Professional Documents
Culture Documents
Marketing decision making is a collaborative process in Famoso Inc., comprising the marketing
department and Famoso partners Jason Allard, COO; Justin Lussier, CEO; and Christian Bullock,
Chief Business Development Officer. The commercial name of Famoso Inc. is Famoso
Neapolitan Pizzeria or simply Famoso Pizzeria or Famoso. The headquarters of the company
used to be located in Edmonton, Alberta, but is now located in Richmond, British Columbia. The
company currently has several plans and challenges. It plans to continue to expand in Canada,
particularly in Ontario and British Columbia. Management is also currently investigating the
market potential for Famoso in the United States, and in 2015 management plans to start
considering which other countries could provide opportunities for the Famoso business model.
One of the companys current challenges is the increase of year-over-year labour cost. From a
marketing perspective, how can Famoso and its leadership seize those opportunities and
minimize those challenges?
Figure 1: http://www.famoso.ca/
1 Dr. Fernando Angulo-Ruiz (AnguloruizL@macewan.ca), assistant professor at MacEwan University, wrote this
case solely to provide material for class discussion. The author does not intend to illustrate either effective or
ineffective handling of a managerial situation. The author may have disguised certain names and other identifying
information to protect confidentiality. The author thanks Jason Allard, COO of Famoso Inc., for providing critical
information to develop the case, as well as Ray Ho, Marketing & Communications Manager of Famoso Inc. for
providing very insightful comments and additional information to enrich the content of this case.
1.
2.
3.
4.
restaurants in Toronto, Vancouver, and Edmonton by Urbanspoon 2012; and one of the five best
gourmet pizzerias in Calgary by Where Alberta 2013.
Questions
1. Where does Famoso want to go? Develop a market-product analysis.
2. What are Famosos goals or objectives?
3. Which are the special capabilities (skills, technologies and resources) that distinguish
Famoso Neapolitan Pizzeria from competitors and provide value to its customers?
4. Which tools does Famoso use to assess the success or failure of marketing programs?
Chapter 3: What Are the Opportunities and Threats for Famoso? An Environmental
Scanning
Industry and Competitive Analysis
The industry group that Famoso Inc. belongs to is North American Industry Classification 72251
full-service restaurants and limited-service eating places. Full-service restaurants (NAICS
722511) are establishments primarily engaged in providing food services to patrons who order
and are served while seated and pay after eating. These establishments may sell alcoholic
beverages, provide take-out services, operate a bar or present live entertainment, in addition to
serving food and beverages. This Canadian industry includes drinking places that primarily serve
food. Limited-service eating places (NAICS 722512) are establishments primarily engaged in
providing food services to patrons who order or select items at a counter, food bar or cafeteria
line (or order by telephone) and pay before eating. Food and drink are picked up for consumption
on the premises or for take-out, or delivered to the customers location. These establishments
may offer a variety of food items or they may offer specialty snacks or non-alcoholic
beverages.12 Famoso Neapolitan Pizzeria is a fast casual restaurant providing the quick
convenience of ordering at the counter with the relaxed comfort of added service at the table.
Famosos model of serving style is as follows: (1) the consumer finds a table [menus are on
table], (2) the consumer orders at the counter, (3) the consumer starts a tab or pays at the counter,
and (4) Famoso servers bring food and beverages to the consumers table. The consumer can
order additional beverages or dessert from the table, and s/he can pay the bill at the table.13
Euromonitor International provides some of the key trends and developments in the consumer
food service in Canada (NAICS 72251) as follows14: Modest Growth Overall as Canadians
Remain Cautious. While the Canadian economy and consumer confidence improved over
2012/13 compared with the recessionary period, the recovery pace was slower than anticipated.
The Canadian economy remained shaky as the recovery was threatened by a host of factors.
These included a downturn in the housing market and stricter mortgage rates, as well as unstable
international financial markets. Canadians will continue to balance their away-from-home dining
budgets carefully and consider where and how they spend their money. The average Canadian
household expenditure on consumer food service was $2,207 in 2011. All in all, over 20122017
sales through Canadian consumer food service are expected to see a compounded annual growth
rate (CAGR) of 1 percent in constant value ($) terms. The number of outlets is also expected to
grow only marginally as the Canadian market is already highly developed, and any growth in one
operator likely to come at the expense of another.
12 Visit Statistics Canada for more information regarding North American Industry Classification System in Canada
at http://www.statcan.gc.ca/pub/12-501-x/12-501-x2012001-eng.pdf
13 Excerpts from Famoso.ca (2014). How it works, May 28, 2014: http://www.famoso.ca/how_it_works.php
14 Excerpts from Passport (2013). Consumer food service in Canada. Euromonitor International, November.
Accessed May 28, 2014:
http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx
Targeting Millennial Crowd on the Go. While the average age of the population in Canada
continues to rise, the country saw an increase in the number of millennialsa group in the range
of 1934 years old, whose numbers increased by close to 10 percent in 20072012 period.
Coupled with the urbanization trend and a tendency to eat away from the family table and on the
go, the increased proportion of young busy urbanites encouraged many operators to focus on
meal solutions to respond to the demands of this demographic group, which is also seeking meals
and food varieties beyond unhealthy fried and typical fast food. Additionally, the strong presence
of millennials online, in every form and format, on a daily basis and for a variety of tasks, also
led to greater emphasis by food service operators on digital media as a means of reaching out to
existing and potential customers to drive traffic. Food service operators will likely continue to
focus on quick breakfast and lunch options to capture busy young urbanites. Fitting into the trend
is likely to be the expected positive trend in street food as more options will open up with
changes in the regulatory environment across major Canadian metropolitan areas. Over the
forecast period 20132017, street stalls/kiosks are expected to see a 2 percent constant value
CAGR, spurred on by new legal developments and consumer demand. Additionally, on-going
use of online tools, social media, mobile applications and interactive communications the
generation of millennials grew up with, and will continue to use going forward, will remain on
the agenda to drive customer traffic and attract the attention to new menus and outlet openings.
Staying Course Toward Healthier Menus. While far from perfect, Canadians continue to try and
look for healthier food options, in both retail and foodservice. Although some foods seen as
unhealthy, such as fries, remain a favorite, more consumers are keeping an eye on menu option
developments and recommendations found in media and online social networks to select better
meals when dining out, whether in a full-service restaurant or fast food outlet. A Harris/Decima
consumer survey released in the summer of 2012 indicated that 65 percent of respondents would
like the idea of having more information regarding fat and sodium content at all restaurants. In
addition to consumers, dieticians and media spotlighting of the issue of healthy eating, debates
continue to evolve around regulatory changes, which could see sodium reduction and other
initiatives to improve nutritional content of away-from-home meals. Thus, for instance, studies
released in the Canadian Medical Association Journal in early 2012 called once again on the
policy that would see mandatory reduction of sodium content in fast food meals. To succeed in
the changing operating conditions and changing consumer views of daily nutrition, foodservice
operators will need to ensure they address concerns through ingredient changes and menu
options that allow those Canadians who seek nutritiously improved meals to have that option.
Alongside popular meals, offering fresher and healthier meal solutions will be increasingly
important. Also, while not part of the regulatory environment, given Canadian consumers
interest in ingredients and meal content, posting information on menu content could be beneficial
(provided, of course, there are menu options that can meet standards of health-conscious
consumers). Finally, it is likely that operators offering fresh made-to-order options and
ingredients positioned as more natural and freshly made will do better in the long run compared
with more established traditional meal choices, especially in quick-service establishments.
Ethnic Foodservice Options Continue To Expand. Canadas immigrant population continues to
grow. This has become one of the key driving forces of population growth in Canada. The
principal source of immigration flow continues to emanate from the Asia-Pacific region,
although Canada continues to see a sizable proportion of new immigrants from the Middle East
and Africa and Central and South America. According to a national household survey released by
Statistics Canada, in 2011 one in five Canadian residents were born outside the country
apparently the highest level among the G8 nations. Additionally, 19 percent of the Canadian
population (or over six million people) counted themselves as member of a visible minoritya
trend further supported by immigration. Immigration statistics released by Statistics Canada for
full-year 2012 indicated that while the number of immigrants from destinations such as Europe
and the US has been flat to declining, the flow of immigration from Asia increased by 12 percent
over 20072012. The six million-strong and growing population of ethnic consumers, in an
otherwise mature marketplace, is likely to encourage players to consider the development of
specifically formulated menus. It will open up opportunities to drive sales by developing
products and marketing strategies that reflect changing the ethnic composition and meal and
ingredient preferences of the Canadian population. Current forecasts are that categories such as
Asian fast food and Asian full-service restaurants will continue to outpace the overall growth
projected for the Canadian foodservice environment. Opportunities will also exist in street food,
with immigrants familiar with the concept and established Canadians looking for more diverse
options in street food stalls (now that laws across municipalities and provinces allow the latter to
a much greater degree). In addition to Asian immigration, opportunities will also exist in
developing menus inspired by African and Middle Eastern cuisine, as well as South and Central
American.
Competitive pressures call for creativity, but not all moves are successful. In 2012 the outlet
count for foodservice in Canada saw a decline of close to 1 percent, in large part due to
significant competition in already highly developed markets and difficulties in driving additional
customer traffic. As competitive pressures mount in the conditions of a very developed market,
coupled with changing consumer attitudes and preferences, foodservice operators consider a
variety of strategies to drive customer traffic. In addition to the use of online tools, menu
developments and greater attention to healthier food options and ingredients, many have paid
closer attention to improved store ambiance as well as attempts to capture a future consumption
audience by developing pre-packaged products for retail. While some strategic moves have
worked well and helped operators to drive customer traffic, others have not been successful,
coming too late and offering too little to excite consumers. The strategies for future growth
should build on lessons learned over the review period 20072012, and this includes both
positive and negative experiences and missed targets. Operators must be well aware of what is
already available and whether they can offer something better to attract consumer attention. For
instance, while entering the retail environment with dedicated pre-packaged products has worked
for some foodservice operators, it does not mean that such a strategy will ensure success for all.
One example of a fairly unsuccessful entry includes McDonalds retail coffee, as the brand was
unable to offer anything of interest to Canadian coffee drinkers, who have a vast choice across all
price segments. Also, while ambiance and experience have become increasingly important for
consumers, it does not mean that all moves to create that special ambiance and experience are
fitting. For instance, in 2013 iconic Quebec coffee marketer Van Houtte (now owned by Green
Mountain Coffee Roasters) introduced an idea of Quartier du Caf (Coffee District) to be built
potentially in the St-Michele area of Montreal. Coffee aficionados, city workers, students and
tourists fuelling the diverse food and coffee landscape of downtown Montreal are unlikely to find
appealing the idea of going to St-Michele to visit Quartier du Caf, especially if the Quartier
consists mostly of a Van Houtte bistro (of which there are plenty in the downtown area) and a
museum dedicated to Albert Van Houtte (founder of the famed Quebec coffee house). Selling the
coffee experience does help support coffee growth. However, such experiences do not have
universal appeal, and location and potential customer makeup have to be considered for such a
concept to be a viable business strategy for growth.
Tables 1, 2 and 3, below, provide statistical information about the size of the industry in Canada.
Table 1 shows distribution of outlets in Canada according to the type of ownership. There were
approximately 3,062 and 3,425 independent and chained pizza outlets in 2012 in Canada. The
number of full-service pizza restaurants was 2,520 stores in 2012; of those, approximately 806
outlets were chained full-service pizza restaurants and about 1,714 independent full-service pizza
restaurants. In 2012, total sales of full-service pizza restaurants was C$2,511.3 million; of that,
C$1,464.5 million was sales from chained pizza restaurants and C$1,046.8 million from
independent owned stores. Additionally, there were a total of 1,545 stores of fast food pizza
restaurants in 2012; of those, 526 were chain-owned stores and 1,019 independently owned
stores. Total sales of fast food pizza restaurants was C$965.1 million; of that, C$359.1 million
was sales of chained fast food pizza restaurants and C$606 million of independent stores.
Table 1. Number of Stores in 2012 by Ownership of Restaurants: Independent vs. Chained
Outlet
Independent
Chained
Total Number of
Stores
Table 2. Number and Total Sales of Full-Service Restaurants in 2012 by Ownership and
Casual vs. Non-Casual
Outlet
Total Number of Stores
Total Sales (C$ Mill)
Casual Dining Full-Service
15,628
13,973.1
Independent
12,496
8,274.0
Chained
3,132
5,699.1
Non-Casual Dining Full Service
8,695
7,309.5
Independent
6,933
4,287.6
Chained
1,762
3,022.0
Total
24,323
21,282.6
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources
Table 3. Total Sales and Stores Growth of Fast Food Restaurants in 2012
Outlet
20072012 CAGR
Number of Stores
Table 4. Brand Share in Chained Restaurants as a % of Total Consumer Food Service (C$)
Brand
Tim Hortons
McDonalds
Subway
Boston Pizza
A&W
Starbucks
Swiss Chalet
KFC
Wendys
St Hubert
Pizza Hut
Dairy Queen
International
Pizza Pizza
Burger King
Quiznos
Dominos Pizza
Montanas
Little Caesars Pizza
East Side Marios
Milestones
Second Cup
Kelseys
Harveys
Pizza Hut Express
Panago
Taco Bell
Keg, The
Mandarin
Couche-Tard
Alimentation
White Spot
Wendys
Corporation
Tim Hortons Inc.
McDonalds Corp.
Doctors Associates Inc.
Boston Pizza
International Inc.
A&W Food Services of
Canada Inc.
Starbucks Corp.
Cara Operations Ltd.
Yum! Brands Inc.
Wendys Co, The
St Hubert BBQ Ltd.
Yum! Brands Inc.
Dairy Queen Inc.
2.9
2.8
2.8
2.2
2.1
2.4
1.6
1.4
1.3
2.3
2.1
2.0
1.8
1.8
1.5
1.2
2.6
2.1
2.0
1.8
1.8
1.4
1.2
1.1
0.9
1.1
1.0
1.1
1.0
1.0
0.7
0.7
0.7
0.8
1.0
0.8
0.8
0.7
0.7
0.9
0.8
0.8
0.7
0.7
0.5
0.7
0.7
0.7
0.6
0.5
0.6
0.5
0.5
0.5
0.7
0.7
0.6
0.6
0.5
0.5
0.5
0.5
0.7
0.6
0.6
0.6
0.6
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
1.8
0.4
-
0.5
-
Others
35.8
35.6
35.9
Total
100.0
100.0
100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources
Questions
1. To what NAICS does Famoso belong: full-service or limited-service restaurants?
2. Classify key trends and developments provided above in terms of environmental forces:
whether they belong to social, economic, technological, competitive, or regulatory forces.
3. How can key trends and developments affect current and future Famoso marketing strategy?
4. How can the current issues on the temporary foreign worker program affect Famoso?
5. What is the ratio of Famosos total number of stores out of the total number of stores in the
chained casual dining full-service restaurants?
The slow economic recovery did not automatically lead to higher demand for fast food, as
reported by Euromonitor International. Canadians became more watchful of health choices and,
minding their budgets, increased consumption of only certain types of fast foods, such as ethnic
cuisine, pizza, and bakery products. At the same time they slowly returned to the more
conventional casual dining, such as cafs, bars, and casual restaurants, proposing a wider variety
of menus and featuring better ambiance. Pizza fast food faces strong competition from 100
percent delivery/takeaway, as well as from frozen pizza products at retail locations. The
segments strategy for growth included promoting cost-effective meal deals and extending the
menu items for budget-conscious consumers.18
Questions
1. What is the purchase decision process of Famosos consumers? Jeff
2. What are the evaluative criteria and the potential considerations of consumers in the fast food
and full-service restaurant industry? Hassan
3. What is the level of Famosos consumer involvement in the purchase process? Nandani
4. What are the psychological factors that influence (or may influence) Famosos consumer
purchase decision process? Jihye
5. What are the situational and sociocultural factors that influence (or may influence) Famosos
consumer purchase decision process? Sami
18 Excerpts from Passport (2013). Fast food in Canada. Euromonitor International, November. Accessed May 28,
2014. http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx
Corporation
Boston Pizza International
Inc.
Cara Operations Ltd.
St Hubert BBQ Ltd.
Yum! Brands Inc.
Cara Operations Ltd.
Prime Restaurants Group
Inc.
Cara Operations Ltd.
Cara Operations Ltd
Keg Restaurants Ltd.
Mandarin Restaurant
Franchise Corp.
White Spot Ltd.
Sportscene Restaurants Inc.
SIR Corp.
Imvescor Restaurant Group
Inc.
Darden Restaurants Inc.
Delight Corp Ltd.
Smittys Canada Ltd.
Imvescor Group Inc .
Joeys Only Franchising
Ltd.
Rickys Family Restaurants
Ltd.
Dennys Corp.
Imvescor Group Inc.
7.2
5.7
4.9
2.6
2.6
7.1
6.1
5.0
2.6
2.6
7.5
6.3
4.9
2.7
2.4
1.7
2.5
1.9
1.7
1.8
2.3
1.8
1.7
2.4
2.1
1.8
1.7
1.6
1.5
1.3
1.7
1.6
1.6
1.3
1.7
1.6
1.6
1.5
1.5
1.8
1.5
1.4
1.0
1.3
1.3
1.4
1.7
1.1
1.3
1.4
1.4
1.2
1.1
1.1
0.9
0.9
1.0
0.8
0.9
0.9
0.8
0.9
0.8
DineEquity Inc.
0.6
0.6
0.6
0.8
0.7
0.6
Humptys Family
0.7
0.6
0.6
Restaurants
Mr Mikes Steakhouse
0.3
0.3
0.3
& Bar
Olive Garden
Darden Restaurants Inc.
0.6
0.3
0.3
Chicken Chef
Chicken Chef Inc.
0.3
0.3
0.2
Mr Greek
Mr Greek Restaurants Inc.
0.3
0.2
0.2
Nickels Grill & Bar
Resto Pro Inc.
0.2
0.2
0.2
Others
38.9
39.8
39.7
Total
100.0
100.0
100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources
Corporation
Share in 2010 (%) Share in 2011 (%) Share in 2012 (%)
Tim Hortons Inc.
29.9
30.8
31.3
McDonalds Corp.
19.0
18.5
18.5
Doctors Associates Inc.
7.6
7.7
6.3
A&W Food Services of
4.9
4.8
4.7
Canada Inc.
KFC
Yum! Brands Inc.
4.0
3.5
3.4
Wendys
Wendys Co, The
3.1
3.1
Dairy Queen International
Dairy Queen Inc.
2.1
2.1
2.0
Burger King
Burger King Holdings Inc.
1.6
1.7
1.7
Pizza Pizza
Pizza Pizza Ltd.
1.6
1.6
1.6
Quiznos
Quiznos Corp.
1.6
1.7
1.6
Harveys
Cara Operations Ltd.
1.1
1.0
1.0
Taco Bell
Yum! Brands Inc.
0.9
0.9
0.9
Couche-Tard Alimentation Couche Tard Inc.
0.8
0.8
0.8
Petro-Canada
PetroCanada Inc.
0.7
0.7
0.7
Country Style
MTY Food Group Inc.
0.5
0.6
0.7
7-Eleven
Seven & I Holdings Co Ltd. 0.7
0.7
0.7
Mr Sub
MTY Food Group Inc.
0.6
Triple Os
White Spot Ltd.
0.4
0.6
0.5
Macs Alimentation
Couche- Tard Inc.
0.5
0.5
0.5
Coffee Time
Chairmans Brand Corp.
0.5
0.6
0.5
Arbys
Arbys Restaurant Group
0.4
0.4
Inc. (ARG)
Esso
Exxon Mobil Corp.
0.4
0.4
0.4
Thai Express
MTY Food Group Inc.
0.2
0.3
0.4
Sushi Shop
MTY Food Group Inc.
0.3
0.3
0.3
Edo Japan
Edo Japan Inc.
0.3
0.3
0.3
Made in Japan Teriyaki
Made In Japan Japanese
0.2
0.2
0.3
Experience
Restaurants Ltd.
Taco Time
Kahala Corp.
0.3
0.3
0.3
Mary Browns Chicken
Famous Mary Browns Inc.
0.3
0.3
0.3
Husky/Mohawk
Husky Energy Inc.
0.3
0.3
0.3
Baskin-Robbins
Dunkin Brands Group Inc.
0.3
0.3
0.2
Mr Sub
Mr Submarine Ltd.
0.6
0.6
Wendys
Wendys/Arbys Group
3.1
Arbys
Wendys/Arbys Group
0.4
Others
14.6
14.4
15.7
Total
100.0
100.0
100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources
Chapter 5: How Can Famoso Seize the Opportunity of Targeting Corporate Buyers?
Famoso Neapolitan Pizzeria was founded on the passion for authentic, fire-roasted pizzas from
Naples, Italy. Whether you eat it on the streets of Naples, or inside Famoso Neapolitan Pizzeria,
experiencing authentic Neapolitan pizza is an unforgettable experience. The business concept is a
franchised fast casual pizzeria that offers authentic Neapolitan pizzas, fresh salads, espresso, and
gelato/desserts in a counter-ordering format with added service. The stores provide atmosphere
and style, allowing for a comfortable meal whether its a quick lunch or a wine-filled evening.19
In general, Famoso Inc. mainly competes in the business-to-consumer market rather than in the
organizational market. The franchising business model allows Famoso to target other
organizations to be franchisees. The question is whether Famoso can target corporations or other
organizations as potential customers.
Perhaps in an effort to target corporations, Famoso currently offers Feast Packages. These
packages offer a group price based on the number of people in a group visiting a Famoso
Neapolitan Pizzeria. For instance, the price for a 10-to-12 people package is $147. The group can
choose 4 items from appetizers and salads and 7 pizzas. Desserts and add-ons are available. The
price for a 13-to-16 people package is $202; diners choose 5 items from appetizers and salads,
and 10 pizzas. The price for a 17-to-20 people package is $265; the group can choose 8 items
from appetizers and salads, and 12 pizzas.
Questions
1. What are the key characteristics of organizational buying that may directly influence
Famoso?
2. Which are the critical organizational buying criteria that may influence corporate decisions to
buy from Famoso Neapolitan Pizzerias?
3. Does the organizational buying process matter for Famoso? If so, why?
20 Taken from Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto:
McGraw-Hill Ryerson.
21 Taken from Famoso.ca Accessed May 28, 2014 http://www.famoso.ca/franchise/
Chapters 7 (with reference to Chapter 16): How Can Famoso Leverage Social Media for
Marketing Research? Is the Company Doing Enough?
Famoso Inc. needs to constantly understand the changing needs and wants of consumers in the
food service industry in Canada. In addition, the company needs to identify industry trends,
analyze potential competitors, and research potential consumers in current markets and
international markets such as the United States. The latter information will help Famoso decide
whether to enter a particular market.
Famoso considers market research critical when entering new markets. Managers know they can
use exploratory, descriptive, or causal research. Exploratory research is often conducted with the
expectation that subsequent and more conclusive research will follow; typical techniques include
searching existing literature, and holding focus groups and in-depth interviews. Descriptive
research is typically used to profile particular situations. The researcher has a general
understanding of the problem and is seeking conclusive data to determine a particular course of
action; typical methods include surveys, observations, and ethnographic studies. Causal research
is employed to identify cause-and-effect relationships among variables; lab and field experiments
are the typical methods used.22
In the past, Famoso has developed few demographics studies to guide decision making and
marketing strategy. Lately, the company has included the use of social media to gain critical
consumer insights. For instance, managers consider social media an excellent driver of great
opinions. They engage consumers on Facebook, Twitter, and Instagram. In addition, they are
implementing QR codes that consumers can scan. This link will direct them to a survey on
restaurant atmosphere, experience, and price point. Managers will then use the results of data
analysis to formulate and implement tactical communication points in Famosos marketing
strategies.
Questions
1. How can Famoso expand its use of social media to do exploratory and descriptive research?
2. From which type of studies would Famoso benefit the most?
3. Develop a short questionnaire to test how well Famoso Neapolitan Pizzeria is doing in your
city and to determine which evaluative criteria consumers are using when choosing a
pizzeria.
4. What kind of research does Famoso need to do before deciding to enter the United States?
22 Taken from Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto:
McGraw-Hill Ryerson.
Source: Famoso.ca
Questions
1.
2.
3.
4.
28 Table 1 provides information about the approximate capital requirements needed to open a Famoso store.
29 Excerpts from Famoso.ca (2014). Franchise, May 28, 2014: http://www.famoso.ca/franchise/
30 Excerpts from Famoso.ca (2014). Franchise, May 28, 2014: http://www.famoso.ca/franchise/
Franchisee fee
30,000
30,000
Training Fee
30,000
30,000
5,000
10,000
10,000
30,000
Tenant Improvements
350,000
500,000
170,000
200,000
20,000
30,000
Signage
7,000
25,000
10,000
20,000
Inventory
25,000
35,000
Insurance
3,000
5,000
Working Capital
30,000
50,000
Licenses
3,000
5,000
60,000
80,000
Total investment
743,000
1,040,000
leaves. Famoso imports bell-shaped fire ovens from Italy that cook the pizza at 900 F in 90
seconds.34
Unlike full-service restaurants where customers wait to order, wait for their drinks, and wait for
their bill, Famoso combines the simplicity of counter ordering with the convenience of a fullservice restaurant. The customer orders at the counter when he is ready, and the staff takes it
from there. The servers deliver food to tables, interact with customers, and clear tables as
necessary. The baristas also offer additional beverages, espresso drinks, gelato, and desserts (e.g.,
Milan Tiramisu) to complete the customers experience. High-end Italian coffee, pizza, and ice
cream under one roofthis is Famoso.
Questions
1.
2.
3.
4.
35 From Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto: McGrawHill Ryerson.
36 From http://www.famoso.ca/menu/pizza.php
Questions
1. Which approach is used by Famoso to determine prices?
2. Which price special adjustments does Famoso use?
3. What are some of the pricing constraints Famoso faces?
Which are the current channel design considerations that Famoso employs?
Which other design considerations will Famoso need to use?
Draw a potential supply chain for Famoso.
How can Famoso align its supply chain with marketing strategy?
Source: maps.google.ca
Source: maps.google.ca
Source: maps.google.ca
Source: maps.google.ca
Source: maps.google.ca
Source: maps.google.ca
Questions
1. Which channel promotional strategy does Famoso pursue: push or pull strategy?
2. Considering that Famoso started operations in 2007, which promotion objectives do they
pursue? Defend your answer.
3. Which method would you suggest Famoso use for setting the promotion budget? Why?
4. Which other promotional elements would you advise Famoso to employ?
5. Which are some of the criteria Famoso can use to select the right promotional tools?
38 From Famoso.ca
39 Excerpts from Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto:
McGraw-Hill Ryerson.
40 Excerpts from Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto:
McGraw-Hill Ryerson.
Chapter 16: Famosos Experience in Using Social Media to Connect with Consumers
Famosos marketing strategy focuses on guest experience, or what the company calls four-walls
marketing. It emphasizes marketing inside the restaurant, the hour-and-a-half to two-hour
consumer experience in the restaurant is critical to the success of Famoso. It is a company
priority to provide an excellent guest experience. The ultimate goal is that the guest leaves happy,
something that seems easier said than done. Some of the key marketing metrics Famoso uses to
measure effectiveness are word-of-mouth, willingness to recommend, and return on investment
(ROI).
Famoso uses of social media for critical insight. Social media creates an opportunity to engage
consumers on a personal and fun level while providing relevant and easy to digest content.
Famoso makes extensive use of Facebook and Twitter, and has recently added Instagram to
appeal visually to consumers, not only for its products but also to evoke a sense of familiarity
with the environment and staff. Through these social media vehicles, Famoso receives lots of
interaction with consumers and the community (see Figures 1 to 3). In Facebook, they have
5,679 likes; on Twitter, they have 7,895 followers; and in Instagram, Famoso has 1,069 followers
as of June 11, 2014. The company also has approximately 10,000 Facebook followers dispersed
across their individual location-based accounts. In Google trends, the words Famoso pizzeria
have more interest in Edmonton, which can be considered a mature market, than in younger
markets in Calgary, Vancouver, and Toronto. However, the words Famoso Neapolitan pizzeria
have interest only in Toronto (see Figure 4 for more details). Metrics for social media mentions
when using words Famoso Pizzeria vary compared to Famoso Neapolitan Pizzeria (see
Figure 5 for more details).
Famoso considers social media an excellent tool to procure useful consumer opinions. The
company is implementing QR codes that consumers can scan. This link directs them to a survey
on restaurant atmosphere, experience, and price point, among other types of data. Famoso will
then use the results of the data analysis to formulate and implement successful marketing
strategies. In the case of social media interactions, Famoso encourages consumer involvement by
giving away gift certificates. For instance, on Facebook, Famoso has posted Hey Calgary, we
need your help! Suggest a name for our Stampede pizzas and you could win a $25 GC if we pick
your name!
Questions
1. In your opinion, is Famoso using social media strategically? If not, what does the company
need to do to link social media with marketing strategy?
2. Operationally, what other activities does Famoso need to do on Facebook, Twitter, and
Instagram?
3. Which other social media vehicles does Famoso need to use?
4. How can social media help Famoso build a stronger brand?
5. How do you rate Famosos use of social media compared to Boston Pizza, Cactus, or Earls?
families with children, a factor that fast casual does not address, and an increased use of a liquor
licence to placate parents, could both help the struggling channels.42
Questions
1. Develop a short international environmental scan for Famoso if it enters the United States.
2. Which international market entry strategy may be most suitable for Famoso to follow? Why?
3. Given that fast casual dining is growing very quickly in the United States, is it reasonable to
suggest Famoso follow a standardized product and price strategies?
Share (%)
Western Europe
51.90
28.30
North America
44.20
24.10
Latin America
16.30
8.89
Asia-Pacific
8.70
4.74
Eastern Europe
4.40
2.40
3.40
1.85
Australasia
2.60
1.42
Source: Global Pizza Market, 2013. Pizza Marketing Quarterly, December, 2013, from Euromonitor.
42 Excerpts from Passport (2013). Consumer Food Service in the US. Euromonitor International, September.
Accessed June 10, 2014.
http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx
43 Global Pizza Market, 2013. Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale,
2015. Business Insights: Essentials. Web. 28 May 2014.
Share (%)
New York
4,269.00
11.23
California
3,371.00
8.87
Pennsylvania
3,152.00
8.29
Florida
2,302.00
6.06
New Jersey
2,125.00
5.59
Ohio
2,025.00
5.33
Massachusetts
1,929.00
5.08
Illinois
1,602.00
4.21
Texas
1,507.00
3.96
Michigan
1,389.00
3.65
14,337.00
37.72
Other
Source: Number of Independent Pizzerias, 2013. Pizza Marketing Quarterly, December 2013, from CHD Expert.
44 Number of Independent Pizzerias, 2013. Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale,
2015. Business Insights: Essentials. Web. 28 May 2014.
35,600.00
Subway
12,100.00
Starbucks
10,600.00
Wendys
8,600.00
Burger King
8,587.00
Taco Bell
7,478.00
Dunkin Donuts
6,264.20
Pizza Hut
5,666.00
Chick-fil-A
4,621.00
KFC
4,459.00
Panera Bread
3,861.00
Sonic Drive-In
3,790.70
Dominos Pizza
3,500.00
3,084.90
Arbys
2,992.00
Source: Top Fast-Casual Restaurants, 2012.QSR, Annual 2013, p. NA. Market Share Reporter 2015. Online
Edition. Gale, 2014.
45 Top Fast-Casual Restaurants, 2012. Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale,
2015. Business Insights: Essentials. Web. 28 May 2014.
12,600.00
34.25
Dominos Pizza
7,400.00
20.12
2,939.20
7.99
Little Caesars
2,900.00
7.88
717.50
1.95
702.00
1.91
Sbarro
602.00
1.64
CiCis Pizza
552.00
1.50
Chuck E. Cheeses
410.00
1.11
384.00
1.04
Godfathers Pizza
335.40
0.91
Marcos Pizza
290.00
0.79
274.20
0.75
Jets Pizza
267.90
0.73
Old Chicago
235.00
0.64
6,177.30
16.79
Other
Source: Top Pizza Restaurants, 2012. Pizza Today, November, 2013, p. 42, from Technomic.
46 Top Pizza Restaurants, 2012. Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale, 2015.
Business Insights: Essentials. Web. 28 May 2014.
Chapter 18: How Can Famoso Integrate Social Responsibility in Its Marketing Strategy?
The Role of Personal Moral Philosophy
Famosos marketing strategy focuses on guest experience in the restaurant, or what the company
calls four-walls marketing. It emphasizes marketing inside the restaurant, the hour-and-a-half
to two-hour consumer experience in the restaurant is critical to the success of Famoso. It is a
company priority to provide an excellent guest experience when it comes to food quality,
excellent service, and a memorable atmosphere. The ultimate goal is that the guest leaves happy,
something that seems easier said than done. Some of the key marketing metrics Famoso uses to
measure effectiveness are word-of-mouth and willingness to recommend, and return on
investment (ROI).
Famoso is also significantly involved with the community, and management considers this
critical to the companys success. The aim is to position every store to feel like a local pizzeria,
one that belongs to the community. Practically, each pizzeria should be involved in local
charities, sponsorships, and events. For instance, Famoso pizzerias host community leagues and
support events that focus on social issues. In 2013 during the Christmas season, Famoso bottled
and sold its tomato sauce for the first time and donated all the proceeds to local food banks in
seven cities (voted on social media by Famosos fans). The company also provides sponsorships
through food donations. These activities allow Famoso franchisees and employees to connect
with people on a personal level. Jason Allard, one of the founders, comments that treating
franchisees as restaurant partners and involving them in the process is a crucial part for the
successful execution of this strategy.
From a consumer perspective, having the ability to make ethical choices is an important aspect of
social welfare. Those choices are based on the personal moral philosophy of an individual. Moral
philosophy is learned through the process of socialization with friends and family, and through
formal education. It is also influenced by societal, business, and corporate cultures in which an
individual finds himself. Moral idealism is a personal philosophy that considers certain
individual rights or duties as universal (e.g., the right to freedom, the right to know, and the duty
to do no harm). Utilitarianism is a personal moral philosophy that focuses on the greatest good
for the greatest number by assessing the costs and benefits of the consequences of ethical
behaviour. This philosophy underlies the economic tenets of capitalism and, not surprisingly, is
embraced by many business executives and students. Ultimately, ethical behaviour rests with the
individual, but the consequences affect many.47 Famoso seeks to support activities that can
promote ethical choices, as in the case of its 2013 Christmas promotion.
Questions
1. Are Famoso and its stores doing enough to be socially responsible? If not, how can they
apply the concept of the triple-bottom line?
2. From a marketing perspective, what are the implications if the great majority of Famoso
consumers follow moral idealism as a personal philosophy?
47 From Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto: McGrawHill Ryerson.
3. From a marketing perspective, what are the implications if the great majority of Famoso
consumers follow utilitarianism as a personal philosophy?
4. What are the five steps that Famoso needs to follow to develop a social audit?