MKT3110

MARKETING STRATEGY AND PLANNING

ASSIGNMENT -2

Topic: Recommendations for Improving the Performance of Souplantations

Name: Alefiya Mustafa

MISIS: M00739545
Module Leader: Andrew Mackenzie
Module Code: MKT3110
Contents
Executive Summary..............................................................................................................................3
Introduction..........................................................................................................................................3
Marketing Objectives............................................................................................................................3
Segmentation, Targeting & Positioning................................................................................................3
Segmentation:...................................................................................................................................4
Targeting:..........................................................................................................................................4
Positioning:........................................................................................................................................4
GrowthStrategy....................................................................................................................................4
1. Market Penetration Strategy....................................................................................................5
2. Product Development Strategy................................................................................................5
3. Market Development Strategy.................................................................................................6
4. Diversification...........................................................................................................................6
Selection of Competitive Advantage....................................................................................................7
Marketing Mix Programme..................................................................................................................8
Product:.............................................................................................................................................8
Price...................................................................................................................................................8
Place..................................................................................................................................................8
Promotion..........................................................................................................................................8
Conclusion.............................................................................................................................................9
REFERENCES........................................................................................................................................10
APPENDIX............................................................................................................................................12
Appendix 1- Ansoff Matrix...............................................................................................................12
Appendix 2- Porter’s Five Forces.....................................................................................................13
Executive Summary
The purpose of marketing strategy is to fulfil the long term needs of consumer and
competitive advantage. It aims to assist the objectives of a business strategy by playing an
integral role between firms, its competitors, and stakeholders (Robertson, 2019). To achieve
effective competitive advantage, managers must be able to analyse the market's response
to proposed strategy. The set objectives and strategy, whether driven by technology,
service, or cost, needs to be consistent with consumer demands and competitive standing
(Morgan, 2019). 
The following report aims to set some strategic objectives for a restaurant in its decline
stage, Souplantations. The concept of Cloud Kitchen has been proposed to help
Souplantations meet its marketing objectives. The objectives will be driven by cost and
service aspects aiming to enhance market share and meet modern consumer needs. The
report uses various theories such as the Ansoff Matrix, PESTLE, Porter’s five forces and
Strategic Analysis theory to determine the effectiveness of the proposed strategy. Consumer
data and behaviours have also been considered for the same.

Introduction
Souplantation was the first-ever one-of-a-kind 'buffet style' soup and salad restaurant
catered toward becoming a healthier substitute for fast food junk brands. The restaurant's
success stemmed from its unique concept and low competition in its earlier stage. However,
due to a lack of branches, financial stability, government regulations, and inability to adapt to
market change, Souplantation saw a decline amidst the pandemic. The following report aims
to set marketing objectives for the effective functioning of Souplantation. Different
approaches to achieve these marketing objectives will also be defined with relevant theories
that can be implemented to enhance market share and competitive standing.  

Marketing Objectives
1. Position itself as an effective alternative to direct and indirect competitors
2. Increase customer return rate by 30% toward the end of 2022

Segmentation, Targeting & Positioning 

The STP (Segmentation, Targeting and Positioning) model proposed by Kotler et al., 2006)
includes the process of market segmentation (developing consumer profiles and identifying
base for segmenting the market), targeting (selecting target markets and developing
measures for segment attractiveness) and positioning (building positioning strategies for
each market based on marketing mix). 

Segmentation: The previous analysis showed that the primary segmentation of Souplantation
is a niche market: Gen Y or millennial customers who are health conscious and have
medium-low spending power living in California. A large population of users across the US
and many other areas of the world prefer a healthy lifestyle and would enjoy eating such
food while on a budget. Souplantation will thus focus on Geographic segmentation by
expanding its area of operations to cater to a larger group of consumers across the US.
Offering healthy-eating options for an affordable rate will even attract the younger Gen Z
crowd, and thus, delivering to a larger group will guarantee the food chain's success. 

Targeting: The need to become San Diego's first-ever buffet-style restaurant serving fresh
and healthy menu options became both the strength and weakness of Souplantation. With
only 5 branches targeting the regional customers, Souplantation failed to understand the
potential of the diet-conscious market. The dining will target a larger market as healthy
eating is on the rise. Targeting a mix of Gen Z and millennial customers can be highly
profitable for Souplantation rather than catering to a niche market, giving it a steady growth.
Researchers at the Journal of Foodservice Business Research found that women are more
likely to choose healthier food choices than men (Campbell, 2016). Explicitly targeting
women based on behavioural intentions can be advantageous for Souplantation. 

Positioning: The previous analysis of Souplantation revealed that its positioning strategies
depended on freshly offered dishes made each day. Furthermore, it provided an 'all-you-
can-eat buffet service at nominal rates so consumers could eat as per their liking. Moreover,
studies show that the USA has the largest obesity cases. Souplantation will position itself as
a medically approved alternative to fast food chains. It will focus on promoting healthy
lifestyle habits, adapting excellent eating practices, and encouraging the benefits of
nutritional values. This will allow Souplantation to differentiate itself from competitors and
gain a better market share. 

GrowthStrategy
As discussed in the previous analysis, the pandemic era was the most challenging time for
Souplantation survival. Government guidelines, precautionary measures, and consumers'
need to avoid close contact become significant reasons for its downfall. Furthermore, per the
previously discussed PESTLE and SPACE analysis, increased competition and lack of
financial stability made it difficult for the business to survive in the local market and grow
globally. Inability to reach a larger group of consumers outside San Diego, California, proved
economically draining for Souplantation. The cloud kitchen concept can be adopted to
ensure Souplantation reaches more nationwide users without the financial burden of opening
new chains. 
Cloud Kitchens (CK), also known as 'virtual kitchens,' are ample commercial cooking spaces
providing food facilities with a common location to prepare menu items for delivery. Unlike
traditional outlets, CK will allow restaurants to employ their chefs or recipes at the
commercial cooking location and deliver it to many consumers with minimal costs (Sriram,
2018). Data showed that food delivery orders increased by 150% in 2020 due to the
pandemic. As more and more restaurants began closing operations, the quick pivot from in-
house dining to a delivery system shaped the survival of many restaurants (Merckaert,
2020). 
Restaurant owners prefer CK in the present due to ease of production and food quality upon
delivery. Often located in industrial complexes due to their large size, cloud kitchens offer
driver parking, waiting for areas, check-in stations, and regulated delivery systems, all
designed to get the food to reach customers as fast as possible (Sriram, 2018). While there
is a cost for being part of a CK, it is also much lesser than the cost incurred from opening
and running multiple branches across the nation. 
The Ansoff Matrix (Appendix 1) can be used to calculate this growth strategy for
Souplantation. Ansoff Matrix, commonly known as the product/market expansion grid, is a
planning framework used by marketing managers to deliberate the level of risk associated
with various growth strategies (Jintana, 2021). The framework suggests four strategic
options, each with different risks, which are evaluated for Souplantation.
1. Market Penetration Strategy: The business sells existing products to a current
market due to established channels. This strategy is most helpful in growing markets
and the ability of a company to utilize marketing mix elements to nullify competition.
Due to safety regulations, it will be risky for Souplantation to penetrate their existing
market due to increased competition and lack of financial stability to use other
marketing activities.
2. Product Development Strategy: New products are developed for existing market
segments. The success of this strategy depends on the organisation's ability to
conduct effective market research to understand consumer demands and create new
products. This strategy resonates well with the proposed CK concept. CK apps being
highly technical and AI-based, regularly track customer behavior and ordering
patterns. The platform assists in understanding what type of user located in a
particular area is looking for what kind of meal at a specific time of the day. It will also
 be essential to understand if consumers prefer competitor restaurants or what kind of
dishes are getting maximum traction. This data will help Souplantation refine its
menu offerings and develop new products for existing markets. The risk involved may
be the failure to accept new products and costs involved in the 'promotion' stage.
3. Market Development Strategy: Taking existing products into new markets is the
third strategy of Ansoff Matrix. Souplantation will explore this strategy for expansion
outside the San Diego region. CK will allow the restaurant to deliver to more users
across the US by providing a cost-effective distribution channel. The tech system will
mitigate Souplantation's risk of understanding the complexities of a new market.
4. Diversification: The final strategy is to develop new products for a new marketplace.
This is considered the riskiest strategy as the organisation moves into an entirely
new line and place of business. Diversification can be undertaken for Souplantation
at a later stage once the chain builds confidence among a large population and gains
financial stability.
According to PESTLE Analysis, which is used to identify external factors that may impact the
decision-making of management, technological evolutions play an essential role. As
consumers become more tech aware and online systems continually innovate, companies
must retain their position by adapting to such changes. Implementing tech-defined activities
can thus become essential to an industry (Walker, N.D). Cloud kitchens are now highly tech
enabled. Various mobile apps are available to place, track and even get discounts on orders.
This model can be highly beneficial when targeting the Gen Z market, as discussed above.
Customers nowadays are constantly looking for ease of service; cutting travel time and
bringing their favorite food to the doorstep is a winning play for all restaurant chains aiming
to grow (McKinsey, 2021). According to the National Restaurants Association (2020), 52% of
customers agree that purchasing order delivery type of food is essential for their living.
Furthermore, cloud kitchens can give a quick digital exposure to the brand through delivery
apps, which is cheaper than traditional advertising.
Adopting a virtual kitchen model will allow Souplantation to overcome its threats and
shortcomings. Enabling the food delivery system will ensure consumers don't have to take
any health risks by visiting the restaurant. Government guidelines to shut down buffet
systems can also be less economically draining when income generation shifts toward meal
delivery. Lastly, the economic burden of expansion and survival in other areas can be
eradicated when operating from a cloud kitchen which ensures delivery to every area. 
The above-defined growth strategy will allow Souplantation to stand out from direct
competitors. It also ensures meeting the objective of customer return rate since by providing
the ease of ordering favourite meals, the target audience is more likely to purchase from the
restaurant continually. 
Selection of Competitive Advantage
The strategic group analysis theory in the previous assessment of Souplantation against
competitors revealed some of the primary reasons for the downfall of the branch.
Souplantation became focused on defeating competitors, thereby compromising on quality
and prices. Furthermore, the benchmarking approach identified various gaps in the
operations of Souplantation, and the following recommendations will aim to bridge these
gaps, which is the last stage of the benchmarking process. 

Souplantation can gain a competitive advantage in two ways, both economically and
socially. Economically, employing the cloud kitchen system is a cost-effective method of
reaching a more extensive customer base. And secondly, by promoting a healthy eating
lifestyle, Souplantation has become a market leader. Porter (1985) introduced the 'five
forces model for deliberating the role of competitive forces that determine a firm's
competitive standing (Explained in Appendix 2)
The direct competitors of Souplantation, as discussed previously, are Soup Exchange and
Fresh Choice. Both these restaurant chains implemented the concept of Souplantations but
gained a better market standing by offering lower prices. In the light of the covid-19
pandemic, the market size of healthy eating in the USA amounted to 63 billion dollars in
2020 (Statista, 2022), and this number continues to grow. While the market is large, the
number of brands offering to meet these demands is low, with almost no single restaurant as
an effective market leader in the niche. Shapiro (1989) defines a competition-based
marketing strategy theory as 'Strategic Conflict.' This theory complements Porter's strategies
(Appendix 2) approach, recognizing a firm's abilities to manipulate its market environment,
thereby approving its competitive standing. As firms plan an action, they also anticipate
competitors' next move and shape their strategies accordingly.
No immediate competitor of Souplantation has shifted to a cloud kitchen format and
continues running as before, which may not last for long as consumer needs are going.
Switching to a cloud kitchen business model comes with multiple competitive advantages:
1. The concept of a cloud kitchen is easily scalable; Souplantation can expand
geographically without the additional cost of real estate.
2. Using customer data from tech-enabled cloud kitchen services, Souplantation can
invest in menu items to set itself apart from competitors.
3. Souplantation can save considerable overhead costs, quickly understand consumer
requirement, and take swift actions before competitors to gain an effective
competitive advantage.
Acting fast on consumer needs will help Souplantation meet its set marketing objectives. 
Reports state that healthy eating continues to be of growing interest in the US as the
country's obesity rate continues to rise due to people indulging in high-calorie diets from
outside food (CDC, 2021). Incorporating 'health' as the core business ethic will allow
restaurants to help community expectations of encouraging a healthy lifestyle. By promoting
good health, Souplantation can position itself as an industry leader. Beneficial food service
also enables Souplantation to create a family-friendly environment, thereby building
community engagement. 

Marketing Mix Programme

Product: The product mix of Souplantation is not limited to the menu offerings. Aside from
the food served, the core product mix of Souplantation will also include restaurant ambiance,
type of service, staff behavior, speed of delivery, hours of operation, etc. Souplantation will
aim to enhance its product offerings by regularly studying consumer data and improving its
menu. Furthermore, to encourage repeat orders, the delivery system will be improved, well-
trained staff will be hired for dine-in consumers, and customer service will be refined. 

Price: Souplantation will incorporate both buffet and à la carte (practice of ordering individual
dishes) types of services in the restaurant, which will be priced differently. Various factors
can influence the pricing of Souplantation items. For example, the price paid for dine-in
service will be lower than the cloud kitchen delivery service as discounts and markups will
need to be provided on delivery. 

Place: The distribution system of Souplantations will be partly handled by the CK delivery
system. After online order placing, food preparation will be undertaken in the centralised
kitchen, and the assigned delivery associate will deliver the food to the customer. The
process is centralised, systemised, and cost-effective for Souplantation to manage an
extensive distribution network easily.

Promotion: With the significant shifts in consumer and environmental demands due to covid-
19, the need for innovation and upgradation becomes a necessary change for
Souplantation. Two types of promotional activities like Social Media Marketing and Search
Engine Marketing. The social media strategy of Souplantation will focus on Instagram,
Facebook, and TikTok, where existing and potential users will be educated about the
benefits of the menu. The platforms will also be used to communicate available sales
promotion offers and in-store discounts or on the delivery apps. Special sales promotion
discounts will be designed for students and working professionals who are more likely to
form the loyal market of Souplantation. Other elements such as safety, hygiene, benefits of
healthy eating, and consumer reviews can also be highlighted through social media. A fun
and quirky approach will allow the restaurant to reach a large audience organically. 
Leveraging the power of paid ads can be essential to ensure the right audience is viewing
the ads. Search engine marketing can give effective results as audiences who have
interacted with a similar niche or searched for it can be exposed to similar ads. Google ads
will mainly aim to educate people about the restaurant's existence. Both these mediums can
be slightly expensive, but the cost-cutting from other areas, as discussed above, can be
balanced by investing more in promotional activities, which is crucial for Souplantation's
success. 

Conclusion

The above report aimed to set relevant marketing objectives for souplantation using strategic
marketing planning. Two main objectives were set to assist in the growth of the restaurant.
Selection of the growth strategy, that is switching to a CK business model was evaluated in
relation to the Ansoff Matric to understand the credibility of the chosen strategy. Competitive
advantage strategies were also chosen using the CK business model as a base to achieve a
head start against competition.

The marketing mix elements aimed to evaluate the elements required for Souplantations to
begin operations again.
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APPENDIX
Appendix 1- Ansoff Matrix

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2- Porter’s Five Forces

1. Competitive Rivalry: Souplantations will continue to face competitive rivalry from

both direct and indirect competitors due to the nature of their business. 

2. Potential New Entrants: As consumer demands continue to shift and technological

aspects become stronger, more restaurants are bound to enter the ‘cloud kitchen’
business model. 
3. Bargaining Power of Customers: Customers have a low bargaining power since
the restaurant industry is large, has fixed prices & many options available.

4. Bargaining Power of Supplier: Remains high as souplantations is interacting with

many third-party vendors to provide their services.

5. Threat of Substitutes: High. The online-based food delivery system is a huge

platform with easy and affordable substitutes to every food item. Other reputed
alternatives like junk fast food chains will continue to have a strong hold against the
healthy eating market.