Alburger[1]
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Al Burger Getting the Bugs Out
Presented By: Neeraj Singhal (Roll No. 32)
About the Company • Burger Bugs Killers Inc. – 17 years old Miami Based Company • Industry: Pest Control • Company Stats: – Revenue (1984) $ 25 million, – Service Accounts – 12,000 Resturants & Hotels in 43 states – No. of Service Specialists – 400
• Industry Size (Annual Sales): $ 2 billion • Main Competitors: – Orkin - $ 213 million annual sales – Terminix - $ 160 million annual sales
• Area of operation: Niche Segment – Charges premium • Company’s USP: Superior Brand Promise - ‘Unconditional Promise to Eliminate (not control) Roach & Rodents’ - ‘ No payments due until Rodents eliminated’ - ‘Promise to refund entire money if Company fails, along with 1 year’s service by another Exterminator of company’s choice
Discussion Questions 1. Identify the elements of Marketing Mix of Al Burger 2. Justify marketing implications of each of these mix elements
Review of Literature – Marketing Mix • The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives Blend of the mix depends upon:
- Marketing objectives - Type of product - Target market - Market structure - Rivals’ behaviour - Marketing position - Product portfolio - Product lifecycle • Traditional Marketing Mix: 4 P’s • Expanded Mix for Services: 7 P’s
Review of Literature – Marketing Mix Elements PRODUCT
PLACE
PROMOTION PRICE
Physical good features
Channel type
Promotion blend
Flexibility
Quality level
Exposure
Salespeople
Price level
Accessories
Intermediaries
Advertising
Terms
Packaging Warranties
Outlet location Sales promotion Transportation Publicity
Product lines
Storage
Differentiation
PHYSICAL EVIDENCE
Blend of the mix depends upon: PROCESS
Employees
Facility design
Flow of activities
Customers
Equipment
Number of steps
Communicating culture and values
Signage
Level of customer involvement
Employee research
Employee dress Other tangibles
• Expanded Mix for Services: 7 P’s
Allowances
Branding
PEOPLE
• Traditional Marketing Mix: 4 P’s
- Marketing objectives - Type of product - Target market - Market structure - Rivals’ behaviour - Marketing position - Product portfolio - Product lifecycle
Product
Marketing Mix Elements: Product The Service Concept
Augmented Service Offer
The Core Service (Reason for being in the market) - Pest Elimination
Accessibility of Service
Facilitating Services
Supporting Services
(Facilitation in providing services)
(used to enhance the value of core service and to differentiate from competitors)
- Employee Hiring - Employee Training - Supporting routemen against losses beyond control
- Promise to refund entire fees for poor customer service
Consumer Participation
Interaction
Marketing Mix Elements: Product Product: Branding, Quality, Warranty, Post transaction service • Brand Promise: ‘Elimination’ and not just ‘Control’ of Pests • Quality: Burger’s Quality-Control system is extraordinary – e.g. Routemen are assigned ‘Service Accounts’ for a day which can be managed professionally unlike other companies who assigns 18-20 Service accounts a day for its Routemen • Maintenance\ Post Transaction Service: After sales reviews by senior managers, customer feedback, Guarantee of eliminating Pests – if company fails promise of refunding last 12 monthly fees along with one year’s free service from other company Implication: • Brand promise helps in product differentiation and position company in ‘Niche’ segment
Price
Marketing Mix Elements: Price Price: Quality-Price Relationship, Consumer’s Perceived value, Discounts
• Niche Service Provider: Company guarantee’s pest elimination, accordingly Charges premium price for superior service. Charges 4-6 times more the services provided by competition • High Customer’s Perceived value: Customers have high respect for Al Burger company and its employees. Implication: • Loss of renewed contracts: Company loses > $ 2million annually in un renewed contracts • Cost of Service Guarantee: Company spends at $2K per month on reimbursing diners / room guests for reported pest sightings • Limited Market: Company operates only a niche segment; which limits itself to enhance revenue
People
Marketing Mix Elements: People •
People represent the business - Personnel Training, Commitment, Incentives, Inter-Personal behaviour, Degree of involvement, Customer contacts, Management culture, customer service
•
Management Culture: Company promotes (a) ‘Open Honest’ culture. At Bugs Burger, ‘Mistakes are forgiven; liar are not’ (b) Routemen is treated no. 1 in the company – Employees are made to feel that they are critical to success of the company
•
Strong Hiring Process: Elaborate personality & aptitude testing, polygraphic examination, Interview by Officials from Headquarter and shortlisted candidate interviewed by local service managers
•
Employee Training: 5 months of intense training combination of both on the job and classroom training. Tests conducted by higher officials in Miami to check techniques they have been taught by field managers against the company standards
•
Work life balance: Employees are given complete freedom to manage the clients as long as they are keeping the client premises ‘Pests free’ and running the account as their own business
•
Employee Support: Service specialist don’t need to worry about losses from conditions beyond their control, they are compensated for such situations
•
Degree of Involvement: Employees not punished for asking support / help in managing client. Top management roll up sleeves and come for help. It is not seen as ‘negative’ behaviour.
•
Incentives: Employees are paid handsomely; performance linked - best in the industry
Marketing Mix Elements: People • Implication: • High Employee Engagement: Company policies, culture, training, freedom and incentive structure helps in maintaining high employee satisfaction. Employees have sense of ownership in running business. • Low Attrition: High employee satisfaction results into low attrition rate of 3% which is the lowest in the non glamorous industry. • High Customer Satisfaction: High employee engagement coupled with low attrition helps in ensuring the highest level of customer satisfaction.
Process
Marketing Mix Elements: Process • Process element consists of – Policies, Procedures, Customer involvement, Flow of activities • Bugs / Pest Elimination promise: Pest elimination techniques / procedures / standards are set keeping customer promise in mind • No compromise on Quality standards: Routemen are assigned nos. of clients which can be managed professionally without compromising service standards • Strong Quality Control System: – – – –
Review of Sales Reports filed by routemen by managers Customer care calls by District managers and not by any junior staff Regular Customer visits by Regional directors, vice presidents Customer complaint calls are routed directly to Miami Headquarter and not to local offices or routemen – keeping local managers and service specialist behave honestly
• Customer Involvement: Regular feedback from customers on service quality and routemen behaviour.
Implication:
• Standard procedures and strong quality control systems helps company in keeping up the brand promise and fight competition
Discussion Questions
Q3: If you are CEO of Al Burger, what measures you will take to increase your sales in 2 billion $ industry. Justify your decisions.
BCG Growth Share Matrix: Al Burger Position BCG Growth Share Matrix
Al Burger position - Characterised by high growth potential Low market share as compared to its Competitors
.
Industry size: $ 2billion annual Competition: Orkin Exterminating: $213 million PA Terminix: $160 million PA Al Burger: $25 million PA
Al Burger Dilemma: How to move from Question marks to Stars category
Ansoff Product-Market Growth Matrix
• Market Penetration and Market Development, two recommended strategies for increasing sales of Al Burger Market Penetration - Least risky way to grow • Focus on Aggressive Advertising and Promotion: Al Burger should hire experienced Marketing staff and pursue aggressive advertising and promotion campaign to gain market share / new clients • More efforts to retain existing clients: Company can achieve this by introducing loyalty programs for its existing clients; introducing loyalty based pricing • Adopt Franchisee route to expand operations: Company should also adopt route of franchising to penetrate further into existing markets (same customer segment) / new geographies
Ansoff Product-Market Growth Matrix
• Market Penetration and Market Development, two recommended strategies for increasing sales of Al Burger Market Development – Higher risk as compared to market penetration • Develop new markets / Customer segment: Currently Al Burger service only Resturants and Hotels. It should expand its market to include Offices and Homes as new Customer segments •Acquisition and / or Franchisee: Company can look to acquire companies and / or have franchisee model to enter into new markets segment
Thank You
Presented By: Neeraj Singhal (Roll No. 32)
About the Company • Burger Bugs Killers Inc. – 17 years old Miami Based Company • Industry: Pest Control • Company Stats: – Revenue (1984) $ 25 million, – Service Accounts – 12,000 Resturants & Hotels in 43 states – No. of Service Specialists – 400
• Industry Size (Annual Sales): $ 2 billion • Main Competitors: – Orkin - $ 213 million annual sales – Terminix - $ 160 million annual sales
• Area of operation: Niche Segment – Charges premium • Company’s USP: Superior Brand Promise - ‘Unconditional Promise to Eliminate (not control) Roach & Rodents’ - ‘ No payments due until Rodents eliminated’ - ‘Promise to refund entire money if Company fails, along with 1 year’s service by another Exterminator of company’s choice
Discussion Questions 1. Identify the elements of Marketing Mix of Al Burger 2. Justify marketing implications of each of these mix elements
Review of Literature – Marketing Mix • The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives Blend of the mix depends upon:
- Marketing objectives - Type of product - Target market - Market structure - Rivals’ behaviour - Marketing position - Product portfolio - Product lifecycle • Traditional Marketing Mix: 4 P’s • Expanded Mix for Services: 7 P’s
Review of Literature – Marketing Mix Elements PRODUCT
PLACE
PROMOTION PRICE
Physical good features
Channel type
Promotion blend
Flexibility
Quality level
Exposure
Salespeople
Price level
Accessories
Intermediaries
Advertising
Terms
Packaging Warranties
Outlet location Sales promotion Transportation Publicity
Product lines
Storage
Differentiation
PHYSICAL EVIDENCE
Blend of the mix depends upon: PROCESS
Employees
Facility design
Flow of activities
Customers
Equipment
Number of steps
Communicating culture and values
Signage
Level of customer involvement
Employee research
Employee dress Other tangibles
• Expanded Mix for Services: 7 P’s
Allowances
Branding
PEOPLE
• Traditional Marketing Mix: 4 P’s
- Marketing objectives - Type of product - Target market - Market structure - Rivals’ behaviour - Marketing position - Product portfolio - Product lifecycle
Product
Marketing Mix Elements: Product The Service Concept
Augmented Service Offer
The Core Service (Reason for being in the market) - Pest Elimination
Accessibility of Service
Facilitating Services
Supporting Services
(Facilitation in providing services)
(used to enhance the value of core service and to differentiate from competitors)
- Employee Hiring - Employee Training - Supporting routemen against losses beyond control
- Promise to refund entire fees for poor customer service
Consumer Participation
Interaction
Marketing Mix Elements: Product Product: Branding, Quality, Warranty, Post transaction service • Brand Promise: ‘Elimination’ and not just ‘Control’ of Pests • Quality: Burger’s Quality-Control system is extraordinary – e.g. Routemen are assigned ‘Service Accounts’ for a day which can be managed professionally unlike other companies who assigns 18-20 Service accounts a day for its Routemen • Maintenance\ Post Transaction Service: After sales reviews by senior managers, customer feedback, Guarantee of eliminating Pests – if company fails promise of refunding last 12 monthly fees along with one year’s free service from other company Implication: • Brand promise helps in product differentiation and position company in ‘Niche’ segment
Price
Marketing Mix Elements: Price Price: Quality-Price Relationship, Consumer’s Perceived value, Discounts
• Niche Service Provider: Company guarantee’s pest elimination, accordingly Charges premium price for superior service. Charges 4-6 times more the services provided by competition • High Customer’s Perceived value: Customers have high respect for Al Burger company and its employees. Implication: • Loss of renewed contracts: Company loses > $ 2million annually in un renewed contracts • Cost of Service Guarantee: Company spends at $2K per month on reimbursing diners / room guests for reported pest sightings • Limited Market: Company operates only a niche segment; which limits itself to enhance revenue
People
Marketing Mix Elements: People •
People represent the business - Personnel Training, Commitment, Incentives, Inter-Personal behaviour, Degree of involvement, Customer contacts, Management culture, customer service
•
Management Culture: Company promotes (a) ‘Open Honest’ culture. At Bugs Burger, ‘Mistakes are forgiven; liar are not’ (b) Routemen is treated no. 1 in the company – Employees are made to feel that they are critical to success of the company
•
Strong Hiring Process: Elaborate personality & aptitude testing, polygraphic examination, Interview by Officials from Headquarter and shortlisted candidate interviewed by local service managers
•
Employee Training: 5 months of intense training combination of both on the job and classroom training. Tests conducted by higher officials in Miami to check techniques they have been taught by field managers against the company standards
•
Work life balance: Employees are given complete freedom to manage the clients as long as they are keeping the client premises ‘Pests free’ and running the account as their own business
•
Employee Support: Service specialist don’t need to worry about losses from conditions beyond their control, they are compensated for such situations
•
Degree of Involvement: Employees not punished for asking support / help in managing client. Top management roll up sleeves and come for help. It is not seen as ‘negative’ behaviour.
•
Incentives: Employees are paid handsomely; performance linked - best in the industry
Marketing Mix Elements: People • Implication: • High Employee Engagement: Company policies, culture, training, freedom and incentive structure helps in maintaining high employee satisfaction. Employees have sense of ownership in running business. • Low Attrition: High employee satisfaction results into low attrition rate of 3% which is the lowest in the non glamorous industry. • High Customer Satisfaction: High employee engagement coupled with low attrition helps in ensuring the highest level of customer satisfaction.
Process
Marketing Mix Elements: Process • Process element consists of – Policies, Procedures, Customer involvement, Flow of activities • Bugs / Pest Elimination promise: Pest elimination techniques / procedures / standards are set keeping customer promise in mind • No compromise on Quality standards: Routemen are assigned nos. of clients which can be managed professionally without compromising service standards • Strong Quality Control System: – – – –
Review of Sales Reports filed by routemen by managers Customer care calls by District managers and not by any junior staff Regular Customer visits by Regional directors, vice presidents Customer complaint calls are routed directly to Miami Headquarter and not to local offices or routemen – keeping local managers and service specialist behave honestly
• Customer Involvement: Regular feedback from customers on service quality and routemen behaviour.
Implication:
• Standard procedures and strong quality control systems helps company in keeping up the brand promise and fight competition
Discussion Questions
Q3: If you are CEO of Al Burger, what measures you will take to increase your sales in 2 billion $ industry. Justify your decisions.
BCG Growth Share Matrix: Al Burger Position BCG Growth Share Matrix
Al Burger position - Characterised by high growth potential Low market share as compared to its Competitors
.
Industry size: $ 2billion annual Competition: Orkin Exterminating: $213 million PA Terminix: $160 million PA Al Burger: $25 million PA
Al Burger Dilemma: How to move from Question marks to Stars category
Ansoff Product-Market Growth Matrix
• Market Penetration and Market Development, two recommended strategies for increasing sales of Al Burger Market Penetration - Least risky way to grow • Focus on Aggressive Advertising and Promotion: Al Burger should hire experienced Marketing staff and pursue aggressive advertising and promotion campaign to gain market share / new clients • More efforts to retain existing clients: Company can achieve this by introducing loyalty programs for its existing clients; introducing loyalty based pricing • Adopt Franchisee route to expand operations: Company should also adopt route of franchising to penetrate further into existing markets (same customer segment) / new geographies
Ansoff Product-Market Growth Matrix
• Market Penetration and Market Development, two recommended strategies for increasing sales of Al Burger Market Development – Higher risk as compared to market penetration • Develop new markets / Customer segment: Currently Al Burger service only Resturants and Hotels. It should expand its market to include Offices and Homes as new Customer segments •Acquisition and / or Franchisee: Company can look to acquire companies and / or have franchisee model to enter into new markets segment
Thank You
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