Food and Beverage Brands’ Expansion and Site Selection Thesis

Abstract

Site selection remains one of the critical steps that have to be taken when expanding a food and beverage brand. When a firm fails to choose the right location, the overall performance will be significantly affected. In this paper, the researcher focused on investigating and comparing the conventional factors influencing site selection and the innovative indicators used in site selection in the food and beverage brands within the Kingdom of Saudi Arabia. Data were collected from both primary and secondary sources. Primary data obtained from the sampled participants were processed both qualitatively and quantitatively. Findings revealed that although traditional site selection indicators remain relevant and important, a firm in the food and beverage industry can no longer ignore novel site-selection indicators. Both the traditional and novel site-selection indicators should be taken into consideration to achieve success during the expansion of a food and beverage brand.

Introduction

Background

When a firm is planning an expansion strategy, one of the major factors that it has to consider is the site of the new branch. According to Fumagalli, Rezende, and Guimaraes (2021), the location that a firm chooses defines its ability to grow and be successful, irrespective of the industry in which it operates. Traditionally, there has been an emphasis on the economics of the location of a business. There is a general belief that a firm should be conveniently located to its customers as much as possible. This principle of site selection still holds despite the changes happening in the retail sector. Consumers will always patronize stores that they can easily access (Angelia and Nagian, 2020). The management has the responsibility of ensuring that the site selected will facilitate a continuous flow of customers.

In food and beverages, site selection is one of the fundamental factors that have to be considered when expanding to new markets. In their report, Sokol and Jordanov (2020) argued that a significant number of those who purchase these products are travelers. It means that finding a strategic location along the highway would be beneficial. Selecting a site close to a learning institution, major entertainment centers, close major industries, or any other similar places where people would regularly frequent is advisable. When selecting the site, a firm will put into consideration factors such as competition (Nanda, Xu and Zhang, 2021). Although finding a great site with huge traffic is critical, some firms might also try to ensure that the location does not expose them to an immense threat. As such, they will ensure that they find a location with as minimal competitors as possible.

Security in the selected region is another factor that one has to consider. A firm can only be successful if it is guaranteed sustainable security in a new location. Factors such as the threat of terror attack, burglary, frequent robbery with violence, theft, mugging, and such security-related concerns may affect a firm’s sustainability (Cheshmehzangi, 2021). Although the location may be attractive in terms of human traffic, when security is significantly compromised, success in such a location may not be assured. Other traditional site-specific factors such as property size and demographic profiles are still essential.

The preliminary investigation has revealed that the emergence of novel site-selection indicators is redefining the retail sector. Chen et al. (2018) believe that a firm that only focuses on the traditional indicators may not be sustainable in the market. New concerns are emerging, and one of them is environmental concerns. Customers want to be assured that the company’s location and operations do not harm the environment. Another major concern is the emergence of online sales and marketing in the retail sector. Many companies are embracing the concept of making their products available on various online platforms. These are emerging issues that successful firms have to put into consideration when expanding to new locations. In this paper, the researcher focused on investigating and comparing the conventional factors influencing site selection and the innovative indicators used in site selection in the food and beverage brands within the Kingdom of Saudi Arabia.

Problem Statement

In the current competitive business environment, firms are under immense pressure to make the right decisions that will ensure that they achieve a competitive advantage in the market. Food and beverage brands face immense competition because of the low barrier to market entry (Bjorklund, 2020). It means that the success of a firm in such an industry requires careful planning and effective management of both external and internal business environmental factors. One such critical factor is the site location of the business. Allen (2019) explains that when the site location is wrong, it will be almost impossible for a firm in the food and beverage industry to succeed. Such firms rely on rapid sales to ensure that their products are sold out before they can expire.

When scouting for a site selection, many companies often emphasize traditional site selection indicators. Most of these indicators focus on the economics of the site. These indicators are still relevant, but they are no longer enough (Pidduck et al., 2020). Changes in the socio-economic and political environment have all introduced new factors that are equally important. Environmental concerns and the emergence of online sales can no longer be ignored when a firm is selecting its location. These new factors pose new challenges to firms in the food and beverage companies. Chen et al. (2018) note that a firm must ensure that its operations do not pose a threat to environmental sustainability. It means that it may force a company to abandon an attractive site primarily because it poses a threat to the environment. The management has a new role of ensuring that the site selected will make it possible for them to operate both in the brick-and-mortar and the digital market places. Understanding how to address these new challenges is essential for a firm’s success in the food and beverage industry.

Significance of the Study

The food and beverage industry is not only competitive but also highly sensitive. Food products often have a short shelf-life, which means that they should be delivered to customers and consumed within a relatively short time. When these products are not sold in time, they will expire, which means that a firm will incur losses (Bjorklund, 2020). The location has a direct impact on the safety and security of food products. When the food and beverage premises of located close to a polluted environment, it is likely that the food items will be easily contaminated, exposing consumers to major health problems. The firm may face serious litigations when it is determined that its products pose health threats to consumers. On top of these traditional concerns, new issues relating to environmental conservation and the digital marketplace are also emerging.

This paper is significant to food and beverage companies because it explains how they can manage both the traditional and the new concerns in site selection. It will help companies in this sector to understand how to transform digital factors from a threat to major opportunities that can help increase sales while at the same time lowering the cost of production (Prommer, Tiberius and Kraus, 2020). The study will also enable firms to understand the benefits of protecting the environment and how to benefit from a clean environment. It will create an understanding of how the traditional and novel site selection factors can be achieved without straining a company.

Research Aim and Objectives

Defining the direction of the study is made possible by clearly stating the aim and objectives of the study. It helps in determining the specific goals that have to be realized by the end of the study. This study aims to compare the conventional factors that influence site selection with the innovative indicators that are used in site selection. The study specifically focuses on food and beverage companies in the Kingdom of Saudi Arabia. The following are the specific objectives that should be realized by the end of the study:

• To determine the significance of site selection on the business performance of food and beverage brands in the Kingdom of Saudi Arabia;
• To determine factors that have to be considered in expansion and site selection for food and beverage brands;
• To determine the relevance of Tapestry segmentation in the site selection for food and beverage brands;
• To identify consequences of ignoring novel site-selection indicators in the food and beverage industry.

Research Questions and Hypotheses

Expansion and site selection in the beverage industry are some of the widely researched fields in marketing and business management in general. Alturki (2021) advises that when conducting research in a widely explored field like this, it is essential to narrow it down to specifics, focusing on knowledge gaps that need to be addressed. Research questions help in defining the specific information that one seeks to obtain in the study. The following questions will need to be addressed through the collection and analysis of both primary and secondary data:

1. What is the significance of site selection on the business performance of food and beverage brands in the Kingdom of Saudi Arabia?
2. What are the factors that have to be considered in expansion and site selection for food and beverage brands?
3. What is the relevance of Tapestry segmentation in the site selection for food and beverage brands?
4. What are the consequences of ignoring novel site-selection indicators in the food and beverage industry?

Developing research hypotheses narrows down the investigation further, focusing on what a researcher seeks to achieve in the study. The following hypotheses were developed based on the preliminary review of the literature:

• H1. The performance of a food and beverage brand in a new site is positively correlated with sustainability performance indicators.
• H2. Tapestry segmentation in site selection positively correlates with visitor traffic in a food and beverage store.

Thesis Structure

The report has five chapters, each explaining specific issues about the research topic. The first chapter provides the background of the study, defining the specific goals that have to be realized. It explains the significance of the study and states the problem that needs to be addressed. The chapter outlines the aim and objectives of the research, questions to be answered, and hypothesis to be confirmed. The second chapter is a detailed review of the literature. It discusses what other scholars have found in this field of knowledge, including relevant theories in the study. The third chapter focuses on the methods used to collect and process data. It also explains ethical considerations that had to be observed and how issues relating to validity and reliability were addressed. Chapter 4 is a detailed analysis of primary data obtained from the respondents. It seeks to answer research questions directly based on the data that was gathered. The last chapter provides a summary of the findings and recommendations that should be considered based on the findings.

Literature Review

The previous chapter has provided the background information and the significance of this study. This chapter focuses on the review of the literature to understand what other scholars have found in this field. According to Chen et al. (2018), the essence of a research project is to bring to light new knowledge on a given topic. Duplicating already existing information does not add any meaningful value to a given field. As such, a researcher needs to start by understanding what other scholars have found out to avoid duplicating information. The review also helps in understanding knowledge gaps that need to be addressed to saturate data in that specific field. In this chapter, the researcher seeks to discuss site selection factors in business expansion and theoretical factors relating to the same.

Site Selection in Business Expansion

When expanding a business’ operation, one of the critical factors that have to be considered is the site. Bjorklund (2020) explains that location has remained one of the critical factors that define a firm’s success in the market. When a company fails to identify a strategic location, it may be faced with a high cost of operation, low customer traffic, environmental challenges, and numerous other challenges. A firm that operates in the food and beverage industry faces even a greater challenge when it comes to identifying the right location for the business. Allen (2019) explains that food items are not only highly perishable but also sensitive to contamination. The location of the business directly affects the product in this industry in many ways.

First, there is the threat of perishability of the product before they are bought and consumed by clients. If the location is not strategic, a firm will be preparing food items that will not be bought and consumed at the right time. They will perish and will have to be disposed of, causing immense financial loss to the company. Sokol and Jordanov (2020) believe that the sensitive nature of food items means that in locations with air, water, and land pollutants, the product can easily be contaminated. The location may be great in terms of human traffic, but immense air pollution will make it undesirable as an eatery.

It is essential to take deliberate steps to ensure that the location for the new business, when a firm is expanding, is appropriate not only in terms of economics but also in other emerging concerns. The need to protect the environment is an emerging concern in modern society. According to Fisher, Stevenson and Burnell (2020), customers are becoming conscious of the need to protect the environment. In many cases, they will avoid purchasing products of a given company when they are convinced that the firm’s operations are negatively affecting the environment.

Traditional Site Selection Indicators

Traditionally, there are factors that the management of a business had to consider before settling on the right location for business. Most of these factors were primarily focused on ensuring that the chosen location has the potential to attract customers and ensure that a firm operates without unnecessary inconveniences (Chen et al., 2018). These factors are still important in the modern business environment and cannot be ignored. For a food and beverage brand, it is necessary to understand these factors and find a way of embracing them when selecting a site for a company.

Security

One of the critical factors that have to be considered when selecting a business site is security. A firm cannot achieve success in an area where it is subject to constant robbery with violence, burglary, and theft. These security threats have a direct impact of robbing a firm of its assets and, in some cases, may paralyze operations, especially when an important asset is stolen or damaged. Constant robberies eat into the profit of a firm and pose major threats to the lives of employees and customers (Bjorklund, 2020). When a firm is operating in a highly competitive business environment, it is important to recruit and maintain a team of highly skilled and innovative employees. Such invaluable workers may not be ready to work in an environment where their lives and wellbeing are under constant threat when coming to work, while at work, and when going home. They will be willing to consider relatively low pay but in an environment where they feel safe.

Suppliers may consider increasing their prices if they realize that they have to overcome security challenges to deliver their products to a firm. When the life of suppliers is threatened, then they may avoid making deliveries to a firm, which will significantly affect the production process of a firm. Consumers will also be keen to avoid frequenting places where their security is compromised. In cases where they have to be in such places because of their job or any other reason, they will attempt to leave as soon as possible to limit the chances of them being attacked (Chen et al., 2018). They will also avoid purchasing an item in such locations because of the fear of attracting the wrong elements. These clients will find it more reasonable to visit a food and beverage store that is in a safer neighborhood as a safety precaution. If it is avoidable, Munoz et al. (2020) argue that a company should consider a location that does not pose any security threat to the business itself, customers, employees, suppliers, or any other stakeholder.

Property Size

The size of the property is another traditional factor that often has to be considered when identifying the location of a business. In a food store, customers need to be offered enough space where they can spend quality time eating. The space should be large enough to allow for the movement of customers with ease. The floor plan should be in a manner that facilitates privacy while at the same time allowing intimate discussions among the patrons (Memon et al., 2021). The outbreak of coronavirus disease (COVID-19) reemphasized the need to ensure that eateries have enough space to avoid crowding that can easily facilitate the spread of communicable diseases.

The size of the property in a food and beverage store is also essential because of the need to have enough space for warehousing, processing of the products, and disposing of wastes. Once raw materials are delivered, there should be a designated room where they are received, inspected, processed, and then stored (Giones et al., 2020). The firm will also need adequate space where the raw materials are processed into food products ready to be consumed. The kitchen should be large enough to ensure employees can move around easily without subjecting themselves to unnecessary dangers.

Proximities

Proximity is essential when selecting the location of a business. When it is a food and beverage store, Sokol and Jordanov (2020) state that the focus should be on finding a place where there is constant human traffic. One of the most desirable locations is along a busy highway. The goal is to attract travelers who may want to purchase a food item along their journey. Having such a food outlet close to learning institutions may be another good idea. Learners tend to be impulse buyers, especially when it comes to food items (Thorgren and Williams, 2020). During breaks, they are likely to purchase food items from stores located within or close to school. Some will purchase such items primarily because a friend has made the purchase. Busy central business districts are also attractive because employees will need to find a place to eat, especially during lunch hours and late in the evening after work. Large industrial estates with a significant number of employees will also be attractive (Chen et al., 2018). The goal is to ensure that the business is close enough to the targeted customers.

When addressing the issue of proximity, there are some places that a food and beverage outlet should avoid. One of them is a location that is close to a dumping site. The air pollution in such locations is likely to drive away customers. As Kautonen et al. (2020) note, no one wants to eat in a smelly environment. An environment with noise pollution may also be less attractive for a food and beverage outlet. As was mentioned above, security is a major issue, and as such, the location should not be close to places that are considered unsafe for customers, employees, suppliers, and other stakeholders.

Competition

Competition has remained one of the critical factors that the management has to consider when making various decisions, including site selection. According to Newbert, Tornikoski, and Augugliaro (2020), competition can be viewed from two completely different perspectives. First, competition can be considered a good thing that promotes creativity and innovativeness among companies involved. A food and beverage brand may choose a location that already has numerous other players as being the most ideal. Having numerous companies offering the same products in one location creates a large pool of customers. It creates the impression that if one wants a variety of products at the best price and of the best quality, they need to visit the place (Shepherd, 2019). As more customers get attracted, sales of individual firms in that location would increase. Competition can also promote creativity and innovativeness among the firms involved. The need to outsmart competitors pushes a firm to develop superior products and superior ways of production. In such an environment, the cost of production will significantly drop at a time when quality and quantity are enhanced.

Secondly, it is possible to look at competition as a major threat to the sustainability of a firm. Since competition enhances innovation, sometimes it may hinder growth. When competition is still, Bjorklund (2020) observes that some firms may consider price wars as a way of forcing their rivals out of the market. A firm may deliberately choose to sell its productions at a loss for some time as a way of eliminating the financially strained firms from the market. Such strategies are not sustainable in the long term. Moreover, adjusting the price upwards after rivals have been eliminated may create a negative image for the firm. It may also attract the attention of the regulators, who may be interested in investigating the competitive tactics of a firm. Still, competition can also result in the constant stealing of ideas.

Demographic Profiles

Demographical factors should also be considered when selecting the location of a business. In the food and beverage industry, the primary customer target may vary depending on the products that a company offers. Some products are primarily meant for young primary school children, some target adolescents and young adults, other are meant for adults, while others may target the elderly. When a product targets young children, the right location would be next to a kindergarten, a primary school, or a popular social amenity center that attracts children.

When a product targets adolescents and young adults, having the outlet next to a high school or a college would be highly advisable. The location should be in a central business district or an industrial park when one targets the adult working class. For the elderly, targeted sales may be advisable, especially when they are in retirement homes. The goal, as Bjorklund (2020) puts it, is to ensure that the location enables the firm to reach out to the targeted audience. In terms of social class, the outlet should be located in places that are frequented by the desired customers. If the outlet targets the rich in the society, then it should be located in rich neighborhoods where the rich stay. The same is the case when a firm is targeting the middle class or the poor.

Novel Site-Selection Indicators

The emerging trends and practices are defining the approach that business entities take in their operations. According to Cliquet and Baray (2020), the business environment is changing, and firms cannot afford to stick to traditional methods alone. They have to find a way of integrating the traditional methods with new practices. Environmental degradation and the need to stop or slow climate change and global warming have redefined the approach that firms take in the market. Technology is also changing the approach that customers take to communicate with customers and make products available for them. In this section, it is necessary to discuss novel site-selection indicators that are directly attributed to these new changes.

Socio-Economic and Demographic Characteristics

Consumers are increasingly getting choosy when it comes to purchasing products because of the numerous options available for them in the market. Shepherd (2019) argues that the ‘one-size-fits-all’ concept is no longer sustainable in the market. Globalization has led to the increased interaction of people from different parts of the world, but tastes and preferences remain as diverse as it has always been (Chen et al., 2018). In Riyadh, for instance, there are North Americans, South Americans, Europeans, Asians, and Africans who are working or visiting the city for various reasons. A successful food outlet must be capable of understanding the unique requirements of these customers.

Tapestry segmentation is seen as an effective tool that makes it possible to identify these unique needs and how to meet them specifically. Defining the socio-economic traits of customers is essential when defining the location. Allen (2019) advises that the first step should be for a firm to select the most attractive market segment, understand their needs, and then develop a product that effectively meets the needs. The last stage should be to locate the business on a site that is easily accessible to the targeted customers. It means that data is becoming a critical factor when defining the location of a business.

Environmental Sustainability

A new trend is emerging where consumers are becoming conscious of the impact of their purchasing patterns on the environment. A significant number of customers are now considering how the operations of a firm affect the environment before they decide to purchase their products (Cliquet and Baray, 2020). They are concerned about the consequences of global warming and climate change. These emerging trends are forcing companies to redefine their operations to ensure that their operations do not have adverse effects on the environment. Most of the corporate social responsibilities (CSR) are forced on protecting the environment. In site selection, a firm needs to ensure that environmental concerns are taken into consideration. Protecting the riparian land and water catchment areas is a major concern, which means that such locations have to be avoided. Allen (2019) emphasizes the need for a firm to find a location that will enable it to manage its wastes without posing any threat to the environment.

The Emergence of Online Retailing

Online retailing is gaining massive popularity around the world. Many companies, including food stores, are now delivering their products to customers. Although the Uber Eats app was not successful in Saudi Arabia, numerous other alternatives have emerged, making it possible for a firm to sell its products through digital platforms. Online sales of products are revolutionizing the concept of site selection (Chen et al., 2018). A firm that chooses to sell its products exclusively on online platforms no longer needs to select a strategic location that is frequented by the masses. Instead, it only needs to find a strategic location to ensure that it can receive supplies and deliver its products to customers conveniently (Sokol and Jordanov, 2020). It means that if the outlet is in a location that has very low traffic, its success will depend on how efficiently it can process products at low costs and deliver them to customers in time.

Theoretical Concepts

The importance of selecting an appropriate site for a new outlet is a critical issue that has attracted the attention of scholars over the years. Various theories have been developed to help explain the practice of selecting appropriate locations and how doing so influences the ability of a firm to achieve success in the market. The following theories were found to be relevant in the analysis.

Consumption Theory of Gentrification

This theory has gained massive popularity in defining the location of specific consumers in an industry. It holds the view that educated people, especially the middle-class, prefer central cities to rural settings because of urban amenities that support their consumption preferences (Bjorklund, 2020). They are attracted to the cities because they can easily access various services and products that they need to sustain their lifestyle. When a food and beverage firm targets the middle-class and the educated, urban locations would be the most desirable locations to establish the business. Such a location would assure a firm of a steady flow of customers, especially if it is in a strategic place that is accessible and conspicuous to the targeted clients.

Sustainable Consumption

The concept of sustainable consumption can no longer be ignored in the food and beverage sector. The concept holds that there is a need to use products and services in a way that eliminates or significantly minimizes the impact on the environment to ensure that the ability of future generations to meet their needs is not compromised (Cliquet and Baray, 2020). In the context of expansion and site selection, a firm should ensure that the selected site does not pose a threat to the environment. Its location should make it possible for the firm to operate without polluting water sources and riparian land, causing fire on forests, or negatively affecting natural resources. As shown in figure 2.1 below, it is a cyclic process that starts with sustainable resource management, designing sustainability strategies, cleaner and efficient production strategies, and sustainable transportation (Brown and Rocha, 2020). It then foes to eco-labeling and certification, sustainable procurement, sustainable marketing, sustainable lifestyle, and sustainable waste management. The chosen site should make it possible for a firm to achieve these goals.

Law of Retail Gravitation

The theory has become one of the important guidelines when a firm is selecting a new site. According to Friske and Choi (2013, p. 3), the theory asserts that “groups of customers are drawn to certain retail locations because of factors like the distance to market, the distance between markets, the market population, the size of the retail establishment, the location of competitors, etc.” A firm should consider these factors when selecting a location. Sometimes it may be advisable to select a location that already has a considerable number of competitors because customers are attracted to locations where they can have numerous choices when making their purchases. More importantly, the location should be convenient to the customers to ensure that they do not strain whenever they need to purchase a product.

Methodology

The previous chapter provided a detailed review of the literature to understand what other scholars have found in this field. The review of the literature has identified research gaps that will need to be addressed through a collection and analysis of primary data. In this chapter, the researcher seeks to provide a detailed explanation of the method used to collect and process data that was collected from the participants. Based on the research onion, shown in figure 3.1 below, the chapter starts by explaining the research philosophy and research approach. It then discusses the research design, data collection method, and analysis approach. Validity, reliability, and ethical considerations are also addressed in this chapter.

Research Philosophy

When conducting research, the first factor that one should define is the research philosophy, as shown in the figure above. According to Le and Schmid (2020), research philosophy relates to the assumptions made when developing knowledge. These assumptions are essential in enabling a researcher to define the path that should be taken when developing the new knowledge. The research philosophy chosen also defines the overall strategy that will be used to collect and process data. A researcher can use positivism, realism, interpretivism, or pragmatism, depending on the aim and objectives of the study. It is necessary to briefly define each of these philosophies before explaining why one of them was chosen as the most appropriate one.

Positivism is one of the popular research philosophies among researchers. It holds the belief that factual and trustworthy knowledge can only be gained through observation and measurements (Busetto, Wick and Gumbinger, 2020). It emphasizes the need to collect quantifiable data that can be processed statistically to answer specific research questions. It involves developing a research hypothesis and then processing data to confirm or reject them. One of the most important requirements that a researcher must observe when using this philosophy is that their role is always limited to that of observation, data collection, analysis, and interpretation (Thanem and Knights, 2019). As such, they are not expected to influence or adversely interact with the subjects. Although this philosophy would be ideal for this study, the fact that it specifically focuses on quantitative data alone made it undesirable. It limited the ability to answer research questions in great detail and to achieve the aim of the study.

Interpretivism is another common research philosophy that is worth explaining briefly at this stage of the paper. According to Busetto, Wick and Gumbinger (2020), this philosophy involves a detailed interpretation of elements of research, which would require a human interest in the study. Unlike positivism, this philosophy argues that a researcher must interact with subjects to understand a specific phenomenon in great detail. Spending time with a community enables one to understand why they behave in a given manner, and the data that will be collected through such a process provides greater insight into the issue than when one has to solely rely on interviews. This method emphasizes the need to use qualitative methods as the only way of providing a detailed explanation of a phenomenon beyond the simple use of statistics.

Realism is another philosophy that is popular among pure scientists, though it is not common among social scientists. Its primary principle is that reality is independent of the human mind (Le and Schmid, 2020). It believes that the human mind can easily be biased in a way that does not reflect reality. In such cases, when a researcher relies on information provided by people through an interview or any other source, it is possible to find skewed data. The only way through which one can collect reliable data is by the use of scientific methods. It believes in the knowledge that is developed in a laboratory setting as the only factual information. In this study, the aim could not be realized through a laboratory study. As such, this philosophy was considered inappropriate for this study.

Pragmatism is another popular research philosophy when one is conducting a study in social sciences. Bougie and Sekaran (2020) explain that this philosophy holds the view that a concept is only acceptable and relevant if it supports action. It allows a researcher to use different strategies to develop a concept, but the concept developed should be practical and capable of addressing the problem that is focused on managing. Pragmatists argue that there are different ways of undertaking research and interpreting the world (Thanem and Knights, 2019). It is unacceptable for one to rigidly define a specific method that everyone must follow when developing new knowledge. Instead, it is liberal enough to allow different ways of interpreting the world, as long as they support action. In this study, the researcher seeks to determine expansion and site selection for food and beverage brands. It will be necessary to use mixed method research to achieve the aim by using both qualitative and quantitative data. Pragmatism allows a researcher to use either of the methods or both if it is necessary.

Research Approach

Defining the research approach is the next step after selecting the research philosophy. The research approach, as Fellows (2021) observes, is the general procedure and plan that one uses to conduct a study. It is the pattern that a researcher relies on to develop new knowledge. Bougie and Sekaran (2020) advise that once a philosophy is identified, it is essential for a researcher to ensure that the selected approach is in line with the principles of the selected philosophy. One can use a deductive approach, inductive approach, or abductive approach as the appropriate design for the study.

Deductive reasoning is a popular research approach, especially when one is conducting quantitative research. As shown in figure 3.2 below, it starts with the identification of a theory upon which a study will be based. The researcher is then expected to develop a hypothesis based on the selected theory (Eden and Nielsen, 2020). Data collection and analysis will then focus on testing the hypotheses to accept or reject them. The confirmation or rejection of the data can only be done through a quantitative analysis of data. This approach is highly effective, but it was not used in this study because it limits data collection and analysis to quantitative methods.

Inductive reasoning takes a completely different approach from deductive reasoning. As shown in figure 3.3 below, it requires researchers to start by observing the world. Fellows (2021) argues that inductive reasoning seeks to be as objective as possible by requiring researchers not to rigidly define the intended goal. Instead, they should be keen on making specific observations to develop a pattern. The developed pattern should be primarily based on the observations made of a given phenomenon. Once the observation has been made and interpreted, the researcher is then required to develop a theory or new knowledge. The assumption made in this approach is that the theory or new knowledge developed should be derived from the observations made and tests conducted (Bougie and Sekaran, 2020). The method is popular when conducting qualitative studies, which meant that it could not be used in this study.

Abductive reasoning is a relatively new approach compared to the two discussed above. According to Fellows (2021), the approach emerged from the need to address the weaknesses of deductive and inductive reasoning. These two approaches have been criticized as being rigid when it comes to the collection and analysis of data. As such, abductive reasoning is pragmatic enough and seeks to address the weaknesses of the two approaches. It involves making observations, which may include developing and testing hypotheses, to facilitate the best predictions. It is in line with the principles of pragmatism as a research philosophy. This was considered the most desirable research approach when trying to determine expansion and site selection for food and beverage brands.

Research Strategy

The next step when the research approach has been defined is to identify the most appropriate strategies for collecting data. The popular approaches to collecting data include experimentation, case study, survey, action research, grounded theory, ethnography, and archival research (Fellows, 2021). The choice of the strategy used is based on various factors. One of the major factors that have to be considered when selecting an appropriate strategy is the time available for the researcher. Some of these strategies are time-consuming, while others can be completed within a relatively short period.

Another factor is the geographic distance that a researcher can cover. Some strategies require a researcher to physically visit places or people to make the necessary observations (Thanem and Knights, 2019). Resources available for the research are another factor that has to be taken into consideration. The researcher used surveys and secondary data. Secondary data was useful in understanding what other scholars have found out in this field of knowledge. It also made it possible to identify existing knowledge gaps that needed to be addressed through this study. The survey made it possible to collect data from primary sources. Information from the survey was meant to address research gaps and to respond to research questions more directly than when secondary data is used.

Research Design

When data has been collected, the next step is to process it in a way that fully answers the research questions and responds to the aim and objectives. Just like the research philosophy and approach, the design selected should make it possible to achieve the aim and objectives of the study. Bougie and Sekaran (2020) also emphasize the need to ensure that the design is in line with the principles of the selected philosophy and approach. Depending on the goal that needs to be realized, the research can be qualitative, quantitative, or mixed research methods.

The researcher considered it necessary to use mixed method research, which involves the use of qualitative and quantitative research. The qualitative research design was considered necessary to explain the reasons for expansion and site selection for food beverages. This method makes it possible for respondents to provide a detailed explanation of a phenomenon, allowing the researcher to understand how and why it happened. Using this method, the researcher explained factors that need to be considered in site selection. The method went beyond statistics to integrate the varying opinions of respondents over the issue being investigated.

Quantitative research was also considered critical in this study. As McGill et al. (2021) observe, different factors have different degrees of impact on the success of a business. When selecting a site for food and beverage, a factor such as location has been identified to be more significant than the proprietor’s personal preferences. Using quantitative data, the research not only identifies these factors but it is also quantifying them, making it possible for one to determine those that are more critical. It means that in decision-making, it becomes possible to identify those that should be prioritized and those that can be implemented at a later date because they cannot significantly influence the success of a business. Using statistical tools, the researcher coded the quantitative data, and the outcome was presented in the form of graphs and charts.

Data Collection Method

Data used in this study were collected from two sources, which included primary and secondary data. Secondary data was collected from peer-reviewed journals, books, company reports, and reliable online sources. Databases such as Jstor, Elsevier, Google Scholar, and Sage Publications. Using keywords and phrases such as site selection, customers, brand, and business success, the researcher was able to locate the relevant materials from these databases. Information obtained from the secondary sources formed the basis of the literature review discussed in the previous chapter.

Primary data was collected from a sample of participants. When collecting data from secondary sources, the researcher observed that most of them were published in Western Europe and North America. It means that these sources do not provide information that is specific to the Middle East, in countries such as the Kingdom of Saudi Arabia or the United Arab Emirates. Collecting primary data was the only way through which the researcher could understand the issue being investigated in the local context. Collecting and analyzing data from primary sources also made it possible to address the identified research gaps.

Sampling and Sample Size

Sampling is essential when collecting primary data from a large population. Bougie and Sekaran (2020) explain that sampling makes it possible for one to have a manageable population. Stratified random sampling was considered most appropriate for this study. This method involves dividing the targeted population into subgroups, often referred to as strata. Once the strata are identified, the researcher will then use simple random sampling to identify the specific individuals to be part of the study. The researcher identified two strata because of various reasons. The first stratum included local businesses that have remained operational for at least the last eight years.

The researcher wanted to know the views of the owners about the role that expansion and site selection has played in facilitating their success. They were considered capable of providing expert knowledge about the issue being investigated based on their experience. The second stratum included customers who use these services regularly. It was necessary to determine how customers view the location as a factor that determines if they would visit a food store. The researcher sampled 15 small-scale business owners and 35 customers to be part of the study, which made the sample size include 50 participants.

Questionnaire Design

When collecting data from participants, it is always advisable to develop a questionnaire to guide the process of data collection. A questionnaire was developed to capture the aim and objectives of the study. The questionnaire had three major sections. The first section of the document focused on understanding the demographics of the respondents. Factors such as age, nationality, and gender were captured at this stage (Vaughn and Jacquez, 2020). This section was meant to ensure that those who participate in this study are Saudi Arabians or foreigners who have stayed in this country long enough to understand local dynamics.

The second part of the document focused on the academic qualifications and experience of the respondents. It helped in determining the authority that each respondent had in explaining a given phenomenon. It was in this part that the researcher was able to determine if a respondent was classified as a business owner or a potential customer. The third section of the document focused on specific issues relating to the expansion and site selection for food and beverages. The section used both closed and open-ended questions to capture data that could be processed both qualitatively and quantitatively.

Data Collection

The approach used to collect secondary data was explained in the section above. Primary data used in the study was collected through a survey. Respondents were classified into the two strata explained above. The researcher then contacted each of the participants directly and informed them about the study and the need for them to be part of it. All their questions and concerns were fully addressed. Those who agreed to be part of the study received the questionnaire through their emails. They were requested to answer the questions and return the document afterward. They were given five days to duly fill out the forms and email them back. Once received, the data was processed and analyzed both qualitatively and quantitatively, as explained in the research design.

Validity and Reliability

It is always important to determine the validity and reliability of a study, especially if the document can be used by policy-makers or business entities to inform their decisions. The validity of a study focuses on the accuracy of a given measure, determining whether the outcome accurately represents what they are supposed to measure (Vaughn and Jacquez, 2020). The validity of this study was ensured through the use of triangulation. Using data from both secondary and primary sources was meant to enhance the validity of the study. Reliability was another factor that had to be taken into consideration as it seeks to determine the consistency of the measure, especially whether the same results can be reproduced in a study with the same conditions (Thanem and Knights, 2019). To ensure there was reliability, the researcher tested the questionnaire to ensure that it could consistently reproduce the same results. The methodology was outlined in clear terms to ensure that the same methods could be repeated if it would be necessary.

Ethical Considerations

Ethical issues had to be taken into consideration when conducting this study. According to Bougie and Sekaran (2020), when collecting primary data from the audience, one of the critical issues that have to be taken into consideration is the need to protect the identity of the participants. Sometimes the issue under investigation may be highly divisive, emotive, or controversial. It means that one can be profiled if their opinion differs from that of the majority of the population (Atmowardoyo, 2018). In this study, the issue is not emotive, but it was still essential to ensure that the identity of the participants was protected.

Instead of using their actual names, the researcher assigned participants unique identifications. They were assigned as Participant 1, Participant 2, Participant 3, and so on to ensure that their identity remains anonymous. Participation in the study was voluntary, and they were informed about the same. All participants in the study were either small-scale business owners or customers. As such, it was not necessary to get the approval of the management before collecting the data. Being an academic paper, the researcher made sure that the document was written from scratch and that secondary data was referenced accordingly using the Harvard referencing style.

Analysis and Discussion

Introduction

The previous chapter explained the method that was used to collect and process data in this study. In this chapter, the goal is to process the primary data collected from the respondents to answer the research questions and to achieve the aim of the study. As explained in the previous chapter, the researcher conducted both qualitative and quantitative analyses of data to understand the significance of site selection for food and beverage brands, especially during expansion. The chapter then provided a discussion, which is an integration of data obtained both from secondary and primary sources.

Analysis

When data was collected from the sampled participants, the next step was to analyze to respond to each of the primary questions linked to the objectives of the study. To help conduct a comprehensive analysis of the issue under investigation, the researcher used both qualitative and quantitative methods of analysis. The following questions were answered through a mixed method research design.

What is the significance of site selection on the business performance of food and beverage brands in the Kingdom of Saudi Arabia?

In the review of the literature, it emerged that site selection was significant in defining the performance of food and beverage brands in the market. The researcher asked the participants to state whether they believe the same is true in the local context based on their knowledge and experience as business owners or employees of food and beverage companies in the country. As shown in figure 4.1 below, 78% of the participants (39 individuals) reported that they strongly agreed with the statement. Another 18% noted that they agree with the statement, which means that 96% of the participant believe that site selection is critical in defining the success of a food and beverage brand. 2% of the participant noted that they were unsure, one person stated that they disagreed with the statement, while none of them strongly disagreed with the statement. Statistically, one can conclude that there is a strong relationship between the success of a food or beverage brand and the site selected for its operations. If a wrong site is selected, it means that such a firm may not easily achieve success.

What are the factors that have to be considered in expansion and site selection for food and beverage brands?

The next question was interested in determining factors that need to be considered in expansion and site selection for food and beverage brands. Using the open-ended question, the researcher asked respondents to identify specific issues that they consider a priority when a firm is scouting for a location in its expansion effort. The respondents identified various factors.

Respondent 1 said, “I consider the traffic flow as one of the critical issues to be considered. A significant number of customers would visit a store that is conveniently located, especially if they are travelers.’

Respondent 7 said, “For me, I highly value security. Before considering other factors, I have to ensure that the location is safe for my business, my employees, customers, suppliers, and all the other stakeholders. I believe a firm cannot flourish in a lawless area where crime is common.”

Respondent 24 said, “I consider proximity to local relevant amenities when looking for a site for a business. I believe that when a firm is strategically located close to such amenities, there will be an automatic flow of customers in the business.”

Respondent 38 noted, “In the food and beverage industry, I believe one of the critical issues that one has to consider is the availability of a skilled workforce. It is meaningless to have a great location frequented by customers if it cannot attract great chefs and waiters as well.”

Respondent 49 said, “I consider socio-economic and religious factors as being important when selecting a location for a food and beverage firm. When the location is great but the food item made available is unfordable or undesirable to the locals, then failure for such a firm will be inevitable.”

What is the relevance of Tapestry segmentation in the site selection for food and beverage brands?

Tapestry segmentation emerged as a significant factor that one has to consider in the site selection for food and beverage brands when conducting a review of the literature. The researcher wanted to determine, from primary data, if this tool is important in the local context. When asked if they consider Tapestry segmentation to be important, 58% strongly agreed with the statement. Another 34% agreed with the statement, which means that an overwhelming majority, 92%, believe that this tool is essential in the local context. It helps the management to classify customers and select the one it can meet their needs the most. It can then focus on moving close to its targeted customers in a targeted marketing approach based on the outcome of the segmentation. 4% of the participants stated that they were not sure about the significance of this tool.

Another 4% of the participants had a contrary opinion to that of the majority, with 2% disagreeing and another 2% strongly disagreeing with the statement. These minority of the participants believe that this segmentation tool has no role to play in selecting a site for a food and beverage site. In this study, the view of the overwhelming majority will be held as being truthful. Figure 4.2 below shows the outcome of the analysis of the primary data.

What are the consequences of ignoring novel site-selection indicators in the food and beverage industry?

The last question focused on the consequences of ignoring novel site-selection indicators in the food and beverage industry. In the review of the literature, it emerged that it is common for companies to try and ignore these indicators, but in the long term, the impact can be crippling. The researcher wanted to know if the participants in this research felt the same based on their knowledge and experience. As shown in figure 4.3 below, a significant majority of the participants (88%) strongly agree with the statement that these novel site-selection indicators are critical and that ignoring them may have devastating consequences. Another 10% also agreed with the statement, which means that there was a near-unanimous agreement among the participants, at 98%, that ignoring these indicators can be consequential. Only 2% of the participants (1 individual) noted that they were not sure about the consequences. None of the 50 participants recorded a contrary opinion. It means that a food and beverage brand should consider a priority, the novel site selection indicators because when ignored, consequences can be crippling.

Discussion

The Kingdom of Saudi Arabia is currently one of the most attractive markets in the food and beverage industry in the Middle East. The growing economy, the growing population, and regular millions of tourists who come to the country for pilgrimage or other reasons are all contributing to the growth of the food and beverage industry (Alqunaibet et al., 2021). As such, firms are keen on expanding their operations to different parts of the country to capitalize on the growing demand for the products offered. Shepherd (2019) observes that the industry has attracted both local and international companies because of its growth potential.

When expanding a business, one of the critical issues that a firm has to consider is the location of the chosen firm. According to Allen (2019), in the food and beverage industry, location is perhaps the most important thing that a firm has to get right to achieve success. A company that has great food items but is in a hidden location that is inaccessible to the masses may be forced to close its operations primarily because of poor site selection. A significant number of those who purchase these products are travelers who visit stores conveniently located along highways. Data obtained from both primary and secondary sources reiterate the significance of both traditional and novel site-selection indicators.

Traditional site-selection indicators are still critical, as indicated in both primary and secondary data. One of the traditional indicators identified in the data analysis is traffic flow. Respondents explained that the ability of a food and beverage store to achieve success depends on the traffic flow. Some consumers do not plan to purchase a product from a specific outlet, especially visitors who have not developed a perception of the local competitors. They will visit an outlet that they find conveniently located (Cliquet and Baray, 2020). It means that if the firm chooses a site that is not easily accessible to the masses, its performance will be directly affected.

Security emerged as another traditional indicator during site selection. As one of the respondents observed, it is difficult for a firm to achieve success in the market if there is a lack of security in the region. Insecurity in an area means that the firm will be subject to regular thefts, burglaries, and robberies, which not only reduces a firm’s profitability but can paralyze its operations as well (Chowdhury, 2020). There is also the constant threat that the insecurity poses to customers, employees of the firm, and the business owner. Robbery with violence can easily turn tragic, and as such, various stakeholders will avoid such places. Customers will try to find safer places to have their meals and drinks. Employees will try to find safer workplaces where they believe their lives will not be threatened.

Proximity to local relevant amenities was another important traditional indicator identified by those who participated in the study. Institutions of learning are some of the most attractive facilities when identifying a location (Shepherd, 2019). Learners tend to be impulse buyers, whether they are in a primary, secondary, or tertiary learning institution. A firm only needs to find the right product for the targeted learners based on their age and other relevant demographical factors. Having a food outlet close to a major industrial center or business park is another brilliant idea because they are likely to be visited by a large number of customers, especially during lunch hours.

A skilled workforce was also mentioned by one of the participants as a traditional site selection indicator that should be considered. A firm’s performance in the market directly depends on the skills and competency of its employees (Shepherd, 2019). The food and beverage industry is highly sensitive when it comes to product preparation. Besides ensuring the safety of the products, a food store has to ensure that the taste of a specific product remains consistent, especially after developing a loyal base of customers. It means that it should have a team of employees capable of meeting customers’ needs. The location should make it possible for the firm to hire the needed employees with ease.

In an expansion strategy, a food and beverage brand should not ignore novel site-selection strategies. Consumers are becoming sensitive about the impact that products they purchase have on the environment. It emerged that environmental sustainability is currently one of the most important factors to consider when selecting a site for a business. The chosen location should not pose an adverse impact on the environment (Chen et al., 2018). It means that it should not lead to the pollution of the environment, especially the water sources. A food and beverage brand should select a location that makes it possible for it to manage its wastes responsibly. It should also consider reducing its carbon footprint in its production activities.

Socio-economic and religious factors are also essential when a food and beverage store is trying to select the right location. Downs et al. (2020) explain that such a firm should start by segmenting the market to identify consumers that it can serve most effectively. The segmentation should focus on consumers’ age, financial status, and personal preferences. Some products are suited for young children, which means that locations near schools would be ideal. Other products target the rich, which would require the firm to be located in rich neighborhoods. Religious beliefs and practices are also critical when defining the location. Riyadh and other major cities across the Kingdom of Saudi Arabia are highly cosmopolitan, attracting expatriates from Europe, North and South America, Asia, and Africa. There may be a huge demand for products such as bacon and sausages among these immigrants. However, a firm should not ignore religious beliefs and practices in the country that declare some food items as not being halal.

Conclusion and Recommendations

Expansion and site selection for food and beverage brands are critical decisions that define the performance of a firm. Data obtained from primary and secondary sources show that site selection is the most important thing in the food and beverage industry, besides having a great and safe product. A firm in this industry can only prosper if its products can reach customers at the right time and when in good condition. In this study, the goal was to investigate and compare the conventional factors influencing site selection and the innovative indicators used in site selection in the food and beverage brands within the Kingdom of Saudi Arabia.

Findings in this study reveal that Saudi Arabia is currently one of the most attractive markets for local and multination food and beverage brands. It has been revealed that the conventional factors of site selection such as traffic flow, security, and proximity remain critical. However, a firm cannot afford to ignore the novel factors such as the need to protect the environment and to consider socio-economic forces within the country. It might be easy to ignore some of the novel site-selection indicators, such as the need to protect the environment in the short term, but these indicators directly influence a firm’s sustainability. As such, a food and beverage brand should consider the following recommendations in its site selection within the Kingdom of Saudi Arabia:

• The management should consider traditional site-selection indicators such as security, property size, proximities, competition, and demographic profiles because they remain critical in defining a firm’s performance;
• A firm in this industry should not ignore novel site-selection indicators, especially the need to achieve environmental sustainability in its operations;
• It is necessary to take into consideration socio-economic factors and religious beliefs in this country when defining products and selecting the location.

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