Hot N Spicy Karachi Marketing Report Assignment

Hot N Spicy Karachi Marketing Report Assignment Words: 3148

1. Introduction 1. 1 Aim of Study The aim of this study was to understand how different basic marketing strategies were applied by a small business of our choice and to apply whatever we had learned in this course. 1. 2 Introduction to Business Chosen Looking at the recent entries makes Karachi look like a food city. Another addition to this chain of restaurants would be ‘Hot n Spicy’, a partnership business which started off around 9 years ago and has grown to be the success story that it is today. It employs around 300 employees in total.

With three branches in areas like Khayaban-e-Shamsheer and Khayaban-e-Rahat, Hot and Spicy has become a famous breakfast spot for most of the people around, especially students, who can afford the place any given day. The variety of flavors is endless. From’ chicken cheese’ to ‘garlic mayo’ to ‘malai chatni’, their variety in rolls is endless. Hot and Spicy has around 45 different kinds of rolls on their menu. The place is usually jam-packed with people of all almost all ages most of the time. It’s open till late in the night which adds to its competitive advantage.

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All in all, Hot n Spicy is your place to be at if you’re looking for some scrumptious breakfast, lunch or dinner. Broad Potential Market Families and Teenagers going out on outings, People who come to have something to eat during their breaks from work. Its customers will also include the customers of the nearby Huqa Bars who order for Hot n Spicy’s rolls while having their shisha. Some School Children also stop by after their school timings to have something to eat. People who want to have get-togethers, Parties and office meetings use their home delivery service.

Characteristics of Typical Customers ??? Medium to High Disposable income. ??? Male or Female ??? Teenagers, Office Workers, Families that go out on outings. ??? People that can take out time for such recreation. ??? People who order on occasions such as parties, anniversaries etc. Customer Profile Teenagers, office workers and families who enjoy having outings or prefer light snacks or different cuisines during work breaks. They will require: ??? Food that is tasty and of good quality ??? A customer friendly environment ??? Value for their money Good seating arrangements and a hall for Get-togethers, Parties, Birthdays and office meetings Broad Potential Market Families and Teenagers going out on outings, People who come to have something to eat during their breaks from work. Its customers will also include the customers of the nearby Huqa Bars who order for Hot n Spicy’s rolls while having their shisha. Some School Children also stop by after their school timings to have something to eat. People who want to have get-togethers, Parties and office meetings use their home delivery service. Characteristics of Typical Customers Medium to High Disposable income. ???Male or Female ???Teenagers, Office Workers, Families that go out on outings. ???People that can take out time for such recreation. ???People who order on occasions such as parties, anniversaries etc. Customer Profile Teenagers, office workers and families who enjoy having outings or prefer light snacks or different cuisines during work breaks. They will require: ???Food that is tasty and of good quality ???A customer friendly environment ???Value for their money ???Good seating arrangements and a hall for Get-togethers, Parties, Birthdays and office meetings

Why was this business chosen? I chose this business because it was a challenging task to understand the dynamics involved and because I wanted to identify and understand the role different marketing strategies have played in its success. 2 Macro Environment of Business 2. 1 Political Environment Political factors such as political instability can have a huge effect on the business. In a country like Pakistan any political turmoil leads to many riots and strikes, which means that the restaurant then cannot be opened on that day or a few days for that matter.

Shops closing down or shortages created because of this cause problems such as higher prices that the shopkeepers may then charge. Government policies on where the business can be opened, expand, the incentives that it may give are all important factors for a business such as a restaurant. The business may not always be able to open up its branch where it wants to due to some policy that may not allow any restaurants being allowed in that area. The amount of tax levied on the business will determine the retained profit a restaurant may be able to hold for further expansion on any other investment. . 2 Economic Environment Economic factors include Inflation rates and GDP trends. Inflation has caused the prices of commodities like rice, onions, potatoes, pulse gram, sugar, wheat flour, beverages, gram whole, fresh fruits, cereals, wheat, readymade food, spices, mustard oil, vegetable ghee, pulse mash, milk products, milk powder etc to rise. The business in order to keep its margin will charge more for their offerings. This may lead to a loss of existing and potential consumers. Also changes in prices will mean altering menus all the time and this is known as menu costs.

In times of recession Unemployment rises and therefore people will have less to spend and may avoid eating out. Unemployment levels will not only determine the potential customers but will also influence the wage the business pays to its employees. The increase in minimum wage will increase the costs of the business. The General Sales Tax (GST) has increased to 16 percent from 15 percent, further adding to the costs of supplies and packaging. Taxation policies set by the government influence spending patterns.

The availability and cost of energy is an important factor in the establishment and growth the business. 2. 3 Legal Environment Different kinds of laws will affect the business in different ways. There may be certain laws on hiring and firing an employee. Employee safety and environmental laws will not only have an impact on the costs of a business it will also affect the kind of people who come to eat as well as the employees who will want to work there. Then there are Food Quality laws, these are perhaps the most important laws affecting a restaurant.

The food may have to be of quality of a certain standard and should not be in any way dangerous to the customers. Laws will also affect how clean and healthy the restaurant environment is. Laws will also affect the timings of the restaurant. 2. 4 Socio-cultural Environment Customer satisfaction and the environment the restaurant provides counts. When customers enter they want to feel welcomed and that the staff is friendly. This is also important when marketing because the business may want to attract a certain psychographic segment of the populous.

You want to accommodate your specific target market by making sure that their needs coincide with what you have to offer and how they perceive it. Hindus will avoid beef rolls, vegetarians will have to be catered to using rolls of a different kind e. g rolls with vegetable filling. Hot n Spicy’s target market includes people who love eating out and this is an important factor that has to be kept in mind. 2. 5 Technological Environment Softwares for accounting and inventory management are not used by Hot n Spicy and this could be a major disadvantage. . 6 Power of Supplier All purchasing of supplies such as flour, chicken, milk vegetables is done from local suppliers in the market. There are a large number of suppliers with similar products. Therefore competition is low because substitute suppliers are available. Hot n Spicy benefits from purchasing economies of scale as purchases are made in large quantities and due to this they receive discounts. 2. 7 Power of Customer There are a large number of customers who are more concerned about the quality of offerings, variety and customer service.

Many of its customers are loyal to Hot n Spicy even though Hot n Spicy’s products are relatively more expensive than those of its competitors such as Red Apple, Milano etc. Even then the power of the customer cannot be overlooked as they can easily leave Hot n Spicy and go to any one of its numerous competitors. 2. 8 Threat of Substitutes Red Apple, Milano, EatOn, Roll Inn all offer rolls that are similar in taste and in their contents to most of the rolls offered by Hot n Spicy. But Hot n Spicy has a competitive advantage when it comes to variety.

They offer more than 45 kinds of rolls and different cuisines such as Arabic, Chinese, Pakistani and Indian etc. Therefore the threat of substitutes is low. 2. 9 Threat of new Entrants There are relatively few if any barriers to entry and exit. But unless and until new entrants can offer better quality, more efficient service, better and quicker home and office deliveries and more variety it is highly unlikely that their entry into the market would affect Hot n Spicy greatly. 2. 10 Rivalry amongst existing firms Numerous competitors like Red Apple, Roll Inn, EatOn, Milano etc.

Their tactics have been to offer prices lower than that of Hot n Spicy and try and match the quality of Hot n Spicy’s products . Competitors like Red Apple existed before Hot n Spicy entered the market. The competitors cater to the same target market but Hot n Spicy has managed to build customer loyalty and has been able to even increase its market share in the past few years. * Refer to Porter’s five forces diagram (Appendix A). 3 Microenvironment of Business Introduction Hot n Spicy follows the market leadership strategy as it has the largest market share amongst its competitors.

It has set prices higher than what its competitors offer but with its focus being on quality and as its customers believe that they are getting value for their money Hot n Spicy has continued to increase its customer base. 3. 1 Product 3. 1. 1 Product Offered ??? Amongst the products that Hot n Spicy offers are over 45 different kinds of rolls, Bar BQ, Sea Food , Tandoor, Indian foods, Arabic foods, Chinese foods, Pakistani foods, Fast Food, , Fresh juices , Milk Shakes, Ice creams, Coffees and other beverages . 3. 1. 2 Branding and Image They have no brands as such nor do they have any copyrights. 3. 2 Price ??? Pricing strategies are a combination of Market skimming strategy and image pricing. ??? As market leaders focusing on quality and the customer getting their value for money they can afford to follow these policies. No fixed mark-up is used. Their prices are relatively higher than those of their competitors. 3. 3 Placement ??? No intermediary is involved. Hot n spicy caters to its customers directly through dine in, take away and a free home and office delivery service. 3. 4 Promotion 3. 4. 1 Advertising Advertisements in Dawn were used in the beginning but they have stopped those advertising now. ??? Their menus, contact numbers and other information such as new products are available on their website… http://www. hot-nspicy. com 3. 4. 2 Public Relations Public Relations is the most important promotional tool that Hot n Spicy uses. ??? Hot n Spicy’s efficient customer service and the quality of its products ensure a satisfied customer. Word of mouth communications between satisfied customers thus ensures repeat as well as referral business. 3. 4. 3 Sales Promotion Hot n Spicy puts up its stalls in University and school Melas and Concerts as well as participating in trade fairs. 3. 5 People People People are the most important element of any service or experience. This can make or taint the image of a business. Our Chefs have been trained to produce high quality food and our friendly waiters have been trained to be efficient so that the orders aren’t mixed up or valuable time of the customer is not wasted. Even the person who takes orders for home deliveries has been trained to answer in a friendly manner and to manage large orders efficiently.

Customer service is paid much attention to. People People are the most important element of any service or experience. This can make or taint the image of a business. Our Chefs have been trained to produce high quality food and our friendly waiters have been trained to be efficient so that the orders aren’t mixed up or valuable time of the customer is not wasted. Even the person who takes orders for home deliveries has been trained to answer in a friendly manner and to manage large orders efficiently. Customer service is paid much attention to. People

People are the most important element of any service or experience. This can make or taint the image of a business. Our Chefs have been trained to produce high quality food and our friendly waiters have been trained to be efficient so that the orders aren’t mixed up or valuable time of the customer is not wasted. Even the person who takes orders for home deliveries has been trained to answer in a friendly manner and to manage large orders efficiently. Customer service is paid much attention to. ??? People are the most important element of any service or experience. This can make or taint the image of a business.

The Chefs at Hot n Spicy have been trained to produce high quality food and its friendly waiters have been trained to be efficient so that the orders aren’t mixed up or valuable time of the customer is not wasted. ??? Even the person who takes orders for home deliveries has been trained to answer in a friendly manner and to manage large orders efficiently. ??? Customer service is paid much attention to. 3. 6 Physical Evidence ??? The three restaurants promote an image of quality and the waiters are all dressed in Hot n Spicy uniforms which add to the professionalism that Hot n Spicy promotes. Seating arrangements, Cleanliness and quality have always been given importance at Hot n Spicy. 3. 7 Process ??? Hot n Spicy makes it a point that orders do reach on time when delivering to homes as well as the orders taken at the restaurant. ??? Quality control is a feature at Hot n spicy which ensures that the process is completed on time and the end result is a product of high quality. ??? The efficient customer service that follows is just another feature that adds to the Process part of the marketing mix that Hot n Spicy wishes to follow. 4 Analysis . 1 SWOT Analysis 4. 1. 1 Strengths ??? Hot n Spicy offer a huge variety of different kinds of rolls. They have over 45 different kinds of them. Unlike any other competitor they have in Karachi. ??? The chutney that they serve with the rolls is very delicious and very famous especially amongst teenagers. Many of its customers find the chutney so good that they refuse to go to any other roll joint just because they like their rolls with that particular chutney. ??? People, who are health conscious, can have their rolls in chappatis instead of parathas. Seating arrangements in a fully air conditioned hall for families, get together, birthdays and business meetings. ??? Free delivery service for homes and offices. Orders reach within 45 minutes. ??? Cuisines offered include Chinese, Arabic and Indian. Sea food BBQ, juices, ice cream, cold coffee, shakes, pinacoladas are also served. ??? It’s at an almost ideal location. There is a lot of rush in Khadda market and people stop to have something light during shopping etc. ??? The prices are reasonable and the quality is good too. ??? Friendly and experienced food service team. ??? Hot n Spicy has a lot of experience under its belt.

This gives it an edge over some of its competitors. ??? They have three branches. Recently, they placed a stall outside Forum. 4. 1. 2 Weaknesses ??? Hot n Spicy take more time to prepare customer orders than many of its competitors. ??? They do not advertise and rely only on word of mouth as their main promotion tool. ??? No kids playing area. ??? No non-smoking area. ??? Parking issues ??? The menu has a lot of errors and this promotes a negative image to the educated populous. 4. 1. 3 Opportunities ??? Spending patterns and eating habits of the teenagers of Karachi are changing.

They now spend more on eating out ??? There are Tuition centers, schools, offices in the vicinity. ??? A reasonably large portion of the populous is vegetarian. 4. 1. 4 Threats ??? The management of the DA Zamzama Club claims that Hot n’ Spicy, the restaurant situated beside the club, has encroached upon the club’s premises. ??? Competition from Roll joints such as Red apple, Milano, Roll Inn, A-One snacks etc. ??? Certain items they offer are prone to seasonal demand. ??? The rise and fluctuations in the price of petrol affects the cost of delivery. ??? Continuous Load shedding may damage supplies. Rising Health consciousness in the population of Karachi may mean loss of customers. ??? Rumors can greatly affect the demand for this business’s products. Two years ago there was a rumor that two teenagers got sick and then died after having a few rolls from Hot n Spicy. This did affect the business until it was proven that the rumor was a lie. ??? Increase in the prices of food items such as wheat flour, chicken, sugar, rice etc. All have a great impact on the business. If the business passes on this increase to the customers in the form of a price rise, they may loose customers. . 2 Recommended Strategies from TOWS Matrix SO – Strength and Opportunities- “Maxi-Maxi” Strategy ??? They have the capital required to open up new branches so that they can cater to the potential customers who find the other branches inaccessible. ??? They can cater to potential customers who are vegetarian by introducing vegetable dishes. ??? Building a kid’s playing area and a non-smoker zone. ST – Strength and Threats-“Maxi-Mini” Strategy ??? As the business reaps huge profits it may be able to absorb some of the increase in costs and not pass it on to the consumer.

This should only be done after analyzing is done on the effect on quantity demanded following the increase in price. ??? Adding further variety and improving more on quality may mean that it is able to thwart most of the competition. ??? Rolls served in rotis to the people who are more health conscious. ??? Purchasing generators to minimize the losses due to load shedding. Increase in petrol prices must be kept in mind. WO- Weaknesses and Opportunities-“Mini-Maxi” Strategy ??? If new branches are opened a kid’s playing area and a non-smokers section can be introduced WT- Weaknesses and Threats- Mini-Mini” Strategy Training chefs and waiters to be more efficient will reduce the time taken to deliver a customers order which will also give them yet another competitive advantage. ??? Advertising through mediums like radio, television and local newspapers unlike their competitors who do not advertise. Appendix A [pic] [pic] [pic] [pic] [pic] [pic] Marketing Report Submitted to: Miss Wajeeha Javed Submitted By: Sennen Desouza ———————– Competition: Red Apple Milano Roll Inn etc Threat of new competitors: Not a major threat Negotiating potential of customers: Moderate Threat of alternate products: Moderate Negotiating potential of suppliers: Low

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