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Waffle House: May I Take Your Order

Essay by   •  May 11, 2011  •  Case Study  •  2,680 Words (11 Pages)  •  1,670 Views

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Introduction:

Mexico City is the largest city in the northern hemisphere. Surrounded by multi-cultural diversity, Mexico is a hub of political and economic strength that has not been seen in this country in decades. With millions of people in such a small area, they all have one thing in common - they all need good food fast. Although there are several hundred restaurants in the surrounding areas, most people go to where they feel comfortable. This is why Waffle House is a perfect fit in Mexico City. We will examine factors pertaining to locating Waffle House into this Market.

Market Size:

Mexico City is a fast paced urban area located in Central America. As a global city, it is one of the most important financial centers in North America. Mexico City is the largest city in population in all the America's. It is the third largest city behind Tokyo, Japan, and Seoul, Korea. According to The Principal Agglomerations of the World - Population Statistics & Maps, Mexico City has a population of 20 million people and consists of 19% indigenous people from the different regions of Mexico. Also, it is home to the largest American population living outside of the United States (U.S.) with a population exceeding 600,000 Americans. This is a segment of the market that Waffle House intends to target.

The majority of residents in Mexico City are Roman Catholic but the trend has been decreasing over the last decade with many Protestant and Jewish communities.

Mexicans respect authority and look to those above them for guidance and decision making. Their social status plays a large role in their perception. In business, the term you will hear often is mañana. The word mañana means tomorrow. In Mexico, it could mean in the future and this reflects their culture. Because Mexicans are a kind and polite people, they use the word mañana to give you hope rather than disappoint you by saying no.

According to Encyclopedia of Nations, in Mexico, the country's income is unevenly distributed. 10% of the population is wealthy, 30% classified as middle class, and 60% are considered poor. It explains that land ownership forms the basis of wealth with 10% of the population possessing 38% of the country's income. The middle 30% has 36% of the country's income while the remaining 60% has only 26% of the country's income.

Socio-cultural Acceptance:

In the Mexican social culture, there are things that Americans may not consider as they look at the business world in Mexico City. "Mexicans place considerable reliance on personal relationships (globaledge.msu.edu)." Furthermore, "good personal relationships are the basis of business success in Mexico (globaledge.msu.edu)." They give priority to socializing rather than working. It is within these confines which we catch a glimpse of the social differences within Mexico City.

Here are a few facts that are important to remember. When you are new to the area, it is important to secure credible introductions using personal contacts. These contacts need to be more than just business contacts. As one can imagine, this may take time to develop this type of personal relationship causing the business process to slow down considerably. The culture, according to Hoftstede's four dimensions, includes individualism vs. collectivism, large vs. power distance, strong vs. weak uncertainty, and masculinity vs. femininity (Ball, 161). Individualism in Mexico is low. This means that the people tend to look out for each other more than self. This could present a problem with laborers. Obtaining reliable workers may be problematic. Unique working schedules may be necessary. Also, the Mexican culture is more dominate toward the male than the female (Ball, 162). Foreigners in the population are substantial in the area that Waffle House intends to set up shop.

The acceptance of Waffle House within Mexico City should not be an issue. Our research indicates there are many Western style restaurants within the city that are accepted and doing quite well.

Mexico City has a diverse population. Waffle House already has some experience serving the Latin culture within the U.S. The southeast and southwest have a considerable Mexican population. This has allowed Waffle House to adapt its menu to the culinary taste of Latin culture. One example of this is the addition the Fiesta Omelets that are now on the menu.

In Mexico City, the population has a division of several distinct groups. At around 20 million people, even a small percentage of middle class gives Waffle House a substantial market to target.

Competition:

The competition in Mexico City has a wide variety of restaurants. Some of the world's most delicious cuisine is in Mexico City. There are over 35,000 restaurants within the city with 96% being small enterprises. The immediate competition will be International House of Pancakes (IHOP) and hotels within the vicinity. With many of the hotels serving continental breakfast, we feel that we will have an edge with a full menu serving 24 hours a day, 7 days a week.

Methods of Marketing:

The advertising of Waffle House within Mexico City will require a greater effort than in the U.S. The following marketing mix will be used.

Product:

Waffle House product's are best described within the mission statement: "Our mission is to deliver a unique experience to our customers through delivering great food, friendly, attentive service, excellent price and a welcoming presence (wafflehouse.com)". Waffle House can use their existing mission statement in the new market.

Waffle House is now in the mature state in the US as it pertains to the product life cycle. However, entering the new market in Mexico City will place the company in the introduction phase once again.

Waffle House's menu can be used with minor changes to reflect local tastes. Waffle House will need to review things such as the color of the menu and verify that there are no cultural issues affected.

Price:

The price of the products will have to be substantially lower due to the buying power of the majority of the population within the target market. However, good profit margins are still possible with lower labor cost, and lower shipping and handling cost. Special care should be placed in the pricing of the products taking into account the legal environment where the business is projected to operate.

Place:

Waffle House will locate its new restaurant in Mexico City, Mexico. Specifically, the location

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