Final exam subject principles of marketing

Some segments seem to have potential, but her restaurant cannot meet the needs of this segment due to lack of high quality resources, etc.. Positioning strategy After segmenting the mark

DAI HOC KINH TE

THANH PHO HO CHI MINH

TRUONG CONG NGHE VA THIET KE

KHOA CONG NGHE THONG TIN KINH DOANH

UEH

UNIVERSITY

FINAL EXAM Subject: PRINCIPLES OF MARKETING

QUESTION 1: Mrs Hai Ninh plans to open a restaurant near UEH - campus B on

Nguyen Tri Phuong Street She needs your advice on who her target audience and market analysis to help her build a marketing strategy Can you share with her the Segmentation-Targeting-Positioning strategy for her business?

Here are my several recommendations for her business to launch a Segmentaation- Targeting-Positioning strategy :

1 Segmentation strategy:

Market is vast and buyers differ in their needs, demands, wants, behaviors, locations

It is impractical to serve all customers in the market; therefore, she should divide market into smaller segments based on several variables:

e Geographic segementation is one of segmentation strategies which is dividing the market into diverse geographical units, it can be countries, continents, regions, cities People in one location are likely to have the similar needs Because her restaurant is near UEH — campus B on Nguyen Tri Phuong Street, her potential customers should be the residents who live near that area or work in that neighborhood For example, UEH students, lecturers, staffs are likely to be the customers of her restaurant By focusing on the local area, Mrs Hai Ninh can attract customers who are more likely to visit her restaurant due to convenient locations

e Demographic segmentation is another strategy which considers factors such as age, gender, income, occupation, education level of population She should select which types of customers she wants to deliver her retaurant’s services

- Age and life-cycle stage: Consumer needs and wants are not sustainable, instead, they alter every single time, every single stage in consumers’ lives

The young generation, often referred to as milennials and Gen Z, has a tendency to consume meals that is relatively trendy and affordable Meanwhile, the older generation tends to prioritize their health and well-being, as well as maintain a balanced diet, so they often seek for food option that rich in nutrients, such as vitamins, minerals, protein They also show their interest in specific dietary requirements, such as low-sodium, low-sugar foods

- Although she have already chose a particular location to start her business, she should conduct more researches on inhabitants’ income This is because people with different income levels often have distinct buying behaviors Individuals with higher incomes can afford higher-priced products or services By contrast, inhabitants with lower incomes have prioritize budget-friendly options or be more price-sensitive when making purchasing decision lf her object is

delivering luxury services, her potential consumers would be in high-income group If her object is delivering affordable services, middle-income or low- income people would be her future customers

Psychographic segmentation is dividing buyers into different segments based on lifestyle or personality characteristics People with different lifestyle, interests, attitudes will have different buying behavior Individuals have unique tastes, preferences, and interests shaped by their lifestyle choices, hobbies In order to have a profound understanding of customer’s lifestyle and personalities, she ought

to conduct researches in the market This can be done through surveys, interviews,

or using existing market research and database to analyze For example, this segment could consist of students who seek for reasonable options, people who are couscious about their health, or people who are favour of trying foreign cuisine Behavioral segmentation relies on market databases, decision -making process of customers In particular, this can be whether customers will be willingness to pay for extra services or not, whether they will return to her restaurant in the future or not To have a deeper insight of customer behavior, she should analyze databases from other restautants in that area:

- Occasion segmentation is clasifying market based on occasions when buyers have an inclination to purchase particular products or to eat a certain food For example, in the morning, people often tend to opt for convenient foods and drinks which are time-saving, but still provide enough nutrients for them to gain energy to start the productive day On the contrary, in the evening, when they have more spare time, they usually consume foods that require elaborate and sophisicated preparation, such as a full meal with appetizers, main dishes, and desserts

- User status: Market can be segmented into non-users, ex-suers, potential users, first-time users, and regular users Her object should be retaining old

customers, and attracting new customers, finding potential customers to come

to her restaurant

- Loyaty status: A market can also be segemented by consumer loyalty

Customer loyalty determines whether they return to the store or not And in addition, it also proves that they will trust the store and not look for other stores

By levergaging different segmentation tools, Mrs Hai Ninh can gain a deeper understanding of customer and divide market into different segments

2 Targeting strategy

After analyzing the market and put them into different segmentation, she now has to evaluate the various segements and make a decision on how many and which segment she can serve best To determine which market segment is more suitable, she should consider three aspects: segment size and growth, segment structural attractiveness, and company objectives and resources

- First and formost, regarding the scope and growth potential of the segment, she should consider whether this segment is suitable for the restaurant's capabilities

or not If that segment is too large and complex, it requires her to have

extensive and professional resources to serve In other words, the restaurant's menu must be diverse and have many choices to meet customer needs and wants That requires preparing ingredients, updating popular trends to update the menu is extremely necessary

- Secondly, Some dishes may be trendy at the moment and bring huge profits in the short term, but it may not bring business benefits in the future This is because trends change every second, every minute, especially the explosion of short video recording trends on social networking platform applications such as tiktok, facebook, instagram New and unique dishes appear again and attract the attention of many users If the restaurant keeps up with the trend and serves those dishes, it may make the restaurant profitable in the short term, but it is not guaranteed to be profitable in the future Therefore, instead of following

temporary trends, restaurants need to find core values, such as serving healthy, environmentally friendly dishes and preserving the traditional flavors of their homeland From there, develop and improve dishes consistent with the core values that create that difference

- Finally, the factor she needs to consider is resources Some segments seem to have potential, but her restaurant cannot meet the needs of this segment due to lack of high quality resources, etc

After evaluating each segment, the next step she needs to do is to choose suitable segment is crucial for business’s success Her restaurant should only focus on segments

that truly match her ability to create outstanding value and gain advantages over her competitors There are many different methods such as mass marketing, differentiated marketing, concentrated marketing and micromarketing For starting a restaurant business

in one location, | advise her to choose concentrated marketing Because in the beginning, resources are limited and lack of experience, restaurants should only focus on one ora few narrow segments And it can be advantageous for small restautants as it allows for a more focused approach and the opportunity to differentiate her business In addition, the F&B market is a long-standing market, it is very difficult to capture the high share in such a market in the beginning

3 Positioning strategy

After segmenting the market and determining the appropriate segment to focus on, the restaurant needs to have specific strategies in differentiating the restaurant as well as creating an impression among the customer group The differentiation and positioning task consists of these following steps:

- Identifying possible value differences and competitive advantages: She need

to define her restaurant’s vision Establishing a clear vision is determining the

core values and principles that her business will follow This will provide a foundation for identifying value differences and competitive advantages These are the key factors that her customers value and consider when making purchasing decisions For example, if she are positioning a product, the core characteristics could inclue price, quality of that meal She can do some researches about the local market to understand existing restaurants and their

offerings in oder to seek out the gap or limitation of theses restaurant And then look for opportunities to cater to specific customer needs or preferences that are currently underserved Finally, her restaurant should create differences

to stand out from other competitor in such a competitive market like F&B market She can find differences and highlights by creating slogans and taglines For example, the “Com tấm Phúc Lộc Tho” store chain has the

slogan "an Phuc, uéng Léc, séng Tho" which leaves a great impression on

customers’ mind with the mission of bringing meals with nuroushing, clean

food selected from clear origins Therefore, the “Com tam Phúc Lộc Tho”

chain has been continuously developing over the past 18 years In addition, Mrs Ninh can also make a difference in service style, store design, or food characteristics, etc It can be self-service style which utilizes modern

technology, help customers be proactive in ordering food, finding a seat, cleaning up after eating

Choosing the right competitive advantages: After finding the differences, the restaurant needs to decide what is the difference that creates a competitive advantage She needs to develop a unique selling proposition (USP) for the restaurant and stick to it to grow the business That is what customers will remember every time they think about the restaurant

In addition to choosing the right competitive advantages, it is also important for a restaurant to select an overall positioning strategy This means that the restaurant needs to choose the value proposition which are the full mix of benefits on which a brand is differentiated and positioned In other words, it should answer the customer's question "Why should | eat in your restaurant instead of others?" This will help the restaurant to identify its target audience and tailor its marketing efforts accordingly With the right positioning strategy,

a restaurant can attract the right customers and build a loyal customer base

QUESTION 2: With the situation in question 1, come up with a 4Ps strategy

The next steps after Segmenting-Targeting-Positioning strategy is the 4Ps strategy consiting of Product, Price, Place, and Promotion strategy

1 Product strategy:

After determining the segment, target market and positioning strategy, the restaurant needs to focus on product development, specifically dishes and menu

People's income levels are increasingly improving, living standards grow continuously, leading to an increasing demand for clean food, clear origin, and good for health Therefore, understanding this basic need, Mrs Ninh needs to rely on that to develop dishes that meet consumer needs:

+ First, product quality must be placed in the most important

emphasis.Food quality must satisfy diners’ needs as well as create value for customers In addition to being delicious, the dish must be made from clean,

nutritious foods Total quality management (TQM) is a method where

everyone in a business works together to improve the quality of food and service By putting customers’ interests first, restaurants can develop new dishes that diversify products, but must also suit consumer tastes Chefs can try new recipes to find differences In addition to researching customer needs, restaurants also need to grasp popular trends on social networking platforms to diversify the menu Updating the menu from time to time, such as quarters, seasons, or important holidays, will attract customers’ attention, making them feel heard and understood

+ Secondly, the point of difference comes from the characteristics of the dish, what customers like most about the dish For example, if she chooses to operate a buffet restaurant, in addition to the variety of toppings, some side dishes must create uniqueness such as meat made from vegetables

+ Thirdly, the presentation and design of the food also creates value for customers Beautiful and unique decoration can make an impression in the hearts of diners Dishes can be decorated in different styles, ranging from European, or rustic style, with strong Vietnamese regional characteristics lf she chooses to run a family restaurant, the dishes on the menu as well as the

decoration must create a feeling of warmth and gathering with the family If you run a buffet restaurant, the dishes on the counter must be filled

continuously, making customers feel like they have many different choices Furthermore, the dishes should also be arranged according to each type of food For example, appetizers, main dishes and desserts should be arranged at different counters

- The next step to do is to create a brand It can be name, sign, symbol, or design Customers will often visit places that have long-standing, reputable brands For example, the McDonald's chain is famous for its fast food and is the largest fast food restaurant chain in the world Or the restaurant "M6t Budi Sang" recently went on a Shark Tank program to ask for investment The restaurant attracts attention with its name because it makes people think that the heart of the restaurant is to serve breakfast dishes

- Packaging is relatively important Some customers prefer to buy take-away rather than eat at the store, so to maximize profits as well as meet customers ' wishes, restaurants should also develop take-away services With today's sustainable development trend, businesses in the F&B industry are increasingly focusing on environmental issues Therefore, they often tend to cut down on the use of plastic bags and instead use paper bags and biodegradable bags

- To increase customer recognition of the restaurant, she needs to design a brand and logo for her restaurant When mentioning Starbucks, people immediately think of the typical green and white logo Although only using two simple colors, Starbuck has succeeded in creating brand recognition Logos may change with the times Most recently, Vinamilk just changed new clothes for its dairy products, which has attracted the attention of many people With eye- catching new packaging, Vinamilk forecasts that profit margins will continue

to improve

2 Pricing strategy:

The selling price of a product is a crucial factor that affects both the consumption output of buyers and the quantity of goods provided by sellers It is important for businesses to understand the concept of price ceiling and price floor to determine the

optimal selling price of their products The price ceiling refers to the highest price that buyers are willing to pay for a product If the selling price exceeds this ceiling, no one will buy the product and the business will suffer from low sales On the other hand, the price floor represents the minimum cost that the seller needs to cover to produce and sell the product If the selling price is less than this floor, the seller will suffer a loss and the risk of closing down is very high To maximize profits, a business needs to price their product in a way that it falls between the price ceiling and the price floor This means that the price should be high enough to cover the costs and make a profit, but not too high that

it exceeds the price ceiling and discourages potential buyers from purchasing the product Similarly, the price should not be too low that it falls below the price floor and results in

a loss for the seller Therefore, it is important for businesses to conduct market research and analyze consumer behavior to determine the optimal selling price for their products

By doing so, they can strike a balance between maximizing profits and ensuring that their products are affordable and attractive to potential buyers

- Determining the right pricing for a product can be a challenging task, as it involves considering various factors There are different pricing strategies available, such as customer value-based pricing, cost-based pricing and competition-based pricing Customer value-based pricing sets prices based on how much the buyer perceives the product to be worth, rather than on the seller's cost Cost-based pricing involves setting prices based on the expenses incurred during the production, distribution, and selling of the product, along with a reasonable rate of return for the effort and risk Meanwhile,

competition-based pricing is based on the strategies, prices, costs, and market offerings of competitors In my opinion, the best approach would be to

combine customer value-based pricing and competition-based pricing This way, when starting a business, the primary objective would be to attract as many customers as possible By pricing products based on consumer values, it will help restaurants satisfy customers because the dishes are prepared and priced based on the customers’ needs Since people's tastes may differ in different regions, it is essential to conduct research by trying dishes from other eateries and restaurants in the area Besides, it is also necessary to consider the

selling prices of competitors to get an idea of what the reference prices should

be

- Market-penetration pricing is a pricing strategy that involves setting a low price for new products or services with the aim of quickly attracting a large number of buyers This strategy is particularly suitable for businesses that are just starting out because it helps to create awareness of their products or services and generate sales In the highly competitive F&B market, where consumers have countless choices, it is crucial for businesses to offer attractive prices to attract potential customers One of the advantages of market- penetration pricing is that it can help businesses to gain market share quickly

By pricing their products or services lower than their competitors, businesses can attract price-sensitive customers who are looking for a good deal This can help to create a positive perception of the business and its products or services, which can lead to repeat business and word-of-mouth referrals However, it is important to note that market-penetration pricing is not a sustainable strategy

in the long run Once the business has gained a foothold in the market and established a customer base, it may need to adjust its prices to suit the economic situation

3 Place strategy: refers to the decisions and actions taken to determine the location and physical presence of the restaurant To do this, she needs to conduct a survey around campus B and identify locations with high student traffic and easy access

to determine the most convenient and accessible location for students

- Firstly, she has determined to open a restaurant on Nguyen Tri Phuong street, but choosing a suitable location is necessary If her target customer group is UEH students, she should open a store close to campus B of UEH university Opening a store near the university brings many advantages to her business because a large number of students have a high demand for food, they often look for restaurants near the school to make transportation more convenient In addition, to create the best experience for customers, needs such as parking should also be covered