Executive Summary
Barcelona, Spain is a popular destination among tourists. It is recognized for a wide variety of dishes. Barcelona food industry is one of the most successful in the region because it is generally driven by a culture of eating, excellent chefs, healthy and fresh Mediterranean cuisines, and the growing demands from locals and tourists. As such, Wagamama should consider entry into Barcelona, but it must fight against fierce competition.
For Spain, it is important to have a local partner and personal involvement. A local partner understands the market dynamics, and it will recommend the most suitable local diets to support the Wagamama line of products. While Wagamama will launch its Japanese noodles and other products, it must however adapt its menu to reflect some local, Mediterranean cuisine. Wagamama should use television, magazines, online, and food exhibitions to promote its products. Besides, it should consider retail outlets, festival-oriented food parks, and online for distribution supported with low prices to acquire market shares.
Introduction
This international marketing plan shows how the Wagamama brand can expand to Barcelona, Spain in its global growth strategy. Wagamama was established in 1992 in Britain to serve oriental Japanese-inspired dishes, but with the modern taste (Wagamama Ltd 2016).
Barcelona is considered the liveliest, innovative, artistic, and vibrant city that has not changed for over five centuries. While the current Barcelona is made of Spanish and Catalan, Catalan still significantly influences it. Barcelona is the capital city of the region, and it is associated with rich history and culture. Catalans have touted their identity, language, and culture. Catalunya was originally not a part of Spain (TripAdvisor LLC 2016).
The beauty of Catalan is reflected in most parts of Barcelona with its originality and charm. Since the 1980s, however, Barcelona embarked on major improvements in preparation for the 1992 Olympic Games. Most industrial cities specifically along the shoreline were abandoned and then later reclaimed, revitalized, regenerated, and transformed into attractive assets. Consequently, Barcelona is now a “sunbathed city consisting of waterfront marinas, beaches, and an exclusive Mediterranean allure” (TripAdvisor LLC 2016, p. 1).
Also, Barcelona has recognized for paintings; sculptures; fashion and design; mosaics; and attractive architecture. In fact, Barcelona boasts of great painters, builders, and sculptors, such as Picasso, Tapies, Miro, Gehry, and Nouvel.
For Wagamama, expansion to Barcelona is an important approach. Barcelona is recognized for its food, latte drinks, and late parties (Barcelona Easy Guide 2013; Barcelona City Council 2012). In fact, clubs can open when residents are preparing to leave for work (TripAdvisor LLC 2016). There are multiple outlets to meet the needs of different customers and visitors. Barcelona maintains stylish bars in most blocks.
For people who love food, Barcelona is a food paradise (Brannigan 2014; TripAdvisor LLC 2016). Barcelona has some great restaurants in the region with both traditional Catalan and modern dishes. Some Catalan traditional dishes include paella, pa amb tomàquet, fideuà, escalivada, and faves a la Catalana among others. One must also note the good wine that accompanies these foods.
Over the year, Barcelona has grown to be among the most popular tourist destinations in the region. Over 7 million tourists visit Barcelona annually, including passengers who arrive by cruise ship. This huge number of tourists has attracted different options, including native and exotic products. These are mainly foods, and today, Barcelona is referred to as Catalonia’s capital of gastronomy (Turisme de Barcelona n.d).
Barcelona now hosts multiple events for exhibiting Catalan gastronomy. Specifically, these events focus on the quality of food for tourists, food literature, and leisure activities among others. Barcelona is also privileged to host some of the best chefs globally, including Ferran Adrià. The Mediterranean cuisine and healthy diets endorsed by dieticians and nutritionists have become the latest attraction in Barcelona as restaurants continue to invest in some of the best chefs available.
Market Audit and Competitive Market Analysis
Evaluation of the Product as an Innovation as it is Perceived by the Intended Market Using Rogers’ (1962) framework
Relative advantage
With over 140 outlets spread across the world, Wagamama should consider other popular destinations like Barcelona. Barcelona will, therefore, provide a large market for the restaurant. Customers are most likely to derive social and economic benefits from Wagamama in terms of unique Japanese food availability and cost (Rogers 1983).
Compatibility
More restaurants are now found in Barcelona to serve millions of tourists that visit the destination every year. Wagamama will have to deliver Japanese-inspired food that meets the diverse needs of both natives and tourists.
Complexity
For individuals who do not understand Japanese-inspired dishes, then the menu could be complex. As such, Wagamama will have to use familiar names and introduce some local cuisines to attract more customers.
Trialability
To some individuals, Japanese-inspired dishes may sound strange. Therefore, Wagamana will provide some dishes for customers to sample and determine their quality.
Observability
Customers can observe Japanese-inspired dishes and make their own judgments. In fact, Wagamama has stated that it aims to offer a new kind of dining experience in a friendly setting (Wagamama Ltd 2016).
With 120 retail outlets in the UK, Wagamama may not face any resistance in Barcelona. It is imperative to observe that many tourists that frequent Barcelona are majorly from the UK. Therefore, some of these targeted tourists may be familiar with the Wagamama brand. As such, Wagamama may thrive in Barcelona.
Although Wagamama is based on Japanese philosophy referred to as ‘kaizen’, which shapes every dish it creates and pushes the restaurant to find better ways of making dishes (Wagamama Ltd 2016), new international markets have their challenges, particularly in Barcelona where restaurants are found in almost every block and corner.
The market
Description of the market
Geographic regions
Wagamama has now opened its outlets in “the US, the UK, Belgium, Denmark, Gibraltar, Greece, Ireland, Kuwait, Malta, New Zealand, Qatar, Slovakia, Sweden, Switzerland, Turkey, Cyprus, the UAE, and the Netherlands” (Wagamama Ltd 2016, p. 1; Dai 2015). These locations give Wagamama an image of a global brand. Hence, expansion in Barcelona will improve its presence globally.
According to the USDA Foreign Agriculture Service (2015), Spain now attracts tourists not visiting troubled countries in the Middle East, North Africa, and others will high inflation rates like Russia.
Barcelona is therefore a better choice in the region.
Forms of transportation and communication
Barcelona has a better means of transportation and communication to support the business. Besides, new technologies are now challenging traditional restaurants set up in Barcelona. For instance, Just Eat acquired Sindelantal in Spain to change food distribution methods (Mobile World Capital 2015).
Consumer buying habits
In Barcelona, demands have increased as the number of tourists grows. Consumers now expect higher-quality healthy foods with Mediterranean tastes served in a casual restaurant (Soler, Gil, & Sánchez 2002). Barcelona culinary practices have increased buying habits. However, these habits have changed as consumers now focus on fresh, high-quality foods with great tastes.
It is necessary to note that Wagamama strives for excellence in its practices.
Distribution
Wagamama depends on strategically located retail outlets to distribute food. Besides, Wagamama uses franchise for distribution (Luxenberg 1985). Today, however, it should consider new technologies to reach more consumers (Mobile World Capital 2015).
Advertising and promotion
Wagamama uses advertisements to inform customers and get positive responses. It generally uses traditional media, such as television and magazines, and the new media, specifically online promotions.
Wagamama offers discount codes, promotional codes, vouchers, and gift cards to its customers.
Pricing strategy
The fast-casual noodle restaurant has adopted a low pricing strategy in which dishes are sold for about 50p or £1 depending on the quantity (Heller 2011). Nevertheless, Wagamama will have to determine new prices for Barcelona. It must take into account the costs of food supplies, labor costs, and the current rate of economic growth in Barcelona after the recession for price markups. In addition, the discount should reflect market realities.
Comparison of Wagamama and the competition’s product(s)
Competitors’ product
Although there are some international brands in Barcelona, including MacDonald’s, KFC, Subway, and Burger King, they do not pose much competition for Wagamama because of different target markets. They have different dishes, but all are casual fast-food restaurants.
Nevertheless, Barcelona has more than 50 Japanese-inspired and other Asia-inspired restaurants, including Indochine Ly Leap, Koy Shunka, Kao Dim Sum, Yashima, Kuo, and Taverna Japonesa Wakasa among others.
Also, local reputable Barcelona restaurants are available with popular local dishes. They include Can Solé, Cinc Sentits, El Atril, Les Tres a la Cuina, and Set Portes among others (Davies 2014).
This implies that Wagamama must leverage its global brand image to succeed in such a crowded market.
Prices
Wagamama noodle dishes are relatively affordable compared to other leading Japanese-inspired restaurants found in the city. Nevertheless, Wagamama will have to assess the local Barcelona market to develop the most appropriate pricing strategies (Lichtenberg 2012).
Promotion and advertising channels
Wagamama will use television commercials, trade magazines, the Internet, and regular food fairs and exhibitions in Barcelona for promotion and advertising of its presence in the city.
Distribution
Wagamama should target retail outlets strategically situated in popular streets.
Market size
According to data obtained from the USDA Foreign Agricultural Service (2015), provide the industry size presented in the table.
Estimated sales for Wagamama for the planning year
After the entry, Wagamama will strive to acquire a claim about 2% of $17 billion noted in 2014.
Government participation in the marketplace
Based on the World Bank report, agencies that can help include the following:
- Ministry of Health, Social Services, and Equality.
- Spanish Consumption, Food Safety, and Nutrition Agency.
- Ministry of Agriculture, Food and Environmental Affairs.
- The Mercantile Register.
- Help Desk for Entrepreneurs for filing the Single Electronic Document (DUE) (The World Bank 2016).
- Town Council.
- Dirección General Trabajo.
Regulations
Wagamama is based in the UK. This position offers an advantage because Spain is an EU member state and, therefore, it has adopted the EU rules and regulations. However, Wagamama must understand some specific city laws and regulations applicable in Barcelona (Kapelko, Lansink, & Stefanou 2015).
PESTEL Analysis
Political
The country is stable politically. This situation has led to an increased number of tourists in Barcelona.
Economic
Spain is gradually recovering from its worst economic crisis of 2008 to 2013 (USDA Foreign Agricultural Service 2015). Since 2014, Spanish has gained economically, and majorities are most likely to have more disposable incomes to support the casual restaurant sector.
Social
Social activities in Barcelona, including festivals and Mediterranean cuisine celebrations, attract more visitors. As such, Wagamama will benefit from these activities.
Technology
New technologies now change industry practices. Therefore, Wagamama should get the necessary technologies to compete successfully in Barcelona.
Environmental
Spain expects absolute adherence to environmental standards, seafood qualities, and healthy diets. However, Wagamama previously failed environmental assessment (Smithers 2015). It must, therefore, consider environmental issues seriously.
Legal
The EU laws and regulations should not challenge Wagamama in Spain, but it must adopt local regulations applicable in the city.
SWOT Analysis
Preliminary Marketing Plan
Mode of entry
The Spanish market requires local representation and personal contact (USDA Foreign Agricultural Service 2015).
Marketing objectives
Wagamama will the UK, Japanese and other tourists, women at workplaces, youth, households with children, and single persons (Beck 1998).
Wagamama should aim for 2% from convenience, fast service, and self-service with profit expectations of about 10% of the revenues.
Market penetration and coverage will be 70% of the market within one year with a bias for the UK and Japanese tourists.
Product/service adaptations
It must serve fresh, healthy foods and adapt to Mediterranean diets.
Physical and/or mandatory requirements and adaptation – Wagamama must assess legal, economic, political, technological, and climate issue in Spain. Packaging, eco-friendly label, food, and cultures are also important for adaptation (Rao 2010).
The product line
Wagamama should continue with its current line of dishes. It must however introduce other popular local Catalan dishes.
Branding policy
Branding target both local and global markets.
Promotion Strategy
Promotion options
Wagamama can use personal selling, sales promotion, food sampling, and advertising, including mobile and online to develop the brand.
The objectives for using these promotional tools
- To reach mass target markets.
- Evoke responses.
Advertising and media strategy
Wagamama enjoys a global status and, therefore, it will use both local and global campaign strategies to reach all market segments.
Promotion strategy and target markets
While promotional strategies will majorly focus on locals, Wagamama shall also target foreign tourists.
Distribution Strategy
Distribution strategy
Retail outlets and popular festival-themed restaurants will be popular among locals and tourists.
Infrastructure environment impact
The available facilities will advance the objectives of Wagamama in a foreign market.
The specific types of distribution
Wagamama will opt for retail outlets with tables, self-service, fast service, drive-through, festival-themed services, and vending machines on a large-scale distribution strategy.
Export as a mode of entry
Spain relies on exported food products, and air transport and port are the most preferred means because of convenience (USDA Foreign Agricultural Service 2015).
Documentations and regulations
- Bill of Lading and/or Airway Bill.
- Commercial Invoice.
- Phytosanitary Certificate and/or Health Certificate when applicable.
Channel partners
Wagamama should carefully choose its franchise partners to avoid the Australian experience (Keating 2013).
Market problems
It is most likely to encounter environmental issues and fierce competition from food vendors and other established chains in an overcrowded market, as well as supply issues.
Pricing Strategy
Costs
It will consider a low-cost strategy to drive growth and sales volume for profits.
Market factors
Wagamama will evaluate the competition, product suppliers, consumer habits, and labor costs to determine the best prices.
Competitive factors
A low pricing strategy alongside excellent customer service and quality food will help the company to mitigate threats from an overcrowded market.
Government policies and pricing strategy
The Spanish government does regulate food prices.
Exchange rates
While Wagamama can comfortably use the Euro, it must however report in Sterling Pound. Hence, a stronger Euro will favor the company.
Proposed pricing strategy
It should adopt a low pricing strategy for growth.
Conclusion
The report has covered the possible entry of Wagamama into Barcelona, Spain. Barcelona is recommended because many tourists flocking the city, but Wagamama must develop an effective strategy to counter threats from competition. In Barcelona, the company will not deal with unusual legal environments, tourist cultures, behaviors, and spending patterns, but it will have to include some Mediterranean cuisines to appeal to local consumers.
Reference List
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Barcelona Easy Guide 2013, Barcelona Food and Drink. Web.
Brannigan, AM 2014, Traditional Catalan Dishes: Eat Like a Local in Barcelona. Web.
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Davies, S 2014, ‘Top 10: Best Restaurants in Barcelona‘, Telegraph. Web.
Heller, L 2011, Wagamama combines food, art and music in new festival format. Web.
Kapelko, M, Lansink, AO & Stefanou, SE 2015, ‘Effect of Food Regulation on the Spanish Food Processing Industry: A Dynamic Productivity Analysis’, PLoS ONE, vol. 10, no. 6, p. e0128217. Web.
Keating, E 2013, ‘Wagamama Australia goes into liquidation as all stores close‘, SmartCompany. Web.
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Rogers, EM 1983, Diffusion of Innovations, 4th edn, The Free Press, New York, NY.
Smithers, R 2015, ‘More than half of UK’s family restaurant chains serving unsustainable seafood‘, The Guardian. Web.
Soler, F, Gil, JM & Sánchez, M 2002, ‘Consumers’ Acceptability of Organic Food in Spain: Results from an Experimental Suction Market‘, British Food Journal, vol. 104, no. 8, pp. 670 – 687. Web.
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Turisme de Barcelona n.d, Barcelona, Catalonia’s Capital of Gastronomy. Web.
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