Marketing Report about the Australian company Pie Face. Examining overall marketing approach

Strategic marketing analysis focusing on internal and external factors

Academic Paper, 2018

38 Pages, Grade: 1,0


Table of Contents

Table of Contents

List of Figures and Tables

List of Abbreviations

Pie Face: Company Introduction

Target Market

Perceptual Map

Environmental Factors Analysis
Political/ Legal

Analysis of Internal and External Factors
Internal Factors
Personal Factors
Psychological factors
External Factors
Cultural factors
Social Factors

Integrated Marketing Communication (IMC)

Overall cost leadership

General Recommendations for Pie Face to Implement
Crisis Management
Social Media and Brand Name
Alterations of Advertisement

Strategy recommendation

Reference List

List of Appendices


List of Figures and Tables

Figure 1: Perceptual Map focusing on brand Pie Face with competitors

Figure 2: Pie Consumption by State in Australia 2017 (Hogan, 2017)

Table 1: Total Annual Eating Out Revenue by Establishment Type by State (The Intermedia Group Pty. Ltd., 2017)

Table 2: Average Annual Eating Out Expenditure per Household, by Establishment Type and State (The Intermedia Group Pty. Ltd., 2017)

Table 3: Pie Face’s current marketing management

Table 4: Recommendations for implementing the differentiation approach

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

Pie Face: Company Introduction

Pie Face was founded by co-founders Betty Wong and Wayne Homschek in 2003. It was first established with a few stores in Australia, and rapidly expanded across the country and opened international stores in New York City (2012) and New Zealand (2013) (Pie Face, 2018). Pie Face is a fast food chain that provides fresh coffee and a wide variety of pies and pastries. The pie fillings are made from raw, fresh ingredients including 100% Australian steak, button mushrooms, carrots, tomatoes, onions, garlic and fresh cream (Pie Face, 2018).

From 2003 to 2014, the chain was performing favorably, expanding overseas to Dubai, Abu Dhabi and Singapore (Pie Face, 2018). During this period, Pie Face received over $35 million in funding from a variety of investors (Heffernan, 2014) after a possible $150 million stock market valuation (Mitchell, 2014). However, in November 2014 Pie Face entered voluntary administration, facing legal action both in Australia and the United States. As a result, the company was unable to recover and forced many company-owned and franchised stores to close (Heffernan, 2014). In 2016, the company went into receivership, again closing 11 more stores. For a short period of time, the company reported that the chain was nearing profitability and that it had found new areas to expand overseas to (Japan and South Korea). However, it continued to remain in debts of over $9 million.

In early 2017, it was announced that Pie Face had been bought by petrol and convenience company United Petroleum (Waters, 2017). They announced that it had acquired the intellectual property and retail network of Pie Face for an undisclosed sum. United Petroleum plan to use its large distribution of petrol stations to grow Pie Face.

Target Market

The company has not disclosed much information on which groups of customers it focuses its marketing and sales efforts on. The website has remained vague and contains less information about the company since the takeover announcement (Waters, 2017). An unsuccessful attempt at finding more information of specific target market metrics was sought through a direct Facebook Message to the Company (see Appendix 1).

However, in an interview with CafeCulture in 2013, the founders mentioned a number of important characteristics about its users. They reported that social media and their web presence was extremely important as their users were spending more time online than ever before (The Cafe Culture, 2013). In addition, they reported that a core product Pie Face customers wanted all year round was coffee. As a result, the founders have branded Pie Face as a “true bakery cafe”, providing their staff training programs and designing their stores to fit this model. The company uses quirky names for all their coffee strengths e.g.“kick my arse” (extra strong), “start my heart” (strong), “open my eyes” (medium) and “still asleep” (decaf) (Pie Face, 2018). This suggests that they target more laid back, fun, and exciting personalities that react positively to a cheeky, convenient and creative brand (The Cafe Culture, 2013).

United Petroleum run stores which are predominantly in petrol stations, target older people (possibly male) who have an interest in buying a travel snack for the road, or families traveling together for a road trip. The stores in the CBDareas target more metropolitan groups of people. Looking at Pie Face’s instagram page (See Appendix 2), it implies that they are targeting young adults 20-30 (most likely Australian) given the trendy layout and color scheme. With the use of smileys on their pies, it appears that the company is trying to seem fun and approachable - a brand that is valued by younger generations who respect peculiar and exciting companies (The Cafe Culture, 2013). Research has shown that pies are often a ‘must’ for sports enthusiasts watching a match.

Perceptual Map

Brand positioning relies fundamentally on the knowledge of marketers to determine the target consumer, the main competitor, as well as the similarity and distinction to competitors (Keller, 2013). A perceptual map can show consumers’ judgments and perceptions about a brand’s position in a graph, compared to its most important competitors. The map is divided up in 4 quarters and two dimensions of positioning (McCarthy, McGuiggan, Perreault and Quester, 2004). For Pie Face, there was no existing map available that was based on academic research. The provided perceptual map for Pie Face (see figure 1) is not based on representative surveys or primary research. It was created considering websites, social media and other advertisement as well as product offerings. The “Integrated Marketing Communication (IMC)” affects directly Pie Face’s alignment on the perceptual map. Only competitors who were deemed the most important were included, with a focus on those with the greatest market share. Although it is difficult to place Pie Face in a single industry, it was considered that it best suits the fast food industry. Its main competitors are local coffee shops, bakeries, and grocery stores, which compete with Pie Face in a broader sense. Grocery Stores are not included in the perceptual map because they are not considered as a direct competitor. Due to a lack of research to determine the two most important positioning dimensions to customers, the general categories of Price and Quality were chosen.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Perceptual Map focusing on brand Pie Face with competitors

Quality is a very general term with a broad meaning. In the context of the perceptual map it refers to perceived quality of ingredients, restaurant atmosphere and services. A good example to describe the factors which determine quality is McDonald’s. They offer standardized products that are not well-presented and in disposable packaging. In contrast, McCafe, a sub-brand of McDonald’s, offers a upscale atmosphere and presents its products on ceramic plates.

The area of each restaurant on the perceptual map shows the importance and market share of the company, whereas the length and width of the shapes show the range of quality and price. For example, Domino’s oval shape in comparison to Pie Face indicates that it has a broader range of prices (i.e. Domino offers Pizzas with the price range from 5 AUD to 15 AUD, but with similar quality).

As seen in the figure 1, Pie Face’s closest competitors are Subway and Donut King. This is because they provide generally medium quality products at a relatively medium price. The size of the shape of the local bakeries is large with a very broad range of products and prices. As a result, Pie Face is as a small competitor due to its limited availability of stores and a small and distinctive product range (e.g. meat pies). It is however competing in a relatively untouched segment of the matrix, which could have given it its competitive advantage until its decline. On the other hand, there is no evidence for a great potential in this specific segment of the matrix. Local bakeries and coffee shops, as well as restaurants and fast food restaurants (FFRs) have the greatest market share in Australia. While coffee shop chains have a minor relevance in the Australian market. The greatest chain is The Coffee Club (TCC) with a market share of 4 % (Robb, 2014).

Environmental Factors Analysis

Recognizing the relevant environmental factors is an important consideration for what affects the company. This includes the social, political, legal, economic, technological, and the demographic/geographic factors.


Lifestyle, attitudes and consumer behaviour are all critical factors that influence the food market. Going out for food is of vital importance in Australia as it is increasingly become a popular trend and even a tradition (The Intermedia Group Pty. Ltd, 2017). The Australian population is going to restaurants, bars, fast food outlets and cafes two to three times a week on average (The Intermedia Group Pty. Ltd, 2017).

Recently, this trend has experienced changes with people becoming more aware of healthier food and cuisine. Traditional fast food offerings are in decline and chains with healthier options are increasing. For example, healthy Japanese cuisine is becoming more popular nowadays whereas traditional Steakhouses, Italian or Chinese restaurants are on the decline (The Intermedia Group Pty. Ltd, 2017; Hegarty, 2016; Elliott, 2012). Customers are also moving away from fast food to more dining experiences, pressuring fast food chains to adapt (e.g. McDonald’s recent gourmet products) (The Intermedia Group Pty. Ltd, 2017).

Among people between 18-65 years old, 58% of them order takeaways, especially during the weekdays, paying an average of $44 per order. Research has shown this is due to shopping and cooking changes, lack of inspiration and long working days. The most common takeaway dishes are butter chicken, Asian noodles, meat, egg dishes, pad thai and pizza (Inside Retail Australia., 2013; The New Daily, 2018).

In terms of the pie market, 59.1% of the higher income, family-orientated people are consuming takeaway pies with their children on occasion. In comparison, less than 35% of young adults like eating pies. There is often a connection between sport and pies. Roy Morgan (2017) notes that “Buying a pie while at a match is almost obligatory”. An above- average proportion of AFLsupporters (56.4%), NRLsupporters (55.5%) and A-league supporters (58.5%) like eating pies (Roy Morgan, 2017). In Australia, the meat pie is the most popular pie, with 270 million sold in 2015 (Barr, 2015). Australians like pies because of their convenience and taste (Industry news- food and beverages, 2017).


Research by Roy Morgan (2017) found that approximately 9.4 million (47.5%) people in Australia like eating pies, of which men represented 57.4% (Hogan, 2017). Furthermore, the most robust rates of consumption by state was South Australia with 61.6% and the lowest rate was in Sydney at 43.2% (Hogan, 2017). It can also be seen that pie consumption is more pronounced in rural areas with consumption rates of more than 50% (see figure 2).

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Pie Consumption by State in Australia 2017 (Hogan, 2017)


As of 2016, a total of 85,284 eating out establishments are in Australia. Fast food outlets represent 34.5% of market share, whereas restaurants have a percentage share of 25.7% and cafes have 24%. The smallest shares are held by clubs (7.5%) and bars/pubs (8.2%). The revenue of the eating out industry is about $45.3 billion per year (Financial Year 2015-2016).

New South Wales, Queensland and Victoria show the highest total annual eating out revenue and annual eating expenditure per household within fast food establishments. In contrast, the Australian Capital Territory (ACT) has the lowest revenue (The Intermedia Group Pty. Ltd., 2017) (see table 1&2).

Abbildung in dieser Leseprobe nicht enthalten

Table 1: Total Annual Eating Out Revenue by Establishment Type by State (The Intermedia Group Pty. Ltd., 2017).

Table 2: Average Annual Eating Out Expenditure per Household, by Establishment Type and State (The Intermedia Group Pty. Ltd., 2017).

Abbildung in dieser Leseprobe nicht enthalten

In Australia, there has been significant growth of people consuming pies, with an increase from 8.1 million to 9.4 million people in the last five years. This suggests that almost one out of every two adults enjoy eating meat pies. Sales have increased 19% in supermarkets and 2% in convenience stores. This success is based on the introduction of flavour innovation and increased quality (Beef Central, 2017).


The concept of FFRs revolutionized dining out is in its inception with the combination of convenience and quick service (Wimalartne, 2017). With the rapid advancements of technology, modern FFRs have had to be quick to embrace and adapt these changes in order to be successful (Hardy, 2014). There have been many new technologies that have allowed fast food businesses to further commercialise themselves and boost sales. For example, food delivery systems such as Deliveroo, Menulog and UberEats collate multiple restaurant menus into one application to give customers a spectrum of selections. Drivers then pick up and deliver the meals to customers. These enhancements have mutually benefited customers and businesses. Incorporating new systems into their business models helps to increase convenience to consumers while decreasing operating costs and extending the reach of businesses. For instance, McDonalds actively uses UberEats to deliver to customers 24/7. This helped them to increase their delivery sales from 60% to 65-70% since the partnership started (Sharma, 2018). However, the implementation of new information technologies (IT) can be complex for smaller businesses with shallower investment funds (This Solution, n.d).

Because so many applications and softwares exist, it can be difficult for businesses to choose and commit to ones that will maximize their profits and customer perceived value. Businesses are caught between having to choose to risk investing in unproven technologies for a chance to capitalise early or follow industry leaders at the cost of lesser market share and positioning for security. Having to compete for customers’ attention means it is impossible to be a bystander without suffering losses (This Solution, n.d). Staying up to date on technologies to modernise the dining experience is a large barrier considering maintenance and upgrade costs (Hardy, 2014). Although, adapting new systems into existing ones can help a business gain a competitive edge over its competitors, experimenting with technologies can be expensive (This Solution n.d).

In general, consumers ultimately seek fast food due to the speed of service (Wimalartne, 2017). Ordering and payment is the most time-consuming process of a fast food restaurant (FFR). Business that are the best at incorporating systems increase the efficiency of this process, making it more convenient for the customer have the largest advantage (Wimalartne, 2017). Some of the most established and successful technologies include online platforms, social media, mobile ordering, self-serve kiosks, novel payments and home delivery (Moore, 2013).

Political/ Legal

The Food Act 2006 is a law that applies to businesses and activities that involve handling and distribution of food for sale. The standards are put in place to minimize incidence of foodborne illness. It acts to ensure food is safe, that businesses deal with the sale properly, and that they abide by the food standards code (Queensland Legislation, 2016). The responsibility of enforcement is a collaboration between state and local governments. However, in the case where the local government fails to fulfil its duties, it falls to the state government to enforce administration (Queensland Legislation, 2016).

There are minimum standards food businesses need to uphold. They are in place to keep the industry liable and honest (Queensland Legislation, 2016). The objectives are achieved through:

a. To provide for the licensing of particular food businesses; and
b. To provide particular licensees to have an accredited food safety program; and
c. To provide for the accreditation and auditing of food safety programs; and
d. To provide for the display of nutritional information for food; and
e. To provide for the monitoring and enforcement of compliance with this Act and the food standards code

Traditionally, FFRs were casual and convenient options of dining (Hardy, 2014). Today, this view has been superseded by the negative image of cheap and poor-quality food, as awareness of health and wellbeing are on the rise (Westcott, 2014). FFRs are being associated as one of the primary contributors to the alarming increase in national rates of obesity. Along with the surge of obesity, other comorbidities such as heart conditions, stroke and diabetes have also inflated and linked with poor diet (Stewart, 2013). In order to address this, the Australian government has made regulation changes and prioritized health education (The Conversation, 2016). FFRs are now required to display nutritional information of their products on their menus and in some cases have had to reformulate their food to decrease the amount of fat, salt and sugar (Stewart, 2013). Furthermore, talks of placing additional taxes on “junk food” are in discussion to further reduce consumption (The Conversation, 2016).

Many FFRs have tried to combat the stigma of being unhealthy by rebranding their business to better align with the national goal of improving health promotion. McDonald’s for instance, began to offer healthier choices on their menus such as salads and juice as well as international dishes like teriyaki salmon and souvlaki (Westcott, 2014). Pies and pastries are generally not the first things that come to mind when thinking about fast food. In that sense, Pie Face is better positioned relative to their FFR competitors. Like McDonald’s, Pie Face has a menu that provides customers healthier alternatives such as quiches and sandwiches.

Analysis of Internal and External Factors

Internal Factors

Internal factors provide insight into the consumer decision making process that is directly situated within the buyer. This includes personal and psychological factors.

Personal Factors

This is one of the most influential parts of an individual’s purchase process as it includes a buyer’s age and life cycle state, occupation, lifestyle, personality, economic state and self-concept (Davis, 2018). This is continually changing and their purchase behavior alters over the course of their lifetime. As mentioned in the target market, Pie Face attempts to stay “cool”, and targets young adults aged 15 to 30. The age group is a mix of:

- teenagers who like to be trendy
- adults in their twenties who are not concerned with the fast food stigma
- young parents who value passing on Australian culture to their children.

The specific personal factors that lead consumers to buy Pie Face may include: low income and low economic status (related to occupation - low income earners or students) as it is a younger demographic who may substitute an expensive or healthier lunch for a cheap pie alternative. Income levels affect what consumers can afford and their perspective towards money (Davis, 2018). The age bracket it targets would have less expensive tastes in food and their environment would promote quick food alternatives (i.e. students buying food to satisfy hunger rather than purchasing more sophisticated foods, or sports enthusiasts who are highly affected by the sports culture).


Excerpt out of 38 pages


Marketing Report about the Australian company Pie Face. Examining overall marketing approach
Strategic marketing analysis focusing on internal and external factors
Bond University Australia  (Bond Business School, Bond University, Gold Coast, Queensland, Australia)
Graduate / Master
Catalog Number
ISBN (eBook)
ISBN (Book)
Marketing, Fundamentals, Strategies, Pie Face, Recommendations, Porter, Environmental Factors, Analysis, Evaluation, Social, Demographic, Geological, Economic, Technological, Political, Legal, Internal Factors, External Factors, Personal factors, Psychological factors, Cultural factors, social factors, differentiation, overall cost leadership, Cost leadership, Sustainability, Crisis Management, Social media, strategy recommendations, perceptual map, marketing management, target market, competitors, mccarthy, product, price, place, distribution, promotion, marketing communication, integrated marketing communication, brand management, brand perception, imc, australia, food market, food, junk food, fast food
Quote paper
Christopher Roßmann (Author)Derek Ng (Author)Isabelle Stoffregen (Author)Debora Kocak (Author), 2018, Marketing Report about the Australian company Pie Face. Examining overall marketing approach, Munich, GRIN Verlag,


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