Heaven Restaurant and bar is located in Rwanda in South Africa. It is owned by an American Alissa Ruxin. Alissa had difficulty finding a job in a new country and therefore decided to open the restaurant. The case “Heaven Kigali – knocking on heaven's door?” focuses on the marketing and environmental challenges faced by the business and how it will reach their future objectives.
To describe the marketing strategy of Heaven, the marketing mix tool can be used.
Kotler, Ang, Leong and Tan (1999, cited in Goi, 2009) discuss that firms can use the marketing mix to pursue their marketing objectives in their chosen target market. The marketing mix focuses on the product, place, price, promotion, people, processes and physical evidence of a business.
Heaven Kigali is a restaurant and bar and their main products are food and drink.
The case states that the restaurant offers prices that are mid-range compared to its competitors.
The place element of the marketing mix can also contribute to the chose pricing strategy. The restaurant is placed in a location that is well known. As stated in the case it is three streets away from a four-star hotel that was featured in a Hollywood blockbuster movie.
The business does not focus much on the promotion of their restaurant. However, it is well regarded by tour operators that suggest Heaven to their guests.
The business is well-staffed with 21 employees including full time and interns. The staff includes Rwandan cooks and interns from the Akilah Institute who they have partnered with to improve service levels.
Heaven The process of training the staff in areas such as customer service and culinary skills by hiring American chefs and managers gives Heaven a competitive advantage against their competitors.
The physical evidence element focuses on the high quality of customer service provide by staff that the customers experience when dining.
In addition to the marketing mix, Heaven Kigali's target strategy focuses on international tourists, the expatriate community, business travellers and Rwandan professionals. The positioning strategy of the business is focused on the reputation of the restaurant. The focus for reputation is on providing high quality service. According to the case, the reputation among local expats is that the restaurant is high end due to the prices in comparison to other local restaurants.
According to the case the business has been successful for four years. It is clear that though the target segment is wide, the reputation Heaven has created for themselves allows them to maintain their customer base. Each segment may have different lifestyles but the reputation of being a high-end restaurant will mean something different to each type of customer. For example, the restaurant can be viewed as somewhere to dine for special occasions by the expatriate community or Rwandan professionals. While for business travellers and international tourists, it is seen as a “must visit” tourist site.
In addition to their reputation, Heaven has invested time and resources into training their staff to ensure high quality food and customer service.
If Heaven continues to build its reputation as well as consistently ensuring their staff provides international standards of service. The marketing strategy will continue to be sustainable for the years.
To analyse the macro environment, the PESTLE analysis tool can be used. The PESTLE gives an overview of the forces that are present in the macro environment of Rwanda. This includes political, economic, social, technological, legal and environmental.
There was an unequal coexistence of two ethnic groups, the Tutsis and Hutus which caused ethnic tension in Rwanda. Though this relationship has been reversed there is still reminder of the conflict. There was also the problem of corruption which the government has made major changes to. With the progress made towards these two issues, they don't pose a threat to Heaven and will have low impact on the business.
Income and salaries are affected by high taxation within the private sector. This is a major challenge that can have high impact on Heaven and will be unfavourable to the business.
Rwanda was ranked among the top 10 most improved economies in 2011.Also there has been strong growth performance over the past few years. Growth in 2009 was at 4.1percent and has accelerated to 7.2 per cent in 2010, and 8.6 per cent in 2011.
This economic growth is favourable for Heaven and could have a high impact because this will allow more locals to have sufficient disposable income and will be able to afford the middle range offerings of the restaurant.
Fifty- four percent of the population that are unemployed are under the age of 19 years old. Also, there is lower participation of girls in school. Which, according to the case, is due to factors such as early marriage and negative attitudes to the education of girls.
Though there is economic growth in Rwanda, poverty is present in 44.9 percent of households. About 33 percent of these households are run by women and sometimes young girls.
These are two major challenges that will have a high impact and will be unfavourable for Heaven.
Rwanda is among the top 100 of 148 countries on the World Economic Forum's Networked Readiness Index 2014 list. This index measures how well the competitiveness and wellbeing of the economies are improved using technology and communication technologies. This is favourable however it has a low impact on Heaven. The developing
The case does not mention any legal and environmental factors that are present in the macro environment of Rwanda.
To analyse the micro environment the porters five tool can be used. The tool is used to analyse the likelihood of profitability and the how the attract the environment is. It includes the threat of new entrants, the bargaining power of buyers and supplier, competitors and the threat of new substitutes.
Threat of new entrants
Heaven's position can be affected by the ability of new restaurants to enter the market. The case states that it is easy to register and construct a company in Rwanda.
Threat of substitutes
As mentioned in the case, though there is economic growth, many locals are still living below the poverty line. Therefore, it is likely that current and potential customers will seek to save money their income by no longer eating out but having meals at home.
Bargaining power of buyers
Heaven has built a reputation of being a restaurant that provides high quality food and drink. Therefore, tourists like to visit Heaven and NGOs often make large group bookings. If the restaurant consistently offers the same quality the customer base should remain the same.
Bargaining power of suppliers
With the issue of unemployment in Rwanda, Heaven has been able to provide employment not only for their staff but for the farmers and suppliers they purchase goods from.
How has Heaven managed these challenges? In your opinion could it have done more than it has to date?
The challenge of women and young girls being unqualified has been manged through the partnership Akilah Institute. The interns involved in these trainings will have a chance to grow their careers in the hospitality sector.
In addition to this, Heaven has been able to tackle the challenge of unemployment within the environment. The business hired graduates with little or no experience. Heave provided training in the necessary skills to work in the hospitality sector by bringing in American staff.
With fewer qualified young people, it is difficult for the business to hire staff from the local community. Heaven will have to either invest more in training of the people that are hired or hire less qualified people and provide less than the desired quality.
As the case states more, commercial properties are arriving in the neighbourhood that the restaurant is located.
Heaven has long term plans to be a training school as well as a bar and a restaurant business – Evaluate the possibilities of this in the environment identified in the case.
Goi, C. (2009). A Review of Marketing Mix: 4Ps or More?. International Journal of Marketing Studies, 1(1).
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