Marketing Case Analysis

ethnic_preferences.docx

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Ethnic Preferences

Summary

Pizza Patron, the pizza chain that has 100 stores opened around the U.S. mainly in Hispanic neighborhoods is now want to attract a new target market, which is the English speaking groups. When the first Pizza Patron opened in 1986, they saw the opportunity to differentiate themselves from other Pizza chains by focusing only on the first-generation Spanish immigrants. Therefore, they used Spanish on their menus and menu boards, offered menus choices that Hispanics preferred, and focused advertising on Spanish media. However, Pizza Patron now is shifting its marketing strategy to focus on young Hispanic group who are the fastest growing segment of the youth population in the U.S. They also have purchasing power in the household because of their English speaking skill. Therefore, the restaurants will use English on their menus, menu board, and media in order to attract more of English speaking group.

Issue

The chain is running the risk of alienating its existing target customer base by changing their marketing mix.

Alternative I

Pizza Patron can open new restaurants in less heavily or non-Hispanics with all of their menu board and printed materials will be in English. Also, advertising will be in English media outlets. However, they should continue offering the same food on menu that appeal to the original clientele. This alternative will benefit the restaurant by helping to expand into a new market segment. By expanding new restaurants into the areas that are less or non-Hispanics can help the restaurant increase their sales revenue. Moreover, for offering the same food on the menu and using English as the main primary of all the ads, menu, and menu board will help saving on their production and marketing costs. On the other hand, for applying this alternative; the restaurant will be facing with the risk of losing original clientele. This is because the original customers can hardly read and listen to English ads, menu, and menu board. Even though sometimes they might have someone to translate into Spanish for them, but some of them might be upset of the change and not want to return to purchase again.

Alternative II

First, they should leave everything the same on the existing Hispanic market; everything on the menu and ads are still in Spanish. Additionally, focus on new target customers in new markets in non-Hispanic areas and change the menus and ads in those areas only. The advantage of this alternative is to lowest the risk of losing current clientele base. If the restaurants are using the same strategy in existing areas, there will be the greatest chance that they will gain the brand loyalty from the existing market. Moreover, the restaurant can expand more to non-Hispanic group in new areas. This will make them gain more revenue and have more customers in their market. However, if they apply this alternative; there will be a high costs in marketing budget, production costs, inventory costs, management costs, promotional costs, etc. The restaurants will run two different market segments, which are Hispanics and non-Hispanics markets. As a result, the restaurants have to worry about the costs from diversifying the markets.

Recommendation

First of all, if the company has enough budgets, and they are not worried about over spending in the two market segments then I think they should pick alternative two. This will help the restaurant with the sales expansion of the company without the risk of losing the original clientele.

On the other hand, if the company doesn’t want to spend too much on the new costs that would occur in different market segments then they should pick alternative one. There will be an opportunity in expansion as alternative two, but in this alternative the restaurants will have a risk of losing its existing customers base.

Therefore, the restaurant should focus on their budget first in order to decide which choice is more suitable for them at the time.