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Business Strategy The Catering Sector

Business Strategy The Catering Sector. Laura Bateman James Farrow Vicki Purvis Katy Stevens 26/11/01. Rationale. Market Analysts Investigate chain of “Contemporary Pizza/ Pasta Restaurants” Undertake primary research within local area Incorporate secondary research to

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Business Strategy The Catering Sector

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  1. Business StrategyThe Catering Sector Laura Bateman James Farrow Vicki Purvis Katy Stevens 26/11/01

  2. Rationale • Market Analysts • Investigate chain of “Contemporary Pizza/ Pasta Restaurants” • Undertake primary research within local area • Incorporate secondary research to establish the broader picture

  3. Aims and Objectives • Brief description of the sector • Provide objective and structured analysis • Present results of primary research • Evaluate sector using analytical tools • Outline recommendations

  4. The Catering Sector - Trends • “By 2020 British trends will mirror the USA and people will spend more on eating out than food consumed in the home” (Caterer, November 1998) • “Expected that between 1998 and 2002 meals served by caterers will increase by 400 million” (Caterer, November 1998) • “Value of restaurant market up by 25% between 1994 and 1999. 5% real terms” (Mintel, September 2000)

  5. Classification Italian Themed Cuisine Refined and Standardised Appeal to World Cultures High Street Locations Variation of Menu Major Contributors Pizza Express Café Pasta Ask Central Bella Pasta Contemporary Pizza/ Pasta Restaurants

  6. Analysis of Market - Trends • 60% High Street Eateries Italian Themed • Average G.P.of 30-35% • 28% Growth 1996-2000 • Not Saturated • Constant and Growing Demand

  7. ASK BELLA PASTA PIZZA EXPRESS CONCLUSION OF TRENDS CUSTOMER AGE/TYPE 18-30 (Wide range) 18-30 (Mostly business women) 18-35 (Young professionals) 18-35 (Young professionals) SOCIAL GROUP A,B,C1,C2 & D A, B & C1 A, B & C1 A, B & C1 AVE. SPEND £12.50 £10.00 £10.00 £10.00 - £11.00 MOST POP. DISH Penne Pollo de Casa Pizza La Reine Pizza Selected range of Pizza & Pasta dishes. SEASONALITY (Busiest period) Summer (Slow during February to mid-March) Summer(But generally good all year round) Summer Summer TAKE AWAY (For or against) They provide take away but do not advertise it. Do not have much demand for it, but do provide this service. Do provide take away. Do not advertise, but provide the option. COMPETITION None (They do not feel threatened by anyone in town) Pizza Hut (Any other restaurant in the near vicinity) ASK/Pizza Hut/Dominos Pizza Direct: All other Pizza/Pasta restaurants GOOD TIME TO INVEST Yes. Yes. Yes. Always room for improvement. Primary Research

  8. Primary Research Results • Aim at 18-30 market • Affluent professional females • Pricing structure to reflect £10 average spend • Inclusion of take-away facility • Potential for market expansion

  9. Analytical Tools – DEEPLIST DEMOGRAPHIC 18-30, female. All demographic groups. Aims at A,B,C1 – but obtainable by all. ECONOMIC Stable. Political crisis, people staying in country more disposable income. ECOLOGICAL More eating out due to higher disposable income. POLITICAL 24 hour drinking, keeping tax low, encouraging public spending

  10. Analytical Tools DEEPLIST LEGAL Lower age of alcohol consumption with food. Licensing Laws. INFORMATIONAL Nutritional awareness. Food aversion/allergies SOCIAL Nutritional information/non smoking. Eating out more – more young professionals, larger salaries, business lunch. TECHNOLOGICAL Internet bookings/marketing tools

  11. Analytical Tools Strategic Group Analysis PIZZA EXPRESS • Large marketing spend • Construction of web site • 286 restaurants (Sept 2001) • High geographical coverage

  12. Analytical Tools Strategic Group Analysis – cont. BELLA PASTA • Smaller marketing spend • Part of Whitbread • Internal group promotion • 72 restaurants (Sept 2001) • Smaller market share

  13. Analytical Tools Strategic Group Analysis – cont. ASK • Relatively newly established chain • Word of mouth promotion • 125 restaurants (Sept 2001) • No conventional marketing strategies • Medium market share

  14. Analytical Tools Strategic Group Analysis - Conclusion • Market is suitable for investment • Room for growth & development New Business • Initial high marketing spend • Low geographical coverage Growth Phase • Greater spend on marketing • Increasing geographical coverage Maturity • Reduced marketing spend • Optimum size and market share

  15. Analytical Tools Boston Consultancy Group Matrix- BCG Soup – (Dog) low MS, low MG, unappealing option Pasta – (Problem Child) high MS, low MG, redevelopment required Salad – (Problem Child/ Star) medium MS, medium MG, high potential due to health trends Garlic Bread – (Star) high MS, high MG, low production cost, high GP, may be ‘fad’ Pizza – (Cash Cow) high MS, stable MG, appealing, consistent

  16. Recommendations • Growth potential within the catering sector • Growth potential within the market • Target young professionals with high disposable income • Awareness of health trends will promote market • Careful consideration of location essential • Establish price differentiation

  17. Conclusion • Key to success is differentiation - Price - Take away facility • Economic Crisis, no significant decline • Highly competitive market but adequate demand for continued growth • Profitable segment of catering sector for initial investment

  18. Bibliography • Kivlehan, N.P. May 2000. Pizza in our Time. Caterer and Hotelkeeper (p38-39) • Profits up for Pizza Express. Sept 2001. caterer.com [Online] • London Sales Flat at Pizza Express Restaurants. Oct 20001. caterer.com [Online] • Pizza Express to Open more outlets Globally. Sept 2001. caterer.com [Online] • Turnover and Profits Soar at ASK. Sept 2001. caterer.com [Online] • Eating Out Review, Leisure Intelligence. June 2001. [Mintel] • Lunchtime Eating Habits, Leisure Intelligence. Aug 2001. [Mintel] • UK Eating Out Trends. Nov 1998. caterer.com [Online] • Jameson, A. May 1999. Pizza Pan Complex. Caterer and Hotelkeeper (p26-27) • Johnson, G, Scholes, K. 1999. Exploring Corporate Strategy. 5th Edition. Essex. Prentice Hall • Sharman, S. ASK. 284-292 Old Christchurch Road, Bournemouth • Lewis, C. Bella Pasta. 84 Old Christchurch Road, Bournemouth • The Manageress. Pizza Express. 200-202 Old Christchurch Road, Bournemouth

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