SWOTT Analysis of PF Chang’s Home Delivery Service
To begin, we present the following presentation of the Strengths, Weaknesses, Opportunities, Threats and Trends of PF Chang’s Restaurant Home Delivery Service:
STRENGTHS include PF Chang’s current reputation for quality food and top notch service (PF Chang’s, 2005). And, the unique menu offerings that PF Chang’s is already known for will revolutionize home delivery Chinese food. To explain further, it is highly favorable for PF Chang’s that they are already known for excellent food, and when this is combined with the value addition of home delivery, a powerful opportunity will exist. Home delivery may compromise food quality
WEAKNESSES center on PF Chang’s inexperience in home delivery of food and the consideration that PF Chang’s original atmosphere may not be projected in home delivery. However, these weaknesses can be overcome with effective marketing strategy.
OPPORTUNITIES within the offering of Home Delivery Service are the conversion of new customers to the joys of Home Delivery Service and the capturing of significant market share from established competitors.
THREATS include possible saturation of the home delivery market, imitators, and intense competition against experienced restaurants. These threats will be countered with market strategy.
TRENDS to consider include the documented recent increase in health conscious eaters (Mellgren,2005) , desire to have food delivered to save time and money (Timmons,2004) , and the trend toward value in food eaten at home, diverging from the past limitation of pizza as one of the only home delivery options for ready-to-eat food.
In summary of the SWOTT analysis, it is accurate to say that PF Chang’s has a great deal of potential in the Home Delivery Food market, provided that the strategy employed is adequate to overcome the weaknesses and threats; however, these do not seem to be insurmountable and are common among firms starting a new business segment.
Customers
Having taken an objective look at PF Chang’s in relation to the delivery business, we shall now take a closer look at the organizational buyers and consumers of this service and the factors that influence their purchasing decisions, followed by discussion of how these factors will impact the marketing strategy.
Organizational buyers are a significant market segment to consider; because of the fast paced nature of the modern business world, and the fact that many executive meetings are held within the confines of a “working lunch”, there is a viable opportunity to provide high quality food delivery to commercial locations. The quality food of PF Chang’s will be attractive to white collar customers who will now have the option of eating delivery food that is a world away from greasy pizza or fast food. The factor of quality being available quickly and conveniently will influence their decision to order a PF Chang delivery as opposed to say
Domino’s Pizza.
The average consumer also represents and excellent area of opportunity within the delivery business; the fast pace of leisure time also creates a need for ready-to-eat food to be brought to the doorstep in an efficient manner. As in the case of organizational buyers, the quality represented by PF Chang’s Restaurant will play a factor in consumer’s choosing this delivery option for meals. We are not just talking about food being delivered fast; we are also talking about good food being delivered fast. Part of the time saving element includes not only the saving of preparation time, but also the swift delivery factor.
To adequately discuss customers, there are several important issues that must be addressed within the marketing strategy if PF Chang’s is to be successful in delivery. As was mentioned earlier, there is a definite trend toward ready-to-eat food being delivered to the home or business. However, the marketing strategy must emphasize quality and healthy attributes of the menu offerings if the message is to be properly communicated. Simply put, delivered food for the most part must be tasty, of high quality and nutritional value, delivered in a timely and efficient manner. This trend is identified in industry research that has been conducted by others in recent years (Mellgren,2005) If any of these elements are neglected within the marketing strategy, there is a distinct possibility that significant market share could be neglected and lost. Given the highly competitive nature of food delivery and the Chinese food restaurant industry overall, these details take on tremendous significance.
The concern that PF Chang’s atmosphere may be neglected in home delivery also needs to be given critical importance and addressed. While the physical setup of the restaurant cannot be replicated in a home delivery, the creation of a mystique of PF Chang’s and the reinforcement of what makes the restaurants unique, and what will make home delivery unique, will have to come through within the marketing strategy. Given the false perception among many consumers that “Chinese food is all the same”, there will need to be marketing elements constructed that will give the consumer the feeling that the enjoyment that they get at a PF Chang’s Restaurant, or the feeling that a friend got at the restaurant and excitedly told them about, will be recreated when the PF Chang’s delivery person brings food to their home or business. It is noteworthy that if this is done properly, additional value will be projected to the business customer, who is very important in the situation, for example, where an executive has to conduct a “working lunch” but still wishes to make a positive impression on a client or superiors. The atmosphere, in this case, could be delivered along with the food, giving PF Chang’s a distinct difference and advantage over competitors.
Pricing Strategy
The pricing strategy for PF Chang Restaurant’s Delivery Service, as an overall concept, should embrace the value that is being provided to the customer; to be more precise, what PF Chang is making available to commercial and residential customers is the opportunity to enjoy innovative, top-quality Chinese food, quickly and efficiently delivered to their location. Therefore, the temptation to take the easy route of offering a discount in order to entice customers away from the competition or to take a chance if they haven’t had food delivered before should be avoided completely. This assertion can be justified from a number of standpoints. What is being offered by PF Chang’s Restaurant is a much better product than what has been offered by competitors up to this point. It appears that other Chinese restaurants have taken the approach that printing flyers with their menu and telephone number on them is all that is needed to attract customers and that if a low price is offered, quality is not such a big concern because customers don’t have a lot of other options and they will be glad to get what they can when ordering Chinese food for delivery to home or workplace. A mentality of “if you build it, they will come” simply will not suffice for a restaurant like PF Chang’s for many reasons which are explained in the subsequent parts of this analysis. Rather, a value-based pricing strategy is essential in this case. This pricing strategy will be based on some very specific facets of quality.
First, the actual quality of the product line will be a key consideration when structuring the pricing. Because PF Chang prides itself on using the best ingredients to create the most unique and delicious dishes available, that should be taken into account when pricing for this new operation.
Further, because of the fantastic atmosphere PF Chang has created within the physical locations of their current restaurants, there is a big perceived value that buyers will place on having PF Chang’s food delivered to them, which also justifies the application of premium, yet realistic pricing.
A strong argument needs to be made for premium pricing in this particular situation. There is no denying that if surveyed, PF Chang’s customers would undoubtedly say that they enjoy the dining experience at PF Chang’s due to being able to order something special that is of outstanding quality, served in an exciting atmosphere. Because our overall marketing strategy is to recreate the restaurant’s attributes and experiences through the new delivery service, there are compelling reasons to demand fair compensation for providing this to the customer. Just as the customer would not choose another option because of what PF Chang is providing to them, they should be expected to pay for the extras that they are being furnished.
Opportunity cost also is something for which customers are willing to pay; for example, in the case of deliveries to commercial locations, the time that is saved by not having to leave the office or disrupt an important meeting to travel somewhere else to eat has a great deal of dollars and cents value to the business customer. In the case of the residential customer, saving time that can be dedicated to family or leisure activities is something that carries its own unique price tag.
A final key consideration within the pricing matrix is also the overhead involved in providing the service. The cost of vehicles, insurance, fuel, and additional personnel to provide this service certainly justifies a somewhat aggressive approach to pricing. To keep up with ever increasing costs of all of these and other factors of producing the delivery service, and in order to avoid an awkwardly premature increase in the cost of the delivery service which may offend customers and drive them away if it takes place after the service is established with steady customers, it is suggested that the pricing be significant enough from the beginning to assure the ability to accommodate increases in overhead as the service grows. Consumption of labor and materials will surely increase as the service grows, so this will be an effective, proactive pricing strategy.
References
Mellgren, James. (2005). Food Trends. Retrieved January 26, 2006, from Food Retailer Magazine Web Site: http://www.foodretailer.com
PF Chang’s Restaurant. (2005). Retrieved January 26, 2006, from PF Chang’s Restaurant Web Site: http://www.pfchangs.com
Timmons, Rachael. (2004). General Remarks on Chinese Food. Retrieved January 27, 2006, from http://www.foodtrends.com
