This is all about the plan we already did the team charter and proposal Khanna, Zach Parker Team Southeast MRKT 1199 S10 1. Market and Company Description Over the past few years, the Canadian food industry has expanded despite changing consumer tastes. In 2014 “4% of national gross domestic product stands for Canadian foodservice industry and in 2015 they are expected to go up by 4% to $74.1 billion” (Khediguian, 2015, p.7). Canadian food industry is divided into two parts Commercial and noncommercial industry. Commercial contains full service restaurants (FSR) and Quick service restaurants (QSR). Canada’s commercial foodservice industry grew by 2,343 units (2.6%) in 2014. Some of the major segments of foodservice industry are FSR and QSR. The number of FSRs grew by 3.8% in 2014 while real sales per unit dropped by 1.3% resulting in real sales growth of 2.5%. In contrast, the number of QSRs grew by 1.7% and sales per unit grew by 2.1%, resulting in sales growth of 3.8%” (Khediguian, 2015, p.10). QSRs are growing faster as compared any other segments. QSR has grown 18% real sales than in 2007 and are continue to grow (Khediguian, 2015, p.10). In 2007, the real sales of QSR was 100 and in 2014 it Increased to 118. 2. Macro-market forces/ Marketing Environment Marketing is an organizational function and a set of processes for creating communication and delivering values to customers. It is also used for managing customer relationships that benefits the organization and stakeholders. There are many forces which affect the market such as micro forces and macro forces. The basic macro forces that affect any organization are: Demographic forces: Demography is the study of human populations in terms of size, density, location, age, sex, race, occupation and other statistics (Kotler, et al, 2004). Demographics are important to marketers as it involves the study of people, and people that make up the market. Political and legal factors: Even in stable countries with no political unrest, political trends may have a significant impact on business (Jain, 2004.) Although Canada is a politically stable country, there are conditions that affect the fast food industry operations. Social and cultural factors: The cultural environment is composed of institutions and other forces that effects a society’s basic values, perceptions, preferences, and behaviours (Kotler, et al, 2004). The cultural forces that are at play in our environment are as follows (Kotler, et al, 2004): it totally depends on the population of a country such as in India the social and cultural believes don’t allow people to eat beef, pork majority of the people are Indian’s so it depend what is the location and what is being served. Technological factors: Nowadays it is a period of innovation and technological change. Education is the supporting factor which brings the change in the technology and the business today. There is a fast pace change in the technological sector for example at A&W they store customers name and in some places the customer’s name and phone number in their records. With the rapid change in choices of people, companies like burger king, McDonald’s, Pizza Hut etc. are conducting surveys to know more about the choices of people and the understand the menus and customer service accordingly to the market. Natural and physical factors: The natural environment is the main focus for critics. People are now more concerned about the global environment. Marketers need to be aware of the threats and opportunities associated with the natural environment (Kotler, 2000). Natural forces affecting market industry are as follows – shortage of raw material, energy cost, increased populations and government interventions. 3. Microenvironment: Value Chain/ Business model In the Quick Service Industry, there are multiple suppliers for beef, soft drinks, etc. Beef suppliers include the likes of: “Canadian Angus Association, Lilydale Inc., Lucerne Foods, Sysco Canada, Maple Leaf Foods Inc., Schneider Foods” (Canada), among many others. Soft drink suppliers in the QSR industry include: Nanton Water and Soda Company, O2Canada Water Inc., Coleman Associates Consulting Limited, Jones Soda Co., Leading Brands of Canada Inc., Leading Brands, Inc., Clarus Canadian Springs, Cott Corporation, Pepsi-Cola Canada Ltd., Puresource Inc., SMART (fx), FarmPure Family of Companies. (Canada, Government of, 2015) There were many discoveries about competition, strengths, and weaknesses in the QSR industry. FsSTRATEGY found that the top growing categories include: “Midscale Diner, QSR Other Ethnic, Casual Spanish, Yogurt, Midscale Barbeque.” They were also able to find the top declining categories in the industry, which are: “Hot Dog, Ice Cream, Bakery/Sandwich, Biscuit/Bun, Cafeteria”. The Top 3 growing chains in Canada’s QSR industry include: “Starbucks, Tim Hortons, Thai Express.” “Canada’s food service industry will grow by less than 1% over the next 5 years. A modest rate that signals an era of more intense competition.” “The foodservice sub-sector had sales of about $45 billion in 2005. The majority of sales (78%) comes from commercial establishments including full service restaurants (for example, Swiss Chalet, Eastside Mario’s, etc.) and quick/counter-service restaurants (for example, McDonald’s, Burger King, etc.).” 4. Consumers Quick Service Restaurants try to target the biggest generations. Currently the biggest generation would be the millennials. Millennials encompass “22% of the population” (Oches, 2012) Being such a large portion, their opinions towards food matters greatly. If all millennials boycotted eating at fast food places, it would not be surprising that many franchises would fail. Many of these franchises have opted to advertise more variety in their menus in order to become more appealing to certain crowds. “To appeal to millennials, McDonald’s overloaded its menu with premium smoothies, gourmet sandwiches, and creative salads.” (Lutz, 2015) Overlooking that millennials are such a large generation, what motivates them to dining out? “… thanks to digital and social tools like Facebook, …photo[s] can now be seen far and wide. [Our] power to influence others is exponentially higher today than it would have been in the past.” (Fromm et al., 2013, p.8) Of course there is plenty of people that do not wish to buy fast food at all especially after the acclaimed documentary “Supersize Me” came out with pretty frightening evidence of what happens to the body if one indulges far too much on Fast Food. Losing your body that badly is very daunting and many people would wish to forgo that and just not eat from fast food locations. This is a huge opportunity for the Quick Service Foods Industry. Should they continue to serve unhealthy food, they’d miss out on a huge chunk of the population as a target market. This can be seen in some extent by this: “Also in April, Tyson Foods revealed plans to stop using human antibiotics in its chickens by the end of September 2017. This follows a statement in March from McDonald’s (a Tyson customer) that said it was “committing to use chicken that is not raised with antibiotics important to human medicine.” In other words, Tyson will continue to use antibiotics — but only ones that “aren’t medically important for humans.” It’s a step, though!” (Boscamp, 2015) By creating the image that the food is healthier than before, the target market being the consumers of healthier food may venture into buying fast food. The kind of research to be done to improve this market requires to identify important characteristics and mindsets. Is the location of the restaurant easy to access? Are the staff well trained and friendly with the customers? Are the customers being coerced into buying this food or are they more interested in a different ethnicity of food? Should we change our menu? Should we make it more affordable for the customer as to draw them in more often? Many companies survey their clients with such questions. It brings them a better image of what management can do to improve their relationship with the customers as well as finding new ones. “[G]enerational cohorts are often used by marketers. Millennials are often targeted by marketers.” (Grewal et. al, 2015, p. 172) So surveying their opinion is key to being successful in the market regardless of what you are offering in the service industry. 5. Assessment This market is a gamble to get into. People, mostly millennials, are concerned whether the food is healthy, and how cheap it is. There are many cheap unhealthy places that are trying to make a healthier menu to appeal to everyone. A&W, McDonalds, and Subway are examples of QSR starting to do this. In order to be successful in the QSR market one must create a restaurant, or a chain of restaurants, that are cheap, healthy, and the target audience is Millennials (the biggest demographic.) But since, McDonalds, and other QSRs are so popular there is almost no room to create a new chain. The newest, and one of the most popular chains are Firehouse Subs, created in 1994(The Top 20 Fast-Food Franchises of 2016, Number 20.) That’s 22 years old. In order to be successful in this market, you have to be invested in it for the long
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