Principles of marketing 2021________________________________________________Najla Aouinti

Tutorial 1 : Principles of marketing

Class: BBA2

Case study: Abou Shakra Restaurant: Creating Customer Value the Old-Fashioned Way

Abou Shakra is a chain of restaurants in Egypt well known for charcoal cooking—grilled meat, kebabs,
and kofta. In 1947 Ahmed Abou Shakra opened his first Abou Shakra restaurant in El Kasr El Einy, a
famous central district in Cairo. The first restaurant was not in a consumer-attractive neighborhood,
but that did not stop Abou Shakra, who believed that offering healthy, tasty, and wellmarinated food
was more important than location in attracting customers and having them return time and again—if
they received a good meal, the location of the restaurant would not have much bearing on their
future dining decisions. Initially the restaurant’s menu was very simple; it mainly consisted of basic
traditional Egyptian dishes, which was the standard menu offered in similar establishments at the
time. Abou Shakra decided to keep his menu simple and traditional to avoid the risks associated with
offering unfamiliar dishes to consumers. As a result, he focused on providing well-known traditional
dishes of exceptional quality. Succeeding in a Competitive Market When the first Abou Shakra
restaurant was established, there was not a wide variety of cuisines featured at restaurants, such as
Indian, Chinese, and Italian, which are widely available today. As noted, Abou Shakra’s competitors at
the time also offered traditional oriental Egyptian food, and due to a lack of other cuisines, he was
essentially competing with the whole market. It was thus very challenging to start up a business in a
highly competitive market, and it was necessary for Abou Shakra to ensure that he could offer
something that would give him an advantage over his competitors. This advantage turned out to be
the great customer value offered by Abou Shakra, which was not offered by the majority of his
competitors. Abou Shakra restaurants have maintained the persistent focus on customer well-being
and satisfaction that originally gave them an advantage over their competitors, and this is one of the
reasons for their success. The importance that the company places on elegant dishes, prepared with
passion, and providing a memorable experience to their guests has endured right from Abou Shakra’s
establishment. We will now take a closer look at how Abou Shakra applies the philosophy of offering
customer value. Abou Shakra owns its own factory, which supplies all branches and outlets with their
daily requirements of fresh meat and poultry. The meat is of high quality—only the best beef and
lamb. Meat is delivered to the factory daily, and a governmental veterinary inspection is performed
to ensure that the meat is fresh and of good quality. The factory is equipped with the latest
technology to guarantee that the meat is stored at the correct temperature to ensure its freshness.
The fruits and vegetables are also delivered daily and are specially stored to maintain freshness up to
the time of serving. Abou Shakra’s quality control department ensures that all finished products are
of outstanding quality, and oversees practices that prevent any of the ingredients from being
contaminated. The company has signed a contract with SGS Egypt to supervise its health, safety, and
hygiene practices, ensuring that they are of the highest standard. The Abou Shakra menu has
changed very little over the past 60 years, maintaining the simple offering of traditional Egyptian
dishes with a particular focus on grilled dishes, which is now Abou Shakra’s speciality. The primary
aim of Abou Shakra is to keep the menu simple so as to wholly master the dishes offered. This has
encouraged customer loyalty, as customers often choose their favorite dishes every time they eat at
Abou Shakra. This has also led to Abou Shakra being one of the most popular places for oriental food
in Egypt. Keeping the menu simple also limits the costs of purchasing different ingredients from
several suppliers. If this was not the case, the recruitment of more managers would be required to
contact the suppliers and follow up on the orders. There would also be more supervisors needed to
ensure that the delivery and storage processes take place smoothly and that each outlet receives its
Principles of marketing 2021________________________________________________Najla Aouinti

supplies on time. In addition, more chefs who are specialized in the new dishes added to the menu
would be necessary as well. Abou Shakra’s managers pay attention to every small detail; they ensure
that each restaurant is spotless and that the kitchen is held to the highest cleanliness standard. All
utensils and cutlery go through a sterilization process to ensure their sanitation and safety. The
tables are wiped with a special detergent so that customers feel they are eating in a hygienic
environment. Focusing on Customer Service Abou Shakra restaurants do not rely solely on their food
to please their customers, but also on well-trained employees who deliver extraordinary customer
service. They hire energetic, friendly, and passionate employees. Abou Shakra restaurants realized
the significance of educating their workers as to the importance of customer satisfaction, and this led
to the establishment of their own training center. The center has a proficient team of trainers who
ensure that employees will have the necessary skills to provide the guests with the best kind of
service. Abou Shakra relies on continuous training to provide employees with the necessary
confidence and skills to provide the utmost customer satisfaction. The company believes that its
greatest asset is its employees, and Abou Shakra thus invests heavily in recruiting and training them
in order to maintain the company’s reputation in the competitive market. One of the core principles
of the company is that by taking good care of the employees, the employees will take good care of
the customers. International Expansion Abou Shakra’s solid customer base is not only due to the
quality of the food and the service offered, but also its slow-growth expansion strategy. Abou Shakra
restaurants cannot be found on every corner; even after 65 years only 13 outlets are operating
throughout Egypt. Abou Shakra decided to stay small and focus on having a few outlets that provide
outstanding service rather than have many outlets with average service. A new outlet is only opened
when the required employees have been trained and are prepared to offer the outstanding service
that is associated with Abou Shakra. It took the company 56 years to open its first branch outside
Cairo, which debuted in Alexandria in 2003. The popularity of Abou Shakra has extended far beyond
Egypt, with the company receiving many requests to open international branches from customers
living abroad who had tasted Abou Shakra while on a holiday. The opening of a branch in Saudi
Arabia in 2005 and another in Kuwait in 2007 are great milestones in the history of Abou Shakra This
expansion was not an easy step for the company, and a great deal of research was undertaken
beforehand to find the correct locations for the restaurants. First, Abou Shakra needed to find
suppliers that could deliver fresh ingredients on a daily basis; this was an important factor for Abou
Shakra to succeed; it had to be ensured that the quality of food provided in any new outlets would
equal that of the Egyptian branches. Employees also needed to be recruited and trained in the same
manner as the employees in Egypt, to make sure that they provide their customers with the same
outstanding service. Along with other aspects of its simple but focused strategy, Abou Shakra does
not spend a great deal on advertising. Only a small proportion of its budget is set aside for advertising
in newspapers and on television, as the company relies heavily on wordof-mouth recommendations
between customers and their friends and families. Abou Shakra believes that the main objective is to
take care of customers, and to provide them with high-quality food and service is better than
spending money on advertising, as satisfied customers will be the best advertising tool. They will tell
their friends and family members about their positive experiences at Abou Shakra, and consumers
are more likely to follow the advice of people close to them than promotional ads. This is also a
strategy the company uses to reduce expenses. Instead of spending a large amount of money on
advertising, which may not generate profitable returns, more money is spent on increasing the
quality of food and service provided. Many have questioned whether Abou Shakra’s 65-year legacy
can be sustained. Its restaurants are run by co-founders and owners Ahmed and Hussein Abou
Shakra, who have drawn up an efficient blueprint for all of their employees to follow. They believe
that if desirable employees are recruited and trained correctly and provided with the appropriate
working environment, then success is inevitable. Ahmed Abou Shakra, the company’s chairman,
Principles of marketing 2021________________________________________________Najla Aouinti

played a critical role in the formation of the strategy that the company would follow. He detailed the
long- and short-term goals in a manner that is easy for all involved to comprehend. The daily
operations are organized and controlled by him, and he has developed an efficient system to ensure
that managers report to him. This system was developed when the business began to grow, as one
person could not manage the daily operations of every restaurant efficiently. Hussein Abou Shakra is
the vice-chairman of the company, and he ensures that the financial goals and objectives of the
company are being met. He supervises the preparation of the financial statements and the budgets
of the company. In the same manner as the chairman, he has set up a structure by which all the
finance managers report to him with daily updates. The legacy of Abou Shakra is expected to
continue with or without its founders. This is because Abou Shakra has become a corporation that
was established with strategies and objectives that, if managed correctly, will lead to a successful
business. This business legacy, so long as the business objectives are met and customers are
continued to be placed first, is expected to last.

Questions

- What is the marketing management orientation followed by Abou Shakra?

- Describe Abou Shakra in terms of the value it provides for customers.

- Do you think Abou Shakra should develop a high-growth strategy? Why or why not?

- Should Abou Shakra spend more on advertising than what is currently expended?