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Marketing Principles Assessment 2 - Business Report ...

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MKTG 1199 - Marketing Principles Brand / Product

PEZZO / IMPOSSIBLE PIZZA

Prepared By : -Ong Che Kang Benjamin S3809412 -Dzulsaibawi Bin Ishak S3771903 -Markus Xaander Cheung S3812162 -Lin Lin @ Ei Ngone Phoo S3809222 -Pyae Phyo May S3812159

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Executive Summary Pezzo is a Singapore-based F&B serving pizza by the slice. Incorporated in 2012, Pezzo has grown into the largest homegrown pizza chain operator in Singapore by introducing the concept of Pizza By the slice concept through kiosks located in various shopping malls. Starting from a single stall in Ion Orchard back in 2012, Pezzo now has 32 outlets in Singapore islandwide and already expanded internationally across 7 countries – Cambodia, China, Indonesia, Malaysia, Myanmar, Philippines and Saudi Arabia. In the first portion of this Marketing report, team will analyze on the environment trends that affecting company in the marketplace, SWOT Analysis of competitors, Segmentation and identifying on buyer’s behavior. In the second portion, reviewing on current company marketing strategies such as 4Ps (Product, Price, Place and Promotion) and analyzing on challenges and strategies which can enhance company progress using SWOT analysis. The last portion of the report will focus on discussion on what are the target segment, how to promote the products to customers, and improvements on Pezzo’s current marketing strategies. The main purpose of this report is to help the company to increase sales and create superior value to their customers by delivering new product which is plant-based meat pizza -gluten – free, vegan friendly pizza called “ Impossible Pizza”.

Table of Contents 1. Company Mission ….…………………………………………………………………4

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2. Company Objectives ……………………………………………………………….. 4 3. Market Overview …………………………………………………………………….. 4 3.1 Market Size and Growth ……………………………………………………….... 5 3.2 Market Trends ………………………………………………………………..…... 5 3.3 Demographic ……………………………………………………………………... 5 3.4 Economic …………………………………………………………………………. 5 3.5 Cultural and Social ……………………………………………………………..... 6 3.6 Political / Legal …………………………………………………………………... 6 4. Competitors’ Analysis …………………………………………………………….... 6 4.1 SWOT Analysis on Pizza Hut …………………………………………………. 6 4.1a Strength …………………………………….……………………………………. 6 4.1b Weakness …………………………….…………………………………………. 7 4.2 SWOT Analysis on Dominos …………………………………………………. 7 4.2a Strength ……………………………………………………………………….…. 7 4.2b Weakness …………………………………………………………….…………. 7 5. Segmentation Analysis ……………………………………………………………7-8 6. Buyer’s Behaviour ………………………………………………………………….. 9 7. Internal Analysis ……………………………………………………………………. 9 7.1 SWOT Analysis on Pezzo…..…………………………………………………..9 7.1a Strength …………………………………………………………………………..9 7.1b Weakness …………………………………………………………….…………10 7.1c Opportunity …………………………………………………………….………..10 7.1d Threat …………………………………………………………………………....10 7.2 Product……………………………………………………………………………10 7.3 Price ………………………………………………………………………………11 7.4 Place ……………………………………………………………………………...11 7.5 Promotion ……………………………………………………………………….12 8. Marketing Objectives (SMART) …………………………………………………..12 9. Market Positioning …………..…………………………………………………..…13 9.1 Desired positioning ……………………………………………………………...13 10. Target Market ………………………………………………………………………..14 11. Strategies Using 4ps……………………………………………………………….14 11.1 Product...………………………………………………………………………...14 11.2 Price...…………………………………………………………………………....15 11.3 Promotion………………………………………………………………………...15 11.4 Place ……………………………………………………………………………..16 12. Conclusion …………………………………………………………………………..17 13. Reference …………………………………………………………………….……..17 14. Credentials ………………………………………………………………………….17

1.

Company Mission

To become the leading expert is kiosk food management through growing our brand profitabaly

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2.

Company Objectives

Pezzo Group aims to continuously grow through partnering with various brands and expand internationally.

3.

Market Overview

In this saturated food and beverage market, companies are always trying to stay on top by growing their sales. Pezzo is no exception to that, larger companies such as Pizza Hut and Domino's Pizza being the direct competitors of Pezzo in the market. Our team has surveyed sample size of 45 people on their most preferred pizza brand, 11.11% of people choose Pezzo whereas 44.44% of people go for Domino’s(the most preferred brand in the market) and 31.11% for Pizza Hut.

3.1 Market Size and growth Based on the estimated number of pizza consumers and number of stores opened, Pezzo is taking place 9% of market share in pizza industry.

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3.2. Market Trends Due to busy lifestyles in Singapore, people opt for to-go food or fast food rather than queuing at the restaurants or Hawkers centers. There are micro and macro environmental trends we should be aware of which are impacting on this fast food industry. 3.3. Demographic According to Nielsen research in 2018 Aug, 44% of Singaporeans have purchased online deliveries or take away rather than eating at home. Changes in family sizes and standard of living also impact pizza industry in Singapore. Due to increase in population and lack of time to prepare own meals for working adults in Singapore, Pizza consumption is expected to increase in the future. 3.4. Economic Macro Environment factors such as exchange rates & stability of host country currency, labor cost, consumers’ income and consumer spending patterns are the main factors impacting the economy. As Pezzo is operating in food- kiosks in the mall and the amount of labor required is lesser compared to other fully operated pizza restaurants in the markets. 3.5. Cultural and Social As Pezzo has successfully expanded their market in Malaysia, Philippines, Myanmar,Cambodia, Thailand, China, even across Saudi Arabia, it is critical to know the cultures and religious value across different regions. Marketing strategies need to practice accordingly based on cross

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cultural differences and customer behavior in different regions. Approaching cause related marketing and being socially responsible is also can increase brand awareness and create additional value for their customers.In 2016, Pezzo has come out with Club rainbow Pizza to inspire positive societal changes, bringing colours and hope to a child’s life. 3.6. Political / Legal Since Pezzo Pizza chain is growing internationally, it is compulsory to be aware of each country’s economy and political stability, pricing regulation and taxation, laws and government policies. In order to understand and overcome the challenges, Pezzo need to get a good partnership in overseas markets.

4.

Competitors’ Analysis

First and foremost, to analyse the threat Pezzo faced by its direct competitors, SWOT analysis will be conducted to analyse the competitors’ strengths and weaknesses. This will give a clearer picture of the present threats. Pezzos’ main Competitors are Pizza Hut and Dominos. 4.1 SWOT Analysis on Pizza Hut 4.1a Strengths With the longest history among all Pizza’s company in Singapore since 1981, Pizza Hut has a premium positioning in the customer's mind with seventy-seven outlets island wide. Due to it having an early start in Singapore, Pizza Hut has been a popular brand known to most Singaporean especially during their childhood. It is a popular outlet where families gather for celebration while enjoying their wide range of hot and fresh pizzas. It has frequent promotions while creating unique flavours to suit certain occasions which enables them to stand out. Having an efficient delivery service while ensuring the pizzas are hot upon receiving it, Pizza Hut has created a strong branding while fulfilling their promises to Singaporeans whenever they need a craving for pizza.

4.1b Weaknesses As Pizza Hut expands, ensuring franchise management and service quality is top is a huge challenge. In addition, consumers have more choices as compared to the past. The market is saturated and market share in Singapore is limited. In terms of the choices provided by the

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direct competitors and indirect competitors of Pizza Hut, consumers are spoilt for choices to cater to their ever changing needs which further dilute Pizza Hut market share. 4.2 SWOT Analysis on Domino’s Pizza 4.2a Strengths With 50 years in the industry, Domino’s Pizza are relatively wellknown in the world. Though Domino started in year 2009 in Singapore,it has expanded to 33 outlets quickly. Dominos are known for its good quality food and efficient deliveries. With an efficient supply chain, coupled with strong aggressive marketing campaign, Dominos lived up to its promises to its customers where they provide delicious, piping hot food within 30 minutes. 4.2b Weaknesses Due to a rise in Singaporeans being more health conscious, Singaporeans are looking for healthier alternatives. As a result, Domino’s Pizza is facing lower sales which results in a lower revenue. Additionally, some outlets are catered for dining in while some are just an operating point for takeaways and deliveries. With this, managing the different outlets and ensuring the quality control and operation will have certain difficulties.

5.

Segmentation analysis

There are few target groups who prefer to have fast food and save time. In the segmentation table in which singles, married, students, office workers from high and middle-class family age ranges from 15-35 years. Pezzo Pizza is one of the popular choices from fast food market for this age ranged segment. Pezzo targets them in the market to maximize the sales to potential customers and achieve superior performance and competitive advantage of the company. When choosing the type of fast food, people usually look for those which are inexpensive, tasty, healthy, convenient, having a variety of choices. Below table indicates details about Pezzo’s current market segment.

Segment 1

Segment 2

Segment 3

Demographic

Teens/Young Adults

Adults

Family

Sex

Male or Female

Male or Female

Male or Female

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Age

15 - 24 years old

25 - 35 years old

35 years old and above

Marital Status

Single

Single or Married

Married

Education

Secondary or College

College or Degree

Secondary and above

Occupation

Students with or without part time job

Students with part time job or Full time job professionals

Full time job professionals

Annual Income

under $20,000

$20,000 to $30,000

$30,000 to 50,000

Psychographic

Teens/Young Adults

Adults

Family

Lifestyle

Dependent, Studying at school

Working part time of full time

Self-sufficient, Working full time

Personality

Active

Easygoing and careless

Sociability

Behavioral

Teens/Young Adults

Adults

Family

Benefits

Grab & Go Dine In

Save time and effort. Can get healthier meal by eating salad in the pizza

Affordable and value for the family

Influences

Influenced by advertisements and choices available

Influenced by easy and accessible locations

Are influenced by affordable prices

Occasion

Gathering and party

Socializing, Party and Entertaining

Family dining

Frequency of consumption

Occasional

Very Frequent

Regular

Size

20%

50%

30%

6.

Buyer behaviour

Buyers usually select which types of pizza offered by Pezzo in order to satisfy their needs and wants. According to Maslow’s Hierarchy of Needs, psychological needs is also important in customers’ decision-making process which includes motivation, perception, learning, beliefs and attitudes, etc. Pezzo offered healthier choice pizzas with reasonable prices for the customers based on their psychological needs and attracts customer’s attention.

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Buyers definitely go through five stages of decision-making processes which are considered in almost every purchase but for some routine purchases, they often skip some of them. As for Pezzo pizza, information search is not needed in purchase decision since it is the routine purchase. Those consumers from age ranges 15-25 years will not be hesitant to buy due to the prices and locations. People may compare the prices, choices of pizza availability and how reachable it would be and their decisions could be influenced by social media, advertisement, peers’ suggestions and the person’s himself experience with it. Most of the customers usually face with the cognitive dissonance after they purchased some products which the final stage of the decision-making process is. Some customers may face it or unable to satisfy after they have purchased from Pezzo and the reasons could be the taste, packaging and prices of the pizza slices. Customers will not repurchase or switch to other brands next time in this kind of circumstances and may suggest others not to go to purchase. Marketers need to understand the consumer behavior and able to persuade the customers that their decisions are right after the purchases in order to achieve their target sales.

7. Internal Analysis 7.1 SWOT Analysis on Pezzo 7.1a Strengths Pezzo as it is has a very distinctive unique selling proposition in comparative to existing competitions larger and older than them in the market. Through innovation, they were able to dominate the market for “Pizza for the go”. With that, they were able to make it accessible, fast and efficient without compromising taste & quality for consumers. Pizza’s natural size and shape is relatively huge. They are also expensive and inaccessible in most cases, reason being is, it can only be obtained through delivery or purchased in certain restaurant chains thus making it inconvenient. Pezzo’s aim is to solve that. By providing more choices and options to consumers, Pezzo tackled the market by implementing Kiosk, instead of full-sized restaurant as compared to its competition. As a result, they better manage labor costs and improve their workflow flexibility. This kiosk allowed them to have smaller format that are more processed driven and minimally staffed, with emphasis to lesser reliance on individual skills but higher produce quality products. Ultimately, their grab-and-go concept proves higher productivity and as well as possible innovation for other creative product within it. 7.1b Weakness Although the kiosk are advantage in the overall growth of the business, the downside of it is it’s limiting factors in terms of property. As their business revolves around kiosk, changing this

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model might affect the brand significantly in the future, thus closing multiple channels of growth in the long run. Since Pezzo is not an original concept, Expanding to other countries in which Pizza on the Go was conceptualized from, may see to Pezzo an impending path due to over saturation of the market. This will lead to losing market griphold and shares. 7.1c Opportunities Opportunities to consider that can help expand Pezzo’s presence in the current market is shelve life items which can be implemented in Supermarkets. Pezzo’s signature pizza can be sold in the market to create more reach within the market, this allows them to explore new channels of revenue outside of their Kiosk. Co-branding with other manufacturers and brand franchising may be an option to be considered as well. Expanding its operation to regional market and neighboring countries is also possible 7.1d Threat Because it's not a new concept, certain markets are harder to penetrate. Competition can implement similar strategies as well as its easily copied and implementable. Competition with more resources and capacity and easily follow certain strategies that Pezzo implements unless Pezzo comes out with a unique & innovative approach that is sustainable and accessible only by them. 7.2 Product Modeling itself as a food kiosk rather than a restaurant, Pezzo maintains a relatively simple product mix. With the core product being Pizza, Pezzo relies heavily on product line filling and line stretching. With Pizza being it’s core product, Pezzo fills the product line by introducing over 10 different flavours of pizza, with the common classics being Pepperoni and Hawaiian flavoured. From time to time, Pezzo also introduces seasonal flavours such as Durian and Satay flavoured pizzas. The toppings are separated into 2 different categories, the ‘Classic’ range and the ‘Gourmet’ range. The toppings will be defined based on the seasonality and cost of production of the product. This is Pezzo’s attempt of stretching it’s product line. With 2 different range, Pezzo is able to able to add prestige in their products while maintaining it’s margin. To complement it’s core product, Pezzo introduces additional products into its mix. To be in line with its positioning as a fast-food kiosk, simple and quick product such as Chicken Drumlets, Chicken Wings, Cheese Sticks and Canned Drinks are introduced alongside the Pizza. This gives the consumer a wider variety, in turn increase revenue for the company.

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7.3 Price By selling the Pizza in slices, Pezzo is able to maintain a low price for their products. The ‘Classic’ range comes at $4.90 per slice, while the ‘Gourmet’ range comes at $5.90. Pezzo also practice product bundle pricing, it encourages consumers to buy in volume by providing bulk discounts. For example, Buying 3 slices in the ‘Classic’ ranges costs $13.90, which comes at $4.63 per slice instead of the original price of $4.90 per slice. On another tier, buying 6 slices in the ‘Classic’ only amounts to $24.90, which equates to $4.15 per slice. As there are many flavours in the range, Pezzo allows the customer to mix and match different flavours rather than sticking to just one. Another method is via bundle purchases. Pezzo groups different products such as Pizzas, Breadsticks and Canned drinks into one combination. These combinations are offered at a lower price compared to buying individually to entice the consumer to purchase together. 7.4 Place By positioning themselves as a Food Kiosks rather than a Restaurant, Pezzo is able to minimize on it’s space and service crew needed. This allows Pezzo to operate in a smaller area, allowing them to expand quickly. Pezzo establishes itself in popular areas such as shopping centers in ION Orchard. These places are usually more expensive to operate in. However, Pezzo is able to mitigate these costs by using less manpower and crew. This is the competitive advantage that Pezzo has over traditional Pizza restaurants, as restaurants require a bigger area to operate in which in turn leading to a higher operational costs. Being in popular shopping centers also allows Pezzo to enjoy a higher foot traffic, granting them the ability to increase brand awareness and customer loyalty quicker than its competitors. 7.5 Promotion Pezzo centers it’s marketing around their core product, Pizzas. Their main marketing strategy is to increase brand awareness. Pezzo leverages on digital channels like Facebook & Instagram, pushing out content such as product highlights, tactical promotions or discounts. It also uses the different platforms to connect directly with consumers. Pezzo also partners up with external food delivery services such as Foodpanda. By tying in with Foodpanda, it allows Pezzo to tap into Foodpanda’s customer base alongside their own. This gives them the opportunity to serve and market to more people, increasing ...