Company Report of Kaki Lima Restaurant

Executive Summary

This report aims at analyzing the various environmental elements surrounding Kaki Lima’s operations, evaluating its current digital marketing practices, and offering viable recommendations that may help improve the firm’s current marketing strategies. The report finds that Kaki Lima’s existing marketing tools incorporate digital marketing systems, such as social media and websites. Other marketing systems include Google My Business and Online Reviews. Based on the evaluation of the customer experience and existing marketing tools, the report recommends that Kaki Lima should incorporate influencer marketing and Search Engine Optimization (SEO) in its marketing strategy to enhance the awareness and visibility of its brand.

Introduction

Kaki Lima Melbourne is an Indonesian restaurant located in Melbourne, at the building 80 RMIT University campus. The firm, which operates in the catering and foodservice industry, provides a variety of Indonesian cuisine, with its most legendary dish being the “Indonesian Crazy rice.” Despite being known for its popular dish, an analysis of Kaki Lima’s activities reveals that significant market changes in marketing exist, which the firm ought to keep pace with, to help target and reach potential customers in the industry. Therefore, this report analyzes the three environments of the company, macro, micro, and meso, and offers recommendations to Kaki Lima’s management on viable digital marketing strategies, such as the use of SEO and influencers to help enhance the restaurant’s potential of communicating its value to potential customers and remaining competitive in the industry.

Macro Environment

Legal

The legal climate in Australia is highly influential, especially in the food industry, that Kaki Lima must conform with the existing marketing policies to survive in the sector. Notably, in Australia, the government requires firms to follow the food standards code, which includes disclosing the nutrition content of the food they offer in their outlets (“Nutrition content claims,” 2016). Amidst these requirements, Kaki Lima must ensure that it remains transparent in its marketing messages about the nutritional value of its delicacies to avoid any clash with the authority.

Furthermore, digital marketing laws that govern the industry exist, which Kaki Lima must conform to, to avoid costly legal penalties. The most common legal issues are consumer law and advertising. Notably, the Australian Consumer Law requires marketers to refrain from misleading advertisements about products and services of an organization (“Advertising and selling,” 2007). Therefore, the restaurant’s marketing team should conduct thorough investigations about the dishes and services offered by the firm to ensure that the message displayed to the public is honest and to avoid the hefty penalties that would result from failure to do so.

Additionally, copyright issues that govern digital marketing exist, which influence Kaki Lima’s use of digital platforms. The Copyrights Act offers automatic protection of creative works by prohibiting the reproduction of exact work by others (Bouchoux, 2008). Therefore, these copyright issues shape the way Kaki Lima utilizes digital marketing. Notably, the firm’s marketing team should be keen on the material they use in their digital platform to avoid the utilization of music or designs that are already copyrighted.

Political

Besides adhering to the legal elements, Kaki Lima must be keen about the political climate in Australia and avoid taking political sides in its digital marketing practices. Notably, for a while now, there has been an international political clash in Australia, in which it is alleged that the Chinese government is secretly trying to engage in political activity in Australia (Cave, 2019). Schmitz (2018) also adds that analysts claim that China’s Community Party has infiltrated Chinese-Australian associations devoted to students and scholars, writers, and religious activities. Due to such allegations, there has been an ongoing trend whereby Chinese visitors in Australia are stereotyped as promoting the spread of the ideologies of the Chinese Communist Party in Australia. Amidst the current political clashes, it would be ideal for Kaki Lima to remain neutral about the political issues in their digital platforms to avoid triggering negative emotions among prospective consumers who hold different views about the matter.

Environmental

Today, consumers are more interested and aware of the firm’s interaction with the environment than was the case years ago, thanks to the development of the digital platforms. Notably, the ongoing digital trends enable consumers to choose restaurants in which to dine based on a review of the latter’s involvement in environmentally sustainable practices. As the literature suggests, the way consumers spend their money sends a message about the type of food system they would like to be a part of (Higgins-Desbiolles, Wijesinghe & Moskwa, 2015). Therefore, the growing power of consumers, through social media platforms, to choose dining points based on a review of the restaurants’ involvement in environmentally friendly practices can influence Kaki Lima to indulge in environmentally sustainable practices such as disposing of the restaurant waste effectively.

Demographics

Gradual and cumulative changes in population structure and distribution continue to be experienced in Melbourne, bearing a significant impact on Kaki Lima’s activities. Prior studies reveal that, in general, Australia’s population change has been dynamic compared to other OECD countries, with 20% of its people constituting of migrants (Hugo, 2013). Due to the existing population dynamism, restaurants have an opportunity to sell their delicacies to people of cultural diversity. Furthermore, in the context of Melbourne, research shows that in recent years, the town has gained a reputation as a multi-cultural and sophisticated city, thus attracting visitors for its food, culture, and sporting events (Goodman, 2018). Among the frequent foreign visitors in the country and Melbourne city are Chinese and Indonesians; thus, the number of Indonesian restaurants offering Indonesian cuisine in the area has been on the rise. As a result of this growth, the marketing team of Kaki Lima must ensure that the firm remains visible to prospective domestic and international consumers visiting Melbourne.

Meso Environment

Figure 1: Porters Five

An analysis of Kaki Lima’s meso environment reveals the nature of the industry in which the firm operates. Notably, scholars assert that the meso environment can be analyzed using the porter’s five model, which enhances the management’s understanding of the influence of the industry’s structure on the profitability of a firm within the sector (Pervan, Curak & Kramaric, 2017). Therefore, the firm’s meso environment can be assessed in five dimensions; the threat of new entries, bargaining power of suppliers, bargaining power of buyers, the threat of substitute products, and the level of rivalry in the industry.

On the one hand, the threat of new entries in the industry is relatively high since restrictions for new entrants is limited. Thus, Kaki Lima’s profitability faces a significant threat from the launch of operations by new market participants. However, regardless of the increase of the threat of new entries, consumers may experience high switching costs, as they may not access the same great taste of the legendary “Indonesian Crazy rice” served in Kaki Lima.

Furthermore, an analysis of the industry reveals that the supplier’s bargaining power is relatively low. Notably, several suppliers offer the same spices and raw materials used in the catering and foodservice industry. For example, a study by Statista reveals that the sauces and spices industry has expanded significantly and is expected to grow annually by 3.0% between 2020-2025 (“Sauces & spices,” n.d.). The data implies that several industrial participants in the spices industry exist for firms such as Kaki Lima to choose from. With the vast pool of suppliers, Kaki Lima may experience a low switching cost, as it can easily enjoy the same quality and quantity of spices from other distributors.

Conversely, the bargaining power of buyers in the industry is relatively high due to the existence of a vast pool of Indonesian restaurants. For example, in Melbourne only, there are at least five recognized Indonesian restaurants that consumers can choose from, including Kedai Satay, Pondok Rempah, and Makan. Besides, with the ongoing digital trends such as the use of Google My Business, consumers can quickly identify different Indonesian restaurants in the city.

Additionally, Kaki Lima faces considerable threats of substitute products in the industry. Notably, there are a variety of dishes that consumers in Melbourne can choose from, including Asia dishes such as Malatang, which are offered in restaurants such as the Dragon Hot pot company. The existence of close substitute products poses a significant threat to Kaki Lima’s competitiveness and profitability in the sector.

Besides, the rivalry in the industry is quite intense to the firm. Notably, several firms offer Indonesian cuisines, including Kedai Satay and Pondok Rempah. Hence, apart from Kaki Lima, consumers have a variety of restaurants to visit within Melbourne.

Micro Environment

Customer

The digital era is on the rise, both in Australia and other parts of the world, and it has a significant effect on the manner in which firms such as Kaki Lima indulge in marketing practices. Notably, a Statista report shows that since 2011, the number of mobile phone users in Australia has risen significantly, with a prediction of twenty million people having used the devices in 2019 (Statista Research Department, 2015). Granwal (2019) also asserts that the rate of internet use in Australia has drastically increased over the past few years, with 14.7 million people reported to have subscribed to the Internet in 2018. The ongoing global trend among consumers implies that firms such as Kaki Lima ought to adopt digitized marketing strategies to keep pace with the Internet and tech-savvy consumers.

Competitors

Unlike before, several digital changes are occurring in the catering and foodservice industry, compelling firms to adopt digital strategies to keep up with competitor’s trends. For example, Muhitin (2019) observes that several technology applications are currently used in the restaurant industry, including Front of House and Back of House applications. Notably, the majority of the industrial participants in Melbourne, such as Kedai Satay, are tremendously incorporating digitalized marketing strategies in their business approach; thus, Kaki Lima should do the same to remain visible and competitive in the industry.

Supplier and Intermediaries

The ongoing digital trends are gradually changing the role of intermediaries in the catering and foodservice industry. The majority of the brands are now partnering with logistics companies to create convenience in their delivery channels. Notably, a significant fraction of the firms in the food industry is partnering with third-party digital services such as UberEats to allow customers to order their meals through digital platforms and have them delivered instantly. Therefore, as a participant in the industry, Kaki Lima also utilizes the online ordering platforms by partnering with UberEats to help support the firm’s overall digital marketing strategy.

Current Marketing Strategies

Digital Marketing

Social Media. One of the digital marketing tools used by Kaki Lima to connect with its consumers and grow its brand is social media platforms. Notably, the business has a considerable presence in social networking sites such as Instagram and Facebook, Kaki Lima AU, in which it posts its different dishes and messages about its services. The active presence of the firm on social networking sites enables it to interact with the consumers, solicit feedback, and develop ways of enhancing the latter’s satisfaction.

Online Reviews. Kaki Lima’s current and prospective consumers can access the firm’s internet review on digital platforms such as Facebook. For example, on its Facebook page, the firm has a “reviews” section in which it has a rating of 4.6 out of 5. Such reviews and other responses by the consumer should help Kaki Lima to identify niches in its operations and work towards enhancing its performance based on customer’s expectations. Besides, online reviews should help prospective consumers analyze the firm’s performance based on other’s customer’s experiences to make informed decisions on whether or not to dine in the restaurant.

Google My Business. Kaki Lima utilizes Google My Business digital tool to enhance its visibility among prospective consumers. The marketing tool, which was developed by Google, provides firms with free business profiles to help connect with customers across Google Search Maps (“Engage with Customers”, n.d.). Similarly, Kaki Lima enjoys this free marketing tool in which it posts photos of some of its delicacies, location, operating hours, and contact details, which help enhance its visibility and connectivity with consumers.

Websites. Kaki Lima also utilizes its website as an essential marketing tool for its business. Notably, scholars observe that websites are rich in information; they provide detailed data on products and services offered by a company (Salehi, Abdollahbeigi, Langroudi, A., & Salehi, 2012). Therefore, the comprehensiveness of the website is used by Kaki Lima to market its services to prospective consumers.

Key Areas where Customer’s Experience Can be Improved Using Digital Technologies and Digital Touch Points

Figure 2: Customer Journey

Figure 2 is a visual representation of Kaki Lima’s Customer journey, which illustrates the customer’s experience with the firm. Scholars aver that customer journey mapping is a path-dependent model that influences the linear ways in which the overall customer’s experience turns out (Varnali, 2018). Folstad and Kvale (2018) aver that the customer journey is a means to assess the viewpoint of the customer and reach insight into their experiences. Therefore, the identified customer journey can help evaluate the experience of Kaki Lima’s customers and identify areas within their journey that can be improved using digital technologies.

Based on the analysis of Kaki Lima’s current digital marketing approach, it is evident that the key areas in the customer experience that can be improved are awareness and loyalty. Notably, additional digital marketing approaches should be incorporated into the business strategy to enhance its visibility among consumers, which will eventually translate to increased visits to the restaurant. Additionally, online marketing strategies should be improved in the loyalty phase of customer experience to foster the intentions of current consumers revisiting the restaurant.

Recommended Action Plan

Using an Influencer

In today’s highly competitive business environment, influencer marketing has become an essential digital tool in enhancing consumer’s awareness about products and services. Kostic, Ivanovic, and Okanovic (2018) argue that currently, this tool is ranked as the leading trend in marketing, probably because of its capacity to leverage famous people in promoting the growth of organizations. Influencer marketing involves the use of selected influencers, often celebrities, to promote a branded content to the influencer’s followers and the brand’s overall target consumers (Lou & Yuan, 2019). Similarly, Kaki Lima may use Australian celebrities, such as Nicole Kidman, who has a substantial social media following of more than six million users on Instagram, to create awareness about the restaurant within and outside of Melbourne.

Search Engine Optimization (SEO)

As noted, the majority of consumers rely on Internet searches in making decisions on what to purchase, and even the best places to dine. Therefore, an SEO may help Kaki Lima enhance its visibility and build loyalty among consumers who conduct searches through Google. Notably, the SEO works by creating the advancement of website pages using target keywords in the title, snippets, and URL (Bhandari & Bansal, 2018). Scholars indicate that based on prior observation of consumer behaviour, “clients are more likely to click on sites recorded on the first page of results” (Bhandari & Bansal, 2018, p. 27). Therefore, an SEO may help Kaki Lima pull traffic to its site, hence enhancing its visibility among consumers.

References

“Advertising and selling” (2007). Australian Competition and Consumer Commission. Retrieved from https://www.adma.com.au/sites/default/files/media/ACCC-Advertising-and-Selling.pdf

“Engage with customers on Google for free” (n.d.). Google. Retrieved from https://www.google.com/business/

“Nutrition content claims and health claims” (2016, April). Food Standards. Retrieved from https://www.foodstandards.gov.au/consumer/labelling/nutrition/Pages/default.aspx

“Sauces and spices” (n.d.). Statista. Retrieved from https://www.statista.com/outlook/40070000/107/sauces-spices/australia#market-globalRevenue

Bhandari, R.S., & Bansal, A. (2018). Impact of Search Engine Optimization as a marketing tool. Jindal Journal of Business Research, 7(1), 23-36. doi:10.1177%2F2278682117754016

Bouchoux, D.E. (2008). Intellectual property: The law of trademarks, copyrights, patents, and trade secrets for the paralegal (3th ed.). Boston, Massachusetts: Cengage Learning.

Cave, D. (2019, May 20). Australia’s China challenge. The New York Times. Retrieved from https://www.nytimes.com/2019/05/20/world/australia/australia-china.html

Folstad, A., & Kvale, K. (2018). Customer journeys: A systematic literature review. Journal of Service Theory and Practice, 28(2), 196-227. doi:10.1108/JSTP-11-2014-0261

Goodman, R. (2018). Melbourne- Growth challenges for a livable city. The Planning Review, 54(1), 6-17. doi:10.1080/02513625.2018.1454661

Granwal, L. (2019, August 23). Internet usage in Australia- Statistics and facts. Statista. Retrieved from https://www.statista.com/topics/5261/internet-usage-in-australia/

Higgins-Desbiolles, F., Wijesinghe, G., & Moskwa, E. (2015). A taste of sustainability: Case studies cafes in Australia. Research Gate. Retrieved from https://www.researchgate.net/publication/282331670_A_Taste_of_Sustainability_Case_studies_of_sustainable_cafes_in_Australia

Hugo, G. (2013). The changing demographics of Australia over the last 30 years. Australian Journal on Ageing, 32(s2), 18-27. doi:10.1111/ajag.12113

Kostic, S.C., Ivanovic, A., & Okanovic, M. (2018). Influencer marketing in a social media context. Conference Paper. Retrieved from https://www.researchgate.net/publication/332441726_Influencer_marketing_in_a_social_media_context

Lou, C., & Yuan, S. (2019). Influencer marketing: How message value and credibility affect consumer trust of branded content on social media. Journal of Interactive Advertising, 19(1), 58-73. doi:10.1080/15252019.2018.1533501

Muhittin, C. (2019). An analysis of technology applications in the restaurant industry. Journal of Hospitality and Tourism Technology, 10(1), 45-72. doi:10.1108/JHTT-12-2017-0141

Pervan, M., Curak, M., & Kramaric, T.P. (2017). The influence of industry characteristic and dynamic capabilities on firms’ profitability. International Journal of Financial studies, 6(4), 1-19. doi:10.3390/ijfs6010004

Salehi, F., Abdollahbeigi, B., Langroudi, A.C., & Salehi, F. (2012). The impact of Website information convenience on E-commerce success of companies. Procedia- Social and Behavioral Sciences, 57(2012), 381-387. doi: 10.1016/j.sbspro.2012.09.1201

Schmitz, R. (2018, October 2). Australia and New Zealand are ground zero for Chinese influence. NPR. Retrieved from https://www.npr.org/2018/10/02/627249909/australia-and-new-zealand-are-ground-zero-for-chinese-influence

Statista Research Department (2015, August 31). Number of mobile phone users in Australia from 2011 to 2019. Statista. Retrieved from https://www.statista.com/statistics/274677/forecast-of-mobile-phone-users-inaustralia/

Varnali, K. (2018). Understanding customer journey from the lenses of complexity theory. The Service Industries, 1(1), 1-16. doi:10.1080/02642069.2018.1445725

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