Low Calorie Fast Food Industry In Australia: An Analysis Of Target Market And Competition

Influences

Question:

Describe about the Marketing Strategy and Plan for Janet Bradley?

The growing rate of obesity problem in Australia has raised the concern of Janet Bradley as it creates health hazards for the consumers. A new chain of restaurants selling low calorie food items will be sold. It is imperative for the organization to analyze the target market. A micro environmental analysis and macro environmental analysis has been done. The product quality and its price will be the major ways in which the target market can be attracted. The target market will comprise of the youngsters and the families. Since the eating out concept has become very popular in Australia, the company can take the advantage and devise its marketing strategy to increase the market share.

Janet Bradley wants to start a low calorie fast food centre in Australia. The rate of obesity in Australia has been increasing which has potential adverse impact on the heath. Thus Janet wants to start a new fast food chain in Australia that will offer low calorie food. The fast food centre will be a viable alternative to the high calorie food selling restaurants like KFC, Mc Donalds and Red Rooster. For this purpose, Janet Bradley has to analyze the market to understand the buying behavior of the consumers. This will help him to strategize his business. For this purpose the micro environment and macro environment analysis has been carried. The micro environment has been analyzed with respect to the various suppliers, intermediaries that will affect the business. The potential competitors have been identified. The macro environment analysis has been conducted with respect to the demographic, technological, political and cultural trends. The target market for the low calorie food chain has been devised. The market mix of the fast food chain has been identified (Brindal, 2015).

It has been reported by the Enhanced Media Metrics Australia that the young Australians were more likely to eat fast food. The fast food consumption was mostly seen among the people of the age group of 14 to 29 years who consumed fast food at least once in a month. On the other hand 45 percent of the national average is seen to consume fast food. The residents of NSW and ACT were the most likely Australians (83%) who spend money eating out or home every month in comparison to the national average of 81 % (Holroyd, 2014).

Influences	Definition	Characteristics of consumers of fast food and/or low calorie food
Cultural		Cultural factors are complex of the beliefs, behaviour, roles and values of the research. The cultural aspect is important to understand consumer behaviour.	The lifestyle of the Australians has changed. In the fast pace lifestyle it is very difficult to keep a check on food. Thus they consume fast food despite of health issues. The rising health issues have raised awareness among certain section of the society to put restriction on fast food consumption.
Social		Social class has direct influence on the food consumption of the food. The social factors and socio economic status has significant impact on the nutrition and diet.	The brand image of the fast food sellers has huge influence on the buying behaviour. KFC and Mc Donald’s are popular brands and preferred by the consumers due to their brand image. The percentage of low calorie food consumers is less. There is lack of awareness among the consumers regarding the benefits of fast food.
Personal		Personal choice plays a major role in the consumption of food. Fast food will be consumed on the basis of the individual preferences.	The personal choice of majority of the Australians is towards consumption of fast food. The fast food items are delicious to taste and they are easily available. Most consumers prefer fast food over low calorie food.
Psychological		Psychological factors affect the buying behaviour of the consumers. The personal choice of the consumers depends on the psychological factors affecting their buying habit.	The Australians prefer fast food over low calorie food items. But there is rising awareness among the population about the adverse effects of low calorie food items. But the rate of consumption of low calorie food items has not increased to a significant extent (Carroll, 2014).

2.2.1 Suppliers and Intermediaries

The fast food giants in Australia maintain a unique supply chain model which is a partnership and collaboration that the company has made with the supply chain members to serve high quality food consistently. There is large number of suppliers supplying food items in the fast food industry. Thus there is high bargaining power of the suppliers. The profitability of the organization is affected as the suppliers gain high bargaining power. On the other hand the group of suppliers can reduce the quality of the food items to a considerable extent and the restaurant owners have to raise the price (Sullivan, 2015).

Definition

The low calorie fast food industry can be targeted towards the people who are conscious of their food habits. They will form a potential market for the organization.

Competitor	Overview of their competing offerings	Target market	Positioning
Organic food sellers	The organic food sellers offer food items that are produced, processed and stored without addition of synthetically produced fertilisers and chemicals.	The target market of the organic food sellers are consumers aware of potential health risk. The rise of the obesity issue in Australia has resulted in the rise in the awareness among the public to transform to organic food. The value of organic food production in Australia has doubled.	The organic food items are sold in the large supermarkets in Australia. This has formed a potential way to attract the target market.

Macro Factor/Trend	Definition of Factor	Explanation of trends / events relevant to fast food or low calorie food
Demographic	The demographic factors define the age group of people afflicted towards fast food in Australia.	The major consumer of fast food is seen amongst the people of the age group of 14 to 35 years in Australia. The low calorie food is less popular among the Australian. But the awareness of the benefits of low calorie food is increasing.
Economic	The economic factors include macro economic factors like GDP, inflation, unemployment and industrial production.	At the time of recession the unemployment rate was high which affected the fast food industry. But the situation is quite stable at present. But the sales of the fast food sellers have dropped marginally due to increase in awareness for organic and low calorie food items (Burks, 2015).
Technological	The technological factor includes use of modern technology, advanced information technology.	The use of advanced technology has made the processing of the food items easier. It has resulted in considerable reduction of cost. Thus the technological factors have helped the fast food industry to grow.
Political	The political factors include the various regulations from the Government. The Government regulations have potential impact on the business activities of the firm.	Government has put strict regulations on the packaging and labelling of the fast food items in Australia. The regulations have been imposed by the Government on over wage.

3.1 Target Market

Characteristics	Segment1( Youngsters)	Segment 2( Family Unit)
Geographic	The target market for the low calorie fast food market can be the main cities in Australia. The places like New south Wales, Sydney can be the location for the restaurant. The youngsters of these regions are seen visiting the fast food centres very often.	The eating out trend has become very popular in Sydney, New South Wales. It is a trend among the family members to go out for dining at weekends. Thus Sydney and New South Wales will be a good location for the low calorie fast food industry.
Psychographic	The fast food industry has two potential markets. They are the convenient oriented and relax oriented. The youngsters prefer the fast food as a result of its convenience and relaxing environment. The low calorie fast food company has to start its business keeping in mind these criteria.	The family members in Australia go out for dining as it is relaxing after the long hectic schedule of work. The potential health issues also concern them. Thus it is essential for the low calorie fast food company to provide a relaxing and comforting environment.
Demographic	The sale of fast food items is seen mostly among the youngsters. The youngsters will be a potential market for the low calorie fast food company.	The rise in the eating out trend in Australia has increased the frequency and number of families visiting the restaurants. It will also form a potential market for the low calorie fast food industry.
Behavioural	The psychological factors influence the behaviour of the individual. Since the youngsters visit the restaurants to relax, it is important for the low calorie food seller to provide a relaxing environment.	The eating out trend in Australia is seen mostly in the populated areas of Australia in Sydney and New South Wales. The behavioural attribute behind the eating out concept is to work in a relaxing environment. This is a potential attribute for the success of the business (McDonald and Dunbar, 2004).

Positioning can be defined as the marketing activity that will identify the potential problem or opportunity existing in the market. The potential solution to the problem or the opportunity will be developed. The positioning strategy will be made on the basis of market research, segmentation analysis and support of the data. The way in which the business will carry its activities can be determined from the objective of the business. Depending on the positioning strategy the organization will be able to increase its sales and the recognition of the brand will increase. The positioning strategy can be implemented with extensive advertising which will derive value for the organization. The positioning strategy for Mc Donald’s will depend on market research. The organization has to identify the need of the customers. Since there is increase in awareness among the Australian about the rising health issues, appropriate promotional activities by the low calorie food firm will be beneficial for the organization. The local taste and preferences of the consumers in Australia has to be analyzed. TV commercial can be a potential way to improve the brand awareness of the low calorie food. Innovativeness of the product will play a major role for the growth of the business. The products sold by Mc Donald’s, KFC and other big fast food companies have to be analyzed. On the basis of the analysis the most popular food items sold by these companies can be chosen and included in their menu. The same food items can be included in their menu but the food items will have low calorific value. This will form the brand identity of the firm. Another strategy of positioning is raising the brand awareness by online promotional activities. The online activities will increase the prominence and popularity of the business. The organization will be able to communicate with larger customers. The symbolic nature of the product will make it popular and it will be considered as socio cultural product. Another way of addressing to a wider customer is promoting the low calorie food items by comparing the health benefits of the food in comparison to the health hazards caused by the fast food. This will draw customers towards the low calorie fast food company (Sdrali et al., 2010).

The elements of marketing mix consist of elements that will form the core of the marketing system of the low calorie fast food restaurant. The marketing mix will be analyzed with respect to product strategy, pricing strategy and strategy for distributing the food items.

The product will be made according to the preference of the consumers. The food items will prepare with organic raw materials and the calorie content of the food items will be low. Market analysis showed that the customers prefer organic food items and food of low calorific value due to the potential health risks of fast food. It is seen that the preference of the customers has changed over time. In order to meet the changing demand of the customers, the low calorie food seller has to identify the changing need of the consumers. The food items in the menu can include some of the popular items sold by Mc Donald’s.  The popular food items should be low in calorie. This will increase the popularity of the business. The menu should offer diversified items. The food items offered in the menu must comprise of vegetarian products, non vegetarian products, deserts and drinks. The low calorie food items will be prepared from organic items. There will be range of food items for children. Thus the food store will attract family members. Variety in the food items will be making a popular choice for the residents in Australia. This will increase the competitive advantage of the food store and it will be a potential alternative for Mc Donald’s and KFC (Bowman and Gatignon, 2010).

Characteristics of consumers of fast food and/or low calorie food

The customer’s perception of value is an important determinant of the price charged by the product. A mental picture for the product is drawn depending on the price of the product. The value of the product increases and decreases depending on the quality and price of the product. The product is more than a physical item. It has a psychological connotation attached to it. If the product is low priced then the consumers may feel that the quality of the food is being compromised. Thus it is important to decide the right price to maintain the identity of the brand and its integrity. The low calorie food seller must use the competitive pricing strategy. The price of the food items will be depending on the price set by the competing firms like Mc Donald’s and KFC. Mc Donald’s classifies the product into two categories. One is based on the brand affordability and the other is based on branded core value products. In the similar way, the low calorie food store should segregate their product. This will make the pricing of the products easier. The differential pricing strategy will satisfy the perception of the consumers. The pricing strategy will attract more consumers to the firm. The consumers will prefer the food store as they are getting quality products which have reduced health risks at affordable prices. It will be a potential strategy of pricing for competitive advantage of the company (Kemmer and Boden, 2015).

An effective distribution strategy is imperative for the success of the business. It is important to maintain a chain of suppliers. Management of supply chain is important for the success of a business. The raw materials must be easily available to the food store otherwise it will have adverse impact on the sales. As a startup company, the food store must carry extensive promotional activities like the other large food stores like Mc Donald’s and KFC. Promotional activities can be carried by using social media like Face book, Twitter to attract the youngsters. Advertisement via television and other form of printing media like news paper, magazines can form an effective way to reach out to a larger audience. At the initial stage, potential discounts can be offered to the customers to increase the visibility of the food store. This will make the consumers aware of the various offering of the low calorie food items. TV advertising will make the consumers aware of the food items offered by the company. The hazards of fast food can form an effective strategy of campaign by the store. This will encourage the buying behavior of the consumers and the sale of the food items will increase (Codita, 2010).

The success of the low calorie food store will depend on implementation of the effective strategies. The analysis of the potential market is essential for the success of the business.

Strategy	Recommendations
Target Market	The target market for the restaurant will be the youngsters and the family members. As the eating out concept has become very popular in Australia it is important for the organizations to target the potential consumers.
Value Proposition	The value of organization will maximize with effective promotional activities. This will make the food items popular among the consumers. The low calorie food items will reduce the health hazards of the consumers.
Competitive Advantage	The low calorie food store will gain competitive advantage by competitive pricing policy. The pricing will be same as the other large fast food chains. The food store will be started at the urban highly populated areas in Australia.
Core Product Strategy	The product will be prepared from organic food. This will reduce the potential health hazards. There will be diverse range of food items offered by the firm. The food items will be prepared with less oil and the calorific value will be low.
Actual product	The product will be prepared from organic food. This will reduce the potential health hazards. There will be diverse range of food items offered by the firm. The food items will be prepared with less oil and the calorific value will be low.
Pricing	The low calorie food store will follow competitive pricing policy. The price of the food items will depend on the price set by the competing firms. The low calorie food store will sell the products at discounts during lean periods.
Distribution	The supply chain has to be managed effectively. The raw materials and the other food items must be available to the food store. This will not hamper the sales of the store.

6. Conclusion –

Low calorie food items have potential market in Australia. This will reduce the health risks of the consumers in Australia. The obesity problem in Australia is rising which has increased the concern of the consumers. Thus it will have a potential market in Australia. The low calorie food store can use organic food items. The calorific value of the food has to be kept low. The fast food chains in Australia maintain an efficient supply chain model which is a partnership and collaboration that the company has maintained with the supply chain members to serve high quality food consistently. There are wide varieties of suppliers supplying food items in the fast food industry. The suppliers have high power of bargaining. The startup low calorie food seller can use the competitive pricing strategy. The price of the items of the food will be depend on the prices of the product that is set by the competing firms like Mc Donald’s and KFC. The success of the business will depend on effective pricing policy, promotional activities and the main factor that will result in success of the product is its quality.

References

Bowman, D. and Gatignon, H. (2010). Market response and marketing mix models. Boston: Now.

Brindal, E. (2015). Exploring Fast food consumption behavior and social influence. 1st ed. [ebook] Available at: https://digital.library.adelaide.edu.au/dspace/bitstream/2440/62481/1/02whole.pdf [Accessed 14 Feb. 2015].

Burks, F. (2015). Types of Economic Factors That Can Affect the Fast Food Industry. [online] Small Business – Chron.com. Available at: https://smallbusiness.chron.com/types-economic-factors-can-affect-fast-food-industry-36923.html [Accessed 14 Feb. 2015].

Carroll, L. (2014). Australians are including fewer healthy food options in their diets. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/lifestyle/diet-and-fitness/australians-are-including-fewer-healthy-food-options-in-their-diets-20140509-zr8bd.html [Accessed 14 Feb. 2015].

Codita, R. (2010). Contingency factors of marketing-mix standardization. Wiesbaden: Gabler.

Holroyd, J. (2014). Average Australian eats fast food nearly every week. [online] Good Food. Available at: https://www.goodfood.com.au/good-food/food-news/average-australian-eats-fast-food-nearly-every-week-20140311-34k15.html [Accessed 14 Feb. 2015].

Kemmer, M. and Boden, A. (2015). “Price” as one Parameter in the Marketing Mix.

McDonald, M. and Dunbar, I. (2004). Market segmentation. Oxford: Elsevier/Butterworth-Heinemann.

Sdrali, D., Anisiadou, M., Goussia-Rizou, M. and Costarelli, V. (2010). Adolescents’ soft drinks consumption in family environment: a case study in Northern Greece. International Journal of Consumer Studies, 34(6), pp.684-690.

Sullivan, D. (2015). Fast Food Industry: The Bargaining Power of Suppliers. [online] Small Business – Chron.com. Available at: https://smallbusiness.chron.com/fast-food-industry-bargaining-power-suppliers-78188.html [Accessed 14 Feb. 2015].