. It is a strategic planning technique that provides a useful framework for analysing the environmental pressure on Prà ªt and its product (ref). Table 5: (1.2 PEST for Prà ªt a Manager) Political Economic Social Technology Source: The researcher Task 2 P 2.1 Marketing Barriers Barriers are vague obstacles that tend to thwart a marketing plan and unable to pass messages to external stakeholders. A marketer needs to understand and identify each of the barriers that they are confronting, in order to avoid scuppering the plan. Marketers generally realise these barriers when they manage to envisage a business is not growing or a prolonged unstable position (ref). These barriers can be both internal and external, and all must take into account: Not knowing your product Lack of knowledge in a businesss product and what services the business can provide to their customers can be an immense barrier to the business success. There will be no guarantee, security, customer loyalty, and number of complaints will increase, the business is ineffectual and needs improvement immediately. Whilst the business competitors understand their products, this can adversely affect the business turnover and repeat sales will not occur. Not knowing your competition If a researcher does not know where a business stands and positions of the business competitors, it is highly unlikely that the business can topple its competitors. Competitors study and observe their own competitors. This will give competitors the ideas how to better their performance. Gradually, competitors successfully satisfy customers and therefore eventually, the business will be ceased. Not understanding the market A product is ready to enter the market. However, if a researcher does not know what a business segmentations are can cause problems to the sales campaign. If the researcher does not know where these segments are, which segment should be regarded and disregarded, the marketing plan will not be effective. It is also concerned with costs. For example, the researcher does not study the environment for the business products, high premises cost, electricity and gas, the business will have no the potential to reach the top. Capital requirements The amount of financial resources that every new business enters a market is immense. Businesses such as manufacturing industries and building constructions are required extortionate machineries in order to run its business. Investments can also occur to existing businesses. For instance, investing in new product: finance availability for research and development, production, marketing etc. The investment risk is great, therefore creates barrier. However, there is a prospect of overthrowing the business competitors. Government policy This is concerned with macro-environment. Government policies sometimes are forced to halt competition. For example, laws and regulations such as product testing regulations, global warming and limits on access to raw materials can inhibit the growth of competitions due to licensing requirements. P 2.2 Solutions for marketing barriers Knowing your product It is vital to understand wholly and study what products and services that Prà ªt are providing, how they are functioned and any most recent information that a marketer should know. This will guide the marketer to the right direction and helps to plan a marketing strategy. Having knowledge of the companys products can laden relationships with customers, suppliers and other stakeholders. For instance, customers expectations will be made, therefore sales enhance. Suppliers will be delighted to supply, as Prà ªt seems stable and able to meet payments on time. Knowing your competition It is important to know and learn about competitors. Competitors can be one of keys to a Prà ªts achievement, as researchers can study and observe the business competitors to acknowledge its weaknesses, opportunities and threats. This consists of competitive pricing, niche market availability, promotion, advertisements and other relevant useful information that can be learned. Understanding your market Researchers must know what are the target groups and who prà ªt is selling its products to. To conduct a market research can help researchers to understand the specific target audience and customers expectations in terms of price and quality. Methods of market research can be primary and/or secondary, quantitative and/or qualitative. Internet is a very effective tool that can help Prà ªt to overcome its barriers. Information and data that are needed can mostly be found online. Also, if researchers are struggling, good guidelines can also be found on the Internet. Until researchers are fulfilled with the results, decisions are then made and subsequently, implement a marketing plan. Task 3 P 3.1 In competitive world, companies need to produce new products to satisfy customer needs. A company cannot expect to continue growth or to maximise profit by relying exclusively on its existing products. The company must retain to control its market by continuous product innovation that involves complete new product development, product improvement, which is to discover different ways in improving existing products effectively, and imitative products, which means a copied product that is already exist in the market by other companies. It is essential to know how to manage a new product, which goes through its life cycle (Kotler et al., year) Every product has its life cycle, showing how long a product will last for. Product life cycle is the phases a product goes through from its introduction to its final decline (ref). The product life cycle has five main phases: Table 6: (3.1 Product Life Cycle) Induction This is the starting point, where a product has just begun its sales life. There is usually no profit making due to higher cost of marketing and development. Growth This is the period when a products sales has just set to rise, and the cost begins to fall due to economies of scale the more consumers purchase the product, the quicker the product will run out, therefore the more quantities of the product will be supplied by the suppliers. Maturity A sale is expanding at a slower rate and profits are soaring. More and more consumers purchase the product. The pricing may be lower due to greater competition. Saturation A market is begun to fall due to many other similar products, better products, out of date etc. The product will not be produced as much as it used to. Decline The ending of a product where the sales cannot survive again, therefore the price will be reduced more. The product then is withdrawn. Source: author , date Hoi Sin Duck Wrap is a product, which has been developed and marketed to Prets customers, and is currently market leader. Still as the researcher knowledge, there is no market follower for this product. Kotler et al. (year) believe a product tends to develop, improve and modify through research, as well as to identify, create and deliver the new product that has not emerged in the market yet. Every business must have its segmentation and targeting, its own branding and knowing relationship marketing in order to innovate flawlessly and increase demand. Segmentation technique is separated a market into groups, where there will be different segments requires and different market approaches. It is concerned on understanding customers lifestyles, preferences and aspirations. This can help businesses to find out what consumers are expected and their needs in order to develop products and increase overall demand. ACORN and MOSIAC help to identify groups consumers who are willing to purchase, therefore there will be a market for each product. Table 7: (3.1 Segmentation) ACORN A Classification Of Residential Neighborhoods, is a tool used to identify and understand the population and the demand for products and services. Businesses use this information to identify consumers needs and try to target at more consumers. Also identifying consumers age, income, employment, and type of holidays they go for etc. CACI Information Services develops classification of residential areas, market analysis and provides information. MOSIAC This is another classification to identify household types by combination of credit history, share ownership, postcode data etc. This can help businesses what type of characteristics they are aiming at. Source: author, date Segmentation technique also includes geographic, demographic, and psychographic. This can be developed so that it can create an effective marketing plan. Geographic This is a method to identify customer behavior information, such as consumer density, past purchasing behaviors etc, which may differ from other countries. Demographic This uses population factors based on variables such as age, gender family size, income, occupation, education, religion, race and nationality (ACORN). Psychographic A breakdown of consumers according to different characteristics, including the attitudes expectations and activities of consumers, their interests and lifestyles. Source: author, date Task 4 P 4.1 Marketing ethical is related to or concerning morals, justice or duty, based on ideas of right and wrong. Rules or laws that have already been set, everyday we make any decision may consider on those principles (Baker, 2006). There two main approaches in ethical identified by Rix (2004) are rules approach and outcomes approach. Rules approach is otherwise known as deontological. It is when rules must be strictly adhered, despite of the outcome. Rix (2004) states trust is one of the main keys of ethical rules in marketing. For instance, a products appearance is deceptive that lures a customer into purchasing the product, although it does not physically harm the customer is still ethically wrong. Likewise a company intends to maximise profit by conducting unethical approaches, such as making redundancies without a reason, the action is regard as unethical (Rix, 2004). Outcomes approach is otherwise known as teleological. It is occurred when an outcome is seemingly good and bad, dependi ng on the outcome prospective. For instance, Tesco brings a product into the market, but other groceries have had the product in the market already. Tesco set an unreasonable price for the product that is much lower than other competitors, which competitors accuse Tesco of unethical pricing. A contrary point of view from Tesco, that the outcome is beneficial to its stakeholders. If this action stays on, it may produce a greater amount of good than damaging others (Rix, 2004). P 4.2 Marketing mix is a tool that a company has the complete control. There are 4 main elements (4ps) in marketing mix, which are product, price, place and promotion. The fifth P, which is people, sometimes is added to demonstrate the relationship with customers. 2 further Ps are usually added within service industry, which are process and physical evidence (Lancaster and Reynolds, 1999). Conclusion