Summary & Chapter 1 of a Case Study on Strategic Marketing Management of Compass Group in the UK
Strategic Marketing Management
Case Study of Compass Group in the UK
This report presents a case study of Compass Group which is a leading contract foodservice and support services company operating worldwide with penetration to over 50 countries including the United Kingdom. How Compass Group approaches its marketing and how it should approach such from a strategic marketing perspective are discussed in this report.
Summary of the Compass Group
Founded in 1941 by Jake Bateman, Compass Group refers to a global contract foodservice and support services company. Compass Group envisions itself as a world-class provider of contract foodservice and support services known for great people, great service and great results. For Compass group to achieve this, it is stipulated in the mission statement that “everyone in Compass is committed to consistently delivering superior service in the most efficient way, for the shared benefit of our customers, shareholders and employees.”
As it concentrates on the hospitality business, Compass Group is employing a structured and sustainable organic growth strategy. Three of the strategies that Compass Group employ are further development of existing expertise and strengths, delivery of the highest quality and service performance and setting the highest standards for corporate governance and responsible business practices. The fourth strategy focuses on a strong performance culture that is basically driven by client sales and marketing and consumer sales and marketing among others.
Compass Group is providing a choice of high quality, nutritious and well-balanced food to the people. The company also has a wide range of foodservice solutions that are designed to cater to any format and size of location. Compass Group owns at least 15 brands and businesses including leisure hospitality, canteen vending, corporate hospitality and restaurants. The company also operates several owned brands as well like Trattoria Pizza, Spice of Life and Origin Foods. The company also operates several owned service systems such as Steamplicity, TrimTrax and Core Concepts among others. Steamplicity, which is a patented system, for instance, is innovative in terms that meals are served restaurant-quality hot.
Being the largest contract foodservice worldwide, Compass Group operates in more than 50 countries. The company serves at least 4 billion meals in different locations like offices, factories, schools, universities, hospitals, mining camps, offshore oil platforms, major sporting events and in cultural venues, making up for its 40,000 client locations. Such an operation is supported by a strong workforce of 386,000 employees. Compass Group Compass Group also boasts of the fact that 90 of the Fortune 100 companies are their client.
1.0 Principles of strategic marketing management
Wilson and Gilligan (2005, p. 5) claims that marketing operates at three distinct levels: culture, strategy and tactics. Culture since it is a set of values and beliefs that highlights the importance of the customers’ interest. As a strategy, marketing concerns the choice of products, markets and competitive stance. To achieve such, there is a need for a set of tactics which can provide the basis for the implementation of the business and competitive strategies. The last two perspectives imply that marketing management takes place in a strategic context. Marketing management therefore pertains to the long-term view towards achieving organizational goals. Strategically, the integration of marketing goals and objectives with the overall goals and objectives of the organization is the core of strategic marketing management.
1.1 Role of strategic marketing in the Compass Group
For an organization like Compass Group, strategic marketing centers on making decisions wherein the organization needs to know what decisions should be made and how these decisions shall materialize. Marketing analysis raises the question of where the organization is now when it comes to competitive position predominantly (Wilson and Gilligan, 2005, p. 8). For instance, Compass Group is considered a leader in contract foodservice and support services industry compared to its rivals as Es-Ko and Supreme Foodservice AG. Through strategic marketing, Compass Group could eventually deliberate on what it can do to further its gap with other companies within the industry and how it can actually do this.
Specifically, Parry (2004, p. 1) maintains that strategic marketing management is a process driven by fundamental decisions that involves targeting and positioning. Compass Group, when making decisions regarding these, shall answer the questions: 1) what does matter and what might matter to potential customers of the Compass Group and 2) on which of the things that matter to customers should Compass Group focus. When these things are answered, it can provide a set of possible positioning strategies for Compass Group and a set of target customers and the way the company can position its foodservice business to these customers.
1.2 Strategic marketing process at Compass Group
Since strategic marketing management entails decisions of the marketing department with a view to long-term growth and a survival in a competitive environment, strategic marketing is a continuous process that mainly although not exclusively takes place at the top-management level. Marketing decisions and strategies at this level are necessarily influenced by the decisions and strategies that apply in other functional areas (Cant et al, 2009, p. 546). As such, there is a need to looked into functional marketing (or the middle-level) so that Compass Group can integrate such with strategic marketing.
Strategic marketing, nonetheless, is considered the task of marketing department at middle- and top-management levels, and such a task is broadly consists of analysis, planning, implementation and control of marketing and market strategies (Cant et al, 2009). According to Kumar (2001, p. 42), strategic marketing starts with the analysis of the market and marketing environment unique to Compass Group. In this way, opportunities could be discovered and environmental threats would be avoided. Marketing planning involves deciding on marketing strategies that will help Compass Group to attain its overall strategic objectives.
Further, Kumar (2001, p. 43) also noted that although a marketing strategy may be brilliant, if Compass Group will fail to implement it properly it would be unsuccessful. Marketing implementation is the process that turns marketing plans into marketing actions in order to accomplish the objectives. Since there several decisions during the implementation of the marketing plan, Compass Group should practice constant marketing control. Marketing control involves evaluating the results of marketing strategies and plans, ensuring that objectives are attained. Compass Group should set marketing goals to which performance could be evaluated against. When there are gaps between the company’s performance and the goals, corrective actions should be considered. Compass Group can use a marketing audit to improve the company’s marketing performance.
1.3 Strategic marketing and corporate strategy of Compass Group
Nijssen and Frambach (2000, p. 15) emphasize that the corporate strategy is the corporation’s overall strategic course while its different companies or strategic business units may each have their own business strategy. Marketing can be both a functional and a business strategy when considered at the middle- and top-management levels. Having said this, it is important that functional and business strategies are formulated in line with corporate objectives and strategies. Same goes with the strategic marketing whereby the goal is to create marketing objectives and strategies in such a way that it can bridge the gap between the company and the customers and thus achieving the corporate objectives through strategic marketing.
Putting in a different perspective, the top management formulates objectives and strategy for the entire organisation. Functional areas including marketing contribute to the process by developing its own functional strategies to achieve the corporate objectives. Critically, the process involves hierarchy of strategies wherein strategies at one level becomes objectives at the next. Such a process outlines whether a strategy will be a success or not (Drummond, Ensor and Ashford, 2007, p. 243).
MAP, or what is internally known as Compass Group as the Management and Performance, serves as the key corporate strategy of the company. As already mentioned, marketing forms two divisions of such pertaining to client sales and customers. Compass Group heavily relies on winning new business, delivering like-for-like revenue growth. It is therefore important for the company to demonstrate the benefits of outsourcing to potential clients while also continuously building the customer profile of existing clients. More innovative approaches are therefore relevant especially through restaurant designs and point of sale displays, for instance, so as not to immediately resort in seeking price increases.
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