Final Internshp Report by mostafa.doc
- 1. 1 | P a g e Chapter-One Introduction 1.1 Introduction In nowadays, our living environment has been changing day by day because of technological advancements and trends of lifestyle, different demands and wants appear, for the urban people, they seek a convenient and quick lifestyle to cope with their busy work. Thus online food delivery service is the one that fulfills the pace of life today. It tends to become more important in our life. Online food delivery, which is one the innovation e-Service, is the most popular and frequently used nowadays. According to the statistics, the number of users on online food delivery has over 1000 millions worldwide in 2020. Under this trend, there are lots of different brands and companies appear to operate this service. Amongst the huge online food delivery market, Foodpanda is the most famous brand, recording the end of 2020, it has operated this service in 14 markets, its majority service in Asian markets. Foodpanda and its parent company gained EUR 1.238 billion total revenues in 2019 worldwide. Thus, the purpose of this paper is to analyse the marketing strategy of the Foodpanda, since the marketing is the front line to connect with the consumer, that marketing strategy is the main element how the company successfully attracts customers and gains high market share. Under the marketing strategy used by Foodpanda, it gains better market share in those markets, the numbers of users are still rising, therefore marketing strategy is analysable to find what Foodpanda are utilising to achieve market position. Since it has a larger market on online food delivery, to
- 2. 2 | P a g e be more analysable, the thesis will focus on two markets, Hong Kong and Singapore, the reason is these two markets are more similar, high density and similar market sizes. 1.2 Background of the Report To analyse the marketing strategy of Foodpanda, the following will majorly divide into two parts, one is the theoretical part, another one is the practical part. In the theoretical part, it connects to chapter one and aims to take the explanation of the key terms of the marketing, which will be associated with the further analysis, such as SWOT analysis, Porter’s five force analysis, Marketing mix etc. In the practical part, it will separate into three chapters and surrounding the target Foodpanda analysis. Chapter two will analyse the current situation of the online food delivery industry and Foodpanda, in this chapter will use SWOT analysis and Porter’s five forces to analyse the Foodpanda business environment and competitiveness. Chapter three will concerning the marketing strategy through segmenting-targeting-positioning and marketing mix to analyse what Foodpanda currently uses, it aims to find out the existing methods of its strategy toward customers. Chapter four, the last chapter will take the marketing research focus on online food delivery service, through research to find out the opinions about this service from consumers, also it will provide some recommendations for it. .
- 3. 3 | P a g e 1.3 Objective of the Report Without objectives, no case study can be the fruitful one. Before preparing the report, I set up some objectives. The objective of my study can be divided into two segments. These are given below: Primary Objective To meet the requirements of the degree, BBA, term paper. Highlighting & analyzing the Marketing Mix Analysis of Food Panda Secondary Objective To gain knowledge about sales & marketing activities and to know how the company implements it. To know how a marketer formulates marketing mix that forms the basis of his marketing strategies and policies. To know the way a marketer takes decision regarding his product, its price, its distribution and its promotion for ensuring optimal adaptation with the marketing environment. To measure promotional effectiveness of Food Panda products. To mention the limitations and future actions of Matador. To suggest possible ways to provide better product. To introduce new products and make a new market segment.
- 4. 4 | P a g e 1.4 Scope of the Report Marketing System of “Food Panda Industries” is the main scope of this report. Marketing Mix & its Importance: The marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in the target market. According to Philip Kotler, “The marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.” 1.5 Methodology of the Report Study Design: The purpose of the study is to understand the decisions in formulating the marketing system of Food Panda. This is a descriptive study. Primary Data: In order to collect the primary data, following methods have been followed: - Key informant (Senior Officers of Matador) - Unstructured Questions - In-depth Interview. - Face-to-face interview. Secondary Data: The secondary date have been collected from – - Previous reports. - Web Sites - Different Books.
- 5. 5 | P a g e - Journals. - Newspapers. - Printing materials of Matador. Interview: I have collected some additional information to conduct interview with some senior officers of Matador Telephone Interview: Face-to face interview was not possible because of pandemic situation in Bangladesh. Basically in-depth interview method has been used with an unstructured questionnaire. Questionnaire: Since I have used an unstructured questionnaire, I have asked the respondents to tell about the decisions they made to properly blend the marketing mix components. They have informed elaborately about their marketing mix strategy.
- 6. 6 | P a g e 1.5 Limitation of this Report Every favorable thing has an unfavorable shadow. I cannot say that my report is absolutely accurate. It has some limitations which has no way to overcome for the time being because some constraints 1. Lack of Information: In marketing and sales employees are busy with their work. So I get few time for interview and collecting information. 2. Communication Gap: Because of pandemic situation in Bangladesh it was not possible to take interview and communicate with respondents directly. When I start to gather data I was facing some problem to communicate with them. So many additional information is absent in this report. 3. Cost Limitation: As a student, I could not bear the additional cost to give my report an attractive outlook. Although the above limitations are present, but I am grateful to submit this term paper.
- 7. 7 | P a g e Chapter-Two Theory of Marketing 2.1 Marketing Marketing is one of the important and common departments in a company, after development of the times there are different definitions of marketing by institutions and influencing people. According to the American Marketing Association (AMA) defines “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.1 Another important person in Marketing, Philip Kolter, a father of marketing, said “Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”(Kotler & Keller, 2012, p. 28) Simply, the aim of marketing is through a series of actions such as certain promotions, advertising or press releases etc, to attract and keep communicating with its audiences in direct or indirect ways. Through those actions to build stronger relationships between audiences and the company. Marketing is important because of several reasons. Firstly, marketing is a communication channel between customers and company. Marketing helps a company to keep in touch with its audiences, using different methods to bring the news to audiences, it can maintain the effective competitive position. Secondly, marketing can bring the company to the
- 8. 8 | P a g e correct direction, through particular research of the market, the company can understand its target consumers and market demand to apply various strategies to achieve its goals. Furthermore, through marketing to stimulate the sales, the company utilises marketing strategy to bring higher sales from potential consumers and new consumers. 2.2 Situation Analysis Before making a marketing strategy or plan, the company always needs to understand the current situation for gaining higher market share and to make the better marketing decision. Situation analysis aims to analyse the business environment of the company there are some marketing tools to help the company to analyse what are pros and cons of the company’s situation. When taking analysis of the current situation, it can classify several areas, analysing strength and weakness, environment, position, and competitiveness. Usually to apply in situation analysis tools are SWOT analysis, Porter’s Five Forces, BCG matrix, 5C’s etc, the following will only apply to some of them. (Steenburgh et. al., 2010)3 SWOT analysis
- 9. 9 | P a g e Self -prepared, Figure 1: SWOT analysis Source: SWOT Analysis. Professional Academy. Retrieved October 22, 2020, from https://www.professionalacademy.com/blogs-and- advice/marketing-theories---swot-analysi. SWOT analysis is a marketing strategic tool, which is to evaluate strengths, weaknesses, opportunities and threats of the company. It identifies internal and external marketing environments. Internal factors, which are concerning strengths and weaknesses, analyse include human resource, brand names, location, financial resource, research and development and service differentiation etc, it aims to analyse the good and bad performance in a company. External factors, which are concerning opportunities and threats, analyse include current and future trends, economic, social, political, technologies and legislation etc. In addition, SWOT analysis can divide in positive and negative influences of the company. This method helps the company to analyse strategic perspective and understand pros and cons of the current position in the market, maximum positive and minimum negative influences, thus taking advantage of opportunities to catch the strengths and preventing threats to get rid of weaknesses.4 The following will describe the elements of SWOT individually. (Steenburgh et. al., 2010) Strengths: refer to an internal factor and positive influence in the company. This area is analysing the special resources of the company
- 10. 10 | P a g e which can take benefits for operations. Comparing competitors, the company does relative well or exceeds them, these strengths are giving advantages over the industry. Weaknesses: is regarding an internal factor but negative influence of the company environment. This element identifies the deficiencies of a company which are the limitations and weaknesses of the company compared to other competitors. The company should improve the weaknesses for maintaining a competitive advantage. Opportunities: is concerning an external factor and brings positive influence in the business environment. Although a company can not influence externalities of opportunities, however, this element is analysing favorable factors and development for the company to gain high profit and sales, and the company can take advantage of these. Threats: is an external factor but negative influence. Threats collect and analyse the unfavourable trends and development for the company which threaten the profit and sale in the company. Even though the company cannot change the externalities' negative impact, the company can get rid of these threats when they understand it
- 11. 11 | P a g e Porter’s five analysis Self-prepared, Figure 2: Porter’s five analysis Source: Porter’s Five Forces. Strategic Management Insight. Retrieved October 22, 2020, from https://strategicmanagementinsight.com/tools/porters-five forces.html The analysis helps to understand the competitiveness of the company environment. It is a tool to analyse industry structure. The analysis measures the competition strength and profitability in the market. The five forces are formed by 1)industry rivalry, 2)threat of entry, 3)bargaining power of buyers, 4)threat of substitutes and 5)bargaining power of suppliers, each of them have specific functions for analysing the company situation. If marketers want the better position and greater influence’s power of a company, they should learn from the industry environment change.5 The following will explain each element directly. (Steenburgh et. al., 2010)
- 12. 12 | P a g e Industry rivalry: the force analysing the competitiveness of the industry. It analyses the number of competitors. When the number of competitors rises, the company’s power will be weakened as larger similar goods and services are provided in the same market. Also, during the competition, more competitors means the company needs to spend more capital on competing in industry. Threat of entry: analysing potential and existing competitors. The competitors will increase rapidly if this type of industry is easy to make profit and less barriers to set up. When facing the increasing number of new competitors, it always makes profit loss as the market share decreases at the same time. For favorable industry it should set high entry barriers, such as high entry cost or require specific skill. Threat of substitutes: is threatened because customers can easily find substitutes goods and services which can replace the company’s products, that increasing substitutes trends may decrease the market pricing. If there are perfect substitutes in the consumer market, consumers always choose the one which compares at a lower price. These substitutes products will weaken the company's power and market share. Bargaining power of buyers: means customers who can influence the price setting and market price, usually a company can set the price by
- 13. 13 | P a g e its own, higher prices of the product can achieve higher revenues. However, buyers sometimes have greater power over the company if they have ability to produce the products on their own. That company will weaken the ability to make price flexibility. Bargaining power of suppliers: refers to the suppliers driving the market inputs. Suppliers have power to influence the price and quality of goods and services, they may increase the price or decrease the quality when there are less suppliers in this industry. It means the company is more dependent on these suppliers, the power of suppliers will be raised, it will weaken the negotiating ability of the company to suppliers. 2.3 Marketing Strategy A marketing strategy is the decision in the long term direction of the company. Marketing strategy is aimed to use a plan which according to the current situation of the internal and external environment of the company to achieve its goal (Drummond, Ensor & Ashford, 2008, p. 12).6 A company though analysing the business environments finds out its strengths and weaknesses, thus understanding and then making adjustments on those findings. The company can utilise some strategies to clearly its direction, for example segmenting-targeting- positioning which helps the company to filter unclear target, marketing mix which can help company pursue its target and goal. The right marketing strategy can bring lots of benefits to the company, like increasing the sales, building customers awareness, understanding customers etc. .
- 14. 14 | P a g e Segmenting-targeting-positioning Segmenting-targeting-positioning(STP) is the strategy approach in marketing for identifying the needs of potential customers. Even though there are lots of products in the world however each of us has different demands and interests toward the products, not all products can be successful to fulfil all customers, thus the company should focus on market segmentation and select the most potential market. There are three steps to utilise this strategy. Firstly, the company should according to different characteris of the consumer to divide the market into segments. and identifies the groups by the geographic, demographic and consumer behaviors, to search the most potential market. Secondly, to decide the targeting group, which is according to the segment result to be chosen. Thirdly, to understand the perception of customers, positioning the product in consumers' mind and using the marketing mix as a cooperation tool. Self-prepare, Figure 3: Segmenting-targeting-positioning Source: Dibb, S. and Simkin, L. (1991), "TARGETING, SEGMENTS AND POSITIONING", InternationalJournalof Retail & Distribution Management, Vol. 19 No. 3.
- 15. 15 | P a g e Segmenting Market segmentation is a process to divide the customers who have the same or similar characteris and interests into different groups. These groups of customers are sharing similar needs and wants. Due to huge differences between consumers, the company can focus on some particular groups of consumers. Consumer Segmentation can search by four criteria, geographic, demographic, psychographic and behavioral. (Kotler and Keller, 2012. Geographic : geographic segmentation is dividing customers by considering the variable in countries, nations, cities, areas etc these geographical units, it also can group customers by population density, climate and location. Because different locations may affect the market demand. For example, the seasons in European countries are obvious, however, in Southern Asia the season always stays in summer. The geographic variable may reflect the cultural difference between markets. Demographic : the variable of dividing customers into different segment groups are gender, age, income, education level, occupation, marital status, size of household, nationality, religions etc. These variables are usually close concerning the needs and wants of customers, and the most easily to manage for the research.
- 16. 16 | P a g e Psychographic : it is dividing the group by personal lifestyles or valus. These groups may be affected by variables with an individual's opinion, interest, attitudes, lifestyles, even in the same group they can present different psychographic factors. The VALS framework is the most popular measurement for classifying the psychographic, it represents values and lifestyles. The company can based on this framework to classify the potential customers. Behavioral : the variables of behavioral segmentation are benefits sought, usage and purchase occasion. The benefit sought is to analyse the underlying reason of why customers buy the goods and services, as these goods and services can bring benefits for customers. Usage is according to the pattern of customers, it can classify customers in four categories of heavy users, medium users, occasional users and non-users. Purchase occasion is analysed according to the different types of occasion to purchase products, such as gifts and celebrations. (Drummond, Ensor & Ashford, 2008, p. 66-70) 2)Targeting After the certain series of segmentation is done, the following step is focused on the target market, which is direct action. According to the statistics of segmenting done, there are two steps for the company to target its consumers, one is evaluating the market segment, another one is selecting the target market. For evaluating
- 17. 17 | P a g e the market segments, two factors should be considered, overall attractiveness of segment and resource of the company Considering the company’s ability and resources, whether it can maintain the development in the long run. (Kotler & Keller, 2012, p. 232) In selecting the target market, choosing correct target strategies can take the company into the market with more success, there are three approaches : undifferentiated, differentiated, concentrated marketing.( Hooley et. al., 2017, p. 231-233)8 Undifferentiated marketing : means focusing on the whole market more than some specific segments, whatever the customers are different age, race, gender or other differences, the product will still cover all segment groups and meet all customers' requirements at the sametime. However, this approach is not easy to take, because customers have different needs and wants, one product is not fulfilled to all of them. Differentiated marketing : is against the different segments to provide relative products. Therefore, the company should better do the segmentation of customers and understand their needs and wants to provide corresponding products. However, this way requires a higher cost than an undifferentiated approach.
- 18. 18 | P a g e Concentrated marketing : is only focused on one or few segments due to limited resources of the company. If a company chooses the right segments, it will bring some benefits for the company, such as a high rate of return. However, it is high risk if the company chooses the wrong segments. To choose the right approach, the company can consider some factors, such as company’s resources, degree of product variability, product life cycle, market variability and competitors’ marketing strategies. These factors may affect the market. 3)Positioning The final step in STP is positioning after selecting the target markets from segmentation of the market. For the positioning, it is the way to combine the company’s capital and ability to produce unique products, which can make customers aware and attract their interest to allocate a particular position in their mind or choice. Customers will receive abundant information concerning products, and identify a series perception by attribute to build specific positions for the product in their mind. (Drummond, Ensor & Ashford, 2008, p. 206) The company can use different methods to achieve a successful position, for example perceptual mapping can analyse and compare the perception position of the current competitor and own company in the customer’s mind. Moreover, brand identity can help the company to build brand awareness, it can send the core values to consumers to consolidate specific positions in their mind
- 19. 19 | P a g e Marketing mix The marketing mix is a business strategy tool to analyse and build the right direction of marketing decisions, it is formed by four elements, 1)product, 2)price, 3)place and 4)promotion, it is the most traditional marketing mix named 4P’s. However, in the service marketing mix, there are three more P’s elements, people, process and physical evidence(Hoffman, 2011, p. 79)10. This three additional P’s and adding with traditional marketing mix, it formed 7P’s of service marketing mix Self-prepared: Figure 4: Marketing Mix for Service Source: Marketing Mix for Services. Marketing-Insider. Retrieved October 22, 2020, from https://marketing-insider.eu/marketing-mix-for-services/ 1)Product Product refers to not only physical goods also services, it can include experiences, events, persons, places, information, ideas (Kolter and Keller, 2012). For the company, the product means the soul of the company, it can be one or more than one product, it is the primary element to attract consumers' choice. According Wolak et.al., (1998)
- 20. 20 | P a g e classified the characteristics of service in to four group11: intangibility, inseparability, heterogeneity and perishability. Thus, to attract more customers and increase the sale, the company utilises different strategies on products, such as branding, quality of the product, packaging, warranties etc. Branding is the symbol of the company, also the image of the company, when customers see the brand they can think of information regarding the brand or company. It is indirect release company information to customers and build high customer awareness. Better branding position can achieve higher profit and gain greater results. Quality of the product, customers mostly pay attention to the quality in the service industry, thus customer service plays an important role, it is the channel to build the positive and inseparable relationship between customers and company, through customer service to increase the customers satisfaction. Warranties are provided as the guarantee to customers, customers can return and ask compensation when the product is damaged before used or some mistake of the product. It can let the company respond to the obligation and also can reassure customers to buy the products. 2)Price Price is the most important component in marketing mix, it is a key element not only to help the company make profit, also to gain market share. “Price has operated as a major determinant of buyer
- 21. 21 | P a g e choice”(Kolter & Keller, 2012, p. 384), that price is the most important factor when customers are choosing the same product. Moreover, pricing is the most flexible element in Marketing Mix, the company can adjust the price depending on the location, season, and other factors. However, setting the price is one of the complex decisions, higher price will out of the consumers' decision, lower prices will lose the profits, to set the right pricing position is necessary. As a result, the company should use pricing strategies to achieve its goals, the company focuses on customers and also competitors to set a right price in the customer market. The following will explain some strategy regarding price. Competitive pricing is a company setting up a price which compares to their competitors, usually there are three options for this strategy, lower than competitors, same price level with competitors or higher than them, the company should choose the best option which fulfills their purpose.12 Bundle pricing is when the company tries to group products together and provide a lower price, compared to individual items, for selling to customers. That is optional to choose by customers, for example in restaurants, usually a set of meals is cheaper than the single items added together
- 22. 22 | P a g e Optional pricing is the company setting a lower price with the base product, but setting a higher price with optional products to maximise the turnover.14 For instance, in fast food restaurants, you can just buy a burger, but you also have the option to pay more to get extra cheeses or beef. Penetration pricing means the company uses a lower price to launch a new product into the market aimed to attract more customers and to increase the sale and market share. It will adjust the price back to the normal level when the market share is occupied.15 Example in this strategy, a new customer of Apple music is free to use three months, it will charge monthly payment after three months of use. Psychological pricing refers to the company considers the psychology of price which means the customer buys the product based on their emotion rather than their rational mind. For example, setting the price at $9 per bottle of water is more attractive than $10 per bottle.16 3)Place In marketing mix, place not only means the location of the product operation, it also means to distribute the product to other places, customers how and where to get the product. A company can use direct and indirect ways to distribute its product, and it usually through different channels to sell products, such as retail and wholesale, also e- commerce which is the new type distribution in this century. The
- 23. 23 | P a g e company can according its product and goal to choose the right place strategy to increase the sell amount.17 Direct distribution is the company used to sell its product directly to customers without intermediary. The benefits of this method is that the company can directly connect with its customers and clearly understand customers behavior by their experience The Internet, one of the distribution channels, is frequently used nowadays because it provides lots of benefits to the company, for example, no renting cost in physical stores, high efficiency of selling and no time limit of store opening hours. There are some types of internet distribution, website and social media are mostly used currently, lots of companies tend to develop business via internet platforms. 4)Promotion The final basic marketing mix element, promotion, is sometimes also referred to as communication. A company uses direct and indirect methods to connect with customers, and release the update information to them such as new promotion or new service, it can remind customers also build the positive relationship between customers and company, thus increasing customer loyalty.(Kotler & Keller, 2012, p. 476) The purpose of promotion mix is increasing sales, gaining market share, creating brand recognition and gaining competitive advantage.18 To make the product more popular in the market, the company usually
- 24. 24 | P a g e uses promotion strategies to promote its products, the following are some channels that are commonly used for promotion. Advertising is the traditional promotion channel, a company major uses paid methods such as televisions, newspaper, radio to increase the exposure rate of its product to attract more potential customers, it can increase the visibility of the product and build customers' awareness . Direct mail through directly connects to customers via email and post address, a company will according to the address which is provided by customers to send update information about the company, such as promotion code, new product launching. This method can keep in touch with customers and attracts higher customer loyalty. Public relation thought press, blog, talk to promote the company or the product, it is the way to build up a positive image of the company, also can minimise the negative impac for the company. Compared to advertising, it is more effective, because the cost is relatively lower and it also publishes by third person, it is more persuasive than paid advertising. Sales promotion for example discounts and coupons which are provided by a company, the company uses such methods to attract more customers, especially new customers, who think they can pay less on the product. It can stimulate more spending from customers, but it only benefits in the short period.
- 25. 25 | P a g e Social media is one of the popular and relatively lower costmethods to promote products nowadays, through Instagram, Facebook, YouTube etc those social media to release the news of the product, such as new promotions or new services. 2.4 Market Research Marketing research is aimed to focus on target groups to find out more about customers or consumers, such as their behaviours, atitudes or feedback. Through marketing research, a company can know and understand more about its customers and do better on it, and make the marketing plan for the company. Marketing research usually uses some methods to contact customers and evaluates the preference of customers and market trends, the research can divide two types, quantity and quality. Quantity research is a major focus on the number of responses, more responses is better, whereas quality research focuses on deeper research on some target.Moreover, to do marketing research, it is usually through online, telephone, face to face interviews toward customers, it depends on the goal of the research. (Kotler & Keller, 2012, p. 97)
- 26. 26 | P a g e Chapter-Three Current Situation Food Panda 3.1 Online Food Delivery Industry Online food delivery, is one of the innovative services, is a type of eService. This service is becoming more and more popular in recent years. The first online food delivery service was 1994 which was used by Pizza Hut in the United State,22 consumers could order their foods via a restaurant’s website. Until nowadays, this service has already been widely used in daily life because of lifestyle changes and technological advancements etc, consumers can order their foods or meals via not only websites also mobile APPs platforms, those food delivery apps provide more choice for consumers and bring convenience. To look at the delivery types, there are two models of food delivery service. One is “Restaurants-to-Consumer delivery”, another one is “Platform-to-Consumer delivery”.23 Even though they are the same purpose of service, they still have a bit of a difference in procedure. For the Restaurant-to-Consumer delivery, the food delivery is based on the restaurant own, it means consumers can order their meals directly from the restaurants' website or mobile APP or the platform which is joined by the restaurant, but the delivery service is provided by that restaurant. It is also a method which was the first used in 1994 by Pizza Hut. Another food delivery service is Platform-to-Consumer delivery, it is the platform which operates by third parties and works
- 27. 27 | P a g e with a lot of restaurants to provide a place for consumers to order their meals. It means consumers may use a website or mobile APP to find their interested foods or restaurants and order their meals via this platform. After they finish their order, the delivery guys hired by the platform company will go to the restaurant to pick up the foods and deliver them to the consumers. For the Platform-to-Consumer delivery, McKinsey(2016) pointed out there are two tier types of online food delivery, “aggregators'' and “new delivery”. “Aggregators” means the platform only receives the order which is made by consumers and sends it to the restaurants, but delivery service is provided by that restaurant. “New delivery” is the delivery service provided by the platform Process of online food ordering The procedure of online food delivery platforms is running by several steps, it shown in the below. Figure 5: Process of online food delivery service Source: Foodpanda About Us. Retrieved November 18, 2020, from https://www.foodpanda.com/about/
- 28. 28 | P a g e Firstly, consumers use the online food delivery apps or websites to position their current location, after that, the apps and website will show the nearby restaurants which are able to provide ordering for consumers. Secondly, consumers can choose their foods and meals and add them into the basket, then to complete their address and to do the payment. The order will be sent to the selected restaurant and prepared. Thirdly, the delivery guys who operate by apps company will pick up the order and deliver the meal to the consumer according to the address which is typed by the consumer. Reasons of the trends and demanding Nowadays, online food delivery service is highly expanding because of several reasons, the demand of this service has been increasing more and more. In 2020, the revenues of online food delivery already reach over 136 billions USD and the users are over 1.2 billions in worldwide.25 The reasons increasing the demand of online food delivery are two main changes, changing lifestyle and technology advance. First of all, the lifestyle changes. Online food delivery is providing convenience for users who are busy or unwilling to cook, they can easily get a meal via an ordering platform without spending extra time to prepare their meals, it is time saving and attracts more consumers to use food delivery apps.
- 29. 29 | P a g e Global market size and trend The market of online food delivery service is rising, the demand for it is increasing year by year, especially the “Platform-to-Consumer delivery”. Self-prepared, Figure 6: Revenue and User forecast for the Online Food Delivery Source: Online Food Delivery - worldwide. (n.d.). Statista. Retrieved November 20, 2020, from https://www.statista.com/outlook/374/100/online-food- delivery/worldwide In Figure 6 showed the two data about online food delivery in “Restaurant-to-Consumer” and “Platform-to-Consumer”. These data are collected in mid of 2020 and estimate the forecast from 2021 to 2024. The first data showed the revenue of online food delivery. The revenue of Platform-to-Consumer delivery was increased from 2017 to 2020, even the revenue was lower than Restaurant-to-Consumer in 2017 and 2018, but in 2019 there were dramatic changes, the revenue
- 30. 30 | P a g e of Platform-to-Consumer was exceeded Restaurant-to-Consumer. The estimation from 2021 to 2024, the revenue of Platform-to-Consumer is much more higher than Restaurant-to-Consumer delivery, it will reach 100 000 millions in 2024. Market trends in select markets The market size and trend of the online food delivery industry in Hong Kong and Singapore, the data showed the past experience on it and estimated the trends in the following four years. Self-prepared, Figure 7: Online food delivery in Hong Kong and Singapore Source: Online Food Delivery - worldwide. (n.d.). Statista. Retrieved November 20, 2020, from https://www.statista.com/outlook/374/100/online-food- delivery/worldwide According to figure 7, the data showed the revenues and users in the total online food delivery market trend in Hong Kong and Singapore, the trends are upward increasing in both markets. The data is accounted for by “Restaurants-to-Consumer” and “Platform-to-
- 31. 31 | P a g e Consumer” delivery modes together. The revenues of the market had gained 500 millions USD in 2017 in Hong Kong, until 2020 the revenues can reach to 750 millions USD. The estimation of the following years will raise more. Moreover, the users of online food delivery service raised from 2.5 millions in 2017 to 3.5 millions in 2020, it had increased 1 million users during these three years. In the Singapore market, the revenues of online food delivery was relatively lower, only 210 millions in 2017, but its rapidly increasing currently. The number of users in Singapore almost reached three times in 2020 compared to 2017. Moreover, in the estimation between 2021 and 2024, the Singapore market will expand, it will reach higher revenues and more users, it has a big space for growth 3.2 Foodpanda and its percent company Foodpanda is one of the popular online food delivery service platforms, which is acquired by German’s company Delivery Hero SE, its headquarter is based on its parent company located in Berlin. Only in Foodpanda, it had operated business in 14 countries, majoring in Asia and Eastern Europe. Initially, Foodpanda was established by Rocket Internet SE company in 2012 by Lukas Nagel and Rico Wyder, the company is the European Internet company.26 However, the end of 2016, Rocket Internet had sold Foodpanda to its competitor Delivery Hero, which is an online food ordering company. Delivery Hero, founded in 2011
- 32. 32 | P a g e Developments of Foodpanda After the acquisition done by Delivery Hero in the end of 2016, Foodpanda was rebranded by the new parent company, it used a new appearance to continue business, it rebranded the logo, the logo of Foodpanda had been changed from orange to pink. Figure 8: Rebrand of Foodpanda Source: Foodpanda delivers neon pink rebrand. Retrieved December 5, 2020, from https://www.transformmagazine.net/articles/2018/foodpanda-delivers-neon-pink- rebrand/ Beginning with the operation of Foodpanda, it majorly ran in Southern Asia, the first launched market was in Singapore in May 2012 and it launched service into other 15 countries in the end of the same year.
- 33. 33 | P a g e Chapter-Four Marketing Strategy of Food Panda 4.1 Segmenting Targeting Positioning Segmenting During the segmenting, it can divide into four segmentations, geographic, demographic, psychographic and behavioral segmentation. The below is to discuss the characteristics of segmentation in the existing market of Foodpanda. In the geographic segmentation, Foodpanda majorly services in big cities and urban areas in the existing market. Because of high populations in those markets, it increases the demand of food delivery, and it can gain more users and expand its market. Take examples from Hong Kong and Singapore, these two markets both have high living density and high income, thus consumers are willing to pay extra fees to exchange convenience and to increase the opportunities to order food delivery. Moreover, the areas are more centralized and crowded both in Hong Kong and Singapore, it shorter the delivery time and distance, and increases flexibility of the delivery process. Targeting Foodpanda is working with various kinds of restaurants and groceries stores, such as fast food, Japanese, Korean, Indian, Mexican restaurants, as well as local dish restaurants. It can attract different
- 34. 34 | P a g e groups of consumers with different characteristics. Thus, Foodpanda has a wide audience around in its markets, the audiences are varied characteristics, there is no specific one group only to be targeted, because the consumers can come from different groups. Thus, the undifferentiated marketing is currently Foodpanda used, even the main target of Foodpanda is focusing on the young generation, however, the online food delivery service is providing benefits to all consumers whatever their ages, gender, nationality, education, occupation etc. All audiences might have opportunities to order food via Foodpanda platform when they are busy and hungry. However the bigger target source is still from young people because of lifestyle trends, also the employees during the working hours. Foodpanda currently targets some companies which are busy and catching time, even the lunch hour, so that the employees can order food delivery during the lunch break and enjoy the meals in the office with their colleagues. Positioning For consumers who are looking for a fast and convenient lifestyle, Foodpanda is a platform that brings consumers and suppliers together. The mission of Foodpanda is “bringing good food into you everyday”.36 Its purpose is providing a great experience and quality of lifestyle for consumers. Foodpanda positioned itself in the food delivery industry as fast delivery and wide choice.
- 35. 35 | P a g e Under the fiercer competition, Foodpanda utilises quick-commerce strategy to shorten the time compared to e-commerce, since the normal or traditional e-commerce usually spends at least a day for delivery.37 During the quick-commerce process, it only takes a short time from order to delivery, usually around to half an hour. However, Foodpanda only spends 25 minutes on average to deliver the orders. It meets a new trend of social behavior. Foodpanda keeps improving the delivery time, it only spends 18 minutes on average on the delivery process in Taiwan currently. 4.2 Marketing Mix Using the marketing mix to identify what strategies are Foodpanda utilising to expand market share and to attract more consumers. According to the service marketing mix, there are seven elements, which are product, price, place, promotion, people, process and physical evidence. The following is analysing each element individually what Foodpanda is utilising. Product The core product of Foodpanda is a delivery service instead of a physical product. Initially it only runs for restaurant delivery service, however, it has launched other categories in recent years, it provides other delivery service except restaurants, also providing the groceries delivery. As launched new service, it shapes different lines of service for example restaurants, Pandamark, foodpanda mall etc. It expands types of products from restaurants to groceries.
- 36. 36 | P a g e The branding strategy, the branding name “Foodpanda” as a synonym for food delivery in customers’ mind, within the brand logo panda with pink colour, it really catches audience attention. For the new service line or product, Foodpanda uses a particular name to these new lines of service, such as “Pandamark”, it is a category launched since 2019, this category is regarding the groceries items, and “PandaPro” a monthly plan which is implementing in Singapore recently40 . Given a particular name in different lines is more attractive and can make the business and marketing more efficient, because consumers are easy to classify what they are looking for. Price During the pricing marketing mix, Foodpanda considers not only the price of items, but also delivery fee. Foodpanda is implementing different strategies, such as competitive, budle and optional pricing etc. Those pricing strategies are increasing sales and attracting more consumers. There are some strategies which Foodpanda is utilising. Firstly, Foodpanda is using competitive pricing. Due to several reasons, one is the technology development, consumers can easily compare the price between the platforms immediately, on the other hand Foodpanda always sets the price around to the competitors, it creates competitiveness between it and competitors. Another reason is there are larger competition in this industry, high price will be out of the choice of consumers, low price will weaken price margin, thus using competitive pricing to ensure its competitiveness in the market.
- 37. 37 | P a g e Place Foodpanda is operating in 14 markets, which majorly Asia and Eastern Europe, in the end of 2020, the markets are still expanding in the areas. It increases the influences in new markets. For example, Foodpanda launched service to Japan in September 2020, it only services in six cities in Japan initially, however, until the end of February 2021, it expanded to fourteen cities, such as Osaka and Kyoto.41 As a customer service sector, Foodpanda typically chooses its target places in big cities with high population and living density. In Hong Kong and Singapore service of Foodpanda has covered all districts. During the place strategy, Foodpanda is majorly operating in cities which have large populations, and using two channels for place strategies, internet and direct. In place of the internet, Foodpanda is an online ordering, e-channel is the most accessible way for consumers to use and order. It is typically for consumers to order what they want via internet channel by website or mobile app. Promotion During the promotion marketing mix, Foodpanda utilises lots of strategies to build customer awareness, consumers and customers can easily gain new messages via those channels. Foodpanda is using multiple channels for promotions. It can divide in the above-the-line, through-the-line and below-the-line strategy.
- 38. 38 | P a g e Chapter-Five Recommendation and Conclusion 5.1 Recommendation Foodpanda has already done lots of strategies through marketing mix, it keeps to do innovation for catering the trends. Although Foodpanda does lots of success strategies, however there are still some recommendations for Foodpanda, the following will be based on marketing mix to provide several advice. First of all, for the product marketing mix. The main image of Foodpanda is delivery foods and groceries items only, that it could operate some new service line, for example to develop its own kitchen such as ghost kitchen to fit local users. Due to its competitors having already set up a central kitchen in Singapore, Foodpanda can consider to build its own kitchen increasing its competitiveness. Furthermore, Foodpanda should launch monthly plans as soon as possible, this plan means the consumer pays delivery fee per month instead of a one-time delivery fee, since delivery service is increasing day by day, the demand still raising that Foodpanda should catch this trend. Regarding the research, some respondents use food delivery service very frequently, providing monthly plans can catch some existing consumers and increase the consumer royalty. Monthly plan in Singapore has already been implemented.
- 39. 39 | P a g e 5.2 Conclusion Although Foodpanda is becoming the leading food delivery application in Asian market, the delivery industry market is pretty competitive. Through the analysis on the trend of online food delivery, the demand keeps rising. Foodpanda has gained superiority from the internal and external environments, it achieves higher market share in existing markets. Furthermore, the analysis found there are various strategies that Foodpanda did behind and to gain success in the markets. It chooses the right target markets which have high demand for the food delivery service, and it catches the trend of convenience lifestyle as well. Through marketing mix strategy, including product, price, place, promotion, people, process and physical evidence, to build a successful branding in the food delivery industry. Through the marketing research, the main finding is that Foodpanda has huge corporation partners which provide wide choice to consumers, most of consumers based on this point to pick up Foodpanda not other applications, it is the main reason why Foodpanda can attract more users to use its application. In addition, it provides different service lines to meet market needs. Ustilsing promotional pricing to attract existing and new consumers to stimulate the usages. It does various types of promotion both in online and offline channels to attract public audiences and potential users.
- 40. 40 | P a g e References Definitions of Marketing. (n.d.). American Marketing Association. Retrieved October 24, 2020, from https://www.ama.org/the- definition-of-marketing-what-is-marketing/ Kotler, P. & Keller, K. L., (2012). Marketing Management (14th ed) New Jersey, USA: Prentice Hall Gürel, Emet. (2017). SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of International Social Research. 10. 994-1006. 10.17719/jisr.2017.1832. http://sosyalarastirmalar.com/cilt10/sayi51_pdf/6iksisat_kamu_isletm e/gurel_emet.pdf Drummond, Ensor & Ashford (2008). Strategic Marketing: Planning and Control(3rd ed) Oxford, UK: Elsevier Dibb, S. and Simkin, L. (1991), "TARGETING, SEGMENTS AND POSITIONING", International Journal of Retail & Distribution Management, Vol. 19 No. 3. https://doi.org/10.1108/09590559110143800 Hooley, Piercy, Nicoulaud & Rudd, (2017). Marketing Strategy & Competitive Positioning (6th ed) Edinburgh Gate, UK: Pearson Claessens, B. M. (2015, June 30). Market Targeting - Targeting Market Segments effectively. Marketing-Insider. Retrieved October 30, 2020, from https://marketing-insider.eu/marketing- explained/part-i-defining-marketing-and-the-mar keting- process/market-targeting/