PART A
1. GENERAL ANALYSIS OF FAST-FOOD CUSTOMERS IN THE DUTCH MARKET
Fast-food industry in European countries has keep growing over years as the result of impact by global trend as North American. More and more consumers across Europe admit that their time becomes too constrained to have home-made food or spend time sitting for a meal at a well-serviced restaurant. Therefore, many fast-food chains have target this customer segments with fast casual styles to provide meals along with quick services. Customer segmentation of fast-food market can be put under analysis as follows: Geographic customer segmentation Fast-food restaurants divide their customers by region and its stores are usually located in urban and semi-urban areas. In Netherlands, most of fast-food chains can be found in the province of Zuid-Holland with about 115 stores while there are over 145 fast-food restaurants in Noord-Holland and Noord-Brabant. Demographic customer segmentation Fast-food consumers are mainly young adults choose these meals as a convenient option. These are most potential customers with high purchasing power due to increasing in disposable income along with increasing trend of dining out among young people. Other than that, kids and family also come to fast-food restaurant as snacks or alternative choice for home-cooked food. Fast-food restaurants are common destination for lower to middle income class as their products are often packed in cheap combos and come along with frequent attractive promotions. Behavioral customer segmentation As per behavioral factors, people who consume fast-food can be segmented into 4 main types: Weekenders: Consumers choose fast-food restaurants on weekly basis in order to meet their friends, treat their family or indulge themselves with burger tastes instead of normal meals in weekend. Loyalist: This type of consumers just make up a small percentage but they do visit fast- food stores frequently to have their full meal as they truly love the tastes of this food. Convenience seekers: These consumers are important customer segmentation so that fast- food chains maximize sales of their products. They purchase these food as they are people who may not have a lot of time to eat or people who do not need proper meal such as working professionals, students and travelers. Partiers: Group of people gather together in enjoy their holiday, birthday parties or special events. Psychographic customer segmentation. Customers buy their meal at fast-food stores as they find it convenient to be quickly served and can easily have take-aways. Another reason for fast-food consumption is that consumers like fast-food because it is tasty and greasy. Cheap price is also motivation for consumers while they can buy a big meal with a lot of available promotions and discounts.
2. ANALYZE THE CUSTOMER MARKET SEGMENTATION OF BOTH COMPANIES
In Netherlands market, Burger King Netherland targets customer segment who are teenagers, young adults and family. The fast-food chain establishes its location around Amsterdam where it is popular city with high density of population and visitors. In term of location, Burger King Netherland has 59% of its store numbers located at cities in order to serve customers in busy cities such as Rotterdam, Utrecht and Amsterdam while 34% of Burger King’s restaurants establishes near highway. In particular, Burger King Amsterdam can easily target young customers and family who visit here as the area benefits with a lot of activities such as eating and shopping with its proximity to Amsterdam Bijlmer Arena, Royal Palace of Amsterdam, Amsterdam Central station, Amsterdam Amstel and Bloemenmarkt. In Amsterdam Arena, while Burger King Amsterdam’s customer segment is targeted in broader scale, they put their stores at cluster area nearby Amsterdam Central station and other shopping and outdoor activities in order to serve who seeks for quick services and convenient transportation. To target this segment, Burger King Amsterdam maintains their activeness on social media such as Facebook, Instagram and Youtube in order to interact more with this customer group. Otherwise, Burger Bitch Amsterdam has a smaller customer segmentation when they mainly target at young adults who would like to find an ambience to dine and hang out. Burger Bitch’s decoration concept, in similarity with its brand name, leans on restaurant bar business where alcohol drinks are also included in the menu with other options such as burgers and salad. Moreover, Burger Bitch takes advantage of its location to target consumers who enjoy activities from Afas Live, Ziggo Dome and Johan Cruijff Arena due to its closer distance to these areas compared to Burger King Amsterdam. Therefore, they target these customers by linking their food with fun experience and reaching to customers Facebook, Instagram and TripAdvior.
3. COMPARE THE MARKETING MIXES AND THE UVP’S OF BOTH COMPANIES
Burger King Amsterdam’s marketing mix Product Burger King serves its customers as a quick service restaurant chain with burgers as their key products. Moreover, they also provides a wide range of products such as chickens and fishes, snacks, sides, salads, desserts and beverages. Moreover, to serve a market with growing customer’s consciousness for healthy food, sustainable products and vegan food trend, Burger King Amsterdam introduces plant based burgers along with nutrition measurement for each product. Burger made from non-artificial ingredients is also communicated in their marketing strategy to increase customer’s trust in Burger King’s commitment in freshness.
Plant-based burger
Nutritional facts found on Burger King Netherlands’s website
Burger King campaign shows a burger gets moldy over time to demonstrate no artificial preservative Price Burger King Amsterdam follows its market-oriented pricing strategy which sets price lists considering prevailing market conditions, supply and demand as well as pricing strategy of rival companies. They will match their pricing strategy with other competitors to offer customer at most attractive prices. Besides, Burger King also applies bundle pricing strategy that allow consumers to purchase value meals and kid meals at bundle prices that is cheaper than individual order. Place Burger King Amsterdam uses 3 places to distribute its products to customers: restaurants, mobile app and websites for delivery. Burger King uses its physical stores as it main distribution channel as it matches with their strategy to provide quickly-serviced restaurants for consumers. Additionally, customers can assess to Burger King’s coupons on Burger King app to redeem special offers and freebies. Promotion Burger King uses mainly advertising on online platform, TV and print media to promote their products. They have maintain their presence on Facebook, Instagram and Youtube with frequent posts to socialize with their young customers. Moreover, Burger King applies sales promotion with coupons and offers on its mobile app and websites. Their staff are also trained to work as personal selling to motivate customers to buy more with add-on options such as desserts and drinks. Besides, Burger King uses public relations by granting scholarship for educational program by Burger King McLamore Foundation to increase their brand with corporate social responsibility activities.
Burger Bitch Amsterdam’s marketing mix Product Burger Bitch provides a lot of options for dinning with main focus on burgers. Other than that, they offers sides, salads, desserts and alcohol drinks. To link customer’s dining time with fun experience, they label their product with quirky names to emphasize their slogan “burger with attitude”.
Burger Bitch’s product names Price Burger Bitch also uses the market-oriented pricing strategy in their menu while their set their product prices similar to other fast-food restaurant in Amsterdam. In comparison with Burger King, Burger Bitch’s burger price is slightly higher than Burger King’s. Place Burger Bitch provides option for dinning in physical restaurant and deliveries on their own website. Promotion As smaller business, Burger Bitch does promote their fast-food restaurant by advertising on their social account (Facebook, Instagram, Tweeter and Pinterest) and TripAdvior that allows them it reach to customers would like to attend events in the area they do business. Promotions with freebies are used by interactive activities with social media users.
Burger Bitch’s post to give free burger for winner’s comment Point of parity: Both Burger King and Burger Bitch Amsterdam uses online advertising to target group of young adults as these customers are highly active on social media. Physical distribution channel are important for both two companies to provide their quick services and take advantage of location strategy.
Storytelling: Burger Bitch aims at young adult customers to link their story with people who will spend their youth time with boisterous events and concerts at Johan Cruijff Area and nothing better is to enjoy a tasty burger with drinks at its restaurant just nearby. Burger Bitch also name their burgers with many different names inspired by a party ambience like “The bombshell, Smoking chick, Philadelphia’s queen”. In other hand, Burger King Amsterdam delivers their story as high quality burger brand with the freshest ingredients and various options that will let its customers enjoy their indulgent time and “Be your way” as Burger King’s slogan. Burger King motivates customers to customize their meals according to their own preferences with their transparency in nutritional information in order to satisfy its customers.
4. Burger King Amsterdam’s value proposition is to offer customers reasonably priced quality foods with quick services in its attractive and clean surrounding. The fast-food chain has applied market- oriented pricing in order to entice customers with affordable prices. However, Burger King maintains its main selling points is the high quality of food and timely services. Burger King restaurants give customers good ambiance with modern and clean facility design to keep its customers coming back to their stores. Burger Bitch Amsterdam’s value proposition is that the business commits to services the juiciest burgers made from Australian beef and American bun. Customers can enjoy their innovative ambiance and Burger Bitch’s special location to access events and shopping in Amsterdam arena. Burger Bitch also updates event schedules in AFAS Live, Ziggo Dome and Johan Crujff Arena on their website. They have done a better job to let customers associate their restaurant brand with fun event, which helps to increase customer’s awareness when there is any upcoming special events in Amsterdam arena. Both Burger King Amsterdam’s value proposition and Burger Bitch Amsterdam’s value proposition share the common point that is to serve the best quality food. However, Burger King Amsterdam targets more customers with its affordably priced food and quick services, which will help to easily expand their business in Netherlands and increase their sales revenue while Burger King Amsterdam tends to offer customers unique experience with food, ambience and surrounding activities.
5. ASSESS THE MARKET POSITIONING OF BOTH COMPANIES
Burger King Amsterdam has communicate its brand to customers on different platforms in their way so that they can find it fit with Burger King’s competing products. Young adults are Burger King Amsterdam’s target customers. The fast-food company have done multiple campaigns to position itself as high quality, great taste and affordable prices. The “moldy burger” campaigns did send a powerful message to people that Burger King Amsterdam truly commits to just serve the best ingredients and relieve the image norm that fast-food is similar to junk-food which is not fresh and inclusive of harmful artificial preservatives. Together with their 100% vegetable Whopper, Burger King positions itself with Dutch customers that the company would like to provide not only tasty but also healthy food options to match the increasing vegan trend. Besides, Dutch consumers grow their consciousness regarding sustainability in product development, which means they care more about how the company make it products in term of fair trade, animal welfare and environmental protection, which hasn’t been cultivated by Burger King. Burger Bitch Amsterdam positions its brand as “burger with attitude”, which means they want customers to know about their brand as a fun place to visit, explore surrounding activities and also have the tastiest and juiciest burgers with commitments in quality and country origin. With quirky statements, Burger Bitch targets young adults who are interested in new things. Burger Bitch used the images of modern and rock-star girls to position as very new concept for fast-food restaurant. Similarly, their posts on social media with quirky contents which can attract users from young age group. As per fast-food brand, Burger King has a stronger brand positioning compared to Burger Bitch. They target better to the increasing vegan and health consciousness trend in Netherlands food industry, which makes their brand more relevant to customer’s mindsets. Contents of the high quality food is properly communicated to target young adult consumers on different platform. Therefore, Burger King Amsterdam have develop their sustainable advantages over other competitors.
PART B
6. ASSESS THE CURRENT MARKETING STRATEGY OF BOTH COMPANIES
As per Porter’s generic strategy, Burger King implements cost leadership and broad differentiation strategy for its competitive advantages while cost leadership is Burger King’s primary competitive strategy. Burger King uses cost leadership by standardizing its process to minimize costs as a result of economies of scale and error prevention. The fast-food company aims to achieve its financial goal that is to offer Burger King’s meals at the lower price by reducing its operating costs. Besides, broad differentiation strategy is also used to help Burger King stand out from other competitors. With Burger King’s tagline “Be your way”, the company carries out its broad differentiation by offering their customers with flexible options to create their own burgers. Burger King’s restaurants also offer free drink refills to its consumers. Burger King’s broad differentiation helps to entice new customers, especially when they come to enter new markets where a lot of local stores and its major rivals already present. Burger Bitch Amsterdam uses differentiation focus strategy to build its competitive advantage. They creates a different association for their fast-food restaurant by linking their brand to modern and quirky concept so as to target young adults who are fans of boisterous activities and events. Its fast-food restaurants want to bring unique ambiance to customers so that they can enjoy fun dining experience with funny and quirky burger’s names.
As per Treacy & Wiersema’s value disciplines, there are 3 points for businesses to meet distinctive needs of customers which will require different resource capacities: operation excellence, product leadership and customer intimacy. For Burger King Amsterdam’s case, Burger King applies operational excellence to deliver superior value to its customers. The company provides its products at the best prices in the market by continuously improving its process to reduce operating costs and setting down prices. In other hand, Burger Bitch Amsterdam targets the needs of smaller segment of young adults. To create value using customer intimacy, Burger Bitch aims to create an emotional benefits to its customers through market communication with music concerts, party night a complement burger while they enjoy fun time.
As per Kotler’s competitive strategies, Burger King plays the role as market leader in fast-food industry. The company is well-known for its high quality products offered as very affordable prices. Burger King keeps innovating to add new products to its existing menu in order to keep its customers coming back to its restaurant. With over 60 restaurants across Netherlands, Burger King is able to cover its distribution to Dutch customers. Moreover, with its extensive promotional activities and bundle prices, Burger King really establish a firmly competitive position in term of product prices. Burger Bitch Amsterdam chooses to be market nicher by selling their products in just a certain area that is near Amsterdam Area. Because they would like to serve well customers who want to enjoy surrounding areas and events at Johan Crujff Arena or Ziggo Dome. Burger Bitch wants to get its customers well enough so that they provides customers different range of products that also includes wine and other beverages besides burgers. As per Kim & Mauborgne’s blue ocean strategy, both Burger King and Burger Bitch follow blue ocean strategy to entice and maintain its customers. For Burger King, the company keep aligning its whole systems of activities in order to succeed in product differentiation and low cost orientation. On the other hand, Burger Bitch Amsterdam tries to make the competition irrelevant for its business. This fast-food store at Amsterdam-Zuidoost follow its creative ideas to serve customers in particular Amsterdam arena. By locating in very beneficial location that is close to Johan Cruijff Arena and other shopping and entertainment options, Burger Bitch has a lot of potentials to capture this market segment of young adults.
7. Burger King’s SWOT Strengths Burger King already builds its global operations as the second largest fast-food restaurants. The company has its present globally with 40 subsidiaries. Therefore, its brand image is one of the strongest brands in the industry, which results in higher change of customer acceptance if the company wants to open new stores in new location and provide new products. American suppliers like Burger King are known for their professionalism and consistency in the quality of products, which allows to offer a great variety of products. Burger King has high market penetration with large number of stores located in Netherlands, which also results in high brand awareness among Dutch customers. Its product differentiation with grilled burgers as key products ensures that Burger King can meet different requirements of its customer demand from different customer segments. Weaknesses Burger King operates its mass-market products that are fast-food, so that it products are easily imitated by other competitors. For example, Burger Bitch can also offer customers with similar grilled burgers in order to entice Burger King’s existing customers. Burger King uses franchise approach to grow its appearance in different markets, which causes the risk of limited control on other stores. Inappropriate operation of one restaurant can affect brand image of the whole fast-food chain. Shipping time will be longer with higher costs in European market, which creates disadvantage for deliveries or import of ingredients. Opportunities Food market in Netherlands keeps growing over years with increasing trend for sustainable product development, country origin transparency, health consciousness and environmental protections. Together with increasing in disposable income, Dutch customers are willing to pay more for taste and authenticity to get their meals that can satisfy their requirements. Dutch customers are affluent, open minded and curious, which opens opportunities for food companies to serve tasty, innovative and convenience products. Besides convenience and health, authenticity, hospitality and affordability will be important points to drive customer purchase in Dutch foodservice industry. Threats Local restaurants can compete with Burger King by offering lower prices while there are also existing international competitors such as McDonald, Subway and KFC. The government and NGO have carried out health awareness in order to increase people’s consciousness towards fast-food consumption, which will affect fast-food industry.
Burger Bitch’s SWOT Strengths Burger Bitch has very special store location where customers can just walk to Johan Cruijff Arena and other shopping malls. They even provide direction instructions and event schedule on their own website. The location helps Burger Bitch to beat other competitors in term of convenience. Burger Bitch attracts customers with its authentic story by associating their brand with events and fun experience. The fast-food restaurant offers different products that provide customers with various choices. They also provides product extension line to serve alcohol drinks so that it can operate as bar restaurant. Unlike other fast-food chains, Burger Bitch gives modern and well-design ambiance with nice decoration. Pink theme colour is actually new to fast-food business but it complements with Burger Bitch’s brand story. Weaknesses Burger Bitch just have one physical restaurant so that it is limited for the company to reach out to fast-food consumers in Amsterdam. Due to its narrow targeting for location, they will have to think about where they should expand their business in compatibility with its brand storytelling. As a small and new brand, it is difficult for them to expand its business to compete with strong brand name like Burger King. Promotional activities are limited for Burger Bitch products. Opportunities More and more Dutch consumers enjoy dining out and they are willing to pay for food with good taste and authenticity. Otherwise, there is increasing customer care for sustainable and environmental friendly business. Dutch customers like authenticity in foodservice outlets, often Millennials and Generation Z. They are interested in story behind the product and brand. Therefore, restaurants can build their storytelling to appeal to young customers. Threats Increasing customer’s consciousness towards health may lead to the risk that consumers boycott fast-food. Increasing number of US fast-food brands enter European market will increase competitiveness pressure for Burger Bitch.
8. WRITE A NEW MINI-MARKETING PLAN FOR BURGER KING AMSTERDAM
Marketing plan for Burger King Amsterdam: Targeting: Burger King Amsterdam will target young adults, especially Millennials and Gen Z because this group have a high potential with high purchasing power in the next few years. They enjoy having food in restaurants and socializing with others. Moreover, increasing in disposable income also increases their willingness to pay more for food products, which opens opportunities for Burger King to extend their product line. Positioning: Burger King will position itself in the new and creative ways. They will still remain their message “Be your way” but it will be put in different concept. Burger King Amsterdam will associate its image with fun moments of young people group and family. To specifically target this segment, Burger King will implement its marketing mix as follows: Product Overall, Burger King’s product mix is various with plentiful options for consumers. To better reach out to customers who are Millennials and Gen Z, Burger King Amsterdam can introduce seasonal menu with food and drinks which are specially offered during some period of events. They can plan the big events of the month from Ziggo Dome and sport activities from Rohan Cruijff Arena in order to introduce limited edition of meals and drinks. Moreover, Burger King can also innovate its packing of burgers, sides, salads and drinks with images that are relevant to the events that about to be held. For examples, a cup can be printed with victory icons together with relevant image or information of sport match. On the other hand, Burger King can develop more options with low- calorie burgers and vegan meals in order to catch up with trend of healthy food consumption. Place Burger King Amsterdam keeps its operation through physical stores, mobile app and deliveries. Customers during event week can access to Burger King’s app to get promotional codes or coupons for discounts or free delivery costs. Its app can offer games based on sport and music events and let winners again coupons or discount codes to redeem. Price Market-oriented pricing and bundle pricing are still applied as it plays at important strategy for Burger King to achieve competitive advantage. Promotion To target the segment mentioned above, Burger Bing will implement multiple online campaigns as advertising on these platform is less costly compared to TV and print media. On the other hand, according to Statista (2020), Millennials and Gen Z are active on social media with the highest users on Facebook, followed by Youtube, Instagram and Snapchat. Therefore, Burger King should target these social media platform with different campaigns. To increase customer’s awareness and engagement, Burger King can ask customers to share their moments of your products during events with hashtag on Facebook and Instagram in order to give gifts for winners with the most interesting pictures. Gifts can be discounts, freebies or special product edition during events such as cups, banners and t-shirts. Burger King can also partnership with another brand to promote both two brands in event period. For example, the suitable brand Burger King can work with is Coca Cola which own coke drinks and its brand association goes with happy and delighting moments. A viral video with Coke and Burger King on Youtube can be promoted with the introduction of events in Amsterdam. Delightful moments to have tasty food and follow favourite matches or concerts is the key message to be delivered in the clip to customers.
REFERENCE
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