INTRODUCTION The company I have chosen to base my assignment on is Taco Bell. It is a leading Mexican style fast-food chain serving tacos, burritos, signature quesadillas, Border Bowls®, nachos and other specialty items. Currently, Taco Bell serves more than 35million consumers each week in approximately 5,600 restaurants in the United States of America. It is recognized as the best Mexican fast-food chains in the United States of America (Yum! Brands, 2010). This fast-food chain plans on introducing its products in Malaysia. MARKETING ANALYSIS (SWOT)
Strengths. Strengths refer to core competencies and positive attributes that give Taco Bell an advantage in meeting the needs of its consumers. The strength of Taco Bell is when it switched to zero trans-fat frying oil in all of its outlets which is a key competitive advantage of the company over other competitors who has not yet switched to the healthier option. Trans-fat is an unsaturated fatty acid produced by the partial hydrogenation of vegetable oils and present in hardened vegetable oils, most margarines, commercial baked foods, and many fried foods.
An excess of these fats in the diet is thought to raise the cholesterol level in the bloodstream which increases the risk of heart diseases such as heart attacks. This is a major advantage as Malaysians are becoming more health conscious and implementing zero trans-fat frying oil ensures a healthier fast-food experience (Algoe, 2010). Besides that, Taco Bell also has the advantage of being a fast-food outlet which offers cheap prices for its products with out compromising the quality. Taco Bell currently offers a $2 set meal which consists of a burrito, a packet of Doritos chips and a medium soda.
The $2 set meal converted into Malaysian currency would be about rm6. 34 which is cheap and is a advantage as there are many fast food outlets in Malaysia competing for the cheapest price. Furthermore, considering the fact that Taco Bell comes to Penang, it will be the cheapest Mexican style fast-food outlet (Taco Bell, 2010). Weaknesses. Weaknesses refer to any limitations that Taco Bell outlets faces in developing or implementing a strategy. Weaknesses of Taco Bell from a customer’s perspective would be the damaged reputation that it holds.
Taco Bell suffered a number of losses and lost its goodwill when in November 2006, twenty two of its customers were hospitalized due to traces of E. coli bacteria which cause can cause severe food poisoning, gastroenteritis, urinary tract infections, and neonatal meningitis ( NBC, 2006). Likewise in February 2007, Taco Bell Manhattan was reported to have rodents. The whole scenario was made public as footage of the rodents scurrying about was shown on news shows around the world which lead to the closure of a number or Taco Bell’s outlets throughout the United States ( Barros, 2009).
Besides that, in March 2005, Taco Bell faced huge protest from its workers specially when Coalition of Immokalee Workers(CIW) boycott the Taco Bell for human rights (Food First, 2009). In 1998 a lawsuit was filed against Taco Bell when it failed to pay payments to Joseph Shields and Thomas Rinks who have worked with the company in the marketing department. The men were paid a heavy compensation of about $30. 1 million plus about $12million additional interests (Howard, 2003). Most Malaysians would be aware of the damaged reputation Taco Bell holds and is a major disadvantage to them.
Opportunities. Opportunities assess the external attractive factors that represent the reason for Taco Bell to exist. There exists extensive opportunities for Taco Bell to expand in Malaysia due to the fact that there are not many Mexican style fast-food outlets which offers “drive-thru” products and a cheap price. Thus, this will be a great opportunity for them to expand their fast-food chain in Malaysia. Moreover, Taco Bell should introduce more health friendly ingredients and recipes in their menus to take advantage of the ever growing health-savvy community.
By catering to this community, they would not only gain more revenue but also divert the people’s attention away from their damaged reputation (Taco Bell, 2010). Threats. The threats include external factors that could put Taco Bell’s business at risk. In Malaysia, the main threat rises from its competitor in the same market which is McDonalds. Taco Bell needs to be constantly revising their prices and menus in order to keep up with McDonald’s offers (Fujinaka, 1996).
Besides that, the new researches and the raised awareness among the publics about the harmful health impacts of fast food consumption is a threat to Taco Bell’s fast food menus. The ingredients such as sugar, oil and salt which are in the fast foods being offered, are thus consumed in low proportions by the aware and educated consumers (Taco Bell,2010). MARKETING SEGMENTATION In Malaysia, Taco Bell should cater to a well defined target market in order to market their product successfully. The major bases for segmentation are geographic, demographic, psychographic and behavioral.
The geographic positioning of any business is important in the success of a business. In Malaysia, Taco bell should be located in the heart of urban areas such at Kuala Lumpur or Georgetown where the population density is at its highest. Climate aspect of the location would not be an issue as the weather throughout Malaysia is considerably fine. In demographic segmentation, Taco Bell as a fast-food outlet should target mainly to teenagers and small kids as they are the ones who are either purchasing or influencing the purchases of fast-food items.
Besides that, under the psychographic segmentation, Taco Bell should target the middle class people as they make up most of the population in Malaysia. In addition, Taco Bell should aim its products at people with an active lifestyle as fast-foods contain high calories which are suitable for people with an active lifestyle. Lastly, in behavioral aspect of the segmentation, should concentrate on providing benefits for its consumers such as quality of service in its outlets, competitive pricing and convenience in terms of obtaining its products.
Furthermore, they ought to aim to increase loyalty status of their products as returning customers are better then to look for new customers (Charles, 2010). ACTION PLAN (BEFORE LAUNCHING) Product Before launching its product in Malaysia, Taco Bell should consider about improving its packaging as packaging is essential because it the container or wrapper of a product which present the image and first impressions of a product to the customers. The Packaging should be eye-catching and also convenient to be carried around.
Besides that, the packaging should be environmentally friendly and emphasizes on the safety of both the product and customer. Taco Bell should also maintain a high standard of quality in all its products by ensuring the ingredients for its meals are fresh and free from infections. Furthermore, Taco Bell must be aware of the diverse races of Malaysians by producing specific products during different festivals such as Deepavali, Chinese New Year and Hari Raya to attract customers (Kotler and Armstrong, 2010). Price Prior to launching, Taco Bell should adopt Cost–Plus Pricing method.
In this method, Taco Bell should add a standard markup to the cost of its products. By implementing this method, it creates a fair situation for both buyer and customers has they do not over price the products. Thus, Taco Bell would be able to attract more customers as they to would offer an attractive price for their products and remain competitive. As for the beginning of the business in Malaysia, Taco Bell would have to bear with the high cost in production and costs of advertising to create awareness for their product in a new market (Mifflin, 2006). Place
The location of a business is vital in determining its success as its play an important role in accessibility and getting products to customers. Taco Bell should set up its outlets at heavily populated areas yet easily accessible such as shopping malls. Shopping malls are strategic places to set up a Taco Bell outlet as it offers convenience for the customers to buy the product and also it is a place where is densely populated, thus creating higher sales. Besides that, the outlets must also be in close proximity to its suppliers so that the ingredients for its meals can be obtained easily and quickly (Kotler and Armstrong, 2010).
Promotion Marketing is the key element in creating product awareness for new product in the market. Thus, Taco Bell is strongly advised to do their marketing in a large scale to create brand awareness. Although it increases costs, but looking on the long-term effect, it would create total brand awareness at would eventually out paced its competitors. They can advertise through media such as television, radio, internet, newspapers and magazines. Television advertisements are the most effective advertising media as it is able to convey the message to all generation.
Thus, Taco Bell needs to create a attractive, enjoying, and eye-catching advertisement to draw the peoples attention towards the product (Kotler and Armstrong, 2010). ACTION PLAN (AFTER LAUNCHING) Product Being in the market for sometime, the product as reach its growth stage in its life cycle. Although the sales are rapidly rising, the product needs to be at par with its competitors to enjoy the soaring revenue. Taco Bells should offer more items in its menu to meet the needs of its ever growing customers.
They should introduce more items in their menus to create a variety of choices so that customers are being provided more choices rather than the same old menu which could cause the customer to be bored. Besides that, Taco Bell can also create meals that reflect the Malaysian food culture, such as to combine the Taco Bell’s menu with food from Malaysia. This feat will catch the attention of Malaysian citizens who are curios to tryout the outcome of the western and eastern food combination (Kotler and Armstrong, 2010).
Price Following the launch, the pricing strategy of Taco Bell should be changed to Market Penetration Pricing. Since the sales is sales is rapidly increasing and the profits are rising accordingly, Taco Bell should take advantage of this situation. They should penetrate the market deeply and quickly when they are being accepted by the market by setting a low initial price. This method enables Taco Bell to attract a large number of buyers swiftly and acquire a huge market share.
During this period, the costs of Taco Bell would have been reduce as the cost of advertising and promoting is being reduced due to the acceptance of the product and the awareness created before the launch (Mifflin, 2006). Place Taco Bell can gradually increase its outlets in Malaysia as it is gaining popularity and there is brand awareness. Taco Bell should open outlets in different places to improve accessibility and provide further convenience to its customers. Having created many outlets in Malaysia, they may reduce their cost of production by establishing their own warehouse to supply goods to its outlets.
By doing so, they will be able to cut cost and generate higher profits which then will enable them to offer a lower price for their products so that they can overwhelm their competitors (Kotler and Armstrong, 2010). Promotion As the cost of promoting was high before the launch of Taco Bell, after the launch the cost should be reduced. This is because Taco Bell as managed to create awareness of its product and enticed people to try it, thus, they can reduce their cost of promotion to take advantage of the demand.
Simple yet effective promotions such as offering vouchers, discounts may still be applicable to increase sales volume. By reducing the cost, the pricing would also reduce causing an increase in sales volume (Kotler and Armstrong, 2010). CONCLUSION Malaysian market is a lucrative marketplace to expand Taco Bell’s fast-food chain as it provides an extensive opportunity. If Taco Bell would like to expand into a new market, they should consider using SWOT analysis, market segmentation and prepare an action plan in advance to evaluate and forecast their performance. (1972 words)