Individual Report: Case Study; Nando’s
Introduction.
Nando’s is a chain restaurant with a Portuguese origin that majors in casual dining. Their target customers are the young people who ate in the age bracket of 18 to 35, and they embark on low price strategy to have a command in the market while ensuring that quality remains a priority and consistency in their products. Their meal items are differentiated, and they have a unique way of preparing their foods. The outlets are mainly recognised for their chicken which is prepared through grilling and the peri peri sauce applied to the chicken (O’Connell, 2016).
Nando’s was established in 1987 at Johannesburg in South Africa with the origin associated with the Portuguese, and this is evident in the logo of the restaurant which is a Rooster of Barcelos, which is a legendary story in Portugal revolving around the rooster. The restaurant has been able to expand the geographical area of operations serving customers in 35 countries worldwide while they have opened a thousand outlets in the respective countries. It was originally known as Chickenland, but the brand name was later changed to Nando’s after it was acquired by the Portuguese. The name Nando’s was the name of Fernando’s firstborn, the Portuguese who acquired the Chickenland restaurant who later rebranded it to resemble his son’s name.
The restaurant was gaining fast popularity among the residents of Johannesburg and South Africa at large. As a result, two years after its acquisition, it had already established one more outlet in South Africa while there was another outlet that was located in Portugal. The restaurant has been a successful one since its rebranding, and in 2010, the restaurant was among the top thirty brands in the world. In 2018 in a report by the UK website that is basis its activities on recruitment, Nando’s was ranked sixth among the private employers.
Today, Nando’s operates within five continents namely Africa, Asia, Europe, North America and Australia. The chain restaurants have gone further to identify their target consumers which have helped them significantly in gaining market share in the competitive world of the food production industry. Nando’s in North America it has been operating in the United States since 2008 with Washington being the first location where the Nando’s started their operations. It has been able to expand the number of outlets within the United States to 40 outlets, where Maryland has the highest number of outlets totalling to 13, 12 outlets in Chicago, Virginia constitutes 9, while Washington D.C has six outlets.
The Nando’s have five pillars that make them achieve their goals among the is the pride they perceive in serving their customers, the passion they have in carrying their duties, the courage to tackle the operational challenges, integrity in their dealings, and the spirit of togetherness building a family. These pillars are well stated in their mission statement that gives a sense of direction in their day to day activities.
Opportunities and risks in the chosen country.
Nando’s is an international company operating in various geographical locations and among these locations is the United States. In the choosing of the country of operation, I decided to choose the operations of Nando’s in the United States.
In the United States, the growth of the hotel industry has been significant as it has been the case for the rest of the world. The hotel industry in the United States this year is projected to be $200 Billion. It is evident that the hotel industry is one of the key players in the Gross Domestic Product (GDP). Increase in the number of hotels in the United States has been influenced by the increase in the earnings that has led to the Americans realising some disposable income. The disposable income is used to purchase and consume the hotel industry products and services.
Various restaurant establishments are operating within the United States and among them the 1770 House, Arethusa al Tavolo, Atera, Barclay Prime, Barrique Venice etc. With hundreds of restaurants operating within the United States, it, therefore, gives an urge to look into the opportunities that exist for the Nando’s in the United States that makes it thrive within this geographical location (Galloway, and Stirzaker, 2015).
Opportunities.
The United States comprises o large population which acts as a source of demand for restaurant products. Based on the United States Census Bureau, the population of the United States adds up to 325.7 million as per the year 2017. The number is high large enough to generate a high demand for the restaurant products and services. The number is expected to rise in the future which means the demand for the products will continue to rise and more outlets will be required to serve the population sufficiently. The population is comprised mostly of individuals who are in the category of the young adults which makes the United States be one of the target countries among the area of location within which the Nando’s operate (Tzanelli, 2015).
The United States comprises the heterogeneous population which makes different people have different cultures and differences. Populations with different backgrounds have settled in the United States bringing heterogeneity in the tastes and preferences, and their interactions have resulted to shared culture (Ting-Toomey and Dorjee, 2018). Among the people living in the United States are the Portuguese, who can be traced in some of the states like the California, Florida, New York, New Jersey etc. The incorporation of the different populations makes the population ideal to share in the Portuguese way of preparing food like the peri peri chicken which is a popular meal item that is prepared by the Nando’s.
Most of the people who are in the urban areas of the United States are employed which makes them rely on the restaurant for the provision of food. Persons who are working in areas like that Maryland and Chicago are employees of certain companies, and they usually have limited time to take their meals. Due to this limiting factor, they opt not to go to their respective homes to prepare foods but instead take readymade foods from the restaurants. There has also been an aspect of urgency that is witnessed in the restaurant yet production of quality products that makes many people think of dining in the restaurant other than preparing their food (Plouffe, Beuk, Hulland and Nenkov, 2017).
It has become a culture among the Americans that they derive pleasure from the interaction that they get while dining together in a restaurant. Therefore, many people will visit a restaurant with their families and friends so that they can dine together while enjoying the interactions between the set group (Porter, and Heppelman, 2014). The restaurants are then deemed to thrive as the more groups of individuals decide to dine together, the more the profits generated and the more successful a restaurant will be in the long run.
There is an increased earning of the individuals living within the urban areas. In return, disposable income is realised which the consumers realise after satisfying all their primary needs (Odiaka, 2018). If the basic needs can be met by most of the American population, it is then possible for these individuals to use the disposable income in purchasing the products that are generated from the restaurants for consumption. It is possible that the Nando’s will continue to thrive in future if the cost of living among the Americans declines, making the residents realise some disposable income that will be spent on the restaurant products and services.
Risks
Although the United States provides opportunities to the growth and development of the Nando’s, certain risks are accompanying the restaurant’s operation within the country. There is stiff competition from other hospitality setups that have been established which offer similar food items. Among these establishments are fast foods like the KFC which deals with chicken. In this case, the Nando’s has to look for ways in which they can position themselves better than their competitors, building an image that depicts quality products and differentiated products (Dobbs, 2014). To curb this issue, the Nando’s have been able to come up with a Portuguese style of grilling that differentiates their products from those of the opponents.
There have been some resistance movements in the United States that have seen revolutionists advocate a need for people to consume food that they have prepared instead of eating from restaurants. Nando’s being part of the restaurant that is operating within the United States, it can relate this problem as one of the hindrances to its growth. If the population embrace the shift from eating food from the restaurant and shift to homemade foods, it means that there will be a decline in the sales — a decline in the overall performance of the Nando’s which may make the restaurant to terminate its operations within the country.
A change in lifestyle and campaign of healthy eating can also affect the Nando’s negatively if people decide to embark on healthy eating. As people try to avoid lifestyle conditions that are associated with the kind of food an individual consumes, it has been known that most of the foods in the restaurant are not healthy. If people were to shift to healthy eating, then it means that the Nando’s will be affected by this shift.
Socio-cultural segmentation based on geo-demographic
The population of the United States comprises of people who have different backgrounds. As a result, people are seen to possess different cultures and behaviours. It is their cultures that will dictate whether they will consume certain foods from the restaurants and many other beliefs (Huston, and Jadevicius, 2014).
The interaction between the various kinds of people living in the United States will bring some borrowed cultures which will be spread to the rest of the people who are living in a certain locality in the United States. Depending on the area an individual is coming from, evidence can be given to show that the individuals in that locality consume certain products due to the geographical position that the area is based (Bernues, Rodríguez-Ortega, Ripoll-Bosch, and Alfnes, 2014).
The criterion has helped the Nando’s to position themselves strategically and avoid setting up outlets in areas that will not support the consumption of the products offered by the Nando’s. The possibility of having an outlet in a population that does not embrace the Portuguese culture will only make the restaurant to operate at a loss which means that in the long run, the outlet will be closed or will rely on the other outlets to finance its operations.
Segmentation is a strategy that will help the Nando’s to establish relationships between their customers and the preposition that they are offering in the market. The restaurant is well versant with the age of the people that they are focusing on serving in the United States whom they have identified as people who are in the age bracket of 18 to 35 years. Segmenting involves ensuring that certain characteristics are shared among the set group that the chain restaurants are focusing on serving so that the product offered in the market serves the needs of the consumers (Ojala, 2015).
The young adults like socialising, and they are the first in the market who want to experiment the use of new products that have been introduced in the market in the product adoption life-cycle. The Nando’s, therefore, will target the young adults and introduce their unique products in the United States markets for they are aware that if the products are of good quality, then the consumers will embrace the new food items and turn to consume it.
Integrated marketing communication strategy
The integrated marketing strategy for the Nando’s restaurant incorporates various means through which the Nando’s enhances their marketing capabilities. It can be viewed in several perspectives and marketing mix that the Nando’s use to communicate the idea to their customers.
The Nando’s has established itself as a differentiated restaurant that deals specifically with fine dining. By identifying itself with fine dining, the restaurant has excluded many clients who might think of visiting the restaurant hoping to find a fast casual, fast food, pop up restaurant or any other kind of a restaurant (Mathooko and Ogutu, 2015). By communicating that they are a fine dining restaurant, it creates a certain image in the mind of potential customers who will be visiting the premises to have their food. Therefore, the market to be served by the restaurant is identified as individuals who love to have fine casual dining in a comfortable environment that resonates the kind of food served.
The products offered by the Nando’s are usually pocket-friendly, accommodating the middle-class customers who might not afford expensive restaurants, but yet assure the quality of the product offered. The Nando’s uses low pricing strategy as a means of marketing their brand and command a bigger market share as opposed to their competitors (Andrews and Shimp, 2017). The prices that are fixed for various products in the restaurant’s menu are of affordable prices that many customers will not strain to pay. The restaurants, on the other hand, enjoy the economies of scale where they produce in bulks and make a lot of sales (Schaltegger, and Wagner, 2017). In the end, they can get more customers and generate sufficient profits from the massive sales they make as compared to the restaurants that target making a lot of profits from a single sale. The affordability of the menu items is yet another means of marketing communication that is employed by the Nando’s in an attempt to make the market aware of their products and lure them to buying from their premises.
Communicating to the market the target population they are dealing with help in designing the strategies through which they can reach their potential customers (Andrews and Shimp, 2017). The target population, in this case, is the young adults, a group of individuals who mostly dominate the population and are eager to try new products in the markets as they are among the first people in the lifecycle adoption curve of a product. By targeting this kind of a group, it creates a certain relationship between the Nando’s restaurant and the target customers (Blakeman, 2018). Young adults mostly dominate the United States population. It is, therefore, a conducive means of marketing the restaurant by identifying it with the majority of the population.
Quality goods are provided by Nando’s chain hotels, which makes the customers remain satisfied. Customers are not only concerned with the quantity they receive in return for the money that they have paid, but they are also concerned with the quality of the products they are consuming. When quality falls beyond customers’ expectations, the customers are said to be unsatisfied and a possibility that they will not return after their initial purchase. On the other hand, when the quality surpasses the expectations of the consumers, the customers are said to be satisfied and a chance that they will return for a repeat buying. Quality assurance makes marketing easy as the satisfied customer will spread the positive message to their friends and relatives, who will opt to accompany them the next time they will be visiting the premise (Belch, Belch, Kerr and Powell, 2014). Due to the reputation that the Nando’s has earned in keeping their promise, many customers have been returning to the premise thereby retaining their customers while attracting new customers to the premise (Šerić, Gil-Saura, and Mollá-Descals, 2015).
The Nando’s has been practising franchise, an activity that has seen its fast growth around the globe. 31 is the number of years that the Nando’s has been in existence and it has been able to operate within five of the seven continents of the world, operating in more than 35 countries worldwide and being able to set up 1000 outlets. It signifies a massive growth of the chain restaurant with the growth being triggered by the use of franchise where certain rights and patents are shared between a restaurant and the Nando’s to facilitate the use of the Nando’s brand name by the restaurant while the restaurant pays some fee for using the brand name (Wiedersheim-Paul & Johanson, 2017). It has made the Nando’s to gain a fast-global outlook with the Nando’s trying to regulate the quality standards of the products offered in an attempt to safeguard the reputation of the Nando’s fine dining restaurant (Fill, and Turnbull, 2016).
Conclusion.
Nando’s fine dining restaurant’s activities within the United States can be termed as a success. The chain restaurant was first unveiled in the United States in 2008, and up to date, it has been able to open up 39 other outlets within the United States. The United States is well known for its fast growth in the hotel industry where the revenues generated from the industry significantly contribute to the Gross Domestic Product of the nation. Despite the many food outlets that are found in the United States, the chain restaurant has been among the successful restaurant in the US land.
The role played by the uniqueness of the product that they offer cannot be taken for granted as they have a distinct way of preparing their chicken using the Portuguese way of grilling and the use of peri peri sauce (Luxton, Reid, and Mavondo, 2015). Customers will not hesitate in buying products that are differentiated since they want to get something beyond the obvious products that they can easily find or make. The United States is one of the states that have the largest number of population and therefore, the operation of the Nando’s within the United States assures a demand for their products.
A company that establishes a market and identifies itself with that market is likely to be more successful than a company that targets the whole market. The Nando’s has segmented its market so that it can identify the various needs of the target market, come up with a proposition that meets their needs and ensure satisfaction of the market. The Nando’s has been in the front row in using the low-cost leadership strategy in the market to outshine its competitors. The use of franchise in some countries has helped in gaining market popularity globally, a strategy that has seen it serve more customers at the end of the day (Wiedersheim-Paul & Johanson, 2017).
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