Nando's Market Analysis and Strategy

The assignment involves analyzing Nando's marketing strategies, including Pestle analysis and Porter's generic strategy. The company is promoting its market to attract Romanian customers by using different promotional methods and connecting with customers through various online channels. This helps establish a good brand image and gain feedback from customers, which can reduce flaws in the product. By focusing on cost while maintaining quality, Nando's aims to enhance its market share and increase profit margins.

STRATEGIC MARKETING

Table of Content
Executive Summary...............................................................................................................................3
INTRODUCTION.....................................................................................................................................4
MAIN BODY............................................................................................................................................5
1. Recommendation of product and PESTLE analysis........................................................................5
2. Modes of entering new market.....................................................................................................7
3. Market segmentation and targeting..............................................................................................8
5. Porters generic strategy...............................................................................................................10
CONCLUSION.......................................................................................................................................11
REFERENCES.........................................................................................................................................13

Executive Summary
The report tells about Nando’s who is going to launch a new product koffee in the Romanian
market. They have make use of Pestle analysis to know about the various environmental
factors which can lay effect on their business and operations. Company has been engaged in
doing market segmentation and targeting in order to gain competitive advantage.
Segmentation is been done by them on the basis of behaviour, culture, values and age. Firm
has also used porters generic strategy in order to have expand their market share. This has
helped them in increasing their revenue and profit.

INTRODUCTION
Strategic marketing is the method in which an organization is involved in
differentiating its product from the competitors by working on there strength and weakness.
In this process company is engaged in creating better value for the consumers than its
competitors. Main aim and objective of the report is to gain competitive advantage through
creative and innovative product. Assignment discusses about the macro environmental factors
that can affect the entry of new good. Further it highlights upon the modes of market entry
which will be suitable for country. Study also lays emphasis on importance of market
segmentation and evaluation of potential target market. It discusses about porters generic
strategy in order to gain competitive advantage.
MAIN BODY
1. Recommendation of product and PESTLE analysis
Nando’s is a multi cuisine international dining restaurant chain which has been
established in the country South Africa. Company presently have more than thousand outlets
in 35 countries. They are dealing in selling all the type of chicken and peri peri chicken has
been there speciality. Now firm wants to do business in some other type of product and
launch it in other region in order to expand their market share. So after doing market analysis
Nando’s decided to launch its new product named “Koffee” in Romania. Enterprise is
Illustration 1: Pestle analysis
Source: (Pestle, 2013)

engaged in doing business in new commodity so that gain competitive advantage and
increase their profit plus revenue.
In order to launch new product “Koffee” company will be engaged in doing PESTLE
analysis, so that wider opportunities and threats are being known to them. This is a tool which
will support Nando’s in tracking all the possible components with which they will operate
and assists in making plan for launching of new product or project. It will include all the
environmental factors that can affect the business of the firm. The elements consists of:
Political factor: These are the factors that assess the intensity or extent to which
government decision, laws and rules can affect a business. For launching new product Koffee
Nando’s needs to have proper knowledge and understanding about the taxation policies and
schemes applied by government in the region. For example government of Romania may
implement new duty or tariff for establishment of new company, this can hamper the revenue
generating system of the enterprise. It can act as a possible threat for the firm. Also
government rules and policies can be an opportunity for Nando’s as there policies may
support them during the time of launching.
Economical factor: They are the components that includes determinants of an
economic performance that directly affects a firm and have a long lasting effect. Nando’s
need to analyse all the economical factors before launching the Koffee product in market of
Romania (Dann. and Dann, 2014). Like for example a rise in the inflation rate of region may
lay negative impact on the prices and policies related to the product or service which firm is
going to launch. It can act as a threat and possible solution for it is to have proper
understanding and market analysis about the economical aspects of country. This can also
affect the purchasing power of consumer and buying power of supplier.
Social factor: For Nando’s to launch new product Koffee in Romanian market, they
must possess great knowledge about the social factors. It includes beliefs, values and attitude
followed by consumer in that region. They need to have proper understanding of the taste and
preference of customers; product should be designed according to their needs and demands.
All these elements can act as an opportunity for the company and help them in gaining
competitive advantage. If firm has a narrow knowledge about their target customers, they do
not know about their buying pattern and purchase behaviour, than this can act as threat for
Nando’s. Ethical issues and religious factors, views and opinions of customers must be
adhere by firm in order to gain competitive advantage. This will also enhance their growth.

Technological factor: In order to deal in new product Koffee, Nando’s need to make
use of innovative technology so that they can successfully establish their business in
Romanian market. Innovation in technology can affect the operations carried on by firm
positively or negatively. For gaining competitive advantage firm must be engaged in using
advancing technology. Promotion of good must be done via online channels. They can make
use of social media website to make customers aware about the good. Also, feedback related
to the product can be taken by them through online websites. This helps them in gaining
competitive advantage. It will also enhance the growth of firm and will act as an opportunity
to increase profit or revenue.
Legal factors: These factors can also lay great impact on the operation and business
of Nando’s for launching of new product Koffee in Romanian market. In this company has to
follow the rules, regulations, schemes and policies implemented by government. By adhering
to legal regulations company will get support from the authorities to deal in new project. It
will also create a good will in the market which attracts more consumers. Also firm will be
able to retain them by this. Through this, they will also be able to create a brand value in the
new market which can act as an opportunity for the firm to increase their revenue share. They
will be also able to expand their market share with the help of legal rules and regulations.
Environmental factors: For dealing in a new business project which is Koffee,
Nando’s need to take care of the environmental conditions of Romania. The company must
be engaged in promoting the environment by involving in activities like doing corporate
social responsibility, arranging charity shows, or developing sustainability in the country. For
example firm can be involved in dosing events for creating awareness about reducing t\\
pollution in the region, they can promote use of paper bags and ask customers to eliminate
use of paper bags. In this way firm will be able to create good will in market.
2. Modes of entering new market
There are different modes of entering to the Romanian market by Nando’s in order to
launch new product Koffee. They can make use of the following mode:
Franchising: In order to do new project in Romania, Nando’s can be involved in
franchising there product (Myers, 2016). The franchising is a system where the parent firm
provide other individual or company to run their business in particular or specific region.
This helps the enterprise in expanding their market share. This method is associated with very
low political risk and also in reduced cost Nando’s can make their business wider. It allows

simultaneous expansion across the globe. In addition profit will also be increased. Well
selected partners to run the business can also bring financial investment for the company.
This helps in increasing the goodwill of the firm.
However, some disadvantages are also associated with this franchising system.
Company might face difficulty in managing the franchisee’s decision. Any dispute with them
can hamper the growth of firm and may include legal proceedings. Also, it can be difficult for
franchisee to maintain the image of owner in the international market(Dann. and Dann,
2014).
Joint Venture: Nando’s can also make use of this method to enter Romanian market
in order to promote their new product Koffee. The joint venture will assist company in easily
entering the market and also the risk related to the new project would be shared and reduced.
Firm will also get the benefit of sharing the strategic planning strategies of other company
and risk plus reward would be shared. In this method it will be easy for enterprise to develop
new product and benefited related to the technology can also be shared between the
companies. Also, partners would get to learn from each other about the unique business
techniques.
But, it will not be easier for Nando’s to be in joint venture as their can exist dispute
over ownership, control, risk, reward, technology, pricing, resources and capital. These
conflicts can affect the operations of the firm and might hamper their growth.
Strategic alliance: In this method, Nando’s can get engaged in doing cooperative
agreement with different companies and firm. The agreement can be related to shared
resources, technology, resource, place and capital(Myers, 2016). The main focus of this
method is to develop and create new product rather than promoting the existing one. So, it
will be beneficial for company to launch Koffee in Romanian market by using this procedure.
Firm can get a huge advantage of using the technology of other company which will help
them in getting competitive advantage. Nando’s can also get benefit of global competition
and can get financial as well as technological support from other firm. Economical and
financial risk are also been reduced through strategic alliance.
But, there also exist disadvantage of this method which includes risk related to
competitive collaboration. Firm might get cheated by their partner and also it is difficult to

get appropriate partner. Also, there exist loss of control company can’t get chance to manage
all the things by themselves.
Recommendation of mode for entering into the market
Nando’s for launching Koffee in the new Romanian market can make use of Joint
venture for promoting and launching their new product Koffee. It will be the most easiest
mode for them to enter into the new international market. In this method risk related to
finance and technology is been reduced. Also the firm can learn more about the new
technique and methods used by the partnership firm. Firm can get advantage of fast market
access; enterprise can focus on developing new product. They can also make efficient use of
resources.
3. Market segmentation and targeting
Market segmentation is basically dividing consumers on basis of different target
groups. It can be based upon varied characteristics like age, sex, place, location. It basically
defines the target customer which firm wants to lay emphasis on. This method will help
Nando’s in reducing the risk related to ineffective marketing campaign. When marketers are
involved in dividing market into different ranges and on the basis of taste and preference of
customer, there are more chances to get success. Marketers can also segment on the basis of
the target audience.
Nando’s in dealing in Koffee product for which they need to segment market as well
as their target audience. Segmentation can be done on demographic basis. Company will be
involved in targeting young and middle aged adults as Koffee is most preferred by them. For
this they will be involve in doing market research, so that the taste and preference of
customer is been known to them(Myers, 2016). It will help them in gaining competitive
advantage. For this firm has to lay keen emphasis on identifiability, substantiality,
reflectiveness and action of customer. This will help them in designing product according to
their need and wants. Firm can also target the audience according to their income status. As
they are dealing in Koffee product it can be affordable by most of the lower as well as higher
income group. So this will help in increasing the profit as well as revenue.
Market segmentation can also be done on the basis of behaviour, attitude and belief of
the consumers. This will help them in better understanding of the people and can assist firm
in retaining them. Also, segmentation can be made by Nando’s on specific basis like culture.

This influence purchase behaviour of the customer(Cravens and Piercy, 2016). Company
must have keen knowledge about the culture, values and belief of the targeted customer. This
will help them in creating awareness among them and will also attract new consumers.
Selecting target market is also one of the most important tasks for firm. Nando’s can target
urban market for launching their product as koffee is most preferred by people or young
adults living in the developed area. This will help firm in effectively establishing their
product. It will also help them in reducing the risk towards consumer diversion. This can act
as beneficial for the company.
Nando’s will also be involved in doing market targeting. It will be done on the basis
of needs, desires and wants of the people. For launching Koffee product in the Romanian
market, firm can involve in doing market research about the taste and preference of teenagers
or young adults whom they are going to target. Identifying target market is one of the most
essential steps in making marketing plan. This will help company in gaining competitive
advantage. Also, it will be beneficial for the company in term of increasing profit or revenue.
It will also help them in gaining competitive advantage.
Segmentation can be done by using various strategies like demographic, geographic.
This will be an advantage for the company(Cooper, 2012). It will help them in increasing
market share and increasing profit. By this firm will be able to know about the taste, fashion
and preference. This can help them in gaining competitive advantage and also assist in
increasing their profit as well as revenue. Also by this segmentation and targeting method
Nando’s would be able to enhance there growth and they will create a good will in the
market. They will be able to retain and attract new consumers towards their product.
5. Porters generic strategy

In order to gain competitive advantage and successfully launch new product Nando’s
can make use of porter’s generic strategy. It will include:
Cost leadership strategy: Nando’s can make use of this strategy. In this their new
product Koffee can gain competitive advantage by reducing the price of the good. Also, firm
must be involved in improving the quality of the product. This will help them in gaining
competitive advantage and enhance their growth. It means being the leader of the cost in
specified region or market. It will help firm in having the access to the advancing technology
which will make it easier for the enterprise to expand their market share.
It will create a very efficient logistics for them which support Nando’s in gaining
competitive advantage. The only disadvantage in cost leadership strategy is that this is not
one of the unique methods and competitor might get benefit of this too. The price must be set
up by the firm according to the purchasing power of consumer. This will create consumer
loyalty towards the organisation and also it can enhance the profit and revenue of
organisation. It also helps in creating a low cost base.
Cost focus: Nando’s can gain competitive advantage by focusing on the cost aspect of
the product Koffee. The cost must be created by them which is affordable by young adults
and also their profit is been added in it. It will help them in successfully entering the
international market and also establish their business over Romania. Company need to make
market analysis and research about the paying capacity of customer, so that it would be easier
Illustration 2: Porters generic strategy
Source: (Porters generic strategy, 2014)

for firm to target them. Also cost must be differentiated from the competitors. So, that
customer will be more attracted towards them. This will support firm in enhancing their
market share. By focusing on cost firm needs to make sure that they do not hamper the
quality of product and also the cost which is been related to technology is been maintained.
Advancing techniques will help them in gaining and retaining new consumers. It will help
them in increasing their profit margins.
Differential strategy: Nando’s can increase their market share by adopting
differential method. In this process, company have to engaged in business which is unique in
nature in order to gain competitive advantage. They will be involved in using differential
pricing strategy to attract more consumers(Cooper, 2012). Also firm can get engaged in
doing research about how competitors are promoting their market. For attracting Romanian
customers Firm will be using different promotional methods to connect with customers. This
will help them in successfully establishing their product Koffee in the market. Also by
making use of different advancing technology company can get a good brand image in the
market. They can also ask for the feedback via new techniques like internet and online
website which can help them in reducing the flaws related to the product.
It can provide them benefits above the competitors. To make a successful
differentiation strategy Nando’s will have to get involved in doing keen market research
about the taste and preference of customers. This can support firm in getting competitive
advantage. Company who make use of differential strategy understand the dynamics of the
market and also try to have knowledge about the unique needs of customers. This will
support firm in enhancing their market share. By focusing on cost firm needs to make sure
that they do not hamper the quality of product and also the cost which is been related to
technology is been maintained. Advancing techniques will help them in gaining and retaining
new consumers. It will help them in increasing their profit margins.
CONCLUSION
From the above study, it has been summarised that Nando’s has used Pestle to analyse
the various environmental factors that can affect their growth. Also, they have been doing
market analysis and segmentation in order to successfully establish the business. This has
helped them in knowing the unique needs and demands of the customers. This has assisted
company in gaining competitive advantage. Through porters generic strategy firm has
established product with unique selling price.

REFERENCES
Books and Journals
Cravens, D.W. and Piercy, N., 2016. Strategic marketing (Vol. 7). New York, NY: McGraw-
Hill.
Myers, J.H., 2016. Segmentation and positioning for strategic marketing decisions. American
Marketing Association.
Fahy, J. and Smithee, A., 2015. Strategic marketing and the resource based view of the
firm. Academy of marketing science review. 10(1). pp.1-21.
Wilson, R.M. and Gilligan, C., 2014. Strategic marketing management. Routledge.
Dibb, S. and et.al., 2005. Marketing: Concepts and strategies (p. 850). Houghton Mifflin.
Cooper, L.G., 2012. Strategic marketing planning for radically new products. Journal of
marketing. 64(1).pp.1-16.
Varadarajan, R., 2014. Strategic marketing and marketing strategy: domain, definition,
fundamental issues and foundational premises. Journal of the Academy of Marketing
Science.38(2).pp.119-140.
Dann, S. and Dann, S., 2014. Strategic internet marketing. John Wiley & Sons Inc.
Online
Pestle. 2013. [ONLINE]Availablethrough:<https://www.professionalacademy.com/blogs-
and-advice/marketing-theories---pestel-analysis>
Porters generic strategy. 2014. [ONLINE] Available
through:<https://www.investopedia.com/terms/p/porter.asp>