Page 45 - Strat mag_africa_1st quarter

INTO AFRICA The competition’s already tough and Battle of the entrenched, but a US-based multinational sees South Africa as a burger brands springboard to the rest of the continent’s burger- hungry consumers. to hot up ITH BURGER KING’S flagship Heerengracht outlet W in downtown Cape Town selling a ton of Whopper patties each week, the international brand has clearly Regional expansion into Zambia, started to make inroads into the South Namibia, Botswana, Mozambique and African market. Now it’s aiming to achieve Mauritius is already being planned similar success in other parts of the continent too. Although Burger King has been Feasibility studies how many stores each target country can readily adopted by South Africans – the accommodate before taking the leap. Heerengracht outlet serves up to 2 000 started in 2008 In the meantime, Sinclair emphasises meals daily and three Gauteng outlets the importance of ensuring the South opened in February this year – this is no African enterprise is sufficiently well overnight success story. Indeed, initial Sinclair explains that Burger King is established to act as a springboard for investigations into the viability of the aiming to create “the largest national the rest of the continent. He reports that South African market started as far back footprint in the shortest time possible”, progress in this area is proceeding at a as 2008. But why, if this market has been an objective that has been greatly solid pace, in spite of the market’s intense under consideration for so long, did the assisted by its appointment as quick- competition. “We have not been overly global brand finally deem 2013 the right service restaurant (QSR) partner to nation concerned about competition, however, as time to establish a presence? fuel retailer Sasol. The energy company other international brands like McDonald’s “We were waiting until the middle has a broad national footprint and burger and KFC dominate the market, outselling class was sufficiently large to support outlets will be set up at each of its local players by a third. This indicates another international brand,” says Burger 250 service stations countrywide, created to us that local consumers are ready to King South Africa CEO Jaye Sinclair. With a massive boost for the brand in terms of welcome another global QSR player.” 28-million people in LSM 4–7, that criterion visibility, accessibility and sales. Burger King’s primary competitors has certainly been reached – especially Next, says Sinclair, comes regional remain other international brands, not considering that these consumers expansion, and operations are already only because they have an aspirational support quick-service restaurants planned for Zambia, Namibia, Botswana, element, but because menu content, (including the likes of already well- Mozambique and Mauritius. Why product quality and value for money entrenched international franchises such these countries specifically? “From are considered superior to local brands. as McDonald’s and KFC) at least once a a logistics and support infrastructure Global organisations also enjoy greater week. This is part of a wider ‘cash-rich but perspective, it is helpful to be close negotiating clout. Burger King, for time-poor’ phenomenon, in which rising to South Africa,” Sinclair points out. example, has buying power that is affluence among the middle class has led “There are also fewer language barriers boosted by a network of 13 000 outlets to greater use of quick-service dining. than countries further north.” in 60 countries. The timing is also pertinent in that He’s quick to add, though, that the The brand has further carved itself Burger King has, of late, started eyeing brand is willing to bide its time. “We will a niche through its flagship product, the many African territories as new expansion evaluate the potential opportunity and, Whopper. Sinclair believes that the South targets. However, an on-the-ground when we feel the timing is right for us, African public has been waiting for such expansion strategy won’t get underway we will expand.” This means that no firm a product (famous for enabling customers before the brand has first cemented its timetable has been set when it comes to to essentially build their burgers to suit presence throughout South Africa. expansion: the company will first ascertain their tastes) – and statistics appear to 42 strategicmarketingafrica First quarter 2014 First quarter 2014 strategicmarketingafrica 43