BSB 126-­‐ Marketing Plan Name :x
I.

Student number:x

Word Count: 1650

Situation analysis
An average Australian eats fast food every week and a report has shown that Australians make
51.5 millions visits to have fast food every month (Holroyd, 2011). The Hot Fresh Fries Vending machine provides convenience for consumers as people can easily access to hot chips. A SWOT analysis (appendix 1) has revealed both the potential and weaknesses of this new innovative machine. However, there are some environmental factors that can also affect the business’s operation. Macro environment factors:
Demographic forces make up the market segments therefore it is an important factor to a business. It includes age, gender, ethnicity, location, lifestyle and other statistics.
Social and cultural factors: The changes in social trends, consumers’ values and beliefs can impact on the demand of a company’s products. For example, there is a growing consumer awareness of healthy eating (IBISWorld, 2015), which could affect The Hot Fresh Fries
Company.
Micro environment factors:
Customers has a huge impact on the business directly as they are the people who purchase the goods. Therefore knowing their needs and wants are critical. The Hot Fresh Fries is a B2C business which means the company needs to market to the consumers.
Competitors are those who sell similar products in the market, such as McDonalds and Hungry
Jacks. In order for a company to gain a decent position in the market, the company needs to analyze their competitors’ products, prices and strategies and offer better benefits or products to the consumers.

II.

Marketing goal
By the end of 2018, to sell a total of 200000 cups of hot fresh fries in NSW and VIC.

III.

Marketing strategy
III.I Target Customers
A profile of the target segment is shown in Appendix 2. A research has shown that people aged between 15-64 is the primary market of the fast food industry and people aged over 65 has the least contribution of the industry revenue (IBIS world, 2015). Therefore, the age of the

BSB 126-­‐ Marketing Plan

primary customer would be between 15-64. Moreover, the target customers would be individuals who enjoy hot snack foods at places like universities, sport events and office buildings. The reason is that competitors, like the major fast food retailers do not have stores in those places thus the Hot Fresh Fries machine would have advantage over them in that aspect. Moreover, the target customers would be looking for snacks that are convenient, cheap and always available which the Hot Fresh Fries machine can deliver. However, people who are health conscious are not the target customers because they prefer healthier food, which the vending machine does not offer.
III.II Value Proposition
The company’s value proposition is providing customers easily accessible hot snacks in universities, office buildings and sport venues. It provides convenience that the competitors do not offer, which gives reasons to the customers to purchase the Hot Fresh Fries.
McDonald’s and Hungry Jacks are the competitors in the market and they also offer cheap hot fries. Therefore these competitors fulfill some of the customers’ needs that the Hot Fresh Fries
Vending machine offers. However, the target customers of The Hot Fresh Fries Vending machine want to have access to hot snacks in universities, sport venues or office buildings and the competitors could not provide. Although the competitors have 24 hours stores around, the vending machines has an advantage over that as the customers do not need to go into the store, queue and place an order which could save the customers more time and is more convenient.
There are also pre-packaged snacks vending machines in those places but it does not meet the customers’ need of wanting hot satisfying snack foods. A positioning map (Appendix 3) shows an overview of the position of the Hot Fresh Fries to its competitors in the market.
III.III Positing Statement
The Hot Fresh Fries Vending machine is a better hot snack option than McDonald’s and
Hungry Jacks for customers who go to universities, sport events and work in an office building because it is more accessible and save the customers more time. It is also the best vending machine for customers who want to purchase hot food because there are no other vending machines that offer hot food items.

BSB 126-­‐ Marketing Plan

IV. Marketing tactics
IV.I Product
Branding
Brand identity is how the business wants the market to recognize its brand. It includes brand name, logos, symbols and slogan. It could separate the business apart from the competitors. The
Hot Fresh Fries is the brand name; it is straightforward and allows the consumers to know that hot fresh fries are the product that the company is offering. Furthermore, the vending machine is red with the images of golden fries on it, which is very striking and straightforward to the customers.
Brand extension is the use of the brand name in a different product line and a line extension is the use of the same brand name within the same product line (Grewal, Levy, Mathews, Harrigan &
Bucic, 2014). Due to changing customer preferences in the fast food market, ethnic food has gained significant popularity and has increased its share of industry revenue over the five years
(IBISWorld, 2015). Therefore in regards to this trend, a brand extension for the Hot Fresh fries could be Hot Fresh spring rolls. Furthermore, there is a growing consumer awareness of healthy eating (IBISWorld, 2015), thus a line extension of Hot Fresh Sweet Potato Fries could satisfy customers with that need.
Both product extensions are hot fried snack foods, which fit the product class of the core brand.
Furthermore, the consumer perception of the brand should be convenient and accessible hot snack food and these two products match the brand attributes. Brand delusion is unlikely to occur because the brand extensions have similar attributes the core brand has and thus it will not adversely affect the consumer perceptions. Additionally, the brand extensions should not be distanced from the core brand, as the products are in the same category as the core brand.
IV.II Price
Company objectives -The pricing of the products should support and allow the company to reach its overall goal. Hot Fresh Fries will take a competitor orientation and focus on competitive parity, which is setting price similar to the major competitors.
Customers – Customers want value in the product and price is always part of the value equation (Grewal, Levy, Mathews, Harrigan & Bucic, 2014). Pricing strategies always depend on the type of demand of the products and the demand for the product could either be elastic or inelastic. Factors that affect the demand elasticity could be whether the product is a

BSB 126-­‐ Marketing Plan

necessity or luxury and whether there is any substitutes available in the market (The
Queensland government, Business and Industry, 2015). Appendix 4 shows the price elasticity of demand of fast food is 1.4, which is elastic. Furthermore, a study has shown that the demand of fast food is elastic and it depends on whether the products can remain a bargain
(Brown, 1990). Thus, the pricing of the Hot Fresh Fries has to be stable and cheap so the demand will not experience significant changes.
Costs – Companies need to understand their cost structures so they can determine whether the products are profitable at different prices. Fix costs, variable costs are the two primary costs.
The breakeven analysis determines at which point the revenue receive will equal to the costs associated in the business. Appendix 4 shows the formula for it.
The other two components of pricing are competition and channel members but they are not quite applicable for the Hot Fresh Fries’ pricing policies.
The competition based pricing method will be used, the price of the Hot Fresh Fries will be very similar to the competitors, setting a price that is similar to the competitors can signal the consumers that the product is similar (Grewal, Levy, Mathews, Harrigan & Bucic, 2014).
Moreover, Hot fresh Fries’ pricing will provide a better value than the competitors (Appendix
5). The pricing tactic of quantity discounts will be implemented as it can encourage consumers to purchase larger quantity each time they buy, an example is shown in appendix 6.
IV.III Distribution
The current marketing channel is an indirect marketing channel; the vending machines need to be placed in different venues in order for the customers to have access to the products.
Distribution is extremely important for this product because the venues are where the customers purchase the products, therefore the ideal situation would be to have the Hot Fresh
Fries machine placed in many venues. The main goal is to have the machines installed at universities, sport venues and office buildings, and then later the venues can be expanded to other locations, such as near nightclubs, cinemas or train stations. The more exposure the machines get, the more sales it can make therefore an intensive distribution strategy will be used, as the marketing goal is to reach the sales of 200000 cups of hot fresh fries in 2018.

IV.IIII Promotion

BSB 126-­‐ Marketing Plan

Promotion is important because it communicates the features of a product to the consumers, without it, consumers will not know about the product. The role of promotion is to attract consumers’ attention and make the consumers familiar with the product to raise enough interest to influence them to buy.
The communication goal is to raise awareness and attract 75% of the target customers. To achieve the communication goal, the company will implement the IMC tools of public relations and sales promotion.

Objectives
Raise awareness to 75% of the target customers

IMC tools
Public Relations- News release
- A news release with the description of the product will be sent to the media through the
PR company. It will then published on newspaper articles and online. The Hot Fresh
Fries will choose a PR company that has a broad media network in Australia so the product will gain exposure nationwide.

Costs
~$15000

Attract 75% of the target customers Public Relations – Event sponsorship
~$15000
Sponsoring universities’ student events, for example, by providing the hot fries for them to fund raise. This can raise awareness and attract the target customers in universities.
Sales Promotion-Samples
It offers potential customers to try the products, for example providing samples near universities, office buildings and other public venues. BSB 126-­‐ Marketing Plan

V.

References

Brown, D. (1990). The Restaurant and Fast Food Race: Who's Winning?. Southern Economic xxxxxJournal, 56(4), 984. doi:10.2307/1059886
The Queensland government, Business and Industry,. (2015). Pricing strategies | Queensland xxxxxGovernment.xRetrievedx1xMayxfrom1https://www.business.qld.gov.au/business/running/ xxxxxmarketing/pricing-products-services/pricing-strategies
Fast Food in Australia, (2015), Euromonitor International. Retrieved 1 May from xxxxxxhttp://www.portal.euromonitor.com.ezp01.library.qut.edu.au/portal/analysis/tab
Fast Food Service in Australia, (2015), Australian Industries Report (ANZSIC), IBISWorld, xxxxxRetrievedx1xMayx2015,fromxhttp://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/ xxxxxreports/au/industry/default.aspx?entid=2005
Holroyd, J. (2014). Average Australian eats fast food nearly every week. Good Food. Retrieved xxxxx1 May 2015, from http://www.goodfood.com.au/good-food/food-news/averagexxxxxaustralian-eats-fast-food-nearly-every-week-20140311-34k15.html

BSB 126-­‐ Marketing Plan

VI.
Appendices
Appendix 1 – SWOT analysis of The Hot Fresh Fries Vending machine
Strengths
Weaknesses
- The first hot fires vending machine in Australia
- This is a new product therefore it is unsure of and this could bring some attention and interest how the consumer will respond to the public
- People might have the misconception that
- There is no other vending machine that offers vending machine cannot provide food that tastes hot chips good - Australians love fast food and hot chips is one of
- As this is a machine, it needs regular the most consumed snack food (cite2) maintenance Opportunities
- This machine can be placed in a lot of different venues and therefore consumers can easily access it
- Convenience of it, could operate 24 hours depends on the venue

Threats
- There is a growing consumer awareness of healthy eating
- The famous fast food stores like McDonalds and
Hungry Jacks also sell hot fries

Appendix 2 – Profile of the target segment
Geographic
• NSW and VIC
Demographic
• Age: 15- 54
• Men and women
• People who attend sport events at sports centres and stadiums
• People who go to universities
• People who work in office buildings
• Income not quite relevant as the product does not have high price
Psychographic
• People who love snacking
• Impatient
Benefits
• Convenience, cheap
• Always available
• Hot food
• Taste good
Behavioural
• Individuals who are not health conscious
Appendix 3- Positioning Map

BSB 126-­‐ Marketing Plan

Appendix 4 -Price elasticity of the fast food industry in Australia
(Q2-Q1)/(Q2+Q1) / (P2-P1)/(P2+P1) = Price elasticity of demand
Q2= New demand Q1= Old demand P2= New price P1=old price
(13146.5-13373.4)/ (13146.5+13373.4) = -1.4 , taking the absolute value of 1.4
(9-8.9)/(9+8.9)
Therefore the price elasticity of demand is 1.4 which is greater than 1 and is price elastic.
13146.5 – sales in 2012 13373.4- sales in 2011 $9- price /transaction in 2012 $8.9-price /transaction in
2011
*Data obtained from Euromonitor, “Fast food in Australia” and IBISWorld , “Fast Food services”
Appendix 4- Breakeven Analysis
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Manufacture price = retail price –retail margin –wholesale margin
Variable costs vary with production volume : Variable costs(units) = Variable manufacturing cost+ miscellaneous variable costs+ salesperson commission
Total variable cost = variable cost per unit x quantity
Break-even point ($)= fixed costs/ gross profit margins
Contribution margin = sales price – variable costs
Break-even point (units) = fixed costs/ contribution margin

Appendix 5 – Pricing compare with competitors
$3.3 for 128 grams (largest)
200 grams of fries = $5.2 and is not available
$3.45 for 159 grams (largest)
200 grams of fries=$ 4.3 and is not available
$4 for 200 grams
200 grams of fries costs $4.
Therefore best price among the competitors. Appendix 6 – Pricing tactic of quantity discounts
1 Hot fresh fries

$4

$4/ each

2 Hot fresh fries

$6.8

$3.4/ each

3 Hot fresh fries

$10

$3.3/each