Marketing Plan on Entering a New Market Assignment Sample

 Marketing Plan on Entering a New Market Assignment

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1. Introduction

Kayal has gained massive popularity among the people of Britain and India because of its specialty in offering authentic and healthy Kerala seafood (Kayal, 2021). This family-run restaurant business has 5 branches in Britain and has several branches in India. The strong brand value of the restaurant did not let any obstacle like the industrial downfall and economic recession harm the business prosperity. After gathering an ample amount of love and response from the people of Britain, the company is planning to expand their brand in the USA. The report will thoroughly highlight the following section,

• Evaluation of selected country
• Analysis of the USA restaurant industry
• Recommendation regarding the market entry mode and method
• Recommendation for communication mix and marketing mix

2. Evaluation of USA market

2.1 Market analysis using

The Kayal restaurant is one of theoldest and famous Indian restaurants in the UK. The South Indian restaurant has gained its popularity by serving fresh and delicious Kerala seafood to its consumers. Kayal has its branch in Leicester, Nottingham, West Byfleet, and Lamington Spa in UK etc. Apart from these, Kayal is famous in the Indian market as well. The massive popularity and success have led the business to expand its horizon and increase its profit potential through expansion in other foreign markets. The restaurant chain has decided to penetrate the USA restaurant market for being part of high demanding food business in the UK.

Hofstede Theory for cultural evaluation:

Power distance: Power distance defines the acceptance of power among the less powerful members within a country. As per figure 2, India scores more than the USA in power distance. That clearly identifies the Indian societal dependency nature on the powerful people in society for getting direction and People expected to be directed by other powerful people. For the US branch of Kayal restaurant, the decision making power will be up to the upper designated persons and the restaurant have to maintain a friendly environment with the workers and other employees.

Individualism: The term individualism defines the degree of independence provided for the people in a society (Hamidet al., 2018). In the comparison between these two countries, the Indian society has been considered to be more dominant in religious perspectives. In the case of the USA, the people of the USA willingly provide independence to the choice and opinion of its people. Where Indians seem to be more influenced by the opinions of the family members and friends and by other known people. Inside this perspective, the restaurant has to consider that the people will be more probable and will have more personal construct.

Masculinity: As per the matrix it can be evaluated that the score of US masculinity is higher than India that clearly indicate their Individualist nature. Therefore, the Americans are freer towards expressing their opinions and success in their life. A masculine society appreciates success and validates achievements.

Uncertainty Avoidance: As per figure 2, Indians tend to have a low preference for avoiding the uncertain situation. For being traditionally patient country, Indians have more patience in accepting the imperfection. Where Americans are freer towards experimenting with new ideas and innovative products. That can be definitely a point of advantage for Kayal restaurant.

Long term orientation: This dimension signifies that the society prioritizes two goals, such as linking experience with future challenges (Baltykov, 2020). The United States has scored low in the Long term orientation that means the country is normative. That means the American societies love to maintain time-honour.

Indulgence:Indulgence relates to the extent to which a person can control their desire and urges. In long term orientation, the USA is more like a believer of 'Work hard and play hard. This clear indulgence nature of the Americans.

Fig : USA and Indian culture comparison as per Hofstede

(Source:Baltykov, 2020)

Cage Framework

Fig : CAGE Framework

(Source: Dogan and Öztürk, 2017)

2.2 Analysis of USA

PESTLE is a common framework for analyzing the USA's external environment, and it is described in detail in this section. The PESTEL study of the United States will identify a few of the “political”, “economic”, “social”, “technological”, “environmental”, and “legal” concerns that the United States is now dealing with. The United States of America (USA) has a superpower in both economics and politics. It is the world's largest economy in terms of nominal GDP, and it is one of the most populous countries on the planet.

• Political Forces

The United States of America-

• “is the world's second-largest democracy”.
• “has a stable political atmosphere “.
• “has a significant impact on the political aspects of many nations”
• “renowned for interventionist actions in other regions of the world”.

These factors will be extremely beneficial for the Kayal Restaurant aiding it to flourish.

• Economic Factors
• the United States has one of the strongest economies in the world.
• “ it may be ranked third in the world by 2050 in terms of the gross domestic product measured in purchasing power parity”.
• Unemployment rates are low (Perera, 2017).
• income levels have risen.
• The global lockdowns that occurred in 2020 and 21 inflicted significant damage to the US economy.
• Labour in the United States is not inexpensive,
• The United States, with its stable political climate, modern infrastructure, and cutting-edge technology, promotes itself as an excellent destination for foreign direct investment.
• “the country has traditionally been the first choice for several transnational companies looking to expand their operations through foreign direct investment (Christodoulouand Cullinane, 2019)”.

It is evident from the discussion that the restaurant can swell a large profit in the USA.

• Social Factors
• “With an overall population of about 332 million people, the United States of America is one of the most populated countries on the planet”
• “The United States of America is an extremely varied country (Casañ, Alier and Llorens, 2021)”.
• Most people are health concerned, yet the food culture in the nation has led to overweight and other diseases among the populace as a whole.
• A liberal attitude prevails among the majority of the people.
• Socio-economic mobility in the United States is high.

These very points will abundantly elevate the restaurant in the aspect of success.

• Technological Factors
• The USA has always led the way in implementing new technology in several sectors.
• The shift in technical innovation and introduction rate in the United States is rapid (Perera, 2017).

Kayal Restaurant may use these provisions to be successful.

• Environmental Factors
• “The terrain, climate, and fauna of the United States are highly diverse”.
• This diversity, along with other elements such as breathtaking natural features, attractive little towns, and dynamic metropolises, has been a key driver behind the country's ability to attract millions of tourists (Christodoulouand Cullinane, 2019).
• In 2019, the United States welcomed 79.26 million overseas visitors.

The large population can eventually aid in the success of the restaurant.

• Legal Factors
• Each state in the United States has its political structure as well as its judicial system.
• Businesses fall under the jurisdiction of the regulatory environment of the state in which they are headquartered.
• “The country adheres to the principle of equal treatment for both nationals and immigrants”.
• Expatriate employees can anticipate a fair and unbiased trial from the legal system in their home country. In addition,
• the United States has a robust legal framework for protecting intellectual property rights (Perera, 2017).

Each of these can help the restaurant to secure its footing in the USA.

2.3 Restaurant Industry of USA

The bargaining power of buyers: In the USA, the restaurant industry has a high demand and the industry is highly competitive (Su, 2017). The bargaining power of the consumer arises when a customer gets multiple options and facilities. Customers of the USA are more conscious about their health and they want value-based products. To enhance the attractibility Kalayal has to offer these stated aspects with their food products to impress the consumers.

The bargaining power of suppliers: Suppliers play a crucial role in any business. The bargaining power of suppliers has a threat of affecting restaurant operation and influence the price of the products. The restaurant industry of the USA relies on many suppliers like brokers, farmers and also with related companies. The bargaining power of suppliers can cause the downfall of profitability (Panghulan, 2021). In the US market, due to huge demand, there are multiple suppliers in the market that is a huge advantage for the famous South Indian restaurant, Kayal.

The competitive rivalry among the competitors in the industry: The main reason behind the rise of rivalry is changing pattern of consumer behaviour and the rising number of competitors, price hikes in commodities etc. The high demand for food in the US market has allowed the various specialized restaurant to enter the US market (Jogaratnam, 2018). There, the demand is definitely an advantage and to gain a competitive advantage Kayal have to reduce the price of offered food products with attractive offers.

The threat of substitute products:To get the competitive advantage in the USA market, Kayal restaurant have to offer internet service, delivery service along with this, Kayal restaurant chain also have to apply some innovational strategy related to service and run a marketing campaign to attract the consumers.

The threat of new entrants, or barriers to entry into the industry:

To open a restaurant in a highly developed economy in the USA, Kayal restaurant has to invest a lot of money. Apart from these, a restaurant requires various modern equipment, human resource etc. Keeping all these in regard, the Kayal restaurant must maintain its services by facilitating consumers and balancing budgetary constraints to bag a large amount of profitability (Emeryet al., 2017).

Fig: CAGE Framework

(Source:Emery et al., 2017)

2.4 Summary of US Market for expanding Kayal Restaurant

3. Recommendation for entering into USA Market

3.1 Positioning strategy and Target Market

Kayal Indian Restaurant can target a certain demographic for its business. Kayal Indian Restaurant's offering of opulent true Kerala seafood speciality –the most famous of its kind, will put this restaurant company in its deserving position in the restaurant business of the USA. The Kayal Indian Restaurant is already known for establishing a reputation for commitment and love for outstanding cuisine and is looking for building a strong consumer base in the market of USA. Numerous honours and recognitions established their distinction from other eateries. They have already achieved Healthiest Restaurant Award demonstrating a commitment to healthy eating. Kayal is about tradition, excellence, discovery, and the use of fresh ingredients and fragrances.Restaurant 2020 implies that its target customers will have a middle-to-high income and an interest in international brands and high-quality products. Kayal Indian Restaurant should thus target the productive age group of 14-64, which is designated as the ideal age range for earning and also makes for a sizable proportion of the American population (Opportunities in SWOT analysis).

Kayal Indian Restaurant's psychographics should incorporate clients' familial and social status values. Additionally, based on Kayal Indian Restaurant's SWOT analysis of its successful customer loyalty programme, consumers with loyal behaviour should be targeted for long-term profitability.Kayal Indian Restaurant will serve the citizens of the USA with high-quality foods at a moderate cost along with the provisionof cosy, comfortable seating arrangements. This Indian originated restaurant not only willmake a distinctive Indian variety of tastes to serve in the market of the USA but also will maintain its qualities as aninternational brand. Unlike other restaurants, they devote the entire group to create a cosy ambience to feel at their restaurants which attract the customer to spend their leisure time while enjoying the authentic taste of good food.

Their restaurant is renowned for having the adjective of 3Es exuberant, enthusiastic and, energetic in the aspect of workforce, ambience and product while being committed to providing the finest service at a moderate cost to the valued clients.

As the “Marketing Position Statement” depicts the picture Kayal Restaurant wants to create in the mind of the customers, they prepare the slogan that says-

“Currying up a piece of India with love for you”.

3.2 Objectives

Based on the detailed discussion of the current position of the Kayal restaurant and their growing massive popularity in the UK and India, their decision to the expansion of their branch in the UK will undoubtedly be a reason for booming profit and sales increase. As per the report, the USA will be evident of 8% rise in restaurant sales and will see an increase of 4% revenue increase in 2021. Hence, through effective marketing strategy and product offering, Kayal restaurant can get a hold of a huge restaurant market. Mainly, Kayal has two objectives in the upcoming time, as below,

• Create mass brand awareness among US citizens aged 14- 64.
• Build a positive perception in 12 months among the 80% residents of the USA by offering quality food and service and placing a right and effective marketing strategy.

3.3 Recommendation for Market entry

A foreign direct investment (FDI) occurs when an investor develops foreign business operations or buys foreign business assets in a foreign firm (Crescenzi, Ganau and Storper, 2019)

The United States is the world's greatest receiver of foreign direct investment, in part because corporations see the United States as a market that is both innovative and stable, and the world's most powerful economic power. The stock of foreign direct investment in the United States reached USD 9,465 billion in 2019. The country's huge customer base, reliable and transparent legal system, productive workforce, highly developed infrastructure, and corporate environment that encourage innovation helped it maintain its position as the top destination for foreign direct investment in the year 2019. In 2019, the United States has been the world's second-largest investor, trailing only Japan, with foreign direct investment (FDI) outflows totalling USD 125 billion. The United Kingdom, Canada, Japan, Germany, Ireland, and France are the nations with the greatest number of foreign investors in the United States. These investments are mostly concentrated in manufacturing, banking and insurance operations, trade and maintenance, and other related activities. Following the emergence of the COVID-19 epidemic, however, foreign direct investment (FDI) inflows to the United States dropped by 49 percent, falling to an estimated USD 134 billion, with wholesale commerce, financial services, and manufacturing being the most negatively impacted industries (Konarasinghe, 2020.). Despite this, the country outperformed the majority of wealthy countries, whose total average foreign direct investment (FDI) dropped by 69 percent in 2020.

As per the World Bank's Doing Business 2020 report, the United States ranks 6th out of 190 nations in terms of the quality of its business climate, an increase of two places from the previous year's ranking (Sabir, Rafique and Abbas, 2019). The country continues to be the world's top economic power, the world's largest international financial centre, and the world's third-largest country in terms of population, all of which are held by the United States. The United States is one of the countries with the finest regulatory performance when it comes to tax collection and remittance. Starting a business is now easier than ever, and enforcing contracts is now simpler as well.

Analyzing all these details the FDI will be a beneficial and easy to access option for the Kayal Indian Restaurant to expand its business to the USA.

4. Product Strategy, distribution and price

4.1 Product

The Kayal restaurant is a south Indian restaurant special for serving in seafood of Kerala. The restaurant provides a cultural and tranquil ambience for its consumers. This south Indian food chain business will adapt the standardization method for penetrating the USA restaurant market.Furthermore, to provide a good ambience along with other food-related services, the Kayal restaurant has to focus on the various sides before opening the branch in the USA. Along with the product and marketing strategy, Kayal restaurant has to transform and adapt its ambience as per the context and requirements of US citizens. Based on the behaviour and choice of managers, this Kerala origin restaurant will offer starters like Potato Porichatu, Lentil Doughnuts, Chili Paneer, Seasonal green fish, Masala Dosa, Chicken Dosa etc. In the main course, Kayal will offer their authentic dishes like Kayal Fish fry, Tilpia Pollichathu, Salmon Mappas and so on.

4.2 Price

A pricing strategy is very crucial for any business. The pricing strategy of Kayal has helped them to grow abundantly and in the US market, the value of the dollar is an advantage for the restaurant (Ahmed, 2019). Again the brand has to keep in mind that in the phase of entering into a new market, Kayal restaurant has to maintain a moderate price of foods among the US consumer to gain a competitive advantage in the highly competitive market of US restaurants. The range of the main course of this product will be $4-15 and the starters will be ranging from $3-$9 along with attractive offers.

4.3 Distribution

A distribution strategy is a process of delivering goods or services to the end-users (Monica N.D.). As per the statement of Rosenbloom and Larsen, the distribution strategy cannot be globalised. In this regard, the Kayal restaurant has to build a distribution strategy in the American context. The South Indian restaurant chain has to choose quality food suppliers for developing a strong reputation.

5. Communication mix rationale

The DRIP framework presented below serves as a "working communication flow model" for designing the corresponding marketing communication mix (Nugraha, 2019):

In addition, Tajzadeh, Namin and Najafi, (2015) summarize promotional methods with the most effective tool shown below-

USA's society is an open society that embraces people from all caste, classes, races, creeds and statuses. Thus, after adapting the marketing mix, it will be necessary to adjust the communication mix to successfully deal with the USA's distinctive culture. Based on the DRIP framework and Tajzadeh Namin and Najafi’s (2015) communication mix, a description of four proposed promotional tactics in the USA that are modified for the country's culture is providedbelow.
The technological tactics offered by the USA resulted in the development of the USA'S networking system. USA has a big range of Digital marketing in it which reduces the time required to reach each target client, particularly in the USA’s mass market (Perera, 2017). Kayal Indian Restaurant may communicate directly with customers using social media platforms like as Whatsapp, Instagram, Youtube and Facebook, which are the most popular social media sites in the USA, particularly among urban residents aged 14-64, with penetration rates over 80% in 2019 (Casañ, Alier and Llorens, 2021). According to this penetration rate, photographs, videos, or live streams updating Kayal Indian Restaurant's information, goods, and future events on Whatsapp, Instagram, Youtube and Facebook may raise 14-64 USA residents' awareness by approximately 80% within a year(Objective 1).

Secondly, advertising is an effective way to educate target buyers with the Kayal Indian Restaurant brand name and image (Objective 1). The target demographic is of productive age, which entails being outdoors continuously. As a result, out-of-home advertising may be successful in this instance. Additionally, outdoor media captures the majority of customers' attention in the USA. There are several advertising venues, including air and land transportation, shopping centres, and billboards. Additionally, television advertising is highly suggested, as it is the most frequently utilised medium in the USA. Referring back to the cultural factors discussed in PESTLE, USA residents typically spend a lot of time outside with their family, friends, colleagues etc.

Thirdly, Kayal Indian Restaurant is targeting middle-to-high income (Target segment and Positioning statement). This restaurant’sproducts are served at a somewhat moderate price (pricing strategy) while maintaining a high level of quality. As a result, Kayal Indian Restaurant must employ personal selling to earn consumers' faith in the food quality and to inspire them to revisit. Kayal Indian Restaurant might have its own sales personnel in the core part of the restaurant to improve consumer engagement with the restaurant, loyalty programmes, and items. This technique will aid in comprehending consumer behaviour and eliciting feedback to make necessary improvements.

If the technique discussed above is used professionally, and if awareness of almost 80% of 14-64 aged USA individuals is effectively increased within a year, Kayal Indian Restaurant is likely to achieve a good opinion. Within 12 months of opening, Kayal Indian Restaurant can demonstrate that it is a premium restaurant selling high-quality food at a moderate price range (Objective 2).

Finally, to assist Kayal Indian Restaurant in accomplishing the second aim effectively, sales promotion should be utilised to add value to items for a specified length of time to maintain consumer involvement. To be more precise, Kayal Indian Restaurant may consider developing a loyalty programme for consumers and their family and friends, which would reward customer loyalty and their family and friends with purchasing coupons. This initiative not only promotes customer visits and encourages purchases, but also demonstrates Kayal Indian Restaurant's concern for customers' families and friends, which is a key value of Americans.

6. Conclusion

The complete research has been dedicated to highlighting the aspects relating to the expansion of Kayal restaurant in the US market. In regard to this, the research has evaluated and analyzed principally four areas. Firstly, the research has investigated in detail the USA restaurant market and understood the nature of the market by using various tools and frameworks like Cage framework, porter's Five Forces etc. These tools have assisted the researcher to identify major relating parts of the Kayal restaurant establishment in the USA market. The next part has recommended various strategies and tactics to enter the new market. Thereafter, the third part has focused on the Kalyan product, price and strategy concerning gain a competitive advantage in the USA market. The research has been concluded by discussing the various communication mix to identify various methods of communication with the consumers and to develop a great marketing strategy for Kayal restaurant in the USA.

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Appendices

Appendix 1:

Cage Framework

SWOT Analysis

Appendix 2:The PESTLE Analysis of USA