INTRODUCTION
The fast food business focusing on Café De Coral is more global than ever and international fast-food consumption continues to increase in popularity in the market as loyal customers form perceptions of fast-food outlets through communication, exposure to promotion from fast-food restaurants, past personal experience and some sources. It is accepted that fast-food marketing strategies should have a sound understanding of consumers’ perceptions and preferences for fast-food outlets and how they differ across cultures. (2006)
The understanding can be helpful in targeting cultures to promote fast food and improving or amending their restaurants’ perceptions so that customer demand can be increased for a fast-food restaurant, promotional campaigns tailored to individual countries as it was called as whether Café De Coral as best fast-food restaurants are perceived across Hong Kong and other countries and whether its positioning can be improved and changed through careful and selective promotion within such diversity of fast-food restaurants as reflected in market strategies in Hong Kong’s Cafe de Coral. Café’ de Coral serves a wide variety of fast food, most of which is served sizzling on a single serving personal iron skillet. Cafe de Coral restaurant is in many ways a fast-food version of a traditional Chinese favorite served at most restaurants and reveal some interesting points about choices of foods made by a certain people, understanding what customers want is important in order for a restaurant to enhance their marketing strategies (2000).
COMPANY BACKGROUND
Café de Coral is the largest Chinese fast food brand in Hong Kong. It was established in 1968 and operates more than 100 self-service fast food restaurants in the territory. With over 34 years of proven experience in the food service and catering industry, Café de Coral currently caters to an average of over 300,000 customers a day, making the chain the undisputed market leader in the field. Thus, Café de Coral has over 330 outlets in Asia Pacific region and over 200 quick service restaurants in North America. (2000) Among a total of over 540 outlets, over 120 outlets and 75 outlets are operated under the household name of Café de Coral, whereas over 200 outlets are operating under the leading brand of Manchu Wok and 20 outlets operating under the name of Oliver’s Super Sandwiches. As the market leader in the Hong Kong fast food industry and the largest National Brand for Chinese quick service restaurant in Canada, the annual turnover of the Group now stands over HK.7 billion generating an annual profit of over HK8 million in the year 2004. (2000) Presently, the company has 120 chain stores in Hong Kong and 210 ones in North America and is always good at providing tasty spaghetti and intends to extend its reaches around Mainland China.
CAFÉ’ DE CORAL’S MARKETING STRATEGIES – STRATEGY LEVEL
MARKET SEGMENTATION
Café De Coral in its market segmentation is evident in terms of its products and services success as sought by the customers as there seeks good quality and convenience as the restaurant has identified useful benefits of knowing what customers want and create the services to meet the need. Direct marketing efforts toward increasing customer awareness of such benefits as it is difficult to accurately estimate the size of their customer group (2006). Café De Coral is a winner in its segments as a winner in knowing customers needs and wants as a basic factor for maintaining a successful growing marketing. The restaurant in its marketing effort have potential business in segmenting its Hong Kong markets in a proper notion. Café De Coral implies various factors that will possibly influence the potential for future markets per se: (2000)
Ø population
Ø available income due to changes in employment
Ø supply of natural resources
Ø laws
Ø consumer tastes and preferences
Ø competition, such as emerging of super fast food store
In strengthening its market segments, it is clear enough that Café De Coral provides a quick service restaurant business in the development and management of quick service restaurants chain as the quick service has now been globalized to cover different part of the world like in US and China. The business has diversified into full-service specialty restaurant operations and its acquisition of a Chinese soup-cum-specialty-dish restaurant chain and achieve a more diverse earning base through the wider market exposure. (2000) The business venture into the institutional catering business with Asia Pacific Catering has gradually developed into an undisputed market leader in the field. Major clients being served cover a wide spectrum of institutions ranging from most major hospitals, universities, private and public corporations, both in Hong Kong and China. Since then, the student catering business was launched under the brand name of Luncheon Star, which has deployed the cook-chill central production technology to tap into this growing business as of it was recognized globally in process of standards accreditation. Coupled with its central purchasing power, centralized food processing also comprises bulk breaking, standardized seasoning and standardized portioning at pre-set specifications, volume requirements and quality standards. (2000)
TARGETING
Café De Coral is basically targeting the Hong Kong market and been expanding its target audiences in some other neighboring countries such as China and Philippines, most of all Café De Coral is extending its hopes among its current fast food customers typically younger generation ages eighteen years old and above as well as those people who are health conscious who do not currently purchase fast food services because of some beliefs. (2006) Thus, having ongoing strategic imperative, Café De Coral reckoned that they are serving a target customer who is constantly redefining her needs, the café took it upon to never stop improving and innovating on our products and shop environment in order to enhance the branding power of local restaurant chains. Henceforth, coupled with a series of effective customer-focus marketing campaigns, the strong branding of Café de Coral have given the pricing power to shelter from cost pressure and margin erosion by revamping its business model, fine-tuning its product mix, rationalizing its costing structures, renovating its shop images and opening successful new stores is well-positioned for local business growth. (2006)
POSITIONING
Café De Coral positions its best influences in the fast food restaurants business being one of the best the industry can offer in terms of fast food quick service as recognized in the Hong Kong markets as one of fast food business pillars giving quality products and services to their loyal and valued customers in a manner that Café De Coral has earned the impetus respect in the fast food business as well as to their customers as well as some known business sectors. It is really a fact that Café De Coral is good in its recent market positioning as proof to that the restaurant has already achieved numerous awards for its strong aura in the fast food business as well as for its management excellence from the local and international institutions, which included the most coveted award of the “Asian Management Award for Marketing Management” and the “Asian Management Award for General Management” by in 1992 and 1993, named “Asia’s Best” in 1997, “Top Ten Best” by in 1998. (2003) In addition, awarded as the “Good People Management Award” by of HKSAR Government. ( 2003) Henceforth, it was said that Café De Coral would continue to maintain dominant leadership position with constant effort in accommodating changing market needs. New product development and exciting design concepts are continuously injected to enrich the total dinning experience of its customers and sees China market as the next area of strategic expansion of successful branded concept. (2003)
CAFÉ’ DE CORAL’S MARKETING STRATEGIES – TACTICAL LEVEL
PRODUCT
Café de Coral’s menu is specially designed to meet the tastes and budgets of customers, with over 100 items on the menu list on any one day and are regularly rotated to maintain variety of choices. Standard menus range from western cuisine to traditional Chinese dishes. New products and seasonal products for each time segment will be introduced regularly (2005).
PRICE
Café De Coral in terms of its prices is quite reasonable adapted within the markets as today, it has a little bit of everything. There’s a grouping of deli sandwiches, sausage, salad and pasta salad with feta cheese, There are pastas, pizzas, Italian sausages and dishes named marsala and parmigiana. The prices usually cost from (.75) and the only items priced over here are three steaks and a dish of pork chops, each at .50. (2005) Some plates are disappointing, others minor revelations. Like an appetizer dish (.25) of 10 thick, sweet scallops, each dipped in a batter and fried to acceptable crunchiness or a couple of big, wide pork chops (.50) cooked to a point of dryness that even applesauce couldn’t save. ( 2005)
Thus, a plate of chili size (.25) that was unusual in the fact that a hamburger bun was used to form a mushy, soak-up bed under the burger meat topped with chili and beans. A wedge of banana cream pie (.50) that had none of that expected yellow custard filling but was simply pie crust, banana and whipped cream. The kitchen makes a fair meat loaf (.95), passable fish and chips (.95) and an acceptable hot turkey sandwich (.25). The fresh salmon (.25) wasn’t bad one time, and hot apple pie (.50) really hit the spot on one occasion. (2005)
Hours Open: 24 hours
Recommended items: Creamed potato soup, fried scallops, meat loaf, hot apple pie.
How much: Everything under . Beer and wine. All major credit cards accepted. Wine list: House varietals are Robert Mondavi Woodbridge (chardonnay, cabernet sauvignon, merlot, white zinfandel) by the glass (.50) or bottle (.95). Corkage .
PLACE
Restaurant locations are found in mixed use district, business core, shopping centers, industrial areas, private and public housing estates. Restaurants of an average 300 sq.m. are designed with a modern and warm ambience aiming to maximize customer flow. ( 2005)
PROMOTION
Achieving A Hundred Points of Excellence has been the café’s commitment to their customers and is now a household catch phrase. As part of on going campaign to strengthen the Café de Coral Brand, proactive advertising campaigns are launched on a continual basis. Through the campaign, the brand image has been further enhanced by positioning Café de Coral as a place not just for best taste and value meals but also a popular meeting place for every lifestyle. ( 2005)
EVALUATION OF CAFÉ’ DE CORAL’S MARKETING PRACTICES
INDUSTRY ANALYSIS
The Café De Coral in lieu to the presence in market industry is using appropriate marketing strategies suitable for the Hong Kong market in engaging to the process of its business maintenance in the society wherein the presence of established competition among others is evident as it can be seen through product advertising as customers need to be satisfied with the status quo. (2003) Café De Coral in fast food industry engages in a responsible marketing process on a continuous basis and that uses marketing properties that will determine customers satisfaction of services provided with awareness, motivation and the resources to succeed, the consumers of Café De Coral can work towards a better future in the fast food market. In its people, there was an energetic and dedicated work force of over 8,000 staffs makes up the Café’s service team as customers come from all ages and all walks of life ranging from students and young executives. ( 2004)
Source: Café De Coral Holdings Limited (2005). Corporate Information – Corporate Overview (Corporate Structure)
Source: Café De Coral Holdings Limited (2005). Corporate Information – Corporate Overview
Furthermore, being a leader in the fast food and dining-out industry, Café de Coral has built its success on product innovation and marketing excellence, backed up by an uncompromising commitment to quality customer service. Its marketplace is fast changing and competitive, characterized by increasingly sophisticated customers and ever-tighter profit margins. To sustain its leadership position in this demanding environment, (2005) Café de Coral needed a way to further improve its customer experience while enhancing operating efficiency and reducing costs. The restaurant group wanted to streamline business processes, improve productivity, promote effective strategic planning and generate savings in manpower and administrative expenses. Most important of all, it needed new ways to continue to enhance customer satisfaction today and into the future. ( 2005).
SWOT ANALYSIS
STRENGTHS
Café de Coral fast food continued to maintain its leading position in the industry despite fierce local competition and continued to introduce innovative products to their menu to provide more and better choices to customers. The offering of freshly brewed coffee was a particular success in winning over the applause of customers. Meanwhile, by upgrading the quality of our core products repackaging them with high quality utensil, has differentiated its products from those of their competitors. The café had maintained high standard of hygiene in food processing successfully transplanted certain labour intensive food processing procedures from Hong Kong ( 2005).
The Café strengths could be clear in the following points:
Ø Knowledge – the business know their connectivity in all its business management
Ø Relationship selling – as the café get to acquire loyal customers, one by one that maintains good customer relationship
Ø History – the café have built loyalty in a strong sense over the years and counting
WEAKNESSES
Café De Coral in its weakness may adhere to the fast phasing of market demands of fast moving goods and services as evident in the fast changes of competition environment within the focus of business and market value as substantial costs may result to as put into full operation in other markets. Failure of market entry and expanding business could be a fact for Café De Coral as some feasibility study could give inaccurate information in order to expand the production capacity without losing its discipline of some business control that may affect negatively with the process of branding power of Café de Coral and their continuous effort to upgrade the quality and standard of food and services, to protect the profit margin of our fast food operations from rising costs ( 2005).
OPPORTUNITIES
Speaking of such opportunities, Café De Coral is taking over the entire operations of super sandwiches restaurants last June 2003 as the concept has regained its momentum for growth. The café was particularly encouraged by the financial performance that came so shortly after acquisition and having successfully revamped its business model,fine-tuned its product mix and upgraded its shop image and positioned as a unique chain of sandwich restaurants offering high quality of products. ( 2006) As indicated unlocking the vast potentials of market has always been long term imperatives of strategic value. There recognized that the café’s continuous expansion into the China market has been a key driver for business growth embarked on a multi-directional development strategy in China. Service as the target market needs more service, the competitors are less than ever to provide it.
THREATS
Furthermore, there could be presence of threats with a strong foothold in having market of great potentials as in implementing a series of value-added business improvement initiatives in the areas of operational control, purchasing and product development, marketing campaigns, staff training, store design as well as menu innovation, which should eventually bear fruits in the upcoming years.
There could be a threat of over empowering of fast food business by the café’s competitors in terms of building on successful cumulated experience and refined business model, as it can adhere to an aggressive branch development program in various countries. Café de Coral set up have now recorded meaningful profitability and consistent earning growth, with new branches and have been relentless in testing out new grounds with business re-entry in cities of China as another strategic play for long term business growth. (2006)
RECOMMENDATIONS FOR IMPROVEMENTS IN ITS MARKETING OPERATIONS AND STRATEGY
In giving emphasis in providing useful recommendations of Café De Coral’s marketing operations and strategies, it is essential for the café to adopt to some useful shifts in enhancing food service packaging as the customers would want it in order to get fast food a much quicker in the phase of marketing process in operations and strategies. Café De Coral must adapt a possible option to make it bigger in the market scene like providing TV ads in pushing their product explaining how it’s bigger, has more ingredients and is more filling. The café should continue to have useful innovation that they should try and make their products look more attractive by packaging it individually and using bright colors – things that people don’t immediately look for but their subconscious does find more appealing. One good marketing strategy that Café De Coral can use is through getting their customers to start out at a young age and are offering kids toys with meals, especially toys that are part of a collection so that the children will insist on keep going back to the restaurant to get more toys and in turn – buy more food. (2005)
Café De Coral must also live their business principles in relation to their critical success factors in terms of their advertising and promotion to maintain a competitive edge in the industry and in advertising. There are different kinds of gimmicks like the café could have a discounted food items if a customer will purchase two items, free gift items, raffle draws and a lot more. Proper Pricing such as price cuts and discounts are offered to increase sales. Food outlets that offer the most value for money are the popular ones and by providing high quality food that conforms to the taste of the consumer coupled with fast and efficient service in a clean environment is a big incentive to growth. Consumers have become even more discriminating and quality-conscious. Targeting the consumers’ taste buds means upgrading the menu. This is one key in capturing more customers. The smooth operations of food outlets require a steady and adequate supply of raw materials. These companies must then establish tie-ups with reliable suppliers. For a possible investment, franchising is a good way to start. With franchising, there is already product identification. Café De Coral need have to acquire a well-managed logistics support system to run several business operations to make a strong impact as good marketing strategies mean having sufficient capital to support the marketing campaign. Café de Coral needed to upgrade its current system and implement a Business Management System in 199 outlets in Southern China to streamline business processes, improve productivity and enhance customer satisfaction. ( 2005)
There has to be a reliable branch intelligence system that streamlines business processes, improves productivity, enhances the customer and enabling a group-wide, Internet-based loyalty program in software such as Windows 2000 Server and SQL Server 2000. ( 2005)
CONCLUSION
In conclusion, marketing strategies as applied by Café De Coral has helped them achieved a steady market catering the international market serving its best and well planned products and services that has amicably soothe the tastes of every aspiring customers and therefore, has built the café success on product innovation and marketing excellence, backed up by an uncompromising commitment to quality customer service. Its marketplace is fast changing and competitive, characterized by increasingly sophisticated customers and ever-tighter profit margins and to sustain its leadership position in a demanding environment, Café de Coral needed a way to further improve its customer experience while enhancing operating efficiency and reducing costs. The fast food industry is attempting to create an image that provides consumers with a comfortable and friendly feel about their product in order to increase sales. The fast food industry is quickly shifting its marketing focus towards an older audience but understood through the same psychological principles nonetheless.
Credit:ivythesis.typepad.com
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