Background, products/services, and markets
Tico Mas is a fast-food organisation that operates in the American market. Its first store opened in California in 2010.Today, it has 15 more stores in different states within the US. The organisation offers products such as vegetable salads, beef hamburgers, fruit juices, coffee, ice creams, French fries, chicken hamburgers, and pizza. It now mainly focuses on the American markets, although the company plans to expand into international markets in its effort to increase profitability.
For example, it is considering targeting the Asian markets in the future. Although the business is predominantly a product-based organisation, customer services are considered an important aspect of enhancing future growth.
In the fast-food sector, issues such as the rate of serving customers and effective management of employees-customer relations are all important aspects of service delivery, which the management believes Tico Mas can use in building its long-term competitive advantage not only in the American markets, but also in other anticipated global markets.
Role of strategic marketing
As Tico Mas manager, I have the responsibility of leading work teams to achieve the organisation’s short-term and long-term growth strategies. To help in building organisational success, strategic marketing is incredibly important. What role can it play at Tico Mas? Tico Mas must apply effective strategic marketing efforts to remain relevant and/or gain market share that can enable it to break even. The objective of any company is to deliver values to its owners (Kotler & Armstrong 2008).
For Tico Mas, this value is expressed in terms of its returns on investments. With the increasing concerns about the role of organisations in delivering value to not only the owners, but also other stakeholders who have vested interests in the performance of an organisation as Kotler and Armstrong (2008) confirm, Tico Mas deploys principles of strategic marketing to portray itself as a business that engages in activities in a socially responsible manner.
Strategic marketing entails a group of continuous activities and comprehensive processes that organisations use to systematise and align resources. Activities in strategic marketing are aligned with the organisation’s mission, vision, and plans (Dess, Lumpkin & Taylor 2005).
Through strategic marketing, Tico Mas acquires a mechanism for changing static plans into strategic performance outcomes that help it to initiate key decisions and/or enable business strategies to gradually develop as change opportunities. Indeed, strategic marketing provides avenues for probable organisational growth by creating an effective mechanism for analysing Tico Mas’ strategic goals, which include its vision, mission, and objectives alongside the analysis of the organisation’s internal and external environment.
Strategic marketing determines the success of Tico Mas since it provides a potential way of aligning the organisation’s marketing plans with strategies for gaining a competitive advantage. Various strategies can be used in gaining a competitive advantage.
These strategies include pursuing the low-cost scheme to help in driving success for an organisation and conducting extensive promotion of products to win customer confidence (Dess, Lumpkin & Taylor 2005). Cost drop focuses on reducing the charges for various products and services in the industries. It aims at increasing profit while at the same time reducing the operational costs.
Process of implementing a strategic marketing strategy
With the knowledge on where to market and/or how to do marketing, the next important issue in strategic marketing for Tico Mas is the development of a mechanism for putting marketing strategic plans in place. Implementation of marketing strategic plans at the organisation has five steps.
The first step is the evaluation of the plans to eliminate any unrealistic elements, the likely excessive cost, and the implementation time. The second step entails setting the vision for implementation of the plan. This step also involves setting goals such that the organisation can know whether the plan is effective if the goals are attained.
The third step is the setting of a team to implement the plan. The team must understand the goals and the inevitability of the plans. The fourth step involves setting and scheduling various group meetings that are aimed at discussing the plan implementation progress.
The fifth step entails bringing all management executives on board to help in analysing the progress and achievement of the marketing plans. This procedure ensures that they also become part of the plan. Hence, if problems arise, brainstorming can be initiated to help in their (problem) alleviation.
The Link between Marketing and Corporate Strategy
Corporate level strategies aim at examining what an organisation does together with its command decisions. These decisions include determining whether a business establishment deserves to diversify into new regions, developing partnerships with other rival companies, and/or abandoning certain product lines to focus on the most profitable ones (Hitt, Ireland & Hoskisson 2013). Marketing ensures that the concern of corporate strategies is achieved by developing appropriate plans for positioning and attracting customers.
Tico Mas’ long-term marketing strategy outlines its growth and increased performance intention within a specified time. The organisation has a variety of corporate-level strategies to assist in its continued growth. It focuses on staying in a single activity in the industry with the chief purpose of creating a competitive position.
Marketing ensures the attraction of customers so that an organisation can gain a competitive advantage through increased sales and profitability. Thus, through marketing, Tico Mas can establish a strong worldwide brand image and loyalty.
As a corporate strategy, Tico Mas can focus on vertical integration. This technique aids in reducing costs via provision of methodologies that uphold forward integration, establishment of allotment channels, and the checking of input and outputs. In this process, marketing plays a significant role in ensuring communication of the organisation’s products to target customers so that the distribution channels can increase the company’s efficiency in supplies.
Theories in Strategic Marketing Planning
Strategic marketers deploy different models of marketing planning. The 3Cs framework aids in developing a detailed approval of issues in the strategic operational setting. The marketing mix positioning is perhaps well explained through Ansoff’s matrix model. When pursuing a given marketing plan, the 4Ps model aids in developing a clear understanding of the market targeting strategy (Shaw 2012).
In determining the long-term implications of altering any element of the 4Ps, customers-lifetime-value model helps to visualise the changes. It is also important to access the market in which an organisation sells its products and services during marketing planning. In this extent, PESTLE and SWOT analysis models are important (Shaw 2012). Tico Mas deploys 4Ps and PESTLE models in marketing planning.
Tico Mas targets markets after considering the PESTLE approach for analysis of the market dynamics. However, based on the 4Ps, namely product, place, price, and promotion model, before conducting the PESTLE approach for analysing markets, the organisation has developed criteria for selecting the location of its stores in the effort to ensure easy positioning.
First, the most appropriate location is the one that does not have large fast-food outlets within a radius of a minimum of 1 Kilometre. A large amount of space should also be available at low cost. The regulations and laws that govern the operation of large and medium enterprises should also be developer-friendly. In the promotion process, new and traditional media platforms are deployed.
PESTLE is the acronym for political, economic, social, technological, environmental, and legal factors that influence a marketing planning strategy (Gerry, Kevan & Whittington 2005). For Tico Mas, the political environment influences the operations of the company via taxing policies since the company must pay charges in the form of taxes to the nations wherever the company has established stores and franchises.
The management must also comply with environmental regulations, tariffs, and employment laws that have been established within the US. From the perspective of economic factors, Tico Mas’ operational economic environment is characterised by rapidly fluctuating customer tastes and preferences, which influence its financial performance in terms of increased costs of running business.
Social factors act as incredible success elements that influence Tico Mas because customers are concerned with safety standards of the foods that the organisation offers. Hence, enhancing hygiene and safety standards of all foods that are offered for sale at Tico Mas helps in retaining and attracting new clients. People who have a first-time experience with the company always send an impressive message to other potential clients.
Technologically, Tico Mas plans to deploy the internet to accomplish tasks such as making it possible for customers to make price comparisons of various fast-food alternatives from other organisations in the industry.
Through the power of the internet in enhancing quick communication, technology is also important in helping to send promotional materials through blogs and direct interaction with customers on social media. However, it also poses challenges in case negative profiling is sent through the same media. In fact, it takes a long time to remove a bad image concerning an organisation’s products than to create positive images of the same (Dess, Lumpkin & Taylor 2005).
Tico Mas is also incredibly concerned with its environmental impacts. Fast foods are packaged. The manner of disposing packaging materials has become an issue of concern to the company. It determines whether the company is environmentally conscious or not.
Indeed, waste disposal is an important issue to Tico Mas because organisations are required by law to put in place strategies for proper waste disposal as the world endeavours to become environmentally green. This expectation is true in the US and even in other parts of the world where the company plans to open outlets.
How Tico Mas implements its Strategic Positioning
Tico Mas implements its strategic marketing positioning by offering low-cost and healthy products. Indeed, the offered products have low calories. Hence, they are easily marketed since they meet the growing trend for healthy eating in a bid to avoid challenges such as obesity and its associated diseases that include hypertension. While marketing the products this way, Tico Mas believes that it has an opportunity for building a brand and its assets and liabilities based on healthy foods. It believes that while large competing corporations such as McDonald’s are attempting to change their brand images from that of unhealthy to healthy foods, Tico Mas stands a better opportunity for building a good brand image right from the beginning.
Relationship Promotion and Success of the Activities
One of the critical challenges in marketing entails getting and keeping clientele to make repeated sales. Relationship marketing helps in resolving this challenge. It entails marketing efforts that are aimed at fostering customer retention and satisfaction, rather than focusing mainly on sales transactions (Mukherjee 2007).
For Tico Mas, customer retention is incredibly important in driving its success. Its slogan is ‘come once and you will be guaranteed to come back again.’ To actualise this slogan, building and maintaining customer relationships is incredibly important.
Relationship marketing finds far-fetched applications in the organisation. Tico Mas recognises the value of customers in building long-term business relationships. It appreciates that customer communication needs to extend beyond advertising and sales promotions. Employees are required to maintain positive customer relationships since they (workers) act as the point of contact between Tico Mas and its customers.
Thus, employees are critical to enhancing the success of relationship marketing activities in the organisation. Customer satisfaction also encompasses another important aspect of successful relationship marketing. Tico Mas’ customers can always consider eating elsewhere. Hence, without their satisfaction, attracting repeated sales to help in establishing the relationship during the first purchase is problematic.
Growth Opportunity
The American market is saturated with fast-food organisations. However, Tico Mas still has a growth opportunity by expanding into international markets. However, this opportunity makes the organisation susceptible to varying cultural influences. Therefore, the strategy also calls for product diversification to meet the cultural needs of different people in the global fast-food markets.
Strategies such as promotion and positioning of various products, especially in the Asian market, are an important aspect of an internationalisation approach for the organisation. Introduction of chicken burgers, rather than offering beef burgers, followed by their promotion in the Chinese and Indian bazaars can be an incredible source of growth.
This diversification counters cultural influences in the new international market. Chinese and Indian people prefer chicken to beef (Goldman, Santos & Tully 2008). Evaluating the preferences of other international fast-food markets can reveal a different cultural preference. Through its creative and innovative team for new products design, Tico Mas can develop appropriate products to meet the specific needs of the new markets.
Suitable Marketing Strategy for the Chosen Market
Tico Mas can pursue different marketing strategies. However, as noted before, it will be pursuing the low-price strategy in the effort to gain competitive advantage. Nevertheless, this task should be done during the first five years of operation, particularly in India and China where competition is anticipated to be less as compared to the US. Building customer relationships constitutes the key marketing strategy that will help in building a long-term positive brand image.
Before any attempt is made to place a promotion on any media platform, effort should be made to clear any negative profiling of the fast food in the news media, including social media. In this effort, Tico Mas deploys the strategy of providing information that not all fast foods have the claimed negative implication on the health of their consumers by ensuring that people who use new media are one of the target audiences of Tico Mas communication strategies.
The internet is deployed as the main media for communication. Online communication strategy for Tico Mas can be realised through a myriad of modalities. These modalities are driven by two main objectives. The first objective is to establish a two-way form of conversation between the organisation and its potential customers.
The second objective include the provision of well thought and implementable details that relate to the measures taken by Tico Mas to ensure that the company adapts to the new markets and that it can secure a quantifiable market share.
Appropriate Strategic Marketing Objective for the New Market and Marketing Mix
The objective of strategic marketing for Tico Mas is to derive strategies that can make it gain competitive advantage in relation to other organisations that operate in the fast-food industry. In this endeavour, the strategy for Tico Mas in the Asian market is to focus on price, products, place, and promotion, or simply the 4Ps of the marketing mix, to survive. Using the 4Ps appropriately ensures that it remains significant in a highly competitive market environment.
Marketing Strategy Based on Marketing Mix Variables
Marketing mix encompasses different choices that organisations make to ensure that their products or services are availed to the market at the right price and using the appropriate promotional strategies (Kotler & Armstrong 2008). Marketing mix for Tico Mas products in the Asian market (India and China) involves four mains aspects, which include position, charges, advertising, and merchandise.
Products for the market should be designed to meet the emerging consumer needs, especially with higher concerns of healthy eating as a targeting strategy. Introducing products that meet the definition of healthy foods is instrumental in enhancing the success of Tico Mas, considering that high-calorie foods are linked to obesity and its associated ailments such as hypertension.
The company’s stores form the place of sale of the products. This place is justified by the fact that healthy eating is an issue of global concern. The company also needs to ensure that the offered products and services in all stores are consistent. A failure to achieve this goal can erode the brand positioning strategy (healthy and low-cost food).
In most instances, Tico Mas potential customers receive information about the need to stop consuming fast foods from the internet and social media. Consequently, this platform is one of the promotional media tools that the company should consider.
In fact, through these media platforms, it is also possible to reach a large number of people globally with minimal expenditure of Tico Mas’ financial resources, especially when social media is adopted. Customers share promotional information among themselves. Point-of-sale promotion is also an additional cost-effective promotional technique that is consistent with relationship marketing approaches that the company deploys.
Changes in the External Environment
The fast-food industry is rapidly changing with more emphasis on the need to develop healthier products. Since its inception, Tico Mas business model has been based on providing an alternative to people who do not wish to carry homemade foods in their workplaces or people who wish to eat out.
Unfortunately, the external environment has incredibly changed since nutritionists and other health practitioners are instructing people to avoid fast foods due to their association with preventable health problems such as obesity and hypertension.
This change influences the company’s marketing strategy. Consumers may attribute the low-price strategy to poor quality and unhealthiness of Tico Mas products. The main challenge is how to create a perception that Tico Mas’ operations in the fast-food industry do not mean that it offers unhealthy food products.
Strengths and Weaknesses of the Current Marketing Strategy
The current marketing strategy aims at creating more awareness of the organisation’s products to make more sales in the US market. One of the strengths of the current strategy is that the company is recording increasing growth in the domestic market. The situation has resulted in a growing brand image.
Therefore, inclusion of new healthy products is a further indication of Tico Mas’ flexibility to meet the needs of its customers. Many people also regard the organisation as offering hygienically prepared products. Therefore, customers are not expected to question the hygienic and quality aspects of its foods, including potential additions to the product line.
Amid the strengths of the current marketing strategy, the technique has some has weakness. Weakness or limitations are the characteristics of a marketing strategy that places an organisation at a disadvantaged position in comparison with other organisations in the same industry (Kotler & Armstrong 2008).
One of the subtle weaknesses of Tico Mas current marketing strategy is attributed to the fact that the company declines offering food services at discounted rates for first-time customers. This situation hinders the success of an attempt to establish initial positive relationships by showing regard to its first timers.
The company also witnesses intensive competition from other fast-food providers such as Starbucks and McDonald’s among many others. These organisations have a large market share.
This case makes Tico Mas suffer from advantages that are associated with large economies of scale such as offering products and services at low prices to the extent of breaking even and/or operating within the profitability range of cost versus quantity curve. Therefore, although the low-cost strategy is a marketing strategy, it presents the weakness of the likelihood of the failure to break even by selling fewer products.
Key Emerging Themes
In any marketing strategy, factors or elements that hinder the success of the developed marketing planning strategies (barriers) are inevitable. Menon (1999, p. 31) identifies marketing planning barriers such as ‘inadequate management support, failure to coordinate and comply with plans, and failure to understand the customer needs’.
In the effort to ensure that the marketing planning that an organisation adopts is effective in realising its objectives, the business also attempts to overcome barriers such as improper communication management, inability to manage change properly, and incapacity to make an accurate prediction of the environmental responses towards the enacted marketing planning strategies. For the success of Tico Mas marketing strategy, the company needs to respond to potential barriers quickly and ardently.
Responding to the above emerging themes can be done by formulating and implementing an evaluation programme for the marketing strategy. This way, it becomes possible to identify barriers to effective marketing in good time and take measures to overcome them. For instance, overcoming poor communication can be effected through the enactment of effective communication processes.
This step entails scrapping one-way bureaucratic communication process, which characterises Tico Mas, and adopting the two-way communication method.
In the two-way communication process, information flows from the top to down and then down to the top so that the top-most communication personnel can identify the effectiveness of the communication strategies within an organisation. Where miscommunication occurs, effective strategies to correct the misunderstandings, which might have negative implications for the brand image, should be sought.
References
Dess, G, Lumpkin, G & Taylor, M 2005, Strategic Management, McGraw-Hill Irwin, New York, NY.
Gerry, J, Kevan, S & Whittington, R 2005, Exploring corporate strategy: text and cases, Prentice Hall, London.
Goldman, E, Santos, T & Tully, S 2008, Observation of leadership and organisational behaviour at McDonald’s, .
Hitt, M, Ireland, R & Hoskisson, R 2013, Strategic management: Concepts and cases: Competitiveness and globalisation, South-Western Cengage Learning, Mason, OH.
Kotler, P & Armstrong G, 2008, Principles of Marketing, Prentice Hall, New Jersey, NJ.
Menon, A 1999, ‘Antecedents and Consequences of Marketing Strategy Making,’ Journal of Marketing, vol. 63 no. 2, pp. 18–40.
Mukherjee, K 2007, Customer Relationship Management: A Strategic Approach to Marketing, Prentice Hall of India, New Delhi.
Shaw, E 2012, ‘Marketing strategy: From the origin of the concept to the development of a conceptual framework’, Journal of Historical Research in Marketing, vol. 4 no. 1, pp. 30–55.