Assignment Number #03

Johnny Rockets Pakistan’s Strategic Mistakes

and Opportunity

Class/Section: 3-A
Group members:
- Arooba Jamal (02-111212-236)
- Hafsah Tariq (02-111212-380)
- Mahek Tahir (02-111212-152)
- Tabia Ayesha (02-111212-267)
- Salman Khan (02-111212-121)
 SYNOPSIS
Fast food and quick service restaurants are seeing increased business
in Pakistan. Since the late 1990s, KFC, McDonald's, Pizza Hut,
Burger King, Hardee's, Subway, Fat Burger, and Domino's Pizza have
thrived in Pakistan, particularly in its urban hubs of Karachi, Lahore,
and Islamabad. Local companies including Hanifia, Burger Lab,
Burger Inc., Burger Mafia, and Burger O' Clock also hold a sizable
amount of market share. Johnny Rockets Hamburgers was first
introduced at Karachi's Dolmen Mall, Clifton in December 2013 by
Hamdan Group, a division of Bandhani Group. The concept quickly
gained popularity and success, and it soon opened locations in Lahore
DHA and Islamabad Centaurus Mall.

After three years of repeated losses, Abdul Wahab Bandhani, a

successful transporter with a large capacity under the tutelage of his
father, was forced to reassess the operation in 2016. The top grade
ingredients used in the hamburgers and shakes, such as white onion,
beef, and ice cream, were initially imported from the United States.
The target market of the establishments was upper class children and
adults, including ladies, and the taste, service, and interior design
were impeccable. Also occasionally welcomed was the middle class.
But because the costs were so high—more than double what a
McDonald's lunch cost per person at the time—customers spread bad
rumours about the restaurant. 1350 against 650 rupees. Recurring
visitors ceased, and sales quickly declined. A mistake that was made
in addition to importing very expensive raw materials for the products
was spending a significant amount of money on the importation of
pricey equipment and other items in order to open 10 branches, but
only 5 outlets (3 in Karachi and 1 at Lahore and Islamabad each).
Employee unhappiness was a result of the management team's
repeated changes.
Johnny Rockets' worth decreased in comparison to its rivals because
the marketing expenditure was only increased by 3%. For better cash
flow, the management chose to resell Microsoft IT equipment, stop
importing raw materials from the United States, and rely on local beef
and other products that meet certain specifications. In order to lower
employee salaries and save money on rent and utilities, it was also
decided to move the Dolmen Mall stores in Karachi and Lahore to
Saba Avenue and MM Alam Road, respectively. For collaboration,
commercial banks like HBL, UBL, MCB, Faysal Bank, Standard
Chartered, and NIB were approached via their credit and debit cards.

Social media marketing was done through platforms like Facebook,

Instagram, and the U phone. The product price tags at the stores were
significantly reduced, and home deliveries also began. Consumers
were angry when they had to pay GST apart from the initially
extremely high pricing; the rate ranges from 14% to 17% depending
on the city. Due to its initial strategic errors and subsequent persistent
losses, Johnny Rockets was forced to shut down the business in
Pakistan despite all of its efforts. mostly because clients here seek
pricing that are competitive with those of the rivals.
 QUESTIONS AND ANSWERS

Question no#1: What should the strategy ahead be?

- The following techniques should be used in advance by

Johnny Rockets Pakistan in order to expand in the future:

1. Johnny Rockets Pakistan needs to serve both

vegetarian and non-vegetarian customer segments in its
target market by using demographic segmentation.

2. Johnnie Rockets Pakistan should put more of an

emphasis on non-personal marketing avenues. Include
the use of offline and online media, including social
media, events, newspapers, magazines, television, and
radio.

3. In today's world, social media is crucial and

significant. Instagram, Facebook, and Twitter are
currently the top 3 social networking sites. As a result,
Johnny Rockets must Post alluring pictures of the food
items on the menu to draw in clients. Additionally, the
company needs to write more frequently and routinely
about its current deals, new products, and other
promotions.

4. JOHNNY ROCKETS Targeting Pakistan's mobile

phone consumers requires the development of bulk
mailings using the AMP (accelerated mobile pages)
technology. AMP emails are distinct from regular
emails since they include interactive components like
order buttons, product information, subscription forms,
 sliders, animations, and an interactive menu showcase
that draws in more customers.

Question no#2: Should JOHNNY ROCKETS invest in

more branches and expand the coverage in market or
consolidate on the current branches?

- JOHNNY ROCKETS Pakistan ought to prioritise

branch consolidation as well as branch growth, in our
opinion.

- As the demand for their items rises, they could grow

their business.
- Profits have been substantial.
- having sufficient and ready access to resources.
- and have potential investors, but they should also
keep in mind consolidating existing branches
because:
- those existing branches are more well-known to
clients;
- those existing branches have a solid foundation that
will allow JOHNNY ROCKETS increase their
resources and stocks.
- Current branches with a more solid foundation will
enable Johnny Rockets to increase sales and
earnings.
- Therefore, for JOHNNY ROCKETS, both branch
expansion and consolidation are vital.
Question no#3: Should the prices of Johnny Rockets
remain low oconcentrat and concentrate or more guest
count or earn more revenue per customers by escalating
prices?

- According to us, Johnny Rockets ought to maintain

the costs low and prioritise increasing the number of
customers. For a bigger market share, Johnny
Rockets needs to build its brand identity at
affordable pricing. The pricing were initially
unreasonably high. A McD's dinner, for instance,
cost Rs 650 at the time. The price at Johnny Rockets
was Rs. 1350. Despite the superior quality of
Johnny Rockets' burgers and shakes, individuals
spread a nasty word about the restaurant. Later,
prices were cut to Rs. 425, but in response, McD's
cut its rates to Rs. 460. However, while revenue
climbed, customer turnover went up.

Question no#4: Should they introduce more

innovative products offers and lines?

- According to our perspective, Johnny Rockets

should concentrate primarily on its burgers and
shakes until it has won the patrons' allegiance
through the quality and affordable pricing of its
goods. More innovative product lines and offers
may be launched to grow the firm when it reaches
break-even and turns a profit. By investing in the
tools and supplies for 10 branches in Pakistan when
only 5 were actually opened—3 in Karachi, 1 in
each of Lahore and Islamabad, and one in Lahore—
Johnny Rockets committed a costly error. As the
 business starts to turn a profit, investments in new
items can be considered.

Question no#5: What could be done for brand

building and enhancing customer loyalty?

- In order to improve their services and build their

brand, Johnny Rockets can first refine their pricing
strategy by giving customers accurate prices for all
of their products. Then, they can enhance their
customer experience to further enhance their
services.

Question no#6: What was the right way ahead for

Johnny Rocket’s?

- For Johnny Rockets, the best course of action was to

first enhance all of their pricing strategies and
carefully consider market segmentation and their
target market, as well as to add price methods that
were based on those segments.