Marketing Case Study at Five Guys Unit

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Marketing Case Studyat Five Guys

Unit

Origination

Five Guys is fast food chain of restaurant headquartered inArlington, Virginia. The restaurant was incorporated in 1986 andexpanded to open several locations across the country soon after. In2003, the hotel took up franchising as an expansion strategy whichhas seen the chain go international with over 300 locations openedworldwide. The chain relies on a unique marketing model of customizedburgers. Clients can choose from over 25 ways to customize theirburgers in addition to other products. This makes for an interestingmarketing case study which makes marketers eager to understand howthe culture of individuality has cropped up in the food market whichis synonymous with high-end luxury consumer goods and how Five Guyshave managed to capitalize on that.

Timetable

Activity

Person responsible.

Target Completion date

1. Marketing Origination.

12/12/2015

-Product Activities

12/12/2015

*Pricing Activities

12/12/2015

*Distribution Activities.

12/12/2015

VI.Marketing Strategies 1. Target Market.2. Market Mix.

12/12/2015

Target Market

12/12/2015

Identification.

12/12/2015

Swot Analysis

12/12/2015

Environmental analysis.

12/12/2015

Marketing Objectives.

12/12/2015

Product andservices

Customizedburgers and fries

The main product offering for the outlet is based on the westernculture of fast food. It is specifically focused on deliveringhamburgers with cheese or bacon, vegetable sandwiches, styled hotdogsand fries. The fries are offered at Five Guys’ style or Cajunstyle. The Cajun Style fries are basically fresh-cut skin-on potatoesdone to a desired crispiness and flavored with Cajun seasoning.Toppings are offered at an extra charge and they include mayo,ketchup, mustard, relish lettuce, pickles, tomatoes, grilled onions,grilled mushrooms, onions, jalapeño peppers, green peppers, A.1.Steak sauce, Bar-B-Q sauce, and hot sauce (Five guys). Variousoutlets may offer egg sandwiches or complimentary roasted peanuts toclients on location.

Online ordering

There are reasons why many restaurants have taken up online ordering.Besides the convenience, there are increased sales. OLO CEO, NoahGlass, indicated that the average online order is 25% larger than aphone order, largely because of a more relaxed ordering environment(Conniff). Furthermore, online ordering based on the design of thewebsite may offer consumers a chance to look through the catalogueand be impressed by the visual display of the products on offer whichcannot be achieved by way of drive-through and even phone ordering(Grensing-Prophal)

Target market

Five Guys throughits customization differentiation aspect targets clients whounderstand what they want. They target consumers who have specifictastes and preferences and are thus catered for by having a burgermade to their liking in over 25 different ways. This way, themarketer appeals to highly individualistic customers to rely on foodand other means to cement their self-identity and character. At thesame time, the marketer has sought to sparingly address healthyconsumers through vegetable salads though majority of the foodscannot be classified as healthy. Thus, the health conscious clienteleis not a niche market for the firm. Furthermore, use of peanut butterin making majority of the foods means that the marketer does nottarget peanut-allergic consumers.

Marketidentification

Millennials form the largest group of young consumers in the markettoday. This group of consumers has a higher sense of fashion,identify and has the greatest potential in the uptake of customizedproduct and services. The baby boomers and the over 40 market segmentis largely comprised of individuals who have a refined taste in theirfood. Therefore, they are more likely to experiment with the variousburger variations offered by Five Guys as a form of food tourism.

Need analysis

Each market segment is defined by shared common factors such asstates and preferences. The narrow product range at the firm does notallow the firm to address the needs of many segments but ratherpeople who need to consume food easy and fast away from home.

Pricing strategy

The strong brand equity and association with quality in the marketallows the firm to charge premium prices for its products, which arerelatively higher than the industry average. This strategy allows thefirm to enjoy better profit margins and also target consumers whoassociate higher prices with higher quality. Again, majority of theoutlets are located in high-end neighborhoods and malls that arefrequented by high end consumers.

Size

Price

Burgers

Hamburger

$6.09

Cheeseburger

$6.79

Bacon Burger

$7.19

Bacon Cheeseburger

$7.79

Little Hamburger

$4.29

Little Cheeseburger

$4.99

Little Bacon Burger

$5.29

Little Bacon Cheeseburger

$5.99

Hot Dogs

Hot Dog

$4.09

Cheese Dog

$4.79

Bacon Dog

$5.09

Bacon Cheese Dog

$5.79

Sandwiches

Veggie Sandwich

$3.29

Veggie Sandwich with Cheese

$3.99

Grilled Cheese

$3.99

BLT

$4.99

Fries

Five Guys Style or Cajun Style

Fries

Little

$2.79

Fries

Regular

$3.79

Fries

Large

$4.99

Cajun Fries

Little

$2.79

Cajun Fries

Regular

$3.79

Cajun Fries

Large

$4.99

Drinks

Coca Cola Products

Regular

$2.29

Coca Cola Products

Large

$2.59

Dasani Bottled Water

$2.09

Source: Five GuysPrices

Distribution

Five Guys does not operate drive-through-. Initially, the firm didnot offer deliveries but has changed to include deliveries as a formof distribution after introduction of online ordering. Again, homedelivery of products was at first powered by phone calls but theintroduction of online shopping cart at the Five Guys website andpartnership with other entities such as the online ordering app hasenabled delivery at home. In future, the firm may explore-drivethrough as a distribution channel. However, onsite consumptionremains to be the biggest distribution channel.

Market mix

The firm neither carries out public relations exercises nor carriesout advertising. Five Guys relies mainly on word of mouth, itswebsite and outlet branding to inform the market of what the storeshave to offer. Based on the reputation of the brand, the firm hasenjoyed free unsolicited publicity such as the case of PresidentBarrack Obama in 2009 when he headed into one of the Five Guysoutlets while filming a day-in-the-life interview with Brian Williamsand had cheeseburger with lettuce, tomato and jalapenos. Thisdefinitely gave the brand very positive exposure. Another way thatthe outlet has enjoyed publicity relates to use of user review blogsand food reviews such as Yelp.

The firm is also a heavy use of social media platform such as Twitterand Instagram. These platforms are used by the firm to interact withthe clients and the public in general. Apart from social media, thefirm has largely been reliant on social events through which itmarkets its brand. Additionally, the strong use of branding throughpackaging and employee uniforms in checked red and white gives thebrand high brand recognition in the market.

SWOT

Strengths

  1. Customization is the major competitive aspect and sales pitch

  2. Proven competitiveness in the market with established fast food burger joints such as Smashburger, McDonalds, and Burger King.

  3. Stringent assessment and evaluation for franchise applicants only ensures the firm has qualified franchisees.

  4. High level of customer retention and customer loyalty especially on food review sites. It was voted best burger chain in 2012

  5. Guaranteed fresh foods for clients as there are no freezers in Five Guys but coolers as a policy

  6. Strict brand control

  7. Cost leadership through reduced advertisement budget

  8. Better employee satisfaction/retention with higher than minimum wage paid

  9. Strict monitoring of operations at franchises through secret shoppers

  10. No trans-fat in their food thus relatively healthy

Weaknesses

  1. Narrow product offering

  2. Use of peanut oil in cooking eliminates a potential client base that is allegoric to peanut.

  3. A few number of suppliers reduces the chances of global operations

  4. No advertising

  5. Strict brand control might deter potential franchisees

  6. Has no wide healthy product options except the veggie sandwich

  7. No drive-through

  8. High startup costs for franchisees – Five Guys is unwilling to help finance franchisees.

  9. No clear signs of market segmentation

  10. Higher than average prices in the market

Opportunities

  1. High demand for franchises

  2. Developing a kids-friendly menu

  3. Global expansion

  4. Increase product range in line with cultural differences in foreign markets

  5. Offer healthier substitutes to cater to healthy conscious clients

  6. Use different oils to peanut-allergic clients

  7. Start advertising

  8. Catering events – i.e. corporate picnics, weddings, etc

  9. Increased home/office delivery in all outlets

Threats

  1. Competition from other players locally and globally.

  2. Culturally-adapted players in the market such as McDonalds in Dubai and France

  3. Higher caloric intake in Five Guys burgers

  4. Competitions

  5. Economic fluctuations

  6. Global challenges such as current fluctuation, new tax regimes

  7. Cattle contamination

Environmentalanalysis

The fast food market in the US is dominated by MacDonald’s.However, according to BizLogis.com, a Morgan Stanley report showsthat Five Guys dominates the burgers market with a net value of $1138million. followed by a distant second by In-n-Out Burger with amarket value of $558 million.

The industry is faced by increased demands for healthier foods andreduced use of sugars, artificial sweeteners and salt. This has ahigh impact on some of the product offering of the firm especiallythe Cajun style fries as the Cajun seasoning is highly slated.

Figure1 Burger market share

Source:http://static1.squarespace.com/static/5429576ae4b096834c527fb8/t/561c25dbe4b084e06317855a/1444685315829/

Marketingobjectives

From the case study,it can be deduced that the marketing objectives of the firm are:

Serve consumers whohave a specific idea on what a burger should entail

To deliver qualityfast food through guaranteed fresh food service at all locations

Works cited

Bizlogie.12.12/2015/ Web

&lthttp://static1.squarespace.com/static/5429576ae4b096834c527fb8/t/561c25dbe4b084e06317855a/1444685315829/&gt

Conniff, Arna. CaseStudy How Five-Guys Implemented Online Ordering. 2011. 12.12/2015/

Web&lthttp://smartblogs.com/food-and-beverage/2011/05/22/case-study-how-five-guys-implemented-online-ordering/&gt

Five Guys Prices12.12/2015/ Web &lthttp://www.fastfoodmenuprices.com/five-guys-prices/&gt

Grensing-Prophal.Benefits of Online Ordering Go Beyond Increased Sales. 12.12/2015/Web

http://hospitalitytechnology.edgl.com/news/Benefits-of-Online-Ordering-Go-Beyond-Increased-Sales84718

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