Answer to Question #181023 in Management for Karabo Maluleke

Question

Fantastic Pizzas is a new restaurant franchise that Mr Reed is planning on opening in Johannesburg. Fantastic Pizza aims to compete in the market by offering good quality pizza at affordable prices as well as provide a memorable experience. The first store will be located in Auckland Park, which is an area buzzing with students and young professionals. The atmosphere and design of the restaurant will be young, vibrant, and trendy focusing on attracting the younger generation. Mr Reed needs to determine who exactly his target market will be, as well as the exact location of the first restaurant, the menu and the type of marketing communication that will suit his target market.

 In a market filled with few players (such as Debonairs, Romans Pizza etc.) who have a large market share, explain market differentiation to Mr Reed and state using practical examples based on their competitors as to how they should differentiate themselves.​​​​​​​​​​​  (3 marks) 

Answer 1

Market is a critical factor that should be considered before starting a business. Market differentiation is the act of creating certain specialized products, which will gain competitive advantage in the market as compared with the products serving the same needs. The restaurant that will have the largest market share is the one that will offer products, which will attract the attention of the youths. Pizzas are part of the types of food enjoyed by the youths in the current society. Fantastic Pizza Restaurant will be the one that will enjoy the largest market share as it offers the food products identified with the youth. For example, the businesses operating in places neighboring schools and colleges offering fast moving food like snacks, which are identified with the youth and the young people. Such types of food should be affordable, as many youth do not afford to buy expensive meals.