Research Korner: Hong Kong Fast Food Industry

The Cafe De Coral Marketing Strategies

INTRODUCTION   The fast food business focusing on Café De Coral is more global than ever and international fast-food consumption continues to increase in popularity in the market as loyal customers form perceptions of fast-food outlets through communication, exposure to promotion from fast-food restaurants, past personal experience and some sources. It is accepted that fast-food marketing strategies should have a sound understanding of consumers’ perceptions and preferences for fast-food outlets and how they differ across cultures. (2006)   The understanding can be helpful in targeting cultures to promote fast food and improving or amending their restaurants’ perceptions so that customer demand can be increased for a fast-food restaurant, promotional campaigns tailored to individual countries as it was called as whether Café De Coral as best fast-food restaurants are perceived across Hong Kong and other countries and whether its positioning can be improved and changed through careful and selective promotion within such diversity of fast-food restaurants as reflected in market strategies in Hong Kong's Cafe de Coral. Café’ de Coral serves a wide variety of fast food, most of which is served sizzling on a single serving personal iron skillet. Cafe de Coral restaurant is in many ways a fast-food version of a traditional Chinese favorite served at most restaurants and reveal some interesting points about choices of foods made by a certain people, understanding what customers want is important in order for a restaurant to enhance their marketing strategies (2000).               COMPANY BACKGROUND   Café de Coral is the largest Chinese fast food brand in Hong Kong. It was established in 1968 and operates more than 100 self-service fast food restaurants in the territory. With over 34 years of proven experience in the food service and catering industry, Café de Coral currently caters to an average of over 300,000 customers a day, making the chain the undisputed market leader in the field. Thus, Café de Coral has over 330 outlets in Asia Pacific region and over 200 quick service restaurants in North America. (2000) Among a total of over 540 outlets, over 120 outlets and 75 outlets are operated under the household name of Café de Coral, whereas over 200 outlets are operating under the leading brand of Manchu Wok and 20 outlets operating under the name of Oliver's Super Sandwiches. As the market leader in the Hong Kong fast food industry and the largest National Brand for Chinese quick service restaurant in Canada, the annual turnover of the Group now stands over HK$2.7 billion generating an annual profit of over HK$258 million in the year 2004. (2000) Presently, the company has 120 chain stores in Hong Kong and 210 ones in North America and is always good at providing tasty spaghetti and intends to extend its reaches around Mainland China. CAFÉ’ DE CORAL’S MARKETING STRATEGIES – STRATEGY LEVEL MARKET SEGMENTATION Café De Coral in its market segmentation is evident in terms of its products and services success as sought by the customers as there seeks good quality and convenience as the restaurant has identified useful benefits of knowing what customers want and create the services to meet the need. Direct marketing efforts toward increasing customer awareness of such benefits as it is difficult to accurately estimate the size of their customer group (2006). Café De Coral is a winner in its segments as a winner in knowing customers needs and wants as a basic factor for maintaining a successful growing marketing. The restaurant in its marketing effort have potential business in  segmenting its Hong Kong markets in a proper notion. Café De Coral implies various factors that will possibly influence the potential for future markets per se: (2000) Ø      population Ø      available income due to changes in employment Ø      supply of natural resources Ø      laws Ø      consumer tastes and preferences Ø      competition, such as emerging of super fast food store   In strengthening its market segments, it is clear enough that Café De Coral provides a quick service restaurant business in the development and management of quick service restaurants chain as the quick service has now been globalized to cover different part of the world like in US and China. The business has diversified into full-service specialty restaurant operations and its acquisition of a Chinese soup-cum-specialty-dish restaurant chain and achieve a more diverse earning base through the wider market exposure. (2000) The business venture into the institutional catering business with Asia Pacific Catering has gradually developed into an undisputed market leader in the field. Major clients being served cover a wide spectrum of institutions ranging from most major hospitals, universities, private and public corporations, both in Hong Kong and China. Since then, the student catering business was launched under the brand name of Luncheon Star, which has deployed the cook-chill central production technology to tap into this growing business as of it was recognized globally in process of standards accreditation. Coupled with its central purchasing power, centralized food processing also comprises bulk breaking, standardized seasoning and standardized portioning at pre-set specifications, volume requirements and quality standards. (2000)       TARGETING Café De Coral is basically targeting the Hong Kong market and been expanding its target audiences in some other neighboring countries such as China and Philippines, most of all Café De Coral is extending its hopes among its current fast food customers typically younger generation ages eighteen years old and above as well as those people who are health conscious who do not currently purchase fast food services because of some beliefs. (2006) Thus, having ongoing strategic imperative, Café De Coral reckoned that they are serving a target customer who is constantly redefining her needs, the café took it upon  to never stop improving and innovating on our products and shop environment in order to enhance the branding power of local restaurant chains. Henceforth, coupled with a series of effective customer-focus marketing campaigns, the strong branding of Café de Coral have given the pricing power to shelter from cost pressure and margin erosion by revamping its business model, fine-tuning its product mix, rationalizing its costing structures, renovating its shop images and opening successful new stores is well-positioned for local business growth. (2006)         POSITIONING Café De Coral positions its best influences in the fast food restaurants business being one of the best the industry can offer in terms of fast food quick service as recognized in the Hong Kong markets as one of fast food business pillars giving quality products and services to their loyal and valued customers in a manner that Café De Coral has earned the impetus respect in the fast food business as well as to their customers as well as some known business sectors. It is really a fact that Café De Coral is good in its recent market positioning as proof to that the restaurant has already achieved numerous awards for its strong aura in the fast food business as well as for its management excellence from the local and international institutions, which included the most coveted award of the "Asian Management Award for Marketing Management" and the "Asian Management Award for General Management" by  in 1992 and 1993, named "Asia's Best" in 1997, "Top Ten Best" by  in 1998. (2003) In addition, awarded as the "Good People Management Award" by  of HKSAR Government. ( 2003) Henceforth, it was said that Café De Coral would continue to maintain dominant leadership position with constant effort in accommodating changing market needs. New product development and exciting design concepts are continuously injected to enrich the total dinning experience of its customers and sees China market as the next area of strategic expansion of successful branded concept. (2003)   CAFÉ’ DE CORAL’S MARKETING STRATEGIES – TACTICAL LEVEL   PRODUCT Café de Coral's menu is specially designed to meet the tastes and budgets of customers, with over 100 items on the menu list on any one day and are regularly rotated to maintain variety of choices. Standard menus range from western cuisine to traditional Chinese dishes. New products and seasonal products for each time segment will be introduced regularly (2005). PRICE Café De Coral in terms of its prices is quite reasonable adapted within the markets as today, it has a little bit of everything. There's a grouping of deli sandwiches, sausage, salad and pasta salad with feta cheese, There are pastas, pizzas, Italian sausages and dishes named marsala and parmigiana. The prices usually cost from ($7.75) and the only items priced over $10 here are three steaks and a dish of pork chops, each at $11.50. (2005) Some plates are disappointing, others minor revelations. Like an appetizer dish ($5.25) of 10 thick, sweet scallops, each dipped in a batter and fried to acceptable crunchiness or a couple of big, wide pork chops ($11.50) cooked to a point of dryness that even applesauce couldn't save. ( 2005)     Thus, a plate of chili size ($6.25) that was unusual in the fact that a hamburger bun was used to form a mushy, soak-up bed under the burger meat topped with chili and beans. A wedge of banana cream pie ($2.50) that had none of that expected yellow custard filling but was simply pie crust, banana and whipped cream.  The kitchen makes a fair meat loaf ($7.95), passable fish and chips ($7.95) and an acceptable hot turkey sandwich ($7.25).  The fresh salmon ($9.25) wasn't bad one time, and hot apple pie ($2.50) really hit the spot on one occasion. (2005)   Hours Open: 24 hours   Recommended items: Creamed potato soup, fried scallops, meat loaf, hot apple pie.   How much: Everything under $12. Beer and wine. All major credit cards accepted.  Wine list: House varietals are Robert Mondavi Woodbridge (chardonnay, cabernet sauvignon, merlot, white zinfandel) by the glass ($3.50) or bottle ($11.95). Corkage $3.         PLACE Restaurant locations are found in mixed use district, business core, shopping centers, industrial areas, private and public housing estates. Restaurants of an average 300 sq.m. are designed with a modern and warm ambience aiming to maximize customer flow. ( 2005)   PROMOTION Achieving A Hundred Points of Excellence has been the café’s commitment to their customers and is now a household catch phrase. As part of on going campaign to strengthen the Café de Coral Brand, proactive advertising campaigns are launched on a continual basis. Through the campaign, the brand image has been further enhanced by positioning Café de Coral as a place not just for best taste and value meals but also a popular meeting place for every lifestyle. (  2005)         EVALUATION OF CAFÉ’ DE CORAL’S MARKETING PRACTICES   INDUSTRY ANALYSIS The Café De Coral in lieu to the presence in market industry is using appropriate marketing strategies suitable for the Hong Kong market in engaging to the process of its business maintenance in the society wherein the presence of established competition among others is evident as it can be seen through product advertising as customers need to be satisfied with the status quo. (2003) Café De Coral in fast food industry engages in a responsible marketing process on a continuous basis and that uses marketing properties that will determine customers satisfaction of services provided with awareness, motivation and the resources to succeed, the consumers of Café De Coral can work towards a better future in the fast food market.  In its people, there was an energetic and dedicated work force of over 8,000 staffs makes up the Café’s service team as customers come from all ages and all walks of life ranging from students and young executives. ( 2004)     Source: Café De Coral Holdings Limited (2005). Corporate Information – Corporate Overview (Corporate Structure)     Source: Café De Coral Holdings Limited (2005). Corporate Information – Corporate Overview     Furthermore, being a leader in the fast food and dining-out industry, Café de Coral has built its success on product innovation and marketing excellence, backed up by an uncompromising commitment to quality customer service. Its marketplace is fast changing and competitive, characterized by increasingly sophisticated customers and ever-tighter profit margins. To sustain its leadership position in this demanding environment, (2005) Café de Coral needed a way to further improve its customer experience while enhancing operating efficiency and reducing costs. The restaurant group wanted to streamline business processes, improve productivity, promote effective strategic planning and generate savings in manpower and administrative expenses. Most important of all, it needed new ways to continue to enhance customer satisfaction today and into the future. ( 2005).                   SWOT ANALYSIS   STRENGTHS Café de Coral fast food continued to maintain its leading position in the industry despite fierce local competition and continued to introduce innovative products to their menu to provide more and better choices to customers. The offering of freshly brewed coffee was a particular success in winning over the applause of customers. Meanwhile, by upgrading the quality of our core products repackaging them with high quality utensil, has differentiated its products from those of their competitors. The café had maintained high standard of hygiene in food processing successfully transplanted certain labour intensive food processing procedures from Hong Kong ( 2005). The Café strengths could be clear in the following points: Ø      Knowledge – the business know their connectivity in all its business management Ø      Relationship selling – as the café get to acquire loyal customers, one by one that maintains good customer relationship Ø      History – the café have built loyalty  in a strong sense over the years and counting   WEAKNESSES Café De Coral in its weakness may adhere to the fast phasing of market demands of fast moving goods and services as evident in the fast changes of competition environment within the focus of business and market value as substantial costs may result to as put into full operation in other markets. Failure of market entry and expanding business could be a fact for Café De Coral as some feasibility study could give inaccurate information in order to expand the production capacity without losing its discipline of some business control that may affect negatively with the process of branding power of Café de Coral and their continuous effort to upgrade the quality and standard of food and services, to protect the profit margin of our fast food operations from rising costs (  2005).                 OPPORTUNITIES Speaking of such opportunities, Café De Coral is taking over the entire operations of super sandwiches restaurants last June 2003 as the concept has regained its momentum for growth. The café was particularly encouraged by the financial performance that came so shortly after acquisition and having successfully revamped its business model,fine-tuned its product mix and upgraded its shop image and positioned as a unique chain of sandwich restaurants offering high quality of products. (  2006) As indicated unlocking the vast potentials of market has always been long term imperatives of strategic value. There recognized that the café’s continuous expansion into the China market has been a key driver for business growth embarked on a multi-directional development strategy in China. Service as the target market needs more service, the competitors are less than ever to provide it.   THREATS Furthermore, there could be presence of threats with a strong foothold in having market of great potentials as in implementing a series of value-added business improvement initiatives in the areas of operational control, purchasing and product development, marketing campaigns, staff training, store design as well as menu innovation, which should eventually bear fruits in the upcoming years.       There could be a threat of over empowering of fast food business by the café’s competitors in terms of building on successful cumulated experience and refined business model, as it can adhere to an aggressive branch development program in various countries. Café de Coral set up have now recorded meaningful profitability and consistent earning growth, with new branches and have been relentless in testing out new grounds with business re-entry in cities of China as another strategic play for long term business growth. (2006)   RECOMMENDATIONS FOR IMPROVEMENTS IN ITS MARKETING OPERATIONS AND STRATEGY   In giving emphasis in providing useful recommendations of Café De Coral’s marketing operations and strategies, it is essential for the café to adopt to some useful shifts in enhancing food service packaging as the customers would want it in order to get fast food a much quicker in the phase of marketing process in operations and strategies. Café De Coral must adapt a possible option to make it  bigger in the market scene like providing TV ads in pushing their product explaining how it's bigger, has more ingredients and is more filling. The café should continue to have useful innovation that they  should try and make their products look more attractive by packaging it individually and using bright colors - things that people don't immediately look for but their subconscious does find more appealing. One good marketing strategy that Café De Coral can use  is through getting their customers to start out at a young age and are offering kids toys with meals, especially toys that are part of a collection so that the children will insist on keep going back to the restaurant to get more toys and in turn - buy more food. (2005) Café De Coral must also live their business principles in relation to their critical success factors in terms of their advertising and promotion to maintain a competitive edge in the industry and in advertising. There are different kinds of gimmicks like the café could have a discounted food items if a customer will purchase two items, free gift items, raffle draws and a lot more. Proper Pricing such as price cuts and discounts are offered to increase sales. Food outlets that offer the most value for money are the popular ones and by providing high quality food that conforms to the taste of the consumer coupled with fast and efficient service in a clean environment is a big incentive to growth. Consumers have become even more discriminating and quality-conscious. Targeting the consumers' taste buds means upgrading the menu. This is one key in capturing more customers. The smooth operations of food outlets require a steady and adequate supply of raw materials. These companies must then establish tie-ups with reliable suppliers. For a possible investment, franchising is a good way to start. With franchising, there is already product identification. Café De Coral need have to acquire a well-managed logistics support system to run several business operations to make a strong impact as good marketing strategies mean having sufficient capital to support the marketing campaign. Café de Coral needed to upgrade its current system and implement a Business Management System in 199 outlets in Southern China to streamline business processes, improve productivity and enhance customer satisfaction. ( 2005)   There has to be a reliable branch intelligence system that streamlines business processes, improves productivity, enhances the customer and enabling a group-wide, Internet-based loyalty program in software such as Windows 2000 Server and SQL Server 2000. ( 2005)   CONCLUSION In conclusion, marketing strategies as applied by Café De Coral has helped them achieved a steady market catering the international market serving its best and well planned products and services that has amicably soothe the tastes of every aspiring customers and therefore, has built the café success on product innovation and marketing excellence, backed up by an uncompromising commitment to quality customer service. Its marketplace is fast changing and competitive, characterized by increasingly sophisticated customers and ever-tighter profit margins and to sustain its leadership position in a demanding environment, Café de Coral needed a way to further improve its customer experience while enhancing operating efficiency and reducing costs. The fast food industry is attempting to create an image that provides consumers with a comfortable and friendly feel about their product in order to increase sales.  The fast food industry is quickly shifting its marketing focus towards an older audience but understood through the same psychological principles nonetheless.

The Cafe De Coral Marketing Strategies

INTRODUCTION The fast food business focusing on Café De Coral is more global than ever and inte...

Corporate Profile of Cafe de Coral Holdings Limited

Corporate Profile of Cafe de Coral Holdings Limited               Cafe de Coral Group is the largest Chinese Fast Food restaurant group in the world with 182 outlets in Hong Kong, 74 in Canada, 119 in United States and 2 in Poland. Among a total of over 380 outlets, 115 outlets are operated under the brand name of "Cafe de Coral", whereas 195 outlets are under the brand of "Manchu Wok". Specialty restaurants include "Spaghetti House", "Bravo le Cafe", "Ah Yee Leng Tong", "Super Super Congee and Noodles" and "Noodles Plus", as well as the institutional catering business under the trade name of "Asia Pacific Catering".             As the market leader in the Hong Kong fast-food industry and the largest National Brand for Chinese quick service restaurant in Canada, the annual turnover of the Group now stands at HK$3 billion, generating an annual profit of HK$220 million in Year 2000 with a growth of over 72% in the past 5 years.             The principle business of the Group is the development and operation of self-service restaurants with the distinctive trade name, "Cafe de Coral". In addition, the Group has also diversified into full-service specialty restaurant operations and Asia Pacific Catering business. Acquisition of a Chinese soup-cum-specialty-dish restaurant chain, "Ah Yee Leng Tong", in 1990 and a mid range Italian restaurant chain, "The Spaghetti House", in 1991, enable the Group to achieve a more diverse earning base through the wider market exposure.             The recent development of "Bravo le Cafe" restaurant and "Super Congee and Noodles" restaurant concepts in 1997 and 1999 respectively further strengthen the Group's leading market presence in the dining-out industry in Hong Kong. Since September 1999, the commencement of the school lunch box catering business under the brand name of "Luncheon Star" has also proven successful.             The Group currently operates about 180 restaurant units in Hong Kong and Guangdong province under its direct management. The Group has about 18% of the market share in the fast food sector and is a market leader in this field. The Group has also attained 4% market share of the total HK$ 57 billion dining-out industry in Hong Kong.             The 120,000 sq.ft. food processing plant is housed all under one roof within the Group's self-owned 12 storey headquarters in Hong Kong, which has its own cold and dry storages, food processing lines, quality control laboratory, uniform laundry, and distribution fleet. Food processing comprises bulk breaking, standardized seasoning and standardized portioning at pre-set specifications, volume requirements and quality standards.              The commencement of production at the food processing plant in Guangzhou city, China marked another important step forward for the Group in the year of 1995. The centralization of Group's China material sourcing, food production and distribution facilities confer synergistic benefits the Group.   (floor plan and layout of the above)             The acquisition of Scanfoods in 1997 and the acquisition of Denny's Bakery in Year 2000 led the Group towards downstream integrated expansion into the food manufacturing and distribution business in the Greater China region. Aside from having an efficient sales network in Hong Kong and China, Scanfoods also owns a 40,000 sq. ft production base in Dongguan city, China with advanced imported machineries and technology from overseas.             At present, Scanfoods processes and distributes ham products to over 1,000 institutional customers in Hong Kong and China. It is one of the leading processed ham suppliers in Hong Kong with about 20% market share of the domestic processed ham market.             With regards to public listing, the year 1986 marked a milestone in the Group's history as the Group went public and obtained an official listing for its shares on The Stock Exchange of Hong Kong Limited in July 1986, which was the first of its kind at the time of the listing.             For the past 30 years, Cafe de Coral has received numerous awards for its management excellence from the local and international institutions, which included the most coveted award of the Asian Management Award for Marketing Management and the Asian Management Award for General Management by Asian Institute of Management in 1992 & 1993, named Asian's Best in 1997, Top Ten Best by AsiaMoney in 1998.             In the year of 1999, the Chairman of Cafe de Coral has personally been awarded the prestigious Stars of Asia Award by Business Week. In addition, we have been selected as the Service Category Leader - Catering by Hong Kong Retail Management Association, and the Good People Management Award by Labor Department of HKSAR Government.             Three times in a row, Cafe de Coral have been selected as World's 300 Best Small Capitalization Companies by Forbes Global and The International Chinese Enterprises 500 by The International Chinese Newsweekly respectively in 1998, 1999 and 2000. And Cafe de Coral have also been chosen as Powerhouse Hall of Fame - Best Practice Companies by Hong Kong Productivity Council consecutively in 1999 and 2000. Corporate Motto & Mission             The trade name "Cafe de Coral" () originates from the Chinese ideal of family togetherness, forming a three-word logo through which the shareholders, the customers and the staff are "happy together", through "Cafe de Coral." "A HUNDRED POINTS OF EXCELLENCE"             The corporate motto "A Hundred Points of Excellence" (100) reflects to their commitment to strive for excellence, as they make strategic business moves in a rapidly changing world. And that is, if something is worth striving, it's worth striving for the best.             Looking back on 30 years of continuous sales and profit growth, the history of Cafe de Coral reflects a successful story whose character exemplifies what is unique about Hong Kong.             As an undisputable market leader in the fast food and dining-out industry, Cafe de Coral has always prided itself on its product innovation and marketing excellence with uncompromised standard to quality, unconditional service to our customers, and undivided commitment to excellence.             The Group is principally engaged in the operation of fast food, institutional catering, specialty restaurants and food manufacturing business in Hong Kong and Southern China. Today, with the dedicated support of 6,000 employees, the Group operates the fast food and restaurant business under the various household brands of "Cafe de Coral ", "The Spaghetti House ", "Ah Yee Leng Tong ", and "Bravo le Cafe " as well as processing and distributing branded ham products in the Greater China region. Their commitment to the food business is attested by the Group mission statement:             "To establish Cafe de Coral Holdings as a distinguished corporation in the food and hospitality industry in the Asia Pacific region, maintaining a publicly recognized leadership position in the mass-market, quick service restaurant chain business, with vertical and horizontal diversification towards the food services, food processing and distribution, catering and hospitality sectors in the international arena, will into the 21st Century." Highlights of the Issues in Cafe de Coral Holdings with Respect to their Business Development for the Year 2003 ·         The sudden outbreak of SARS has taken a heavy toll on our hospital and student catering business but did not deter the Group from delivering a stable sales performance of approximately HK$1.3 billion for this half year. ·          In addition to the consistent interim dividend, the Board of directors also recommended to double the dividend payment with a special dividend of 6.4 cents per share to mark the Group’s 35th Anniversary celebration. ·         The acquisition of Oliver’s Super Sandwiches restaurant chain further solidifies the Group’s business position in the Hong Kong quick service restaurant industry. ·         The acquisition of a 50% stake in New Asia Dabao, the largest Chinese quick service restaurant network in Shanghai, has established a dominant foothold for the Group in the PRC market. ·         We are honored that the Group was awarded the “2003 Best Employers in Hong Kong” while our Group’s Chairman was also personally awarded the “Directors of the Year Award”. Joining hands with all our shareholders in saluting the heroic performance and undaunted spirit of our 8,500 employees during the SARS outbreak.

Corporate Profile of Cafe de Coral Holdings Limited

Corporate Profile of Cafe de Coral Holdings Limited Cafe de Coral Group is the largest Chinese Fast Food restaur...

Questions/Answers – Principles Of Marketing

A. Assess what environmental factors have had the most impact on super-market and fast food in recent years in Hong Kong. (8 Marks) Because of its growing population and its ever-booming tourism industry, Hong Kong is considered to be the next substantial market for all food products. Nonetheless, there are various factors – and the combination of these factors – that influence the supermarket and fast food businesses in the region. Yeung (1993) states that the hyper/supermarkets and department stores, the specialty stores and themed restaurants including fast food chains, the convenience stores and the traditional markets which include family-owned shops and wet markets are the four primary classification of food business in Hong Kong. Chung (2007) describes supermarkets as the combination of Western supermarket and traditional wet market style which epitomizes the ‘one-stop-shop’ experience and with extensive product categories which reaches to over 20, 000. On the other hand, fast foods are food retailers which generally aimed at niche markets. While specialty stores usually sell a certain type of good, of the highest grade and quality, themed restaurants and fast food outlets are intended to bring other places’ flavors in Hong Kong. Stores and restaurants of this kind are known to be developed in order that the emerging food trend opportunities be captured and profit from such trends. Of all the environmental factors which impact both food retail segments, the most notable are the food consumption trends such as food safety and increasing health consciousness, changing demographics, busy lifestyles and continuous arrival of tourists. Although there are many food products vying for the attention of nationals and tourists, it is clear that the consumers are increasingly demanding and preferring healthier, fresher and highly nutritional food choices. Consumer preferences also shifting as people now favor chilled and frozen foods since these food products are believed to be safer and more hygienic although Hong Kong national generally prefer fresh foodstuffs. Functional foods are also in high demand because of its health benefits. Convenience foods, nonetheless, had been the most popular such as instant noodles, cup noodles, frozen and canned meals and instant soup because of the busy lifestyles. Such a trend is trickled down on major supermarket chains where retail space for these ready-made meals was extended as well as for restaurants which now offer neatly packaged food-to-go. More specifically, convenience foods have also been in boom because of dual income families, smaller households, the ageing population and the busy lifestyles of Hong Kongers and migrants. Also, changing lifestyles and increasing average incomes are seen to be the reasons behind the boom in convenience food products in Hong Kong. Consumer awareness, likewise, has also been raised particularly on the origin of the food and the ingredients of the products. Food safety is evident on the demand of the consumers to include information on labels specifically the composition of the products. Informations that the label should include are name or designation of the product, list of ingredients, special storage conditions or instructions for use, name and address of manufacturer, nutritional panel and expiry date of the product in English or Chinese or in both languages as well as the presence of allergic substances (Yuen, 2006). Moreover, the last available statistics claim that over 21 million visited Hong Kong in 2006. Tourists’ spending on restaurants excluding hotel restaurants and including fast food restaurants is worth US.25 billion. Hong Kong has approximately 10,340 restaurants, as well as over 1,000 bars and other eating and drinking places. Chinese restaurants dominate the Hong Kong restaurant sector, accounting for 45% of the industry. B. Using the consumer decision-making process as a guide, how would you go about to purchase at super-market? How applicable is this model for purchasing fast food? Please give examples to illustrate your answers. (17 Marks) The consumer buying process is set in six stages: problem recognition, information search, alternatives evaluation, purchase decision, purchase and post-purchase evaluation. The first stage points to determining the difference between desired state and actual condition. Product information could stimulate this stage onward to gathering information. Searching happens internally and externally, the first through memory and the second through marketer dominated sources or comparison shopping aside from word of mouth. The success in this stage could lead to having an evoked set of alternatives whereby the consumer establishes criteria prior to weighing them. After the choice has been made, actual purchasing based on product availability will be considered. Whether the consumer makes the right decision or not in purchasing will be contemplated on the last stage (Parcon, 2007, pp. 95-96). As a consumer, I have several commodities to purchase in the supermarket and so firstly, I have to determine for instance what or which among the commodities I need. Need recognition occurs when a perceived discrepancy exists between the actual and desired states of being. Needs could be innate or learned and are never fully satisfied. Expressive needs and utilitarian needs are the two basic consumer needs where the former involve desires by consumers to fulfill social or aesthetic requirements and the latter involve desires by consumers to solve basic problems (Mowen and Minor, 1997). In the supermarket, food and non-food product categories are there hence depending on my needs I can choose from these specific categories to purchase. Supposing, I need to purchase home cleaning tools. The step would be to search for information such as in which supermarkets are these supplies and/or commodities are available and which brands would be most reliable. Two of the most reliable supermarkets for me are Park ‘n’ Shop and Wellcome Supermarket. In searching for information, it would be worthy to mention that consumers evaluate a product or a service. The necessity to recognize their motivations influencing customers is therefore apparent. There are several advertisements that could aid me in deciding which among the various products would be most suitable for my need. This leads me to alternative evaluation wherein I could ask my neighbors or rely on Internet forums which among the available brands will fulfill their promises in actuality. I could also do some canvassing in local supermarkets to compare and contrast their products depending on price range, features and efficiency of the tools I intend to buy. These processes would be necessary so that I can put value on my money to spend. Next, decision-making comes when I have conducted all of these procedures. I need to know first if the brands I have chosen to buy are available and on-stock on Park ‘n’ Shop and Wellcome supermarkets, choose the supermarket from which to buy from and then buy the products. In the purchasing process, I could ask the supermarket representatives (sales staff) if there are warranties and if ever I chose to return the products for some reasons, will I be able to get my money back. These are informations that are often overlooked by the typical consumer. During post-purchase stage, I can contact the company of the brands to determine if they are additional informations that I could get from them or just give them my feedback about the product probably after the first month of use. Such consumer buying model when applied in the fast food restaurant purchasing could be haphazardly used. I say this because problem recognition is always evident that is hunger. Nevertheless, eating in fast food establishments will depend on price level, service level and product offerings or cuisine or menu. What makes fast food purchases plausible are because of the amount of disposable income allotted for food spending (Davies, Lockwood and Stone, 1998). Information search, and also alternatives evaluation, could be also carried out through advertisements that have most appeal since they have the recall. Basham (2007) maintains that the quality of the food, the quantity of the food and the prices of the food as well as the range of products being offered should be considered when searching and evaluating choices for fast food. For instance, the choices of food will depend on the budget and the time of the day. While also, the subsequent purchase decisions will be based on the health factors. Wendy’s and Burger King, for example, are extending their menu offerings especially the breakfast menu, for the purpose of competing with McDonalds. The decision of dining or eating out, even so, depends on the choice of the buyers, making them powerful in this sense. Since they can do without the products from fast food restaurants, we can say that buyers have a relatively strong influence on the strategies of restaurants. Other restaurants of my choice would be Fairwood and De Carol Café. From the stage of purchase decision onwards the post-purchase; these are the processes that I as a food buyer will dwell into. What we should remember is the fact that if the consumers are not satisfied with anyone of the key elements identified above they can easily switch their fast food provider. Leaving the fast food restaurant operators at the disadvantaged position especially when they have limitations in their food choices offerings and that consumers could always refer to other fast food chains since their current fast food does not provide anything unique for them. As such, the fast food have no power to keep the restaurant business going when consumers’ requirements and expectations are not met (Price, 2007).   Nonetheless, the consumers will attempt to find best prices for a meal as well, and will settle for restaurants which offer promotions and price cuts. Fast food chains like McDonalds, Starbucks, Burger King, etc. are examples of these restaurants apart from catering to on-the-go people through drive thrus (Eagle and Brennan, 2007). In sum, provided that taste, palatability, cost, convenience, diversity and availability are the key elements in the consumption, it would be necessary for the restaurant industry to localized product offerings as well as diversify them. KFC’s menu was limited to fried foods. During the 1980s, people demanded for much healthier food consumption. Because of this, KFC changed its menu and added offerings which satisfied the craving for healthier eating habits. In addition, it would be also highly appreciated if food will be offered at the least possible time and place. The quality of the taste must not be compromised despite this, with relation to reasonable pricing and high levels of customer servicing. References Basham, M., 2007. Industry Surveys Restaurants. Standard and Poor’s, pp. 1-42. Chung, K 2007, Hong Kong Food Market Trends, Department of Primary Industries. Davis, B., Lockwood, A. and Stone, S., 1998. Food and Beverage Management. Butterworth-Heinemann. Eagle, L. and Brennan, R., 2007. Beyond advertising: in-home promotion of ‘fast food’. Young Consumers: Insight and Ideas for Responsible Marketers, 8(4), pp. 278-288. Mowen, J C and Minor, M 1997, Consumer Behavior, Prentice Hall. Parcon, P 2007, Develop Your Decision Making Skills, Lotus Press. Price, S., 2007. The new faces of the food market? The potential for consortia in pizza home delivery. British Food Journal, 99(11), pp. 436-446. Yeung, L Y 1993, Time for change: fresh food retailing in Hong Kong. AgExporter. Yuen, C 2006, Hong Kong Retail Food Sector, Global Agriculture Information Network Report.      Credit:ivythesis.typepad.com

Questions/Answers – Principles Of Marketing

A. Assess what environmental factors have had the most impact on super-market and fast food in recent years in Hong Kong. (8 Marks) Be...