Foundation Business Essentials
Foundation Business Essentials – Introduction
Introduction
The world of business is a complex system, which involves the transformation of resources into different products and services. The commercials businesses have the responsibility of meeting the demands and needs of the consumers in exchange for a certain amount of profit. The business organizations are formed with different purposes and they operate in specific markets to align their business objectives and ideas with the market and economy conditions. This assignment would cover details about a new business idea and its several aspects.
Task 1
Part A
The new business idea taken into consideration is about a pizza business called, “It’s All About Pizza!” As the name suggests, all the food items would be pizza flavoured only. The items would range from the classic pizzas and flavoured pizzas to the new pizza rolls and cones. The first diner outlet of “It’s All About Pizza!” would be opened in the Hyde Park area of London. It is one of the prime locations in London, where one can find visitors from different countries. The first new diner outlet would be able to attract students, working professionals and other residents as well. The different items would include healthy, non-healthy, vegetarian, non-vegetarian and vegan options for all the customers. Further, the customers will also have the option of choosing different flavours of cheese and pizza sauce. The customers would be provided with the free home delivery service (Barringer, 2012). The new and innovative business idea would be successful as the pizza diners and high street outlets near the Hyde Park Area do not have such a wide range of varieties related to pizza. “It’s All About Pizza!” would also provide frozen pizza in the supermarkets under its own brand name.
There are 15 top pizza chains in the entire United Kingdom. The new business would face huge competition from the existing pizza chains in the UK. Further, the local brands like Giordano’s, Pizza Capri, Medici on 57th and Italian Fiesta Pizzeria would also give high competition to It’s All About Pizza. The brand image and quality of products and services would make difficult for the new business to gain differential advantage or competitive advantage. Considering the current market scenario of the pizza businesses in London, the market value of the pizza restaurant has increased by 5% and the pizza is the most popular items bought in all the restaurants and is the 2nd most bought item for dinner from the supermarkets. Hence, it can be beneficial for the new company to enter emerging market and gradually expand its business in London.
Part B
The new pizza diner called “It’s All About Pizza!” is going to become a new player in the food industry. The prime location of the restaurant has strong requirements for variety dining options. The combination of well-oriented dining experience, frozen food products and easy home delivery option will position the restaurant to take advantage of the fast-food industry and serve the new needs and trends of the customers (Gabrielsson and Politis, 2012). Along with providing different products, which are pizza flavoured, the customers would also be provided with the option of making changes in the classic pizza base. The restaurant will introduce alcohol infused and flaming pizzas, which would promote the restaurant’s forte of molecular gastronomy (Barham et al., 2010).
Along with product innovation and wide range of options, the business would be established for fulfilling the following objectives.
Business Objectives-
- To use molecular gastronomy and other disciplines of the food science and technology to provide customers unique and innovative food products
- To create high presence for supporting the sales and marketing goals
- To develop better relations with the distributors, customers and other stakeholders
- To achieve the target of high sales and double profit margin within 2 years of establishment
The above objectives have been developed in order to give the business a competitive advantage and better scope. The first objective has been developed in order to promote the restaurant’s new forte of adapting the latest trend of molecular gastronomy. The second objective has been developed to build the foundation for the business to expand. The third objective is justifiable because the stakeholders play a very important role in supporting the business and promoting it (McGrath, 2010). The last objective has been created in order to consider the financial perspective of the business and make sure the organization is able to expand in future by creating good brand image and having strong customer base.
“It’s All About Pizza!” would be a partnership based business which would open its first diner outlet near the Hyde Park are of London. This type of business ownership is essential as the restaurant has different products and departments to handle for which two or more heads are required. Moreover, after the business is able to establish properly, the business would be able to expand by providing the option of franchisee. Franchised ownership would maximise the sales volume, increase profit and create better brand awareness.
Task 2
As the “It’s All About Pizza!” is going to start its business for the first time in London, it is essential for the organization to understand the business environment where it is about to operate. Given below is the PESTLE analysis of “It’s All About Pizza!”-
PESTLE Analysis
|
Factors |
Analysis |
|
Political |
After the Brexit event, the value of sterling has been decreasing because of which the exports would be cheaper and the country would have more reliance on imported foods. Moreover, there can be higher tariffs that might create barriers in the trading activities. This type of issues would create financial and operational issues for “It’s All About Pizza!” as it is going to operate in London. |
|
Economic |
With slow economic growth and high inflation rate, the cost of the food materials has been increasing. As the company has thought of providing such a massive range of pizza products, it might have to struggle while implementing its pricing strategies (Armstrong et al., 2015). |
|
Social |
The taste and preference of the people keep on changing as per the trend. In case of food items, all the fast food items were listed on the top five meals. However, the demand for healthy food products has also increased. Hence, going by the trend, the business idea would be successful and many customers would be attracted towards the food items of the restaurant. |
|
Technological |
The new strategy of the food businesses of using food science, technology and molecular gastronomy has helped them to bring innovation to the food products and services (Cousins et al., 2010). As the organization has decided to incorporate the latest technology, which is available in their country of operation, they would be able to execute their business effectively. |
|
Legal |
After Brexit, there have been various changes in the legal framework of the UK. All the business organizations have to understand the new legislations. It might be difficult for “It’s All About Pizza!” to set up their business successfully. Moreover, it is essential for the organization to follow the The Food Hygiene Regulations 2006, Food Safety Act 1990 and other related laws as well. |
|
Environmental |
The need for greener packaging and proper food safety and hygiene needs have increased in Europe, UK and U.S. Moreover, the demand for gluten free and vegan products have also increased. Hence, it is essential for the business to abide by these environmental requirements, manage their wastes and develop products accordingly. This would help them in creating better reputation in the market (Weinberg and Pehlivan, 2011). |
Table 1: PESTLE Analysis of It’s All About Pizza!
(Source: Created by the learner)
Task 4
The marketing plans for “It’s All About Pizza!” has been developed where the marketing mix elements have been used. The details about marketing objectives and target markets have also been mentioned that would be useful to construct the marketing plan.
Marketing objectives
As the company is going to venture into the food industry for the first time, it is essential to promote and market its business, products and services for which the following marketing objectives should be considered. The marketing objectives have been aligned with the business objectives of the company-
- To create huge presence in the city by using different promotional and marketing strategies
- To increase the market penetration every year by providing quality and wide range of products at low cost
- To enhance brand awareness that will be quantified by the feedback and reactions of customers
- To reach the customers through social media platforms
- To create high brand equity and make customers aware about the new products and services being offered by the company
Target Markets
“It’s All About Pizza!” will use the mix of psychographic, demographic and geographical segmentation variables to introduce its products market. Further, the organization would use the technique of undifferentiated targeting strategy to target its customers and market its products and services. As “It’s All About Pizza!” is a new food chain company, it is essential for the organization to target the right type of market to ensure their new and innovative products and services get properly promoted. As “It’s All About Pizza!” is going to start out for the first time, it is essential for the company to treat all the potential customers as homogenous group. Rather than developing different target market strategies for different groups, society or products, the method of undifferentiated marketing will help the organization to reach the potential customers with a single marketing strategy (Solomon, 2014). This would also save the company huge costs and time, as this approach’s main aim is to reach maximum number of people at the same time.
Marketing Mix
The marketing mix strategy given below described about how the business organization has decided to choose specific approaches for developing the appropriate marketing plan and carry out the business operations successfully. Given below are the different elements of the marketing mix plan along with description and justifications-
|
Element |
Description |
Justification |
|
Price |
The price of the different would be depending on the type of customisation made by the customers. Otherwise, the basic range of the products like Pizza rolls, pizza rings, pizza cones, etc., would range from £3-£7.5, the classic pizzas would range from £5-£20. Further, the alcohol infused and flaming pizza would have additional charges depending on the choice of the customers. Other products, soft drinks and desserts would also have a lower price. |
The restaurant is using a penetration pricing strategy as it is about to enter the fast food industry of the UK for the first time. It is important to have lower price range compared to the competitors to attract more customers. This price strategy would help the organization to attract more customers. |
|
Product |
The restaurant has decided to use the discipline of molecular gastronomy to develop its products and provide a large range of food items that would have pizza flavour. The customers also have the option of choosing different flavoured pizza sauce and cheese for their orders (Keller and Thackeray, 2011). The customers would have the option of customizing food items like classic pizzas, flaming and alcohol infused pizzas. Along with these items being offered at the diner, the restaurant has also decided to provide frozen products under their own brand name in the supermarkets. |
The wide range of products and service would help in attracting customers from different age groups. This would provide the organization a differential edge over the exiting fast food chain in London. Moreover, the frozen products would help in keeping their first few customers very engaged with their products, as they would like to try out other variants. The product and pricing strategy goes well along with each other because of which the organization would be able to operate in a better manner. |
|
Place |
The first diner of the restaurant would be opened near the Hyde Park area of London. “It’s All About Pizza!” has also decided to provide the customers with home delivery service. The frozen products would be available in the supermarkets as well. |
The diner outlet, home delivery service and the product supply in the supermarkets reflects the wider business aim of the business organization, which is to create huge presence of their business and products. This type of strategy would help to market the products easily and reach the maximum number of customers at the same time. |
|
Promotion |
The products and services of “It’s All About Pizza!” would be done through the undifferentiated target market strategy. The social media platforms would be used to make the customers aware about the new and first diner outlet. Moreover, there would be pamphlets, referral codes, promotional offers and hoardings before the first outlet opens up. |
The promotional offers and referral codes are the best ways to attract customers. As high numbers of people are involved in social media sites, it would be easier for the company to reach maximum people at the same time (Huang and Sarigöllü, 2014). |
|
People |
As the company is about to starts its business in London, it would require hiring people for developing workforce. The job vacancies would be advertised on different job portals and on the company’s official websites. Moreover, the partners would be allowed to refer people who have experience, talent and are innovative so that they can be hired as well. |
The job advertisements and referrals are the most cost and time effective method of hiring people from different fields. This way the organization would be able to develop its foundation and have efficient workforce (Baker, 2014). |
|
Physical Evidence |
The interiors of the diners, design of the pamphlets, the uniforms of the delivery boys and restaurant executives, food presentation and the kind of advertisements provided by the organization would reflect the physical evidence of the organization. The company would use bright colours and keep the interiors of the diner modern so that it suits its product line and innovative idea (Peter and Donnelly, 2011). |
The innovation and incorporations in the physical evidences of the organization can help the business to create a good impression on its customers and other stakeholders. |
|
Process |
The main process of the organization includes the development and incorporation of molecular gastronomy, home delivery, diner service and product supply in the supermarket. |
Such a process would help the organization to stay updated with the latest food trend and technology. Moreover, it would also meet the needs and requirements of the customers. |
Table 2: Marketing Mix elements of “It’s All About Pizza!” with description and justifications
(Source: Created by the author)
Marketing strategies for each target market
The main marketing strategy of “It’s All About Pizza!” is to target the mass market and enter the emerging market by using the undifferentiated marketing strategy. Moreover, all the 4Ps and 7Ps of the marketing mix will be used by the organization in order to support the marketing strategies. Such strategies and the pricing strategies would facilitate the business organization to attract more customers and develop better brand image (Zikmund et al., 2013).
Task 5
Given below are the identified decision making strategies, which are related to the business information system of “It’s All About Pizza!”-
One operational business decision- The business organization has decided to select the strategy of franchisee option when it becomes a well established and expands its business. This type of business decision would make the operations of “It’s All About Pizza!” much easier and faster.
One tactical business decision- The tactical business decision is the infusion of different flavours and pizza flavour in its wide variety of products. The high number of product range and different flavour would attract high number of customers and suit their food habits (Laudon and Laudon, 2011).
One strategic business decision- “It’s All About Pizza!” will enter the food industry for the first time, the strategy of mass marketing is a strategic decision. This would save cost and time of the organization.
Conclusion
In this assignment, a new business plan has been developed by using different business essential modules. The business plan of “It’s All About Pizza!” incorporates all the details that are required for establishing a new business. The different tasks in this assignment describes about the importance of marketing strategies, market objectives, target market, marketing mix, PESTLE analysis and different business information system.
Reference List
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.
Baker, M.J., 2014. Marketing strategy and management. Palgrave Macmillan.
Barham, P., Skibsted, L.H., Bredie, W.L., Bom Frøst, M., Møller, P., Risbo, J., Snitkjær, P. and Mortensen, L.M., 2010. Molecular gastronomy: a new emerging scientific discipline. Chemical Reviews, 110(4), pp.2313-2365.
Barringer, B., 2012. Entrepreneurship: Successfully Launching New Ventures, (2012).
Brennan, R., 2014. Business-to-business Marketing (pp. 83-86). Springer New York.
Cousins, J., O'Gorman, K. and Stierand, M., 2010. Molecular gastronomy: cuisine innovation or modern day alchemy?. International journal of contemporary hospitality management, 22(3), pp.399-415.
Gabrielsson, J. and Politis, D., 2012. Work experience and the generation of new business ideas among entrepreneurs: An integrated learning framework. International Journal of Entrepreneurial Behavior & Research, 18(1), pp.48-74.
Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.
Hutt, M.D. and Speh, T.W., 2012. Business marketing management: B2B. Cengage Learning.
Keller, H. and Thackeray, R., 2011. Social marketing and the creative process: staying true to your social marketing objectives. Health Promotion Practice, 12(5), pp.651-653.
Laudon, K.C. and Laudon, J.P., 2011. Essentials of management information systems. Upper Saddle River: Pearson.
McGrath, R.G., 2010. Business models: A discovery driven approach. Long range planning, 43(2), pp.247-261.
Peter, J.P. and Donnelly, J.H., 2011. Marketing management: knowledge and skills: text, analysis, cases, plans. Plano: Business pub., INC.
Solomon, M.R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Upper Saddle River, NJ: Prentice Hall.
Weinberg, B.D. and Pehlivan, E., 2011. Social spending: Managing the social media mix. Business horizons, 54(3), pp.275-282.
Zikmund, W.G., Babin, B.J., Carr, J.C. and Griffin, M., 2013. Business research methods. Cengage Learning.
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