Compass Group’s Strategic Marketing

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Introduction

The complexity and multidimensional nature of the marketing process, coupled with its innovative base, indicates the likelihood of some uncertainty about legal issues in marketing. Where guidelines are clear, there is no excuse for illegal practices. Businesses must comply with the true spirit of the law. The government, the courts, and enforcement agencies must share equal responsibility to provide the legal climate within which economic efficiency is rewarded, competition and the competitive system are strengthened, and market forces are permitted to operate with a minimum of official intervention. The rewards of successful competition should serve as incentives for effective marketing activities, whereas monopolistic market power, which is undesirable, should be curbed.

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Company’s Strategy and Performance

Strategic alliances

The case of Compass Group suggests that outright purchase brings the company some portion of the market distribution channels and productive facilities from which new ones are readily established. Here, less market uncertainty is traded for developmental costs and perhaps a higher profit situation. Recent strategies of the company are closely connected with mergers and acquisitions activity. Compass Group recognizes that acquisitions and mergers require an assessment of the assets of both the merging and merged companies. For a merger to be effective, the marketing systems, plans, and structures of the merging and merged companies must be compatible (Kotler and Keller, 2005), This orientation to potential markets, future competition, and anticipated developments result in nebulous guides at best. Marketing management must, therefore, develop concepts, techniques, and data that will show the changing dimensions of future markets. As conglomerate companies emerge, this task becomes increasingly difficult. Successful marketing requires recognition and authority at the top decision-making level. Marketing programs must be carefully planned and based not merely on knowledge of internal corporate affairs, but also knowledge of external environments (Bearden et al 2004).

Leadership and performance indicators

Market leadership and organizational excellence are the core of its business strategy. Compass Group states that a point of equilibrium between customer wants and needs is called for on the one hand and corporate goals and resources on the other. A distinction should be made between the top management posture toward marketing and the performance of marketing activities per se. For it is these two points of view that distinguish between the marketing philosophy and the marketing concept. The former refers to the philosophy and the latter to the concept. For example, designing products or distribution systems that better satisfy customer wants and needs refers to the implementation of the marketing philosophy; the particular marketing organizational arrangements or posture, adopted by a specific company in carrying out these changes refers to the marketing concept (Fill, 1999).

Mission and philosophy

The philosophy of Compass Group implies that such activities as pricing, management of the sales force, advertising, personal selling, credit, physical distribution, and other marketing efforts should be integrated, coordinated, and directed at satisfying consumer wants. It also emphasizes that the success of the firm is dependent on profitable sales, which in turn depend on consumer action. Several characteristics distinguish this approach from other conceptions of marketing. First, it is concerned with more than the transfer of title and movement of goods. Marketing begins before goods are produced and continue after the consumer has purchased them. Second, it emphasizes helping consumers to solve problems in ways that are compatible with the profit, volume, and image objectives of the firm. Third, it recognizes the management implications of adopting this view — for example, top-level responsibility for the marketing executive, reorganizing the marketing department, and integrating and coordinating marketing activities (Hollensen, 2007). The sales forecast is one of the vital tools of marketing planning since adequate planning and effective development of marketing resources are based on sales forecasting data. Sales forecasting promotes and facilitates the proper planning of many segments of a firm’s total business and marketing activity. Influencing every budget that is established, affects almost every other projection and prediction of business operations. To integrate goals, objectives, and operating programs with potential market opportunities, management must concretize its sales forecasts. This necessitates translating the sales forecast into a specific market, customer, product, territory, and volume goals to be realized during some future period. Thus, the sales forecast becomes the foundation for marketing programs, financial budgets, purchasing plans, personnel budgets, production schedules, plant and equipment demands, expansion programs, and other aspects of management programming (Drejer, 2002).

Responsibilities and change

Primary among the Compass Group marketing manager’s responsibilities is the management of change. The CEO must function in an environment that is characterized by rapid and widespread change, and by explosive development and availability of usable knowledge. The major task of coping with continuous change, anticipating problems and opportunities in a market environment that will be substantially different from the present situation, is difficult. Marketing managers are concerned with growth, cultivation, and market trends and movements as part of the change process. Marketing forces generate not only changing pressures but also methods of controlling and directing business effort to meet them. Change must be pursued on a planned basis through deliberate, coordinated efforts intended to improve marketing systems (Schaefer, 2006). Such effort utilizes the techniques and knowledge available. From the standpoint of the individual firm, the economy, society, and culture, marketing is an agent of change. Marketing managers assess opportunities for change, creating it in terms of products, supporting systems, and promotional programs. Evaluating changes, they weigh and overcome resistance to them. Corporate growth and survival require that the management of change be the first order of business (Drejer, 2002).

SWOT

The strengths of Compass Group are a strong brand image and expert system, excellent website, and customer support. Resource-based philosophy and innovations create new opportunities for market development and brand recognition. Customers’ loyalty can be achieved through the people who are employed by Compass Group. Innovations in technology and bakery processes allow the Compass Group to attract millions of customers each day (Drejer, 2002). Technological factors involve the Internet access and development of the company’s infrastructure, new methods of cooking, and information availability. Such factors as continued economic growth, increased disposable profits, dynamic domestic and local competition, accelerating technology, automation, population decentralization, expansion, and innovation will spur the appearance of this new marketing form. The competitive advantage of the company is its unique product proposition and location. Low prices and high quality of products appeal to middle-class consumers (Perreault et al 2003).

For Compass Group, the opportunities include the high potential for growth in America and penetration into new markets. Also, Compass Group has financial and human resources in improving its profitability, professional management team, and corporate culture, customized order system, and free shipping. There are great opportunities for Compass Group, because specialized restaurants, throughout the world, are interested in goods produced in an environmentally friendly manner. The company tries to expand its activities by introducing self-service, limited-menu express.

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The main weaknesses are fierce competition in the food industry and the limited ability of the proposed products. Competition is the main threat for Compass Group. Despite weaknesses and threats, Compass Group has an attractive position based on a combination of cost management and customer services. In recent months, the economic situation and crisis have harmed the company as many potential customers try to save money and prefer to cook at home. Some of the repeat customers prefer to buy cheap food and visit the restaurants seldom (Perreault et al 2003).

Both in physical appearance and most aspects of their culture-notably, their language, their traditional form of administration, and their religion. It is the northern half of America, and, despite provisions for moving refugees to the south, this distinction is not likely to disappear entirely. The problem is that volume size does not significantly change the cost base. Compass Group’s competitors provide ‘commodities’ with little differentiation and customer loyalty is low. In addition, high inventory costs and competence barriers prevent many companies to enter this market. Compass Group relies heavily on high-quality products and on-time delivery. Compass Group, suppliers have a unique availability product they can exert a strong influence over prices and conditions of supply, therefore potentially putting pressures on the businesses purchasing their product. as the most important, there is a limited number of suppliers in this industry. Competitors follow the same strategies as Compass Group, relying on product differentiation and cost leadership.

Alleged Bribery Case

The problems

The alleged bribery harmed the company, its image, and its relations with suppliers. The case proves that consideration of marketing’s social dimensions raises many significant questions. These questions and issues require a legal entity possess and a personality, whose sum is greater than the respective attributes of its managers and owners. The objectives of socially responsible marketing executives include not only profit responsibilities to shareholders, but also high levels of employment, economic and technical progress, economic stability, community development, and improvement, improved living standards, and personal freedom. The problem is that some of them may conflict. There is no concrete standard or test of social responsibility or public welfare — businessmen must define it for themselves.

Moral and ethical dimensions of illegal behavior

However, it can also result in other undesirable consequences such as more limited consumer choices, stifling of initiative, development of cumbersome bureaucratic structures, limiting innovation and competition, presenting a misleading picture of the accomplishments of business, and responsible business action. Sometimes consumerism merely results in a political gain and not in the improvement of marketing imperfections that should be the true objective of government action. The case of alleged bribery allows us to say that there exists a tendency among some: interested in promoting “consumerism” to see business as the villain with governmental agencies as the protective shield. The relative effectiveness of the American marketing system in satisfying consumer wants and needs as compared with other economic systems, and the great freedom of buyer-seller relationships that it promotes, are often forgotten as attention is centered on an extremely small proportion of market transactions that involve intentional business abuse (Perreault et al 2003).

Negative impact on the company’s reputation

Marketing leaders like Compass Group are now being challenged, by public concern for many market situations, to sharpen their vision and take a major role in resolving some of the problems of social change. The government on its own has not been too successful in meeting such problems as adequate housing and jobs for the hard-core unemployed and is turning to business. Some activities previously considered purely governmental activities are now in the marketing domain of private enterprise and through creativity and innovation may prove to be economically profitable. Social profit can be consonant with corporate profit. Increased social involvement can be achieved by blending government and business perspectives in the desire to maintain a business climate and also “do the right thing.” This requires the acceptance of new social commitments and responsibilities on the part of the business. Yet the indispensable role of business and marketing in securing social progress and in improving the quality of life has not been widely studied or understood (Kotler and Keller 2006).

Market Opportunities and Threats

Opportunities

The data and statistical results suggest that Compass Group can make fundamental and continuous corporate adjustments to the demands of shifting market environments through new acquisitions and market expansion in Europe. To date, relatively few have truly adopted a market orientation, despite the lip service that has been paid to marketing as an orientation in business. Such factors as continued economic growth, increased disposable income, vigorous domestic and foreign competition, accelerating technology, automation, population decentralization, expansion, and innovation will spur the appearance of this new marketing form. This conception implies a top-management philosophy of business operation (Kotler and Armstrong 2005). Industry consolidation demands new ways of cooperation, so Compass Group has to follow its strategy of acquisitions and mergers.

Another opportunity for Compass Group changes in lifestyles. Changes in lifestyles and market environment have had a direct impact on goods and services produced, expenditures, and the consumption process. For example, the effect of increased leisure time, suburban living, shopping centers, automatic vending machines, automobiles, television, and widespread geographic shifts on consumer wants and needs is pronounced. The shift from rural to urban populations, the growing number of women employed in industry, the decrease in the length of the workweek, increasing productivity, and higher incomes all shape consumer behavior and, hence, market opportunity. Development of such sectors as education and healthcare will help Compass Group to sustain its market position.

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Threats

The main threats are negative publicity, competition, and changing market demands and structures. The living space may be segmented into action and orientation space. The action space refers to the arena and methods by which transactions take place, including organizational constraints imposed by business. The orientation space includes numerous economic, psychological, and source factors influencing buyer behavior (Kotler and Armstrong 2005).

For Compass Group, the purchasing process and the related acts of accumulation and consumption are means of achieving goals both of the purchaser and those he represents. The acts of accumulation and consumption indicate the differences between consumers and purchasers, and between consumption and buying. Both industrial purchasing agents and “consumer purchasing agents” are essentially engaged in solving problems. In the household, performing purchasing activities to satisfy all the wants of one’s family and friends through the evaluation of an overwhelming array of available goods and services is an impossible task. Within a family unit, wants and needs are not directly known. Two sets of forces are at work encouraging economic and social mobility. First, a steady upward flow of immigrants leaves the lower economic and social ranks empty. Second, upper opportunities exert a force to pull people up the ladders and are reinforced by immigration, which exerts a thrust to push them upward. It is only in a climate of abundance that both forces operate Taste, although it is hard to define and intangible, is becoming more significant because of affluence. It is comprised of education, sensibility, and morality. Tastes are learned and seem to be improving (Kotler and Armstrong 2005).

Conclusion

The case of Compass Group shows that a dynamic, abundant economy with widespread discretionary purchasing power, leisure time, and private ownership of automobiles stimulates mobility — economic, social, occupational, and geographic. The core strategy of Compass Group will be based on value propositions and product differentiation is well developed. The main strength of this strategy is the clear identification of the product advantages and potential target audience. This strategy will result in a plan that can assist the company in selecting and positioning the product. A greater product differentiation strategy will help Compass Group to create an entry barrier for other companies and creates a unique market proposition. New customers will become loyal supporters of the brand if they receive unique products and exceptional service at Compass Group’s stores. Consumption is not a passive, costless, unenjoyable activity. Consumers do not receive their products and services passively or without considerable effort. They must make purchase decisions and expend energies, time, and money for both the purchase and use of products. Consumers would like to do so conveniently.

References

Bearden, W. O., Ingram, Th. N., LaForge, L.W. 2004, Marketing, Prentice Hall.

Drejer, A. 2002, Strategic Management and Core Competencies: Theory and Application. Quorum Books.

Fill, C. 1999, Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall.

Hollensen, S. 2007, Global Marketing: A Decision-Oriented Approach. Financial Times/ Prentice Hall; 4 edition.

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Kotler, Ph., Armstrong, G. 2005, Principles of Marketing. Prentice Hall; 11th edition.

Kotler, Ph, Keller, K. 2005, Marketing Management. Prentice Hall.

Perreault, W.D., Cannon, J.P., McCarthy, E.J. 2003, Marketing: Principles and Perspectives. McGraw-Hill/Irwin; 4 edition.

Schaefer, A. 2006. An Introduction to Marketing in Business. Open University Worldwide.

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BusinessEssay. 2021. "Compass Group's Strategic Marketing." December 7, 2021. https://business-essay.com/compass-groups-strategic-marketing/.

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