TRIMESTER 1 2021 FINAL EXAMINATION

STUDENT ID 1490322

STUDENT NAME Akbar Ali Khan

SUBJECT NAME: Marketing New Products

SUBJECT CODE: MKT002

TIME ALLOWED: 2 hours

PERMITTED MATERIALS:

 This is an Open Book exam.

INSTRUCTIONS FOR STUDENTS:

 You do not require a separate answer booklet. Please type your responses in the space
provided.
 Type your full name and ID at the top of this page.
 Read the case study and answer all FOUR questions.
 Each question is worth 15 marks.

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Case Study – Waffle House

There are four questions in this exam. Each question is worth 15 marks. As a
guide, your answer should be approximately 300 words for each question.

Waffle House, Inc. is an American restaurant chain with 2,100 locations in 25 states in the
United States. Most of the locations are in the South, where the chain is a regional cultural icon.
Waffle House is headquartered in Norcross, Georgia, in the Atlanta metropolitan area.

Each Waffle House location is open 24 hours daily, up to 366 days annually. This schedule has
inspired the urban myth that "Waffle House doors have no locks".

The chain's restaurants almost always have jukeboxes, which have traditionally played 45-rpm
singles and, in some cases, CDs. Waffle House has released music through its own record
label, Waffle Records. It has released songs from "Saturday Night At My Place" by Gary Garcia
released in 1995 to "They're Cooking Up My Order" by Alfreda Gerald released in 2006. The
co-founder Joe Rogers had high standards and said, "If it sounded like a commercial, it got the
axe." If the song makes the cut it will be recorded and make its way to Waffle House jukeboxes.
The songs are on ordinary discs, which are produced for Waffle House and are not
commercially sold, but the chain has made a CD of some of the songs available for sale. In
2012–13, most (if not all) of the locations have removed the 45-rpm/CD jukeboxes in favour of
digital touchscreen jukeboxes provided by TouchTunes, which, at Waffle House restaurants, still
feature all the original Waffle House songs.

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The servers use a proprietary version of diner lingo to call in orders, and the menu suggests
some use of the same lingo. When placing orders for hash brown potatoes: they say
"scattered" (spread on the grill), "smothered" (with onions), "covered" (with cheese), "chunked"
(with diced ham), "diced" (with diced tomatoes), "peppered" (with jalapeño peppers), "capped"
(with mushrooms), "topped" (with chili), and "all the way" (with all available toppings). The
option of "country" was added for hash browns with sausage gravy on them. Additionally, the
company has a symbolic code by which grill operators are told the specific orders that go on
each customer's plate.

Using symbols such as jelly packets, mayonnaise packets, pickles, cheese and hash brown
pieces, grill operators are told what orders go on which plates. A jelly packet at the bottom of
the plate signifies scrambled eggs. A packet of apple butter signifies raisin toast. A mustard
packet facing up means a pork chop. Facedown means country ham. A pat of butter is a T-
bone, and its place on the plate determines how the steak cooked, from well done at the top to
rare at the bottom.

The company claims to be the world's largest seller of several of its menu items—the namesake
waffles, ham, pork chops, grits, and T-bone steaks. It also claims that it serves 2% of all eggs in
the US.

Waffle House has now decided to transform one of its most popular breakfast foods into a
sippable spirit. 

Known for its coffee and waffles, the restaurant chain moves in a different, alcohol-infused
direction with the launch of Bacon & Kegs, its first beer line. The beer, brewed with bacon
extract to give the taste and smell of the breakfast staple, is a red ale crafted by the Oconee
Brewing Company. Waffle House hopes to appeal to breakfast devotees with the beer’s flavour,
though the can’s design could also entice loyal fans. The cans feature Waffle House-inspired
imagery, including the classic yellow restaurant signs and drawings of the restaurant’s

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traditional brick and mortar structure. Bacon & Kegs will be available at the end of December
2020.

Waffle House will not be selling it at liquor stores nationally. Rather, the Oconee Brewing
Company will be in charge of distribution, which includes selling the cans at breweries as well
as locally for consumers in Georgia, Waffle House’s home state. 

With the launch of its first beer line, Waffle House could appeal to older consumers who could
now support the restaurant outside of its brick and mortar locations. While Waffle House’s
devoted fan base could help boost beer sales, the push also provides an alternative opportunity
for the brand to reach consumers unfamiliar with it, such as those who do not live in the
southern United States.

As the Coronavirus pandemic shifts how brands reach consumers, Waffle House’s beer could
prove a unique way to connect with diners outside of its restaurants. With Bacon & Kegs,
Waffle House takes advantage of an exclusive opportunity to taste-test a new product while
staying true to its breakfast roots. 

Answer the following four questions:

1. Identify the target market that Waffle House is aiming at for this new product and
state if this clashes with the existing target market.

[Answer here]
Waffle house was primarily a famous and household name in Southern United States, where it
attracted the customers based on their taste for music and breakfast menu. However, with the
launch of Bacon & kegs, its beer line, the company is targeting people all around US. The target
market is segmented based on several factors. Firstly, the market was geographically segmented
with a focus on Southern USA, while the north United States was not targeted. This squeezed the
potential target market for the company. With the launch of beer line, Waffle house is not
targeting its customer owing to its geographical location; instead the products will be delivered
nationwide.

Next, the target market is demographically segmented based on the age group. Firstly, the age
group of young college students (18-24) frequently visits the Waffle house. For example, this
age group visits areas as waffle house to feast upon the game while having the food and listening
to music. As the Bacon & Kegs beer line will be launched, this targeted age group will be highly
attracted to drink beer as well within the friends group or social circle.

Lastly, the target market of waffle house are old age people (60 + years), who after retirement
generally spend their time with their friends at places like waffle house. Since with the pandemic
outbreak and lockdown placement, old people are prevented from meeting at the food outlets as
of Waffle house. Therefore, the beer with nostalgic design attracts the old people to continue
their legacy of Waffle house outside their bricks and mortar structure.

Although this products expands the target market to whole USA as it is not only limited to the
Southern United States, it still has focus on its two main age segments (demographic segments),
which are young college student (18-24) and older people (60 +). It can be predicted that this
product will boost the sales in both the target market age groups.

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 2. Recommend how Waffle House could promote its new Bacon & Kegs to its current
and potential customer.

[Answer here]
In South United States, Waffle House is a famous brand, where the only marketing strategies
will be focused on launching Bacon & kegs. In this segment, the company has loyal customers
that will be attracted to buy the company's product decreasing the need for promotions.
However, in the North and other regions of USA, the company is yet to develop its product
market before development of loyal customers. Therefore, strategic promotional strategies are
needed.
The waffle house is targeting two diverse customer groups that are younger students and older/
retired people. Both of these require different promotional techniques to attract the customers to
buy the products. For example, the younger target segment is more comfortable with the online
platforms as social media (Facebook and Instagram), websites, search engines, and emails as
compared to conventional promotional techniques as billboards. Based on this, the online
programs can include conducting an online challenge to increase the reach of customers. For
example, one challenge can be that the person with highest votes on social media will be given a
free takeaway. This will cause excessive sharing of social media platform, which enhances the
reach of the customers with no costs incurred by the company.

However, an effective tool is creating buzz of the word, such as the 'beer aids in bringing fresh
aroma of grandma's kitchen', which attracts the customer as elder and younger target groups to
try the new product. This buzz of the word will influence the choice of customers and increase
the sales of the Bacon & Kegs.

However, the elder target customers lack in using social media. People above the age of 60 are
still orthodox to the usage of social media and search engine searches; therefore, they will be
targeted through conventional advertisement techniques. The traditional promotional plans
include use of newspaper, magazines, billboards, and television advertisements. However, the
promotional plans such as buying 1 free beer with 2 or, buy 1 bear at full price and other at 50 %
discount will attract the customers.

These are the promotional plans that will be used to attract the target customers.

3. Recommend the launch campaign, including the media that Waffle House should use to
ensure the success of Bacon & Kegs.

[Answer here]
Since a well-established company is launching a new product in the market (old and new), it
requires a strategic launch campaign. An example is that the company cannot directly launch the
products in the market without first promoting its products. Next, a plan is formulated with the
Oconee Brewing company to forecast the demand of the beer and then stock the inventory. In the
initial phases the company is focused towards gaining trust for their products, so promotional
strategies as advertisement are designed. Primarily, the advertising program is developed and
managed, which consists of setting the advertising objectives. These objectives include ideas as

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creating demand in the society, deciding the budget needed for the plan, choosing media, and
evaluating the effectiveness of advertising.

The Waffle house will use sales promotion techniques to attract the customers as coupons, price
packs and premium gifts. For example, every first customer of the Beer & Kegs will be given a
coupon to receive 10 % discount on their next order. Through this a cycle will be formed to
attract the customers. Next, the price packs will be available to every target market despite their
geographical segmentation. For example, a pack of three bottles of the new products will be sold
at a discounted price by $15. Lastly, the premium gifts as free mail is sent to the old or previous
customers to retain their loyalties.

Since the target market is segmented into two diverse groups: college students who like to visit
these places after their parties or games and older people (mostly who have retired from their
jobs), they require different promotional campaigns. For example, college students spend most of
their time using social media platforms as Facebook, Instagram and Twitter; therefore, for them
social media or digital campaigns will be used. It consists of paid promotions on social media
apps, where the consumers can be asked to be a part of any challenge or giveaway. Moreover,
360 degree digital marketing plan can be implemented that consists of social media platforms,
web engine searches, blogs, and paid emails to attract the customers.

One challenge to implementing this technique for elder group is their lack of use of social media.
People above the age of 60 are still orthodox to the usage of social media and search engine
searches; therefore, they will be targeted through conventional advertisement techniques. The
traditional promotional plans include use of newspaper, magazines, billboards, and television
advertisements. In this method, less selectivity of target audience is performed attracting a higher
range of customers.

To sum up, the media used will be newspapers, television, direct mail, and radio for the elder age
group, who are benefitted with high appeal from visuals and flexibility, while the younger
generation will mostly rely on digital media.

4. Identify some of the challenges Bacon & Kegs could face and recommend how these
can be overcome.

[Answer here]
One of the major challenges to the success of Bacon & Kegs is the resistance to accept change in
the society. For example, one segment of Bacon & Kegs is its young generation, mostly of who
will be college students, who are inclined to use new products. They will not pose any problem
to the new products as the beer. However, older generation is more comfortable with their old
routine and choice of products while presenting resistance to the new products. It will be a
challenge to promote Bacon & kegs to the older target group, who is uncomfortable with seeing
their favorite breakfast meal of years being converted to a drink. It can be summed that the first
challenge to the success of new product of Waffle House is resistance to change of its elder
target group.
The Waffle group is quite famous and popular in the South USA with loyal customers; however,

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when launching the products beyond South USA will cause lack of trust in people. In the
beginning, customers will be uncertain of the quality of products achieved. The high competition
in the new markets will create barrier to creating popularity of Bacon & Kegs. It will require
strategic marketing and promotional plans to attract the customers and build their trust for the
company products. Such trust will assist in gaining competitive advantage in the saturated
market.
Lastly, the customers have developed trust on the Waffle house, where they can present their
suggestions and complaints to enhance the future experience. Waffle house has options to
directly supply to its consumers or through a distribution channel (retailer and wholesaler),
where they have selected the distribution channel. Since the company is dealing through Oconee
Brewing company that will directly contact the consumers. This raises the third challenge when
the customers have no contact with Waffle house and are unable to present their valuable
suggestions. It can lead to customer dissatisfaction, which ultimately causes the company to lose
competitive advantage. Therefore, the suggestion is to use direction business to consumer
distribution plan, where the customers are satisfied with the quality and customer care in the
company.

END OF EXAM PAPER

[Extra writing/working space if required]

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