Description
Background
As a marketing manager of an Italian food company, you have been asked by senior management
to explore opening up a new Pizzeria in the town of Oakland, New Jersey. I have deemed this
market as the Pizza Capital of Oakland, New Jersey because currently there are the following:
Luca’s Trattoria
Juniors Pizza and Subs
Pizza Hut
Café L’Amore
Cucina 347 (formerly Oakland Pizza)
W’s Grill
Frank’s Pizza
Your Task
1. Evaluate the current market (Oakland, NJ) following the 4 K’s Know your Market,
Know your Product, Know your Customers and Know your Competition to determine
the feasibility for your new restaurant
a. This means: you need to research the market ie. Size, demo graphics (people,
income, education etc.)
b. Develop a “Market Analysis”
c. Develop a “Competitor Analysis
d. Develop a “Enviornmental Analysis
2. Following is an over view of the task to complete
1) Brief Description of the Need and the Product (Service) Concept
• Is the need a new need? If so, why/how was it created?
• If not a new need, how has this need been satisfied thus far? What are the problems?
• How will the proposed product/service solve the problem?
2) Industry Analysis
Describe the Industry & Background: Market size, growth, trends.
3) Environmental Analysis:
What are the major external influences and how they affect consumers and/or your choice
of market strategy elements, e.g., whether & how technological, political/legal &,
economic factors influence your marketing strategy? How have the companies in this
industry adapted to these factors? Can you provide concrete examples?
3) Competitor Analysis
Identify direct and indirect competitors and compare in terms of size, goals, market share,
growth, trends, products offered, positions, strengths/weaknesses of brands, success/failure
of recent marketing strategies. You must also address how your product concept will meet
the market’s needs better than the competition.
4) The Marketing Strategy
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The Target Market
Who are your customers? Describe consumers’ purchase behaviors/patterns, what
is important to them? You must provide relevant Economic, Social, Cultural,
Demographic and Geographic information and identify whether and how these
factors influence the choice of marketing strategy. How will consumers perceive
your product relative to the competitors’ products?
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Product Positioning
What is the basis on which you intend to position your product? How does this
compare with existing competitors? Is the differentiation meaningful? Will it
sustain you in the long run?
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Placement (Distribution)
Describe how you intend to make your product available to the target market. How
does this compare with that of the competition?
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Pricing
Describe the basis of your overall pricing strategy. How does this compare with
the competition?
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Promotion
Describe how you intend to promote your product/service? How does this compare
with the competition?
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Market analysis will require you to do some basic research on the available
secondary information which can be obtain via the internet. The size of the
market, the growth trends either positive or negative the opportunities and threats.
The analysis should begin with a simple summary. You should generally describe
the different groups of target customers included in your market. Make sure to
explain and define the different segments, particularly since you refer to them and
they are the basis of your marketed strategy
What distinguishes small business from large business, if this is part of your
segmentation? Do you classify them by sales, number of employees, or some
other factor? Can you define which segment and why?
Explain why your business is focusing on these specific target market groups.
What makes these groups more interesting than the other groups that you have
ruled out?
Why are the characteristics you specify important? For example a clothing
boutique, might focus on one set of upper-income customers instead or another
for strategic reasons. Or an office equipment store might focus on certain
business types whose needs match the firm’s expertise. Some fast food
restaurants focus on families with children under driving age.
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Explain Market Need, Growth, and Trends
o All marketing should be based on underlying needs. Did the need exist
before the business was there? Are there other products or services or
stores that offer different ways to satisfy the same need?
o For example: As a shoe store are you selling shoes or are you satisfying
the customer needs for covered feet? Are there really underlying needs ,
such as style and prestige for fashion footwear, or padding for runners, or
jumping for basketball players, that relate to selling shoes?
o Understand and explain market trends. What factors seem to be changing
the market or changing the business? What developing trends can make a
difference?
o Market trends could be changes in demographics, changes in customer
needs, a new sense of style or fashion, or something else
o For example:
▪ A building supply store might note the trend toward remodeling
older homes instead of buying new homes, or a trend toward more
rooms in larger houses despite smaller families, because of home
offices, dens, and exercise rooms.
▪ A grocery store might note a trend toward Asian foods or spicier
foods, or toward fresher, healthier foods, or development of a new
shopping area in a different part of town.
▪ A medical supplies store might note demographic trend, as baby
boomers age, leading toward more need for estate planning and
retirement planning.
▪ Look to market trends as a way to get ahead of the market; to know
where it is going before it gets there.
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In summary, the more information you can collect about the market you
plan on offering your product/service, the better equipped you will be as
the marketer and the greater chance of succeeding rather than failing
because you overlook some element i.e. current trends are they lasting or
faddish or the effects of technology, changing government regulations etc.
Competitor Analysis
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One of the critical 4K’s is to “Know your Competition” if you want to remain
competitive or a market leader. This is a key part of any marketing plan to identify
who are the major players which will impact your business’s current and future
success in generating revenues (profits) and maintaining market share within your
market/category.
• Competitor analysis basically is an assessment of the strengths and weaknesses
of current and potential competitors. By conducting this type of analysis a
marketer can plan both an offensive and defensive strategy when dealing with
one’s competitor(s).
• The analysis should describe your major competitor in terms that have a
direct influence on revenues – some of these factors include the following:
• organization size
• market share
• comparative product quality
• growth
• available capital and resources
• image
• marketing strategy
• target markets
• and any attributes you consider important.
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If your competitors are privately held companies this type of information
would not be readily available within standard secondary data sources; and
may be difficult to obtain.
Why bother to analyze competitors?
Some businesses think it is best to get on with their own plans and ignore the competition. Others
become obsessed with tracking the actions of competitors (often using underhand or illegal
methods). Many businesses are happy simply to track the competition, copying their moves and
reacting to changes.
Competitor analysis has several important roles in strategic planning:
• To help management understand their competitive advantages/disadvantages relative to
competitors
• To generate understanding of competitors’ past, present (and most importantly) future
strategies
• To provide an informed basis to develop strategies to achieve competitive advantage in the
future
• To help forecast the returns that may be made from future investments (e.g. how will
competitors respond to a new product or pricing strategy?
Questions to ask
What questions should be asked when undertaking competitor analysis? The following is a
useful list to bear in mind:
• Who are our competitors?
• What threats do they pose?
• What is the profile of our competitors?
• What are the objectives of our competitors?
• What strategies are our competitors pursuing and how successful are these strategies?
• What are the strengths and weaknesses of our competitors?
• How are our competitors likely to respond to any changes to the way we do business?
Environmental Analysis Summary
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Are factors outside the control of both the firm and its industry but can impact a
business if not identified by the marketer when developing a marketing plan
These factors can be summarize by the following areas:
o Technology
o Political
o Economic
o Regulatory
o Social Factor
Technology = understanding the current impact technology has within any given
industry needs to be identified by the marketer. Product categories that are
weaker on the technology dimension are particularly vulnerable to competition
both from new products and from foreign competitors that have made the
necessary investment. Some of these areas:
o Energy
o Materials
o Transportation
o Information
o Bioengineering
Political = usually involve goods/services that are exported or imported from
foreign countries is a significant area of vulnerability marketers face if they do not
appropriate identify the issues/problems dealing with different kinds of political
structures. If your product/services that operates domestically the political factors
are not as great but it is still important to understand the current political climate.
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Economic = conditions involving the economy is not a static dimension but is
always changing. Analyzing the current economic conditions and its impact on
your product/services is very important. Attention to inflation, interest rates,
availability of credit is required. Similarly, current labor demands, be it highly
skilled or semi-skilled has, to impact any business. For example: when
unemployment rates are low, it is harder to find minimum wage employees
because more higher-paying jobs are available.
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Regulatory = government and other agencies have an impact on category
attractiveness through regulations. Some product categories have become less
attractive over time because of recent laws that restrict managers’ abilities to
market or that raise the overall cost of doing business. For example: government
regulations deny the tobacco industry from advertising, the drug industry (FDA)
highly regulates the way drug companies develop their products. It is not possible
to generalize about the sources of regulation impact because each product
category is affected by different regulatory bodies. As a result, this part of the
analysis must be highly category specific.
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Social Factors = trends in demographic, lifestyles, attitudes and personal values
among the general population are of particular concern for consumer product
manufacturers and services. What is important for the marketer is to recognize
and understand trends in lifestyles and demographic changes that my affect their
product/services. For example:
o The aging of the baby-boom generation will create more goods/service
required by this group
o Increase in the growth of older adults (85+) represents another change
in demographics probably impacting more in the health care services than
in luxury items
o The importance of children as consumers who are more tech-savvy will
impact immensely in goods/services that will be developed for this
demographic sector of our society
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