Starting a Business and Fundamental of Marketing

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This report provides an evaluation of the external environment of a restaurant through PEST analysis, an overview of its competition, and ways to gain a competitive advantage. It also suggests a target market for the restaurant.

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Starting a Business and
Fundamental of
Marketing
1

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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of the business idea................................................................................................3
PEST analysis.........................................................................................................................4
Competition and competitive advantage................................................................................5
Suggestion for proposed target market...................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
A business can be defined as an organisation or a person earns profits or revenues by
selling goods and services in exchange of money. Business is important as they contribute to the
growth of a country’s economy (Baker and Hart, 2016). Organisation chosen for this report is
7spices, which is a restaurant based in Sheffield. The restaurant is spacious and large with an
attractive bar area. 7spices is an ideal place for large as well as small parties. The restaurant is
planning to launch a new outlet in Bath, UK. The report provides an evaluation of the external
environment of the restaurant through PEST analysis, an overview of its competition and the ays
in which it can gain a competitive advantage. It also provides suggestion for the target market of
the restaurant.
MAIN BODY
Overview of the business idea
7spices is a restaurant that offers Indian food dishes in Sheffield. The restaurant has
unique décor because of which it is one of the most sophisticated restaurants in the location. It
offers a perfect ambience as well as food to its customers. A variety of Indian cuisine dishes are
offered that are prepared keeping quality in mind (Payne, A., Frow, P. and Eggert, A., 2017).
Thus, the restaurant has now decided to open a new outlet in Bath, UK. For this, the restaurant
will have to conduct a market research in order to understand the needs of the customers and if
they will accept the idea or not. The outlet that will be opened in UK will offer all kinds of
Indian cuisine dishes to the customers in order to increase its overall sales as well as customer
reach.
Initially, the prices of the products will be kept low so that a large number of customers
visit the restaurant. After that, gradually the prices will be increased (Bergmann Hundt and
Sternberg, 2016). The quality as well as hygiene of the products will be kept in mind at all times
without compromising on the same. The market research will also provide insight about the
various internal as well as external factors and their impact on its performance. Thus, for the
business idea to be successful, it is important that the restaurant identifies the needs of its
customers. This will help it to segment its customers effectively. People who will be hired to
work in the outlet should be qualified and possess skills that will help the company attain its
main objectives as well as goals and also achieve a competitive edge. High quality and hygienic
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food dishes will be offered to the customers so as to gain their loyalty as well as trust. Also, in
order to understand the impact of various external factors on the company, a PEST analysis will
be conducted so as to identify their impact on its decision to open a new restaurant outlet in a
new location.
PEST analysis
A PEST analysis is a method through which an organisation can analyse the major
external factors and their impact on the performance and also on the process of decision making.
The analysis in context to Bath, UK is explained below –
 Political Factors – These factors include stability and instability of country and political
stability is one of the country’s strength. Being a city in the United Kingdom, Bath is also
politically stable (Kotler, P., Kartajaya, H. and Setiawan, I., 2016). Since the country
maintains good relations with countries, it will be beneficial for the restaurant to establish
an outlet in Bath. But it should have a complete understanding of different kinds of
tariffs, tax rates, restrictions to trade etc. that area result of Brexit to be able to carry out
business effectively.
 Economic Factors – The UK is also economically strong with a high GDP with a large
population which means that even small businesses can generate profits. Thus, 7spices’
decision to open a new outlet will be effective as the UK market is diverse with a lot of
growth and profitable opportunities. Thus, economic factors will support the growth of
the respective restaurant in the market. By setting up a new outlet, the restaurant can
provide employment to people who are in search of a job and thus provide them salary.
 Social Factors – The people living in UK belong to different cultural backgrounds which
is why 7spices offers a variety of products to cater to the needs of different people (Shaw,
S., 2016). Also, the people have a high level of disposable income and thus they will be
willing to pay a high price for the company’s products. The pricing as well as choice of
products in the menu should be done keeping in mind the age groups as well as
preferences of people in them.
 Technological Factors – The UK has an access to the latest technology and businesses
there usually adopt to the same. 7spices can implement latest technology in its business to
attract customers and also provide them a lasting experience so that they consider coming
back to the restaurant. The number of people using smartphones with a high-speed
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internet is rising continuously which means that this is a great opportunity for the
restaurant to generate interest among people by marketing its products through various
platforms of social media.
A PEST analysis should be carried out in order to understand the needs and demand of the
company effectively as well as identify the various issues that can be posed in the near future.
Competition and competitive advantage
There are many restaurants that can pose competition to 7spices by offering similar
products to the customers in order to attract them. Such restaurants can attract people by offering
various discounts and coupons (Chaffey and Smith, 2017). Therefore, 7spices should come up
with different innovative and unique strategies so that more customers get attracted towards its
products and services. This will help it in gaining a competitive edge against competitors. Also,
all the processes within the system should coordinate and interrelate with each other so that its
efficiency is maintained. Respective restaurant should choose the location of its outlet carefully
so that there is least possible competition posed from other players in the market.
Strengths as well as weaknesses of each competitor should be analysed so that effective
strategies can be formulated. In order to gain a competitive advantage, the restaurant should
deliver services that are not offered by its competitors without compromising on the quality
(How to Gain Competitive Advantage in the Restaurant Business, 2020). Also, the restaurant
should also analyse the performance of any new competitors to identify potential threats that can
be posed by them and can affect its overall business operations.
Exceptional customer service should also be provided by the restaurant in order to gin a
competitive advantage. The staff should greet all customers warmly and should also remember
names of the ones who visit the restaurant frequently. The customers should be asked about their
experience at the restaurant, taste of the food as well as any other feedback and should thus make
changes in its system accordingly in order to avoid similar mistakes in the future. The restaurant
can gain an edge over others in the market by making sure that the ingredients that go into
making of a food dish are of premium quality and not a copy. High quality products will attract
positive reviews from people on various online channels.
Also, the various areas of concern including the menu should be identified and addressed
in order to avoid any kind of confusion among people. The various dishes on the menu should
not be priced at a higher rate but in a way that the products are not heavy on a customer’s pocket
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and that they can order and enjoy whatever they want from the menu. The staff of
7spiciesrestaurant should be provided effective training so that they have complete knowledge of
already existing products and services in the market as well as the manager of the restaurant
should also take up meetings either daily or weekly to know the track of training and
development needs of the customers.
7spices will only be able to gain a competitive edge if its customers understand the kind
of products it offers. For this, the restaurant can carry out an effective marketing campaign that
will differentiate it from others as well as attract the attention of people (Piercy, N. F., 2016).
The process of branding should be carried out effectively so that restaurant’s culture as well as
value are understood by the customers properly. Also, when customers provide feedback or a
suggestion, the restaurant should take it seriously and work towards improving their experience.
This will help the company in fostering a bond with its customers and retain them for a long
duration of time.
Suggestion for proposed target market
The restaurant should segment customers in its target market depending on various
segments. The target market of the restaurant is that of people who have a moderate to high level
of income (Kaur, 2016). Such people will be willing to pay extra amount in order to receive
better experience as a customer. The target market can also be segmented on the base of
demographics, population, availability of internet are some of the major opportunities should be
identified, as per the views of the project management plan that is explained by the company in
order to reach the goals and objectives of the company effectively.
In order to build a large target market, the restaurant should initially offer food products
at affordable rates and also serve them popular dishes (Gonzalez-Uribe, and Leatherbee, 2018).
The restaurant should build a target market that comprises of customers who like eating Indian
cuisines. An effective target market will help the respective restaurant to increase its overall sales
as well as profitability. This will lead 7spices to gain a competitive edge against competitors with
a large and loyal target market. Therefore, it should understand the needs, requirements as well
as preferences of its target market and open the restaurant outlet at a location hat is easily
accessible to many people.
In order to decide the target market, the company should follow the process of STP. This
will help the company in deciding which segment of customers it will like to cater to. To attract a
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large number of customers, 7species can post attractive and unique pictures of its products and
increase followers. Online advertisements can be flashed across various social media platforms.
Also, emails and magazines are other effective ways to raise awareness about the new outlet
among customers. Thus, all of the above stated suggestions should be taken into account by the
restaurant to be able to stand out in the market against other players.
The respective restaurant should also choose specific demographics for which it will
develop and offer products (Brown, Mawson, 2019). A complete analysis should be done and
data relating to customers should be gathered to identify who are the people that would like to
visit the restaurant. Competition should also be analysed beforehand so that 7spices gets to know
its products are competitive enough to sustain in a highly competitive market. Various kinds of
ads should be tested on the target market, once it is selected in order to understand if the decision
that is made by the restaurant will be successful or not. Therefore, test market is an important
component for any organisation that is what defines the success and failure of a business idea in
the market.
CONCLUSION
From the above report, it can be concluded that businesses help organisations in
expanding their business operations and thereby increasing sales in order to generate effective
output. There are various external factors like political, economic, social as well as technological
factors that can impact the overall performance of the company. Organisations face a lot
competition from other key players in the market. Therefore, a careful analysis of the industry
should be done in order to understand the needs of the customers. This helps in choosing the
target market effectively.
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REFERENCES
Books & Journals
Baker, M. J. and Hart, S. eds., 2016. The marketing book. Routledge.
Bergmann, H., Hundt, C. and Sternberg, R., 2016. What makes student entrepreneurs? On the
relevance (and irrelevance) of the university and the regional context for student start-
ups. Small Business Economics, 47(1), pp.53-76.
Brown, R., Mawson, S. and Rowe, A., 2019. Start-ups, entrepreneurial networks and equity
crowdfunding: A processual perspective. Industrial Marketing Management, 80, pp.115-
125.
Chaffey, D. and Smith, P. R., 2017. Digital marketing excellence: planning, optimizing and
integrating online marketing. Taylor & Francis.
Gonzalez-Uribe, J. and Leatherbee, M., 2018. The effects of business accelerators on venture
performance: Evidence from start-up chile. The Review of Financial Studies, 31(4),
pp.1566-1603.
Kaur, S., 2016. Social media marketing. Asian Journal of Multidimensional Research (AJMR),
5(4), pp.6-12.
Kotler, P., Kartajaya, H. and Setiawan, I., 2016. Marketing 4.0: Moving from traditional to
digital. John Wiley & Sons.
Payne, A., Frow, P. and Eggert, A., 2017. The customer value proposition: evolution,
development, and application in marketing. Journal of the Academy of Marketing
Science, 45(4), pp.467-489.
Piercy, N. F., 2016. Market-led strategic change: Transforming the process of going to market.
Taylor & Francis.
Shaw, S., 2016. Airline marketing and management. Routledge.
Online
How to Gain Competitive Advantage in the Restaurant Business. 2020. [Online]. Available
through:< https://smallbusiness.chron.com/gain-competitive-advantage-restaurant-
business-24162.html >.
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