Green Marketing Plan †Nandos Essay

The purpose of this plan is to analyse the environmental efforts of the Nando’s Carnegie branch, and to develop strategies that propels them a step closer towards a more eco-friendly and sustainable future. Nando’s was established in 1987 in Johannesburg, South Africa. It has approximately 300 stores in Australia since the brand arrived here in 1990. Nando’s has already taken action to be more environmentally responsible, with better packaging designs and partnering with organizations that are tackling the world’s social problems. The sources of information for this  marketing plan include websites, articles and the management at the Carnegie branch of Nando’s. Since some data is unavailable to us (e.g. the annual costs of the business), certain assumptions will have to be made. Nando’s already has a clear focus on reducing its packaging, but energy and water usage have not been addressed as effectively. To reduce their usage of energy, they will have to consider their lighting, and the equipment that is used in the kitchen. Solar panels will also be installed to reduce their electricity use. Water usage will also be reduced by switching to more effi cient equipment in the kitchen and toilets. By employing the strategies that have been outlined, Nando’s will be able to target their triple bottom line by reducing cost, lightening their carbon footprint and consequently improving the lives of the people. Situation Analysis Nando’s Background Nando’s is not the common type of fast food joint, but is more of a casual dining place. Nando’s first began trading in 1987, in Johannesburg, South Africa. It arrived in Australia in 1990, with its first store opening in Perth. Since then, its popularity has grown in every state in Australia, with new stores opening all the time. There are approximately 300 stores operating nationally, with plans to expand further. Nando’s is famous for its unique Peri-Peri marinade that is used for all the chicken items on the menu (Nandos, 2012). This green marketing plan is for Nando’s Carnegie and how they can incorporate sustainability into their operations. Nando’s Environmental strategies Nandos does not advertise their sustainability efforts much, but protecting the environment and â€Å"doing the right thing† has always been a part of their business strategy. They are already raising awareness for an organisation called â€Å"United Against Malaria†, which is a charity that raises awareness of malaria, and aims to put an end to it (Mumbrella, 2012). Nando’s Carnegie has been selling â€Å"United Against Malaria† bracelets to raise funds for the charity. All Nando’s restaurants also use recyclable packaging for their products (they signed the Australian Packaging Covenant in 2010, which means they must adhere to their guidelines). They have also begun selling water bottles which use 35% less plastic than the previous bottles that were used. Recycle logos and information are also printed onto the packaging to educate consumers (Nandos, 2010). Nando’s also makes use of recycling services, which are available at every branch, including Carnegie. Nando’s have implemented a system of having its suppliers of oil provide oil to each store in large quantities so as to reduce the amount of trips that they need to make. This system also reduces the use of steel drums for containing the oil. Spent oil is then sent to recyclers to produce biodiesel, which Nando’s then uses to run its trucks (Nandos, 2010). Analysis of environmental performance Even though Nando’s does undertake all of the above- mentioned activities in their business processes, they are still not realizing their full potential in terms of sustainability. Even though Nando’s does try to buy recycled products, they do not have an explicit policy that states that they should buy recycled. Nando’s also does not have a policy to encourage their overseas suppliers to improve design to reduce the environmental impact of their packaging (Nandos, 2010). Just by implementing these guidelines, Nando’s could improve their environmental performance substantially. However, Nando’s does print environmental logos on all its primary and secondary packaging to encourage recycling throughout its value chain all the way to consumers. Nando’s also discourages consumers to take away the food, and this helps to reduce the use of extra packaging. All Nando’s restaurants have a relaxed atmosphere and a â€Å"homely† feel that urges consumers to eat there rather than take the food home (Nandos, 2012) The fast-food chain also uses renewable resources i.e. sugar cane material, for most of its packaging. Also, they try to make sure that the packaging is made using no small parts so littering is minimized (Nandos, 2010). A few inefficient business methods that are specific to the Carnegie branch include the washing of dishes and the use of disposable gloves. The bulky dishwasher is used even when there are just a few dishes, which results in wastage of water. Also, workers use disposable gloves which are not made of  renewable resources, and are replaced quite often due to overuse. Evidently, Nando’s has integrated sustainability into its organizational plans. However, with a more concentrated focus on the environment, Nando’s will be able to reduce their impact further, and could position themselves as the industry standard in terms of environmental impact. Current marketing strategies Nando’s main message in its advertising campaigns is the fact that they use fresh chicken that is flame-grilled, not fried. They use this as a point of differentiation to gain an advantage over other fast-food chains, like McDonald’s or KFC (Baker, 2010). With its creative and occasionally controversial marketing campaigns and catchy taglines such as â€Å"Portugasm†, Nando’s targets an educated, younger demographic market. The organization has successfully used social media to connect with their customers, and its website to communicate any new plans, or to inform the public of any events taking place at Nando’s.  Nando’s also uses its store design to complete the brand experience for customers. Wooden tables, soft,fluid lighting and posters showing the history of its unique flavours convey an image of relaxation and a natural, friendly appeal to the brand (Nandos, 2012). Even though the target market may be a young demographic, consumers of all ages and backgrounds visit Nando’s, presumably because of its uniquely cooked chicken. Industry analysis The Australian fast food industry has flourished in the last decade, with industry revenue rising by 4.3% to reach $16,007,400,000 per annum. There were approximately 36,730 fast food establishments in Australia in 2010 (RAPS, 2011). With such a large number of fast food organisations, they definitely have a significant impact on the Australian environment and could make a massive difference if they incorporated sustainability into their business practices. The current macro-environment factors will further examine the current situation and trends in the fast food industry. Political factors – All businesses involved in the production and sale of domestic food products must abide by the guidelines set in the â€Å"Food Standards Australia and New Zealand† (RAPS, 2011). This ensures that all businesses follow at least the minimum requirements for sustainability. – The introduction of the carbon tax has resulted in prices of products like fruits, vegetables, bread and meat will rise (Sebo, 2012), this means all fast food chains including Nando’s will have to raise their prices. Social factors – Consumers nowadays place more importance on preservation of the environment and healthy eating, so businesses must ensure they must deal with these issues (Price & Lawson, 1992) – Fast food continues to be seen as unhealthy and pollutants of the environment (Price & Lawson, 1992). – Fast food businesses are also perceived as litterers by a majority of consumers (Price & Lawson, 1992). Technological factors – A new kind of method of utilizing solar power, referred to as solar thermal, means that power can be stored for a longer period of time as the technology does not rely on direct sunlight (Sorly, n.d.) – Advances in packaging designs so they use less material mean that costs for companies are decreased and they decrease their environmental impact (Joy, 2011). – Progress in the development of water efficient fittings result in reduced water usage for all businesses. Natural factors – Water is a major factor influencing all businesses in Australia, as Australia is the driest inhabited continent in the world (White, 2009). – Growing population means more demand for food, which places more pressure on the sources of fast food businesses (White, 2009). – Depleting sources of fossil fuels, which are the main source of energy in Australia, will result in increased energy prices (White, 2009). Customer analysis There has been a significant increase of fast food consumption in Australia, with traffic to fast food joints increasing by roughly 7% in 2010 (Markey & Watson, 2011). People of all walks of life come to Nando’s, but a majority of them consist of younger people. Majority of consumers who purchase fast food do so for convenience (TheTelegraph, 2007). Therefore, they probably do not consider environmental factors in their purchase decision. However, with the green consumer group growing within Australia, opportunities for going green for businesses are becoming more appealing. In Australia, there are certain trends that define consumers today. Consumers can be divided into certain groups. These include the Value Consumer, the Busy Consumer and the Green Consumer to name a few (ACRS, 2010) The Value Consumer These are consumers who spend their money more wisely, and mostly consider only what they need. This is mainly a consequence of the Global Financial Crisis as consumers have become more cautious in their spending habits. This can be evidenced by the fact that consumer spending in Australia has been decreasing steadily, and this trend looks set to continue (Schwarten, 2012). These customers then force businesses to create value, so as to attract them to their brand. The Busy Consumer These are consumers who are becoming increasingly time-poor and convenience has a major effect on their purchase decisions. They place more emphasis on â€Å"speed, simplicity and convenience† (ACRS, 2010). Time is very valuable to them, so fast food is the ideal choice for these types of consumers. The Green Consumer This has become a growing niche in the market, and identifies those consumers who are more concerned about the environment than other people. They are willing to spend more for products if they know it will help to conserve the environment. They will actively seek out green products or even organic products, and they take into account the environmental practices of the  business before choosing to purchase. This consumer market is continuously growing, with an estimated buying power of US$500 billion in 2007 globally (ACRS, 2010). In Australia, consumers spent around AU$12 billion on environmentally-friendly goods in 2009, and the market reached AU$21 billion by 2010. Australians attitude towards environmental issues Australians are undoubtedly concerned about the environment, but the high costs of going green are stopping them from being very eco-friendly. This is confirmed by the fact that 100% of Gen Y and 91% of Gen X believe in the effects of climate change, according to McCrindle Research (n.d.). However, 65% do not want to pay more than 10% for green products, while only 10% are willing to pay any price. Consumers also feel that environmentally friendly products should cost less than other  products so as to encourage people to buy them (McCrindle, n.d.) Consumers nowadays expect business to be transparent with their activities and to be accountable at every level of business (Davis, 2007). Organizations are also expected to provide accurate information regarding the environmental impact of their products, and to minimize the impact through the use of innovative designs and manufacturing techniques (Savita, 2011). This means a restaurant like Nando’s is expected to provide the information about their environmental impact to customers, and do all they can to protect the environment, and provide safe products to customers. The purpose of this marketing plan is to target the growing Green Consumer market, and to inform the Value Customer of the high level of environmentally friendly business practices taking place at Nando’s Carnegie so as to give them another reason to eat there. Competitor analysis Direct competitors of Nando’s Carnegie include Grill’d, McDonalds, KFC,  Subway and other various dining restaurants due to their geographic proximity to the Nando’s branch. McDonald’s Strengths 1. Participate in the  government’s Energies  Efficiencies  Opportunities Program. 2. Engage in countrywide water saving  programs. 3. McDonald’s has full  control over its supply  chain, which allows it to  incorporate sustainability  into its operations easily. 4. Conduct extensive  research into reducing  the impact of their  packaging, and are a  member of the Australian  Packaging Covenant.  (McDonalds, 2012) Weaknesses 1. The strategies they are undertaking have  not changed their greedy, corporate brand  image (Barriaux, M. 2007) 2. McDonald’s does have a slight perception  of going green in the minds of consumers, but  its actual green performance is much lower  (Streeter, 2011) 3. McDonald’s customers alone produce 6.35  kgs of trash during peak hour. 4. McDonalds, due to its large size, is  susceptible to being sued by individuals or  organisations that see any weakness in their  sustainability efforts e.g. the 1986 court case  (Archives, 2007) 5. Damage the environment extensively from  their production techniques  (EthicalFootprint,2010) Strategies 1. Litter Control program helps  keep the restaurant grounds clean. 2. Restaurant includes rain water  tanks, dual flush toilets and water  restrictors on taps. 3. Use scorecard method for  sustainability targets for its  suppliers to make sure the goals  are being met throughout the  supply chain. 4. Use recyclable material for  packaging, and continuous  research is put into finding new  ways to reduce packaging material.  (McDonalds, 2012) KFC Strengths Weaknesses Strategies 1. Benefit from alliance  with Carbon Trust, as  they provide them with  ideas of green  technologies. 2. Yum! Brands, (KFC’s  parent company) are  always looking for new  ways for environment  sustainability (Yum!  Brands, 2010). KFC  benefits from this as  they have access to all of  the green technologies  that Yum! Brands  develops. 1. KFC has been linked with deforestation  activities in several parts of the world  (Halladay, 2012). 2. KFC has experienced problems with animal  rights groups, hygiene problems at certain  restaurants, and poor working conditions for  workers. This has had an adverse effect on  their brand image. 1. Switched to recyclable material  for packaging in 2009  (EnvironmentalLeader, 2009). 2. All wrappers for chips, burgers,  and cups are put through a dual  waste stream bin, which is then  sorted and sent out to recycle  (KFC, 2012). 3. Dual flush system and waterless  urinals in the restaurant help to  conserve water. 4. Increased insulation for floor,  walls, and ceiling (KFC, 2012) Subway Strengths Weaknesses Strategies 1. Work with  International Purchasing  Companies Ltd to  generate ideas for  environment  sustainability (Subway,  2012). 2. Subways brand motto,  Ã¢â‚¬Å"Eat Fresh†Ã‚  complements its  sustainability goals  (Fitzgerald, Brown &  Stewart, 2009). 3. Member of the  Australian Packaging  Covenant, which  provides Subway with  clear goals for reducing  environmental impact  (Subway, 2012) 1. Subway received some bad press for an  incident involving animal cruelty, which may  have damaged their brand image in the minds  of a few consumers (Reale, 2011) 1. Switched to more energy saving  lighting and low flow water  faucets. 2. Furniture and cleaning materials  are made from more sustainable  materials. 3. Majority of the paper packaging  used is completely recyclable.  (Subway, 2012) – Grill’d is also a competitor of the Nandos Carnegie branch. They have a brand image that promotes healthy living and their supply consists of only fresh ingredients. Their Local Matters initiative, which is used to support local charities, is a fundamental part of their corporate social responsibility program (Grilld, 2012) Internal analysis Human Resources The management at Nando’s Carnegie has had experience with Nando’s for quite some time, so they know how to implement any new operations into the business effectively. Also, this Carnegie branch is family-owned so they would be enthusiastic about any positive innovations or advancements. Marketing capabilities Nando’s uses several mediums to reach its consumers. It uses social media such as its own Facebook page and Twitter account. They also re-designed their website to give it a more informal, fun look. Nando’s also advertises in-store with a variety of posters and brochures. Nando’s also utilises TV advertising but not as intensely as the other fast food franchises. Nando’s is known for its somewhat cheeky advertising, and this has improved brand awareness since it first moved to Australia (Squidoo,n.d). Financial Resources Average revenue daily for the Nando’s Carnegie branch is approximately $2,200. So average annual revenue is approximately $791,720. Objectives To incorporate sustainability into Nando’s accounting framework, the Triple Bottom Line will be used. This means that objectives will be formed so as to address business, society and environmental factors. The TBL framework considers people, planet and profit at the core of the business. Objective 1: Reduce overall environmental impact by intensifying focus on water usage, energy usage and packaging material. By doing this, Nando’s Carnegie will aim to achieve a 50% reduction in costs. Objective 2: Increase awareness of Nando’s Carnegie’s environmental efforts by 50% among consumers by December 2014. Green Marketing Strategy Objective 1: Reduce overall environmental impact by intensifying focus on water usage, energy usage and packaging material. By doing this, Nando’s Carnegie will aim to achieve a 50% reduction in costs. Strategy Reduce water usage by 50% by December 2014. Strategy Reduce energy use by 50% by December 2014. Actions 1. Replace existing  dish washer with  dishwasher that has 4  Star Water Efficiency rating. 2. Ensure all employees  use the dishwasher only  for a full load. 3. Install time flow taps  and dual flush toilets. Actions 1. Replace fryer with  energy-efficient fryer  that has earned the  ENERGY STAR. 2. Install ENERGY  STAR convection oven. 3. Add strip curtains and  automatic door closers  to the walk-in  refrigerator to keep  inside temperature low. 4. Install CFL bulbs in  every part of the  restaurant. 5. Install demand based  exhaust control. This  regulates the exhaust fan  speed in the kitchen to  meet ventilation needs. 6. Install energy  efficient Reverse Cycle  Air Conditioner. 7. Install 7 solar panels  on roof of building. Cost $3000- $6000. Time flow taps- $300 each Dual flush toilets- $500 Cost $950- electric $4,400- gas $1,800- electric $ 3,400- gas $5 per bulb. (Times approximately 25 bulbs for the restaurant = $125) $1500 – $2000 $3000- $4000 Through the implementation of these strategies, Nando’s will be able to reduce their overall operating cost. The investment in green technology might have a high initial investment, but will definitely be profitable in the future. For example: – Energy-efficient fryers can save up to $100 for electricity or $470 for gas annually. ENERGY STAR electric ovens can save up to $190 annually CFL bulbs can reduce energy consumption by 75% Cutting down on idle time for the combination oven can save up to $800 annually. By turning down the central cooling by 3 F, air conditioning costs can be reduced by 12-15 percent. The solar panels could help save up to $400 in electricity costs. (Energy Star, 2012) Clearly, these cost savings are quite significant, and a 50% reduction in costs is therefore perfectly realistic. Strategy 4: Nando’s is already committed to eco-friendly packaging practices, as they follow the strict guidelines under the Australian Packaging Covenant. However, Nando’s does not currently work with third-party organizations to improve design and recycling of packaging, they must begin doing so in order to benefit from specialist knowledge that those firms (e.g. The Cardboard Pallet Company) have acquired. Objective 2: Increase awareness by 50% of Nando’s Carnegie’s environmental efforts among consumers by December 2014. Strategy Actions Increase communication efforts  of eco-friendly changes taking  place through a range of  mediums and creative tactics. 1. Change in-store poster design  to a green theme to emphasize  the changes taking place. N/A Cost 2. Advertise in local â€Å"Caulfield  Glen Eira Leader† newspaper  and â€Å"The Daily Green† website  about the restaurant’s green  efforts. 3. Use outdoor banners to  advertise sustainability practices. 4. Distribute brochures inside  store to raise awareness of the  shift to sustainability at  Nando’s. $500 (approximately) $300 ($150 for each banner) $2000 Other strategies that Nando’s could undertake involve: Using their food waste and turn it into compost to use it to grow plants. They could do this by having their own compost recycling operation or send their food waste to a compost facility. Encouraging more eat-ins by providing facts about the environmental impact of packaging to consumers. Using the strategies listed, Nando’s will be able to affect its Triple Bottom Line positively. Through the implementation of the strategies, they will be able to minimise their environmental impact, reduce their costs significantly and improve the store environment for the people who visit the store (i.e. through improved design and having more decorative plants in the store). The achievement of these objectives will show Nando’s devotion to sustainability. References Archives (2007, April 11). McDonalds, Environmental McNasty? Retrieved 27 September, 2012 from http://theconcordian.com/ Baker, R. (2010, June 30). Nandos has lipsmackin’ giveaway plan. Marketing Week. Retrieved from http://www.marketingweek.co.uk/nandos-has-lipsmackin-giveawayplan/3015217.art icle Barriaux, M. (2007, July 05). McDonalds goes green, but not all customers are lovin’ it. The Guardian. 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