Hi there! can you help me with this case study please? Cate
Hi there! can you help me with this case study please? Cater… Hi there! can you help me with this case study please? Cater Inc.:… Hi there! can you help me with this case study please? Cater Inc.:Targeting thebuying centre Case Study Catering is usually one of the first processes that is outsourced to partners. Running acompany cafeteria is not a core activity and increasing competition forces companiesto outsource everything that is not considered core. Cater Inc. is a Stockholm-basedfirm specialising in managing catering processes from start to finish for all kinds oforganisations in the Scandinavian countries. Cater Inc. has 7,500 employees and1,285 contracts for 1,740 locations, where catering services are offered to almost500,000 individuals. Its annual sales are approximately %450 million.Cater Inc. distinguishes between three types of customer: companies,institutions and government agencies. Companies represent by far the largest partof annual sales, but there is no longer much growth potential in this market segment.All companies that want to outsource their catering have already done so by now.In contrast, many institutions have never considered outsourcing their catering,while increasing privatisation of government agencies also represents a potential forgrowth. The composition and size of the buying centre varies significantly betweenthe three customer groups:? In companies, the composition of the buying centre can sometimes be deducedfrom the number of tender copies requested. When a prospect only asks for twocopies of a tender, Cater Inc. probably deals directly with the key decisionmakers.But when four or more copies are requested, the buying centre anddecision-making process may be quite complex. It is often difficult for Cater Inc.to get a good grip on such complex decision-making processes, because itusually deals with just one contact person (a facility manager or someone fromthe management team or from human resources). The job description of thecontact person is an indicator of their role in the decision-making process.? In institutions, the size and composition of the buying centre depends on thenature of the institution. In hospitals, someone from the management teamusually conducts the negotiations, while in prisons Cater Inc. has to deal witha facility manager and a representative from the government.? In government agencies different decision-making processes are also used. Someagencies purchase their catering services directly, while others use a centralpurchasing organisation. In the latter case, price is usually the most importantbuying motive (second to the quality of the catering service).Negotiations with a prospect usually start when Cater Inc. is invited for an initialmeeting, where the discussion focuses on the customer’s wishes and requirements,such as the desired service level, pricing level, service personnel and free meals.Based on this discussion, Cater Inc. writes a catering proposal that details the serviceoffered and its financial consequences. Most prospects invite several catering fi rmsfor an initial briefing. Two or three of them are invited to present their proposal toseveral employees of the prospect. Usually, the prospect will also demand a visit toone of Cater Inc.’s customers to experience its catering service in a real-life situationthat matches the prospect’s situation as closely as possible. When several cateringfi rms are still in the running, such a customer visit may determine the eventualdecision. After a caterer has been selected, negotiations focus on the details ofthe contract and the operational issues. This decision-making process takesapproximately four to six months, while in extreme situations it may lastas long as two years or just one week. The key buying motives are:? effective management of personnel? improved cost control? improved quality.Cater Inc. uses long-term contracts; its customers tend to be very loyal (theaverage length of a customer relationship is nine years). This is very different fromsome other countries, such as the US, where customers switch caterers on averageonce every three years. Scandinavian customers tend to be more forgiving towardstheir caterers; even when mistakes have been made, caterers usually get a chanceto restore the relationship. This means that in 90 per cent of cases, the proposal isfor a new customer, outsourcing its catering for the fi rst time (rather than a customerswitching caterers). When Cater Inc. is asked to write a proposal for a customer thatconsiders switching caterers, the customer’s current caterer usually goes to greatlengths to keep its customer. In such situations, the customer frequently decides togive its current caterer a second chance. All this implies that the loss of a customeris taken very seriously.Cater Inc.’s service offering, and personal selling are its most important marketinginstruments. Telemarketing does not work in this business; a personal approach isessential to acquire new customers. Prospects are only visited when an appointmenthas been made in advance; cold calling is not appreciated. Personal selling issupported by direct mail and participation in networks of facility managers.Ultimately, everything revolves around the effective management of personalrelationships. This is also reflected in the emotional buying motives that often playa role in the final buying decision (‘which caterer would I like to award the contractto?’). Services marketing is a matter of trust and trust is built through effectivepersonal relationships. Questions1) Cater Inc. sells and markets into 3 segments: businesses, institutions and government. In your opinion and during a ‘pandemic such as Covid-19’, which of these segments represents the greatest opportunity for growth? If you were the ‘sales person’ for Cater Inc., who would you target (ie- which employee) in your chosen segment to sell and market to? And why would you select that employee? 2) What are the ‘key buying motives’ for Cater Inc.’s customers? Which one do you think is most important and why? 3) In this industry, when problems have occurred, the customer’s caterer is usually given a second chance. What should Cater Inc. do when a serious problem has occurred with one of its customers to prevent a competitor from stealing this customer? What can Cater Inc. do to steal a customer from a competitor when that competitor has experienced a serious problem with that customer?Arts & Humanities Communications Marketing MKTG BUSI 2204
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