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Master of Business Administration

4.750 Strategic Marketing  

Lecturer – Dr. Sarah Dodds  

Marketing Strategy Report

28th October 2016  

Word count ~ 2750

Prepared by:

Sekar, Thiyagarajan (ID 20152685)

 

Table of Contents

1.0 Executive Summary

2.0 The Situational Environment

2.1 Demand and Demand Trends

2.2 Social and Cultural Factors

2.3 Demographics

2.4 Economic and Business Conditions

2.5 Technology

2.6 Current Political / Legal / Regulatory Factors

3.0 The Competitor Environment

3.1 List of Competitors

3.2 Major Competitor Analysis

3.2.1 Products

3.2.2 Plans

3.2.3 Experience

3.2.4 Resources

3.2.5 Marketing Channels

3.2.6 Marketing Communications Strategy

3.2.7 Competitive Advantage

4.0 The Company Environment

4.1 Overall Strategy

4.1.1 Target Groups

4.1.2 Products

4.1.3 Plans

4.1.4 Experience

4.1.5 Resources

4.2 Marketing Channels and Marketing Communications Strategy

4.3 4.2 SWOT Analysis

4.4 Positioning

5.0 Competitive Advantage

5.1 Ethical Eating

5.2 Health and Wellness

5.3 Customization

6.0 Recommendations

6.1 Product

6.2 Price

6.3 Place

6.3 Promotion

7.0 Conclusion  

Reference

1.0 Introduction

Zambrero is a healthy quick service, fresh Mexican grill restaurant launched in Australia in the year 2007. The restaurant was started with a mission to support humanitarian causes such as providing education, fighting hunger in developing countries. There are currently more than 110 outlets spread internationally across Australia, New Zealand, Ireland and Thailand. Zambrero offers healthy and modern menu in Mexican style with quesadillas, tacos, nachos and burritos. (Zambrero, 2016). Though Zambrero is well established in Australia, still the brand is trying to establish in New Zealand. As of now, the brand has 10 outlets in New Zealand. (Zambrero, 2016). This strategic marketing report will analyze the environment, situation, competitors, company environment, competitive edge and provide recommendations for the future growth.

2.0 The Situational Environment

2.1 Demand and Demand Trends

Globally, food service industry has been dominating the overall industry. The overall estimation of  global food service industry in the year 2013 was USD 2.5 trillion with the major contribution from the Asia Pacific which accounted for USD 1.1 trillion. The majority of growth in the food service industry comes from the fast food market. In the year 2013, more than 70 per cent of overall fast food sales were from quick service restaurants. The rising rich population of India and China are the major driving factor of the key growth in Asia Pacific region. Though Australia and New Zealand are in the Asia Pacific region, they are classified as a more saturated market. But the overall consumption of fast food is very high despite of its small population.  

The estimated average consumption of fast food per person per year in New Zealand was about 2-3 Kgs in 2013. Based on the average dining out rate of thrice in a week, the expenditure on fast food of a person per year was over USD 1200 to 1500.  (Food Technology, 2013)

2.2 Social and Cultural Factors

Social and Cultural factors changed a lot in the past few decades. Eating out become a sign of socio-economic status and part of culture. For all functions, from birthday party to get together, valentines day to anniversary, dining out become a culture. Restaurants become the best place to socialize with. Eating behavior of one will differ when they eat alone with, when they eat with others.

2.3 Demographics

The demographics differ from one location to other based on store location. In terms of overall demographics of the market, it consist of both males and females aged between 18 to 35 who are predominantly busy with their life, people who want to dine out with their family, and friends.

2.4 Economic and Business Conditions

In the last 30 years, the New Zealand economy has transitioned from most regulated one to free-market economy (Least regulated economy) in the OECD Countries. The country has a very low-inflation rate and trying to maintain the price stability. The country was rated as the third freest economy in the world by Heritage foundation in 2015 in its Index of Economic Freedom, where Singapore and Hong Kong got the first two places. (New Zealand Now, n.d).

Real gross national disposable income per person in New Zealand has been growing since 2011 after the recession slow down since 2008. New Zealand ranks 23rd in the country list with highest gross national income per person. (Statistics New Zealand, 2016).

2.5 Technology

Technology plays a vital role in modern era. Most of the fast food brands are relying on the technology in today's world. Modern food processing equipments help restaurants to cook food quickly, easily and efficiently. Software technology allows the companies to order the  products automatically which are low in inventory. Customers can self-order through the contactless kiosk with lot of menu in touch screen and McDonalds is an example of such technology. Some software can perform employees scheduling, and tracking their working hours.  (Franchising, n.d). Social media development is another technological advancement which enable food service companies to interact with their customers and to receive feedback. Companies which make use of technological advancement hold competitive edge towards others.

2.6 Current Political / Legal / Regulatory Factors

New Zealand ranks number one in the world bank's ease of doing business report. The country is also in the top of the list for starting a business and dealing with construction permits.  The rankings are based on the benchmarking to June 2016. Higher the rank, easier to do business. (Doing Business, 2016). New Zealand is the place where any one can start business quite easily which means the legal and regulatory factors are very stable, business friendly and are not very stringent.

3.0 The Competitor Environment

3.1 List of Competitors

(Google Maps, 2016)

When it comes to Zambrero Oteha Valley, Albany, the main competitors who are in to Mexican foods are Mad Mex, Mama Loco and The Flying Burrito Brothers.

There are plenty of indirect competitors in Albany such as BurgerFuel, McDonalds/ PitaPit, Subway, Pizza Hut, Burger King, Domino's, KFC, LJ's, Nando's, Carl's Jr. and many more. There are few other Mexican foods in North shore, Auckland, they are Hola Burritos, Poncho Mexico, and Mexicali Fresh. (Zomato, n.d)

3.2 Major Competitor Analysis

However, Mexicali Fresh is not located in Albany, and hence only Mad Mex is analyzed below.

3.2.1 Products

Mad Mex offers fresh Mexican grill. The main menu of Mad Mex are ‘Burrito','Quesadilla', ‘Nachos', ‘Tacos' and ‘Melt'.(Mad Mex, n.d). Apart from main menu, they have kids Meals, Side Dishes and Soft Drinks. Mad Mex provides choice for Brown Rice and Tortilla made from whole wheat. (Mad Mex, n.d).

3.2.2 Plans

As of now, Mad Mex's fillings are pork, steak, chicken, beef and veggie, but they are planning to introduce fish, especially in Taco's. In addition to that more tables and extension of the available room space for the dine-in options, usage of QR codes for their refer a friend campaign ‘member get member' are in the consideration. Mad Mex is also looking for expanding the number of outlets in the global market. (Prezi, 2014).

3.2.3 Experience

It's been almost 10 years since the company ‘Mad Mex' was first launched in Sydney, Australia in 2007. As of now there are 59 outlets in Australia. (Mad Mex, n.d). In New Zealand, Mad Mex has 10 outlets with 8 outlets in Auckland, 1 in Hamilton and 1 in Wellington and outlets are yet to be opened in south Island. The growth of the company was in peak three years ago, expanding the number of stores from 15 to 35  in a period of just 16 months. On average, there are nearly 10 new stores getting opened every year. (Hospitality Magazine, 2016).

3.2.4 Resources

The Mad Mex chain has a support office with talented team of more than 20 staffs from Sydney, Australia. (Snow Ball Effect, n.d). There are 990 staff members working with the brand. (Hospitality Magazine, 2016).  

3.2.5 Marketing Channels

The main marketing channels of the Mad Mex are the social media, promotion campaign (Burrito Challenge) and through Zomato.

3.2.6 Marketing Communications Strategy.

Mad Mex communicates with customers through Instagram, Facebook, Twitter and Youtube. Apart from the company website, Mad Mex also has mobile application. Mad Mex invested $30,000 for the training platform to train their staffs for consistent preparation of food and food service. Mad Mex regularly conducts public promotions such as Burrito challenge to make new customers and also to keep the customer loyalty. (Hospitality Magazine, 2016). Anyone can communicate with Mad Mex through their website. Mad Mex has loyalty program for their customers under the name ‘Los Locos'. Customers can register through the Mad Mex website. (Mad Mex, n.d).

3.2.7 Competitive Advantage

Mad Mex has diversified their product range ever since they launched in 2007. Mad Mex introduced a new concept called Cantina which offers more relaxed dinning and offers wide range of food for whole families. The founder of Mad Mex, Mr. Clovis Young says  “Our customers want somewhere fun where they can take their families and Dad can have a margarita, Mum can have a glass of wine, the kids can have crispy tacos … and they can hang out and have a solid meal for 45 minutes then go see a movie” (Hospitality Magazine, 2016).

4.0 The Company Environment

4.1 Overall Strategy

4.1.1 Target Groups

Zambrero  targets demographics of age 18 to 35 who lead a very busy lifestyle and also prefer healthier foods. It comprises of office workers in the local area, who are busy, local professionals who eat healthy  and nutritious lunch during weekdays and does not bother about the price much.  University students from Massey university who want to try healthy Mexican food without worrying about the distance. Casual consumers who drive through the Oteha valley road and like to try different food.

4.1.2 Products

Zambrero offers fresh Mexican grilled food which includes burritos, nachos, tacos, chips, quesadillas dos capas, and bowls. Customer can able to select the meat (fillings), salsas and sauces. Zambrero also offers special menu for kids. Zambrero has special IQ range of menu which claims to improve brain activities. Zambrero offers menu for vegetarians and vegans too. Consumers can choose black rice over white rice for more healthier choice. (Zambrero, 2016).

4.1.3 Plans

Zambrero plans to open new 100 outlets in the next three years, to expand in Australia, New Zealand and worldwide. There are 100's of new product development ideas are in the pipeline. (Business Focus, n.d).

4.1.4 Experience

Zambrero was founded in 2005 by Dr. Sam Prince in Australia and within ten years of operation, the company has opened more than 135 outlets across the world and well established themselves in Australia and trying to establish themselves in New Zealand. (Zambrero, 2016).

4.1.5 Resources

Zambrero has more than 300 energetic, authentic and passionate employees across 135 stores worldwide. Zambrero believes in taking the right people with right mindset as it makes all the difference. (Business Focus, n.d).

4.2 Marketing Channels and Marketing Communication Strategy

The main marketing channels of Zambrero is the social media such as Facebook, Twitter and Instagram.

Zambrero also has loyalty programme called Zambrero Zone where they engage with customers. There are many promotions being organized regularly such as Meal Packing Day where volunteers pack food. There is also Plate 4 Plate, join the movement initiative through which all the charity work are communicated to customers and employees effectively. Anyone can contact Zambrero through the contact us page in the website. (Zambrero, 2016.)

4.3 SWOT Analysis

4.4 Positioning

5.0 Competitive Advantage (300 Words)

5.1 Ethical Eating

The main competitive advantage of Zambrero is the humanitarian cause it works for under the E-magine foundation. The plate 4 plate initiative of Zambrero to stop hunger across the world has donated nearly 11 million meals to developing countries of Asia, Africa and Americas. (Zambrero, 2016). This charity work and sense of social responsibility has created a highly positive brand image for Zambrero among the consumers.

Zambrero uses local / Australian produce wherever possible, all of the tacos, chips, tortillas are made in Australia and only items which are not available locally or in short supply are being imported.  Refried beans and jalapeños are being imported due to the shortage in supply in Australia. (Business Focus, n.d)

5.2 Health and wellness

The trend of health and wellness in fast food industry is providing leverage to the sales of Zambrero.  The number of organized fast food outlets across New Zealand is more than 3000 and the entire fast food industry is under the pressure of providing healthy foods. The cardio vascular diseases and obesity in New Zealand are in constant rise. (Food Technology, 2016).  

Zambrero offers healthy food menu, which is a blend of Australian - Mexican. Most of the Mexican foods are greasy and with highly processed meats, but Zambrero offers delicious food with no heavy processed meat, no grease, no wilted lettuce scraps and highly nutritious. Zambrero offers fresh food which is filling but never fattening or bloating. In Zambrero, all the meats are slow cooked. Zambrero cooks lamb and beef for 16 hours and cooks chicken at 95 degrees for two hours. Zambrero constantly works with local producer for organic fresh products. In addition that, only free-range chicken are offered in Zambrero menu. (Business Focus, n.d).

5.3 Customization

Zambrero is an assembly line style quick service restaurant, where customer can select  their food the way they want, they can choose the filling (meats), salsas, and sauces, so ordering is quite easy.  Zambrero has vegetarian and vegan menu as well which most of the competitors don't have.  Zambrero follows a very open approach, all the foods are made in front of the customer and nothing is hided from them by doing it inside the closed kitchen. Zambrero has got it's own proprietary sauces such as red chili sauce (made from serrano chillies, ginger and crushed peaches.), verde sauce (made from zesty lime, mange and jalapeños) and many more. (Business Focus, n.d).

6.0 Recommendations

6.1 Product

The product portfolio of Zambrero is not well diversified. But founder of Zambrero, Dr. Sam Prince says “you are only as strong as your weakest item,” and he also felt, if customers orders a menu and if it is of worst combination,  then it will dent the reputation of the brand.

But still the idea of new product development is in the consideration. (Business Focus, n.d). Zambrero should consider expanding the number of menu. Though the food choices are claimed to be more healthier in Zambrero, research found that a bowl of pork nachos contains more than the double of daily recommended average intake calories in an adult meal which is 5005 kilojules which is equated to running for an hour and 48 minutes to burn the calories. (The Sydney Morning Herald, 2016).

Being popular for healthier choice of food, Zambrero should take care of these kind of things which hampers the brand reputation.

6.2 Price

According to Zomato rating, approximate cost of food for two in Mad Mex and Mexicali Fresh is NZD 40, where as it is NZD 70 in The Flying Burrito Brothers, NZD 55 for Mexico, NZD 80 in the Mama Loco. Zambrero is the least expensive, costing approximately NZD 30 for two people. (Zomato, 2016). Being labelled as high quality, premium healthy food, Zambrero should match the price or increase slightly over competitors, as there is a general perception that inexpensive food are of poor quality.

6.3 Place

The store location of Zambrero oteha valley, Albany is nearly 3kms far from Massey university, and about couple of kilometers away from Westfield mall. One of the direct competitor Mad Max and many indirect competitors like KFC, Nandos, Pizza Hut, Subway, have their outlet in and near Westfield, Albany which is much nearer to the Massey university.

Even North harbour stadium and Park are far from Zambrero oteha valley. It's recommended to shift the location near the Westfield mall or close to Massey university.

The competitor Mexicali Fresh has online order option and catering facility, where as Zambrero has no such option as of now, but should consider in the future.

6.4 Promotion

Promotion of Zambrero is not as effective as their competitors. Combination of various promotional and advertising ideas should be used to reach each and every potential customers. A strong brand image should be created in customers' mind. Various events shall be organized like burrito challenge to promote the products. Every new opening of stores should be popularized.  Competitive advantage of the brand shall be conveyed to customers.

7.0 Conclusions

Zambrero achieved  great heights in short span of time. Over 135 stores are opened in the period of 10 years with an average of 13 to 14 new outlets opened every year. Zambrero's healthy recipe, bold, fresh, and tasty flavor combined with the heart to fight hunger across the globe created a huge success for the brand. The brand is living up it to its title ‘ Mexican with the mission'. Few changes in marketing strategy and being proactive can make Zambrero to create their own brand name in due course of time across the globe.

Reference

Business Focus, (n.d). ‘Feel Good Food - Zambrero'. Retrieved from http://www.businessinfocus.com.au/index.php/2012/08/zambrero/#

DocSlide, (December 4, 2009). ‘Zambrero Marketing Plan FINAL'. Retrieved from

 http://docslide.us/documents/zambrero-marketing-plan-final.html

Doing Business, (2016). ‘Economy Rankings'. Retrieved from http://www.doingbusiness.org/rankings

Food Technology, (2013).  ‘New Zealand's fast food industry – a trend analysis'. Retrieved from http://www.foodtechnology.co.nz/content/new-zealands-fast-food-industry-trend-analysis/

Franchising, (n.d). ‘Fast Food Franchise Industry Is Rushing To Acquire Technology Tools That Will Help It Stay, Well, Fast'. Retrieved from http://www.franchising.com/articles/fast_food_franchise_industry_is_rushing_to_acquire_technology_tools_that_wi.html

Google Maps, (2016). ‘Albany'. Retrieved from https://www.google.co.nz/maps/place/Albany,+Auckland+0632/@-36.7221676,174.7072867,17z/data=!4m5!3m4!1s0x6d0d3bf1f3d7fd3b:0x500ef6143a2b100!8m2!3d-36.725942!4d174.6983128

Hospitality Magazine, (2016). ‘Fast casual case study: Mad Mex'. Retrieved from http://www.hospitalitymagazine.com.au/food/profiles/fast-casual-case-study-mad-mex

Mad Mex, (n.d). ‘FAQ'. Retrieved from https://loyalty.madmex.com.au/#/login

Mad Mex, (n.d). ‘Find my nearest Mad Mex'. Retrieved from http://www.madmex.co.nz

Mad Mex, (n.d). ‘Find our locations'. Retrieved from http://www.madmex.com.au

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Prezi, (2014). ‘Mad Mex Marketing Strategy'. Retrieved from https://prezi.com/3e-9qvcwfx9n/mad-mex-marketing-strategy/

New Zealand Now, (n.d). ‘Economic Overview'. Retrieved from https://www.newzealandnow.govt.nz/investing-in-nz/opportunities-outlook/economic-overview

Snow Ball Effect, (n.d). ‘Mad group information memorandum'. Retrieved from https://www.snowballeffect.co.nz/store/madgroup-im.pdf

Statistics New Zealand, (2016). ‘Disposable income per person'. Retrieved from http://www.stats.govt.nz/browse_for_stats/snapshots-of-nz/nz-social-indicators/Home/Standard%20of%20living/disp-income-pp.aspx

The Sydney Morning Herald, (2016). ‘Zambrero nachos tops list of fast food overloads'. Retrieved from http://www.smh.com.au/national/health/zambrero-nachos-tops-list-of-fast-food-overloads-20160216-gmvbhw.html

Zambrero, (2016). ‘Locations'. Retrieved from http://zambrero.co.nz/locations

Zambrero, (2016). ‘Meals Donated'. Retrieved from http://plate4plate.zambrero.com

Zambrero, (2016). ‘Menu'. Retrieved from http://zambrero.co.nz/menu

Zambrero, (2016). ‘Story'. Retrieved from http://zambrero.co.nz/story

Zomato, (2016). ‘Mexican Restaurants in North Shore'. Retrieved from https://www.zomato.com/auckland/north-shore-restaurants/mexican

Zomato, (2016). ‘Zambrero'. Retrieved from https://www.zomato.com/auckland/zambrero-vulcan-lane

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