Analyzing International Marketing Situations: A PESTLE And SWOT Analysis Of Muthu’s Curry In UK

PESTLE Analysis

Ques: Evaluate international marketing situations from the perspective of an international marketing manager.

INTRODUCTION

PESTLE ANALYSIS

SWOT ANALYSIS

Recommendation. 

CONCLUSION

References

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Muthu’s curry hits the top list in Singapore for their food choices. The motto of Muthu’s curry is “Serving Passionately”. It was established in the year 1969 starting from Makan shop on Klang road. Presently it has become the icon of South Indian Food serving passionately from last 43 years.

PESTLE analysis helps to analyze the macro level factors of the business (Srdjevic, Bajcetic and Srdjevic, 2012). This framework will help to understand the external factors of Muthu’s Curry that might affect the business once they launch in UK.

There are various political factors that can affect Muthu’s Curry. One of the main political decisions that can affect the business in UK is the tax rate which is levied by Government of UK. This factor has the capability to affect the spending ability of the customers and also the corporation tax of the organization. Currently the Corporation tax level has been decreased for stimulating the economic activity of the country (Ruddick, Gribben and Armitstead, 2012). Another factor is the Interest rates of UK which is low of 0.5% (BoE, 2010). This is positive factor which would help Muthu’s Curry to borrow huge amounts as capital expansion. This borrowing from financial institutions or banks can be long term and also the firm can choose the corporate bonds (Arnold, 2007). Apart from this the political system of the UK is based on parliamentary democracy which reduces the risk of war and also reduces the risk to operate in the country, thus making the business of Muthu’s curry to sustain for longer period (Cia.gov, 2013).

The present economic environment of UK has a great impact on Muthu’s Curry business. From the statistical perspective from 2007 there has been economic rollercoaster in UK. In the year 2007, there have been negative figures in GDP growth due to financial crisis. There was contraction of -1% in the economy followed by -4% contractions in the year 2009 (BBC News, 2012). Further there has been low growth rate in GDP of UK with 1.8% and 0.8% in the year 2010 and 2011 respectively (Data.worldbank.org, 2014). The business press indicates that the economy of UK would continue to show worst results due to double dip recession. Due to these negative pictures, there might be negative impact on the business of Muthu’s Curry as there might be only few customers who would buy the products due to increase in the unemployment. However, it is an opportunity for the Muthu’s Curry to improve the average spends per customer of UK.

There have been various cultural and social changes in UK creating impact on the restaurants like Muthu’s Curry. One of the main issues which Muthu’s Curry should focus on is the growing aging population. Ageing population may see Muthu’s Curry to adapt their products or cuisine that appeals to their demography. According to the census of 2011, 86% of the total population are White ethnicity group, 7.5% of the population is Asian or the Asian British the rest are 3.3% Black and the 2.2% multiple or mixed culture people (BBC News, 2012). Since the Asian population is second largest population in UK, there is a high demand and supply of curry or south Indian food. However, Curry is the top 10 favored food of UK, especially Chicken tikka masala (The Independent, 2014) thus the acceptance level of Muthu’s Curry product is high. This creates an opportunity for the organization.

SWOT Analysis

Technology developments like internet in UK can allow Muthu’s Curry to create online business model, as it is one of the most rapid acceptance model of the customers of UK. Online social Networking sites like Twitter, YouTube and Facebook are the most interactive platforms for communicating with the customers. This is seen as the main ingredients for a successful strategy of marketing allowing the customers to find the best facilities and develop effective communication using the apps on their smartphones.

It is very much important for Muthu’s Curry to conform the legal minimum standards that are enforced by the jurisdiction. The main key legal regulations are food regulation where they must follow the regulation of food processing, food packaging and also food sourcing.

UK regional climates depend on Latitude and Atlantic ocean. The temperature of UK ranges from seldom extreme to cooler, sometimes drier and less windy especially in the eastern regions. However, the country has the possibility to suffer from high intensity natural calamities like forest fires, hurricanes earthquakes (Theretailbulletin.com, 2013). Despite such issues, the weather of UK is good and is suitable to eat curries.

• Establised in 1969- For past 43 years they have been serving the Singapore population with passion with excitement of foodie in the way the mix the ingredients in their dishes.
• A lot of supporters- Since their 43 years of establishment they have increased their customers base and have captured the market by providing variety of dishes from both Southern and Northern region of Indian subcontinent.
• Curry fish head- Mango lassi and Fish Head Curry is their signature dish
• Worth of mouth- Since their customer base is high; the word of mouth helps to increase their growth in the country because of referrals the other customer assumes that the restaurant provides high quality products and services.

• Limited market (space) – high competitive- Singapore food market is highly competitive in nature. The HRI sector is performing very well with diverse restaurants and hotels (gain.fas.usda.gov, 2014). For instance, the Suki Group is focusing on providing affordable products with high quality and is almost capturing market (Thinkbusiness.nus.edu, 2014). This is creating the market space limited to grow.
• Low population rate (Overall & Indian)- The total population of Singapore is growing at a slowest rate with 1.6% compared to last year. The population is now is 5.57 million (Straitstimes.com, 2014). The overall population consists of 74.2% Chinese, 9.2% Indian, and 13.3% Malay and rests other 3.3% (Indexmundi.com, 2014). The market is much of Chinese people thus the preference would be more of Chinese food.
• Weather in Singapore- The climate of Singapore is tropical is humid and warm throughout the year (Statravel.com, 2014).

• Large Population: Indian population is second largest in UK which and this makes the Muthu’s Curry to tap the Indian market in UK compared to Singpaore. Apart from Indian Market, the UK market is also shifting towards curry dishes. This gives them an opportunity.
• Easy to employ employees: Due to financial crisis, there is a rise in unemployment, opening a branch in UK would help to employ many people who would give them an opportunity to understand the culture of UK.
• A market demand: London now consists of most of the Indian restaurants and Britain now is boasting the Indian restaurant. British are too much enthusiastic about curry dishes. Chicken Tikka masala is their favorite dish (Hindley, 2014).

• Lack of foreign investment experience- The infrastructure development rely much on the foreign investment. There is a lack of international consensus on government role in the industrial strategy (gov.uk, 2012).
• Weather in Singapore is much better than UK
• Restaurant industry of UK has high competitors which have captured the market of London.

Segmentation (in UK)

Geographic

There is high preference for Asian ethnic food in UK (Hamlett et al., 2008). The Singapore restaurant Muthu’s curry will be preferred in UK. The climate in UK is temperate in nature. The winters are severely cool and the summers are not very hot. The ethnic food of Singapore will be preferred by the UK nationals as the food has unique combination of herbs and spices. The food in Singapore has originated from Malaysia. The ethnic qualities of the Asian food will make it popular in UK (Lawrence et al., 2007).

Demographic

Asian food is preferred by the low income group, middle income group and the high income group UK nationals. The food is available at cheap prices. Singapore food has morphed from the street food paradise into the culinary capital that has found its way into the gastronomic temples of high cuisine in UK. The ethnic food of Singapore is preferred by people belonging to all age group (Jones, Comfort and Hillier, 2004) ; (Kearney, 2010).

Psychographic

Healthy eating has become a mainstream dining trend in UK. The salt, sugar and fat are being replaced by healthy and bold flavors. Since the ethnic food of Asia offer healthy variants, Singapore food will be popular in UK. The food in Singapore is healthy and it is a mixture of herbs and spices. It is seen that the consumers in UK prefer Singapore food more than the western cuisines. The diversity of the cuisines of Asia has increased its attractiveness (Nam, Jo and Lee, 2010).

Behavioral

Majority of the population in UK prefer healthy and spicy food. The diversity of the Asian food is the major attraction. The current trends in the industry show that the Indian food is highly popular among the residents in UK. There is increase in the number of Indian restaurants in UK. Thus looking at the current trends it can be said that there is high scope of Indian restaurants in UK (Rasarestaurants.com, 2014).

Group	Name of the Segment and Characteristic	Profile	Value / Benefits
1.	Working population in UK prefer various types of food. Eating out is the new trend in UK.  They spend on lunch.  They like experimenting with new kinds of cuisines.	The working population belongs to the age group of 25 to 60 years. The purchasing power of this group is high.	This can be a favorable target for Muthu’s curry.
2.	Foreign and Local tourist. The number of tourist is less. They come from diverse cultural background.	The tourists belong to the age group of 23 to 65 years	They will also form a potential market.
3.	Students are mostly UK nationals. They are short term customers. They prefer dining out with friends and family during occasions.	They belong to the age group of 18 to 25 years.	They will also form a huge market for Muthu’s curry. Positive worth of mouth about Muthu’s curry from Friends and family will be effective.
4.	Neighborhood residents will form long term association with Singapore Cuisine. They will come to Muthu’s curry along with friends and family.	They belong to the age group of 8 to 70 years.	They will form a potential market for Muthu’s curry. They will form a long term relationship.

Recommendation

 The target market group has to be identified by Muthu’s curry. Muthu’s curry will form a strong base in UK if they can identify the potential market segment. The segmentation analysis shows that the working population and the students comprise majority of the customers for Asian cuisines in UK. There are some firms that sell a product to one segment of the market. The product has mass appeal. While there are other firms target diverse segments of the market for the product. This is known as multi segment marketing. The working population will form the primary group and the students will form the secondary group of the target market for Muthu’s curry

Market Positioning

 Perpetual positioning

Market entry strategy –

Muthu’s curry will position itself in the UK market by entering into a joint venture with the Rasa Restaurant. Rasa restaurant is an already established Indian restaurant in UK. It was established in 1994. It is an award winning chain of restaurants. It offers southern Indian food to UK. Muthu’s curry will gain popularity from the reputation of Rasa restaurant. It will enter into a joint venture with Rasa restaurant. The name of the joint venture will be Rasa and Muthu Restaurant. The joint venture will beneficial for Muthu’s curry (Killing, 2014). The joint venture will help Muthu’s curry to achieve a strong position in UK (Deitz et al., 2010). Rasa restaurant is an already established restaurant in UK. It will be easier for Muthu’s curry to target its market. Rasa restaurant serves Indian cuisine. The joint venture between the two restaurants will offer Indian food along with Singapore dishes (Technology, 2003). There will be a good mixture of two cultures. This will be attractive for the customers.  The cost for opening a restaurant in UK will be reduced. Both the restaurants will share the risk equally. The joint ventures between the two firms will remove the barriers of trade. The policies of joint venture will create the climate for business that will be beneficial for both the firms. The profit margin of Rasa restaurant will increase with the joint venture. The market share of Asian restaurant in UK will expand. The joint venture is a good strategy to explore the UK market (Rasarestaurants.com, 2014) ; (Washington and Patterson, 2011).

Product –

Home	Host	Decision
Tangible and Augmented	Tangible and Augmented	Tangible and Augmented
Range of food products	Range of food products	Adaptation ( Local Taste of UK)

Home country

The product will be tangible and augmented. Muthu’s curry offer wide range of product to their customers. In Singapore, Muthu’s curry offer both vegetable and non vegetable items.  Some of the extremely delicious food offering of Muthu’s curry are fish head curry, lamb curry, sheekkakbabs. The North Indian food offered by Muthu’s curry is delicious.

Host country

The product will be tangible and augmented. Since, Muthu’s curry will enter into a joint venture with Rasa restaurant, the product offering of both restaurants will be conglomerated in the new restaurant. The new restaurant named Rasa and Muthu restaurant will offer North Indian cuisine as well as South Indian cuisine. The range of offering of the restaurant in UK will increase. This will be one of the major advantages for the Indian restaurant in UK.

Conclusion

Decision

The product offering in UK will be tangible and augmented. Rasa and Muthu will offer South Indian as well as North Indian cuisine in UK. The customers in UK will have the delicious experience of both the cuisines. It will portray the culture of India

Price –

Home	Host	Decision
Market price	Market price	Adaptation
Sales Maximization	Sales Maximization	Standardized
Penetration Price	Penetration Price	Standardized
Market Based pricing	Market Based pricing	Standardized

The price of the food at Muthu’s curry is moderate. In the home country, the price of food items offered by Muthu’s curry range between $10 to $30. This price is affordable by the UK nationals. The objective behind pricing of Muthu’s restaurant in Singapore was to increase the market share of the organization. The maximization of the sales of the restaurant was the main objective. This will help the organization to have a strong base in Singapore. The penetration price for the food items at Muthu’s curry will be moderate. The pricing strategy used by Muthu’s curry in home country is based on the price of the competitors.

The price of the food items of the Rasa and Muthu’s restaurant will be between £10 to £30. Moderate pricing will help the Indian restaurant in UK to have strong base of customers. There are large numbers of Indian restaurants in UK. The price of the vegetable meal will range between £ 20 to £23 and the non vegetarian meal will range between £ 30 to £ 35. The pricing strategy of the Rasa and Muthu was to maximize the sales of the restaurants. There is wide range of Indian restaurants in UK. The pricing strategy of the restaurant has to be moderate. This will ensure strong positioning in the market. The penetration price will be moderate to maximize the sales of the organization. The pricing strategy of the new venture in UK will be based on the prices of the market competitors.

The price at the Rasa and Muthu restaurant will be moderate. This is done to increase the market share of the restaurant in UK. There is large number of Indian restaurants in UK. The increase in the price of the food items will reduce the market share of the organization. The pricing strategy of the Indian restaurant in UK will be moderate. This will maximize the sales of the restaurants. The organization will gain competitive advantage. The penetration pricing will be standardized in nature. The pricing strategy will be standardized in nature.

Home	Host	Decision
Manufacturer to consumer	Manufacturer to consumer	Standardization
Selective	Selective	Standardization
Push	Push	Standardization

 At the home country and the host country, the food will be directly served by the restaurant to the customers. The wholesalers have no role. The distribution of the food items will be selective in nature at the host as well as the home country. The customers will chose the product and it will be served at the restaurants. The restaurant owners will use the push strategy. They will generate positive word of mouth for their product that will generate new customers for the restaurants.

Home	Host	Decision
Reinforce	Inform	Adaptation
Rational	Rational	Standardization
Trade Promotion Word of Mouth	Trade Promotion Word of Mouth	Standardization

The quality of food offered at the Rasa and Muthu’s restaurant will generate positive word of mouth. This will generate new customers for the restaurant. Since there are large numbers of Indian restaurants in UK, it is important for the restaurant to offer good quality food that will gain positive response from the customers.

References

 In conclusion, this report has highlighted the International market analysis of Muthu’s Curry. It is clearly demonstrated that the organization have lot of opportunities if they enter UK market. However they have to face lot of competition and have to differentiate themselves from other Indian restaurants in market. The entry strategy that would be feasible for the organization to enter in London is Joint venture.

References

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BoE, (2010). Bank of England maintains bank rate at 0.5% and the size of the asset purchase program at £200 billion. 

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Data.worldbank.org, (2014). GDP growth (annual %).

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gain.fas.usda.gov, (2014). Singapore Food Service – Hotel Restaurant Institutional.

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Srdjevic, Z., Bajcetic, R. and Srdjevic, B. (2012). Identifying the Criteria Set for Multicriteria Decision Making Based on SWOT/PESTLE Analysis: A Case Study of Reconstructing A Water Intake Structure. Water Resources Management, 26(12), pp.3379-3393.

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The Independent, (2014). Britain’s favourite comfort food: Roast dinners put tikka masala on the back burner.

Theretailbulletin.com, (2013). ItÂ’s time for retailers to prepare for the worst and adapt to climate extremes | The Retail Bulletin, Retail News.

Thinkbusiness.nus.edu, (2014). Case study: Serving up success. 

Washington, M. and Patterson, K. (2011). Hostile takeover or joint venture: Connections between institutional theory and sport management research. Sport Management Review, 14(1), pp.1-12.