Chapter 7: Reaching Global Markets. Famoso Inc. Targets US Consumers

Famoso Inc. has considered entering in the U.S. market. They are investigating the market potential for Famoso Neapolitan Pizzeria in the U.S. and they also plan to start thinking about what other country markets can provide opportunities for the Famoso Inc. business model. Table 1, below, shows a global picture of the pizza market.

One of the key trends in the U.S. consumer food service industry, as reported by Euromonitor International, is that food service operators are going digital. In 2015, foodservice operators in the U.S. adopted digital ordering and payment platforms at an unprecedented rate. As smartphones and other digital devices proliferate among American consumers, operators are recognising the opportunity to develop a more seamless path to purchase, make a loyal customer base and cater for consumers' desire for greater convenience[1].

Another interesting trend in the U.S. is that Pizza 100% home delivery/takeaway and specialist coffee shops lead the way. Specialist coffee shops posted impressive current value growth in 2015, driven in large part by Starbucks' continued expansion. Smaller-scale operators which brew premium coffee also contributed to the category's value growth. In many metropolitan areas, thriving specialist coffee shop operators like Intelligentsia Coffee & Tea, which has locations in Chicago, Los Angeles, New York and Atlanta, cater for younger, more affluent customers with a preference for drinking premium coffee in sophisticated outlets. Additionally, pizza 100% home delivery/takeaway also performed well in 2015. Chains in this category, Domino's and Papa John's in particular, attribute much of their sales growth to online ordering, with some operators generating around half of their sales in 2015 through orders on digital devices such as mobile phones, tablets and PCs[2].

Table 2 provides information about number of independent pizzerias by states. Tables 3 and 4 show statistics of fast food restaurants and pizzerias in the U.S.

Questions

1. Which international market entry strategy may be most suitable to follow for Famoso Inc. and why? Market entry strategies:http://www.tradestart.ca/market-entry-strategies

1. Given that fast casual dining is growing really fast in the U.S., what would you suggest Famoso Inc. use for pricing strategies? Choose 2 ideas and briefly explain. Pricing strategies: https://quickbooks.intuit.com/ca/resources/business/pricing-strategy-types/

1. Based on table 4, the pizzeria business in the USA, what level of market share is realistic to aim for as a new product? Based on table 2, what states should they have franchises in and why?

Table 1. Global Pizza Market, 2013[3]

Market size is shown in billions of dollars.

	($ bil.)	Share (%)
Western Europe	51.90	28.30
North America	44.20	24.10
Latin America	16.30	8.89
Asia-Pacific	8.70	4.74
Eastern Europe	4.40	2.40
Middle East and Africa	3.40	1.85
Australasia	2.60	1.42

Source: "Global Pizza Market, 2013."Pizza Marketing Quarterly, December, 2013, p. NA, fromEuromonitor.

Table 2. Number of Independent Pizzerias in US, 2013[4]

	Pizzerias (# stores)	Share (%)
NewYork	4,269.00	11.23
California	3,371.00	8.87
Pennsylvania	3,152.00	8.29
Florida	2,302.00	6.06
New Jersey	2,125.00	5.59
Ohio	2,025.00	5.33
Massachusetts	1,929.00	5.08
Illinois	1,602.00	4.21
Texas	1,507.00	3.96
Michigan	1,389.00	3.65
Other	14,337.00	37.72

Source: "Number of Independent Pizzerias, 2013."Pizza Marketing Quarterly, December,2013, p. NA, from CHD Expert.

Table 3. Top Fast-Food Restaurants in US, 2012[5]

Companies are ranked by system-wide sales in millions of dollars.

	Mill $
McDonald's	35,600.00
Subway	12,100.00
Starbucks	10,600.00
Wendy's	8,600.00
BurgerKing	8,587.00
Taco Bell	7,478.00
Dunkin' Donuts	6,264.20
PizzaHut	5,666.00
Chick-fil-A	4,621.00
KFC	4,459.00
PaneraBread	3,861.00
Sonic Drive-In	3,790.70
Domino's Pizza	3,500.00
Jack in theBox	3,084.90
Arby's	2,992.00

Source: "Top Fast-Casual Restaurants, 2012."QSR, Annual2013, p. NA.Market ShareReporter 2015. Online Edition. Gale, 2014.

Table 4. Top Pizza Restaurants in US, 2012[6]

Companies are ranked by sales in millions of dollars.

	Mill $	Share (%)
Pizza Hut	12,600.00	34.25
Domino's Pizza	7,400.00	20.12
Papa John's Intl.	2,939.20	7.99
Little Caesar's	2,900.00	7.88
California Pizza Kitchen	717.50	1.95
Papa Murphy's Intl.	702.00	1.91
Sbarro	602.00	1.64
CiCi's Pizza	552.00	1.50
Chuck E. Cheese's	410.00	1.11
Round Table Pizza	384.00	1.04
Godfather's Pizza	335.40	0.91
Marco's Pizza	290.00	0.79
Hungry Howie's Pizzaand Subs	274.20	0.75
Jet's Pizza	267.90	0.73
Old Chicago	235.00	0.64
Other	6,177.30	16.79

Source: "Top Pizza Restaurants, 2012."Pizza Today, November, 2013, p. 42, fromTechnomic

[1] Excerpts taken from Passport (2016). Consumer food service in the U.S. Euromonitor International, May. Accessed December 13, 2016.

[2] Excerpts taken from Passport (2016). Consumer food service in the U.S. Euromonitor International, May. Accessed December 13, 2016.

[3]"Global Pizza Market, 2013."Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale, 2015.Business Insights: Essentials. Web. 28 May 2014.

[4]"Number of Independent Pizzerias, 2013."Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale, 2015.Business Insights: Essentials. Web. 28 May 2014.

[5]"Top Fast-Casual Restaurants, 2012."Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale, 2015.Business Insights: Essentials. Web. 28 May 2014.

[6]"Top Pizza Restaurants, 2012." Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale, 2015. Business Insights: Essentials. Web. 28 May 2014.