Marketing Management Report

FOODPANDA

A research report submitted

By

Sobia Farrukh
Muhammad Naseeb
Hafiz Arsalan Malik
Adil Usmani
Muhammad Bilal Arif

To

Sir Nauman Tirmizi

 Foodpanda: Marketing Management Report

Contents
Introduction:..................................................................................................................................3
Industry Overview:....................................................................................................................3
1.1: Corporate History (Food-Panda).....................................................................................4
1.2: Owner’s Profile:..................................................................................................................5
SITUATION ANALYSIS:............................................................................................................6
2.1: Foodpanda strategies:........................................................................................................6
2.2: Brand Market Share:.........................................................................................................7
2.3: Competitor Analysis (Strengths and weaknesses of competitors)..................................9
2.4: Marketing Strategy:.........................................................................................................11
2.5: Marketing Department Structure...................................................................................12
2.6: Value Creation:.................................................................................................................12
2.7: Management Evolved by Customer Touch Points:.......................................................13
2.8: Product/Service Development Strategy:.........................................................................14
2.9: Brand-driven Innovation.................................................................................................15
2.10: Pricing Strategy..............................................................................................................16
2.11: Consumer Profile............................................................................................................17
2.12: Channel Management....................................................................................................18
2.13: Financial Profile of the Company.................................................................................19
2.13: SWOT Analysis...............................................................................................................22
3: PROBLEM DEFINITIONS...................................................................................................24
4: ALTERNATIVES...................................................................................................................26
5: RECOMMENDATIONS........................................................................................................28

Page | 2
 Foodpanda: Marketing Management Report

1. FOODPANDA

2.

3. INTRODUCTION:

Industry Overview:

The central bank’s annual report on the e-commerce industry in Pakistan concludes that

the sector has a promising potential. The sector has witnessed rapid growth in recent years owing

to increased digital connectivity and the ease of transaction.

The State Bank of Pakistan states that the size of the e-commerce market in Pakistan is Rs. 99.3

billion in FY18 (FY17: Rs. 51.8 billion) with a yearly growth of 92 percent. But there is still a

huge untapped potential with e-commerce still being less than one percent of all retail shopping

done in the country.

This enormous untapped potential has recently attracted global e-commerce giants

including Alibaba, which has acquired Daraz.pk; and Ant Financial that acquired a 45 percent

stake in Telenor's Tameer Microfinance Bank.

Owing to the lack of availability of data for cash-on-delivery (COD), which roughly

amounts to 90% of total transaction volume and about 60 percent of e-commerce transactions, the

SBP has provided data for total digital payments (includes credit/debit cards, interbank funds

transfer (IBFT), prepaid cards and mobile wallets), which have grown by 93.7 percent in FY18 to

reach an impressive Rs40.1 billion as compared to Rs20.7 billion in FY17. The bank expects this

to grow at 25 percent for the next two years.

Page | 3
 Foodpanda: Marketing Management Report

1.1: Corporate History (Food-Panda)

Foodpanda is a global online food service, was launched in March 2012 in Singapore.

Their delivering marketplace headquarterred is in Berlin, Germany and operating in more than 40

countries across four continents including Thailand, Malaysia, India and etc. Foodpanda is the

fastest growing Rocket Internet venture in terms of country expansion.

Within Pakistan, Foodpanda is an online food ordering platform, focusing on delivery. It

has now evolved into a food delivery company. Previously, it was just a marketplace where

customers could place an order at the restaurant of their choice and their order would land to the

restaurant which would then deliver it to the customer which states that so Foodpanda was only an

order transmission service provider but now it has become a delivery service provider. Currently,

Foodpanda is Pakistan’s leading food delivery app and generated over Rs. 1bn for the food

delivery market in Pakistan in 2016. The Company has around 300 full-time employees and 7,000

riders in Pakistan which have been largely acquired over the past 6 months.

With over 1,000 local and international food chains on-board, Foodpanda currently offers

its services in 12 cities of Pakistan including Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad,

Multan, Hyderabad, Sialkot, Peshawar, Sukkur, Murree and Mangla. Acquisition of Foodpanda

was and its adjustment into the Delivery Hero’s portfolio. After acquiriacquired by Delivery

Herong Foodpanda in 2016, Delivery Heroand was did a global rebrandeding globally of the

brand by changing the logo, color and the identity of the brand through the implication of a more

modern and minimalistic touch as touched upon previously as well.

Page | 4
 Foodpanda: Marketing Management Report

Post-acquisition, Delivery Hero decided on how to amalgamate the brand into the overall

hierarchical structure and which management structure to leverage in order to assure the brand is

handled well.

1.2: Owner’s Profile:

Nauman Sikandar Mirza is CEO of Foodpanda Pakistan. Since founding his own

company in 2011 from his father’s living room, he has become the head of one of the largest e-

commerce companies in the country. He started on 7th July, 2011, with an online food review

platform called Food Connection Pakistan. He started from his father’s living room. He set up 4

tables and that was it. He did not have salaries to pay for the first month of operations, so he had

to make money every month or he would go bust. In a year’s time he listed 3,000 vendors on a

platform and reached 200,000 visitors per month.

After completing of MBA from Lancaster University, he had an opportunity to run one of

the largest restaurants in England. During that experience he discovered food delivery companies

and he saw them enter the UK market and grow quickly. In Pakistan there are millions of

customers and thousands of restaurants, but there was no platform that connected both. So he

thought that given his my experience in food and education in IT, heHe should pursue business in

the online food space.

Page | 5
 Foodpanda: Marketing Management Report

4. SITUATION ANALYSIS:

2.1: Foodpanda strategies:

Foodpanda is an individual brand under the umbrella of its new parent brand ‘Delivery

Hero’ but with no connection from the parent brand at all. However, its connection with one of its

sister brand ‘Foodora’ remains intact with some markets and customers often using Foodpanda

and Foodora names interchangeably.

The final decision made by the brand remains to operate it, as a separate brand. as that’s

Tthe nomenclature that Delivery Hero has been following for all of its delivery services.

However, the important decision to be made was, to of how to integrate the various markets of

Foodpanda within a management structure,- should it be the one owned and supported by the

international portfolio of the parent company or should it be relying on the central management

structure of the parent company in terms of decision making and control?.

Foodpanda’s Asian markets were decided to be integrated into the Foodora (sister brand)

management structure as both the businesses. were It’s pretty similar in terms of own delivery

operations and technological platforms. This would have enabled the company to be strengthened

and provide better and improvised services for restaurants and delivery operations.

However, Foodpanda’s markets in Middle East and Europe were integrated into Delivery

Hero’s regional management structure in order to combine a strong local approach with best

practices and relevant innovation from the central team of Delivery Hero.

Page | 6
 Foodpanda: Marketing Management Report

Since, Delivery Hero utilizes the House of Brand framework with the corporate brand

having no connection with the individual brand, the transfer of associations after the acquisition

from Delivery Hero to Foodpanda or vice versa were zilch.

Globally Delivery Hero uses the Hero archetype and presents itself as the hero that

provides the easiest way to one’s favorite food through the provision of its various online service

providers like Foodora and etc. However, the archetype or personality doesn’t really transfer to

each of its subsidiaries or individual brands since they have their own separate identities.

Hence, the acquisition of Foodpanda didn’t result in any major association transfer from

Delivery Hero to Foodpanda, in fact majority of people might not even know that Foodpanda falls

under the umbrella of Delivery Hero and that there has recently been a change in the parent

company at all.

The acquisition however did lead to the transfer of assets, markets and infrastructure to

the corporate company and the individual brand which would just necessarily mean an expansion

of the markets and what the corporate brand stands for, like just an addition to its global identity

and portfolio.

Another strategy that Foodpanda is using the full intensity of email advertising. After

ordering from Foodpanda you are more likely to get mails with different promotional coupons

frequently. The organization consistently attempts to guarantee that their client's first experience

stays wonderful and afterward they attempt to retarget them through limited and special messages.

The values and service that Foodpanda has been providing is resonant to the core product

of Delivery Food and justifies its positioning of providing convenient food delivery. The reason

why Delivery Food operates all the brands individually is just to cater the different markets

around the globe with different technicalities and drive individual brand based on those values

and customer drivers.

Page | 7
 Foodpanda: Marketing Management Report

2.2: Brand Market Share:

During its initial years (2015-2017) in Pakistan, Foodpanda was positioned as a niche

brand – a brand for the elite class. This was based on Pakistani market’s behavior where ordering

food is considered a luxury and is only done so by people who have the money to afford this

luxury. In line with this strategy, Foodpanda only launched its operations in certain areas of

Karachi and Lahore including DHA, PECHS, Model Town, Gulberg and covered all of Islamabad

i.e. areas that had a “burger” feel to them. The messages conveyed to these audiences were along

the lines of trying to encourage them to try new foods like sushi etc. The tagline was also in

English which said, “Order online with Foodpanda.”

However, since 2017 Foodpanda Pakistan has received targets to achieve hyper growth

from its headquarters. Realizing the fact that it would not be able to achieve these targets with its

current strategy, Foodpanda repositioned itself as a brand for the masses. It began to target all

areas of Karachi, Lahore and expanded to “non-burger” cities like Rawalpindi. Ali Gul Pir,

Shoaib Akhtar and currently Aamir Liaquat were chosen as brand endorsers as they have a mass

following. The brand’s campaigns began revolving around cricket which is a sport loved by the

Pakistani masses. Additionally, the tagline was also changed to Urdu and is now “Foodpanda

karo.” Name The name Foodpanda is a representation of the entire brand. The word “food” is

associated with the core brand offering i.e. delivery of food. “Panda” simply refers to the animal.

Firstly, it is associated with eating a lot which is essentially what the brand aims to do –

encourage people to eat more by ordering food through its platform, albeit being a slow animal.

Secondly, the brand originates in Asia where the population has a strong affinity with a panda.

Page | 8
 Foodpanda: Marketing Management Report

Thirdly, Panda is a lazy animal so the brand aims to promote the idea of lazy people who do not

want to cook food and just order it from a restaurant instead.

Thus, the word Foodpanda is actively conveying the essence of the brand from the

corporate perspective. However, from the customer perspective, the name is often associated with

the slowness of the panda and is a point of scrutiny amongst customers who fail to get their orders

on time.

Although, the name is not limiting itself to just food delivery as it does not incorporate

the word “delivery” in any way, it is limiting in the sense that it can only expand into food-related

ventures. Logo 2012-2017.The Foodpanda logo incorporates the iconic panda. The typography is

thick in orange color based on their original color scheme. The font used is sans serif as it tends to

give the brand a modern and friendly look.

2017-2019

The change in logo follows Foodpanda’s acquisition by tech giant Delivery Hero in

December 2016, changing its brand color from orange to pink. While the iconic panda still

remains at the forefront of its logo, it has been tweaked into a rounder and more “modern”

version. The font is still sans serif, however it is significantly thinner than before, giving the brand

a more sleek, minimal and contemporary look.

2.3: Competitor Analysis (Strengths and weaknesses of competitors)

Brand Name App presence Desktop Site Mobile Site

Foodpanda   

CareemNow   

Page | 9
 Foodpanda: Marketing Management Report

Eat Mubarak   

Cheetay   

 CareemNOW only launched in Dubai, Jeddah and Karachi is considered Foodpanda’s biggest

competitor by the marketing head of Foodpanda. He believes that there’s a great possibility of

massive number of discounts and ease of payments.

Until now $150 million have been invested with 33 million customers on the App. The food

delivery market in CareemNOW’s target countries is predicted to grow to around $25 billion by

2022.

It has very limited Facebook and twitter presence. The expansion will be followed by

Egypt. Careem NOW has an app that has 500K+ downloads with an average rating of 4.3.

However, the restaurants on Careem NOW are limited as it’s only in its introductory stages. Eat

Mubarak Sari Ali - a Social Sciences graduate from LUMS - co-founded ‘Eat Mubarak’ with

Yusuf Jan (ex-chairman Pakistan Software Houses Association).

 Eat Mubarak was launched to carve a niche in the digital economy with expedient, improved

food delivering system across the nation. Around 600+ restaurants and 800 eateries are onboard

with Eat Mubarak. On average 1500 orders are processed every day. Eat Mubarak is very active

on social media with on average 5 to 6 posts per day to keep the consumers engaged. Moreover,

70% repeated transaction are received on the App.

Since, it’s just based in Pakistan and is planning on running pilots in New York, it’s not a

big competitor for Foodpanda. According to Nauman Mirza, marketing head of Foodpanda, Eat

Mubarak is still growing, and it does not have the finances to compete with a giant like

Foodpanda on a bigger scale.

Page | 10
 Foodpanda: Marketing Management Report

 Cheetay, founded by Ahmed Khan, CEO of Cheetay.pk, was launched in 2015 in the cultural

capital of Pakistan, Lahore. Initially, starting off as a food delivery service the business expanded

vertically into providing logistics for other goods, namely books, cosmetics and healthcare. After

Lahore, Cheetay has established its roots in Islamabad and Rawalpindi covering more than 300

restaurants. The expansion to Islamabad, with the aim to provide users with a greater customer

experience than the alternatives, supports the long-term growth plans of cheetay.pk to become the

leader of the industry.

After expanding the company successfully in Lahore, Islamabad and Rawalpindi now

Cheetay has expanded into Karachi with its introductory promocode KHI300.

According to twitter, Cheetay has received several awards in development of its business such as

digital marketing, supply chain and a best startup award.

Since it’s a start-up, they have about 455 followers and 7 are followed. They are very active on

Facebook, posting about all the deals available on the App and recently as they have joined

Karachi exclusive deals are available for Karachi ties with cities mentioned as well.

2.4: Marketing Strategy:

Considering the nature of its business, the company has to consider customer first while

putting everything on second priority. Foodpanda has been seen to prioritize customer over

anything. This is clearly indicated through the strong technology being used by the company that

ensures real-time customer feedback. The company has a dedicated team to deal with the issues

faced by the customers. The team has the only objective which is to keep the customer happy and

not let them such an experience that would break the relationship.

Page | 11
 Foodpanda: Marketing Management Report

Certain bad experiences with the customers made it clear to the company that the

negative word of mouth can spread like anything in the marketing especially among the exact

target market. The very bad word multiplies exponentially and also because of the latest algorithm

used by social media nowadays, the bad word of mouth actually reaches the target market faster

than any other platform. Thus, the company has been taking customer feedback very seriously

which indicates that Foodpanda has clearly chosen a strategy focusing on customer cultivation.

Foodpanda focusses on prioritizing to cultivating customers. Being a food lover is all

about seeking out the freshest flavors in the city, and the unforgettable experiences that come with

them. Foodpanda helps our food lovers discover that fresh flavor anywhere they are, whether that

means a healthy salad for a late night at the office, indulgent pizza for a no-fuss supper party, or

bakery savories in the park for a romantic picnic. The Foodpanda platform offers up to 50%

off on some of the most popular Pakistani restaurants; the most celebrated of these being

OPTP, Kababjees, Broadway, Domino's, McDonald's, Burger Lab, Burger O' Clock and

Karachi Biryani. Foodpanda understands everyone's love for food and is helping make the

process of ordering and feasting on meals at the most crucial time. 

2.5: Marketing Department Structure

As the company operates in many counties, each company has a different marketing

department structure. Foodpanda ins Pakistan does not seem to have a dedicated R&D

department. The marketing department is divided into main two sections. One is dedicated to the

customer care and the other one is for advertising. However, Foodpanda Corporate office which is

in Berlin Germany does have a department which mainly focuses on bringing new technology to

the company. The department works very closely with the IT department to ensure that all the

technical aspects are taken into consideration.

Page | 12
 Foodpanda: Marketing Management Report

2.6: Value Creation:

Foodpanda ensures the healthy, tasty and unique experience of eating without the hassle

of travelling or prior planning. Foodpanda has become a huge online portal and this has been

possible because of several pricing policies are undertaken by the brand. It has adopted a value-

added pricing policy as it offers quality items for a reasonable price to its customers. Customers

are offered several incentives like discounts and special offers to lure them away from rival

brands. It also makes its services more affordable and ultimately results in more orders and better

revenues for Foodpanda.

Foodpanda Convenience, availability of over 1000 restaurants, affordability (minimum basket

size is Rs. 50 and no delivery fee).

Page | 13
 Foodpanda: Marketing Management Report

2.7: Management Evolved by Customer Touch Points:

Target group 1 – Students:

The first target audience we are targeting are the students belonging to the age group of

18 to 30 years. The students would be belonging to socio economic class A, B and C. The

students are generally tech savvy, innovative and fun loving seeking convenience in

mundane tasks. For instance in the case of eating, they will strongly prefer to order food

rather than cooking it. Such audience can be targeted through brief ads playing while they

use their social media networks, YouTube, and search engines like Google. Branding

through billboards, banners and standees in and near their educational institutions will

also be effective to instigate a desire for a delicious meal. The discount offers will arouse

this audience to order from Foodpanda as they are mostly too young to be employed, and

thus, short of cash.

Target group 2 – Stay at home:

The second target audience we are targeting are the house wives who are above 25 years

of age. They belong to the socio economic class of A, B and C. The house wives might

not be tech savvy but already have too many responsibilities at home that cooking

becomes a hectic task despite of being an obligation. We have to shift them from cooking

food at home to ordering it from Foodpanda, which is more convenient and fun.

Foodpanda is offering all sorts of cuisine and not just limited to a few. It is very

important to cater and satisfy this target audience as they are the influencers in a

household. The decision maker of the house listens to their advice as they are the ones

that are actually running everything in the household. They can be tapped by playing

Page | 14
 Foodpanda: Marketing Management Report

advertisement on TV especially on the drama channels. They spend the whole day at

home and the only entertainment they get is by watching TV shows and using social

media. This target audience can also be catered by tapping on their social media networks

via 5-second ads or teasers.

Target group 3 – Professional:

The third audience we are targeting is the working class who are above 28 years of age.

They belong to the socio economic group A, B and C. They are the audience who are

short on time because of a busy work schedule and are in search of convenience over

ambience when it comes to eating. Especially the working woman who would want to

order food instead of cooking it at home after work. This target audience can be best

targeted through their social media networks as it is the most convenient entertainment

they have when they find a little spare time for themselves. Billboards, banners and

standees in and near their offices will be an effective means of communication since they

are already confused and open to ideas for their lunch break.

2.8: Product/Service Development Strategy:

Foodpanda is very efficient in making and executing its product development strategy which in

their case, offering service to customer i.e. online food ordering service and getting customer’s

feedbacks.

The strategy is a perfect blend of how to combine customer insights and their buying behavior

with technology and coming up with a strategy most suitable for the brand.

Page | 15
 Foodpanda: Marketing Management Report

Since its inception Foodpanda has evolved to become more customer centric along with

maximizing customer lifetime value through its strategy.

It all start with online application accessible through various ways as follows

 Cellphone

 Syncing Facebook account with the application

Talking about the online application of Foodpanda, it can easily be said that it’s the most user

friendly application when it comes to online food ordering services.

App Install
 
Browse
Restaurant
 
Add to Cart
 
Place 1st Order
 
Repeat Order
App Install

Page | 16
 Foodpanda: Marketing Management Report

Its easy interface and continuous working on the customer feedbacks helps develop the service

more customer-centric. After every order the customer is asked to rate and review the order to

delivery experience. The positive feedback helps maintain the goodwill of the brand while the

negative feedback help with the product/service development.

2.9: Brand-driven Innovation

Foodpanda made excessive use of research and feedback mechanism. They have employed SEOs

for this from where they get detailed customer insights. That includes buying behaviors and

patterns as well and that helps in designing services accordingly.

Foodpanda believes in building strategic alliances as follows

 Local restaurants

Collaboration with local restaurants helps Foodpanda build their customer base irrespective

of any specific customer associations.

 Grocery Stores

In future perhaps, FoodpandaFas can get all the ingredients to become an online grocery

store. At present one can say that Foodpanda is mixing two strategies i.e. Market penetration

with Product development. The future approach of having to enter into grocery market will

be a related diversification for Foodpanda that can increase Net Revenue without having

much to Change in their business model.

Page | 17
 Foodpanda: Marketing Management Report

 Payment Partners

This can have a great impact on cash flows of Foodpanda as different modes of payment

from diversified platforms can increase their monetary activities which can have a great

impact on Foodpanda financially. Also in terms of customer convenience that provides a lot

of payment options to customers.

2.10: Pricing Strategy

Foodpanda’s strategy on pricing can be classified into two arrays because of their business model

that includes B2B and B2C operations.

Foodpanda helps restaurants swell their revenues by increasing sales volume thus in return they

charge a value added price from them. They make sure the customer from a certain restaurant

buys particular quantity of food.

Foodpanda on the other hand when it comes to their B2C operations charge price for two facets

i.e. the application which is free to download and log in to. Secondly the Foodpanda charges its

prices for the core services that they provide. The latter price depends on location of customer in

relation with the restaurant from where the food is ordered. Foodpanda often is liked by its

customers where it does not require to order a minimum quantity to avail discounted prices

during special offering days.

Foodpanda is using its price strategy to build its brand image. Their pricing strategy fits well

with convenience they are offering to customer having to get food at their doorstep. Also in

terms of its B2B operations their pricing strategy helps the restaurant owner to build on their

revenues.

Page | 18
 Foodpanda: Marketing Management Report

2.11: Consumer Profile

Foodpanda is one of its own kind when it comes to customer profiling which enables it to stay

ahead of their competitors. They have done in a way that enables them to identify their most

profitable customers. This ion return enables Foodpanda to design its services and special

offering for the most profitable customers.

Through its app they have profiled their customer into three categories

 Users who have used the application least

Such users only view the application and goes through the certain items the application is

offering e.g. browsing through the menu.

In this individual category they have profiled users on a scale of

Very recent Less recent

 Users who have shown interest in food items

There are certain user that adds the food items in their cart but they don’t order it. Their activity

is also measured on a scale of

Very recent Less recent

 User who are frequent buyers over a certain period of time per user who have at least

ordered something from Foodpanda at some stage.

Page | 19
 Foodpanda: Marketing Management Report

Each category of users are monitored closely and the changes in scaling pattern of each category

is tracked. Specified services are then designed for each category of user based on their activities

over a certain time frame.

2.12: Channel Management

Foodpanda exists majorly because of its online Channel. The company cannot survive

with a traditional channel as the only unique selling proposition it has is the online selling option

(selling through mobile application and website). Like many other businesses which operate

solely through an App, Foodpanda also manages most of the customer through its mobile

Application. The major focus on becoming a highly responsive platform that ensures quick

delivery and response.

As far as the online platforms like such businesses go, there has been two main market

channel strategies available namely “Aggregators” and “New Delivery.” The Aggregators is

considered to be a traditional platform which simply brings many restaurants together at one

place. This allows consumers to choose from a huge of deals which are mostly based on the

price. This types simply takes the order from customers and routes the same to the specific

restaurant. Once this process is done, the restaurant is responsible for delivering the food.

The second strategy is called “New Delivery” in which multiple restaurant connect

through one website and Application. The product is not delivered by the restaurant by the

company which is offering the platform for this restaurant. This type is mainly targeting the

restaurant which do not have their own deliver channel. The website manages all the delivery

operations and also takes responsibility of customer satisfaction and feedback. Foodpanda comes

under this example as if delivers the food by itself. A customer can place the order through
Page | 20
 Foodpanda: Marketing Management Report

Foodpanda website and then everything will be done by the company itself starting from picking

up the order to delivering it to the destination.

2.13: Financial Profile of the Company

The following data is extracted from the annual report of “Delivery Hero” which is the

parent company of Foodpanda. A separate financial profile of Foodpanda in Pakistan is not

available online and the company did not respond to our email requesting the financial reports.

Thus, we are using the following data for our analysis. In the financial profile, we have included

company’s balance sheet, income statement, and cash flow statement. The most important

number is the profit or loss. In this one, it can be seen that the corporation is faces heavy losses at

the moment.

Page | 21
Foodpanda: Marketing Management Report

Page | 22
Foodpanda: Marketing Management Report

Page | 23
 Foodpanda: Marketing Management Report

2.13: SWOT Analysis

Strengths:

In Pakistan, Foodpanda is somewhat the initiator of food delivery business by doing

thorough research, creating a segment and then paving its way to sharing the customer

pie. It is one of the most renowned and largest food delivery services today. Foodpanda,

as a brand, enjoys a strong financial background due to its parent company, Delivery

Hero. Delivery Hero is a German giant that has 30 brands under its portfolio which in

itself portrays its financial worth in the market. This financial muscle gives Foodpanda

the edge to offer great discounts to its customers. Majority organizations don’t have this

benefit resulting in companies operating for 6 years above, become a minimal threat or in

some cases none at all. It enjoys a good worldwide brand image. The international

company gives way to a better organizational structure, managers, trained employees and

thus, a better customer support. It provides an easy to browse and user-friendly platform

which offers a wide range of restaurants giving a huge variety of choice to customers to

choose where to eat from. The delivery is free for most restaurants. The 24-hour service

and online payment makes customers get more attracted to it.

Weaknesses

Foodpanda is limited to certain parts and does not yet cover all areas in a city. Orders are

only available from restaurants that are in the zone of the order placed. This is a weak

point as all the restaurants will not be available at all places. Foodpanda lacks customer

loyalty programs to make the customer stay with them unlike its competitors. Some cities

experience extremely slow delivery and therefore lacks customer interest.

Page | 24
 Foodpanda: Marketing Management Report

Opportunities

International Advertising Bureau states that approximately 69% of the people use mobile

apps to order food. This is a growing market with a possibility of an enormous range of

potential customers. They have the opportunity to expand to all the cities and countries

all over the world. To preserve quality, they can ask people for their feedback that is,

asking for their complaints and praises. Shorter delivery times can build customer

satisfaction as well as attract more customers. Introducing reward programs and shorter

delivery can be major factors to retain customers and develop loyalty. More than 70% of

a restaurant’s revenue come from its loyal or retained customers. These factors can

improve their chances of re-ordering.

Threats

Foodpanda’s competition is gradually increasing in recent years. Careem by launching

CareemNow is by far the biggest threat to Foodpanda. Foodpanda has a history of taking

over weak brands to show and maintain its dominance in the food delivery market.

However, Careem is a BIG brand with a financial muscle in the competition.

CareemNow stepped in the market giving 50% offs for first five orders to every

customer. Now this is a customer reward that Foodpanda lacks to provide. Interestingly,

both these brands used peculiar or irreverent tone of voice in their communications yet

our study shows that CareemNow is taken more ‘seriously’ for its funny gimmicks while

Foodpanda’s humor is generally not considered very funny. Moreover, CareemNow is

known to have an exceptional customer service when it comes to speed (except for some

negative instances). Whereas Foodpanda is bashed mostly for its customer service
Page | 25
 Foodpanda: Marketing Management Report

making it harder to beat the new competition even harder. Low obesity rates, low

customer base, and neglecting potential competitors can put Foodpanda in hot waters

over time. Pakistan’s economic instability, inflation and high taxes make it hard for

businesses to stabilize and keep the customers retained.

Page | 26
 Foodpanda: Marketing Management Report

5. PROBLEM DEFINITIONS

1. Covid-19

The latest issue faced by Foodpanda like many other companies is to handle the crisis of

COVID-19. A business like Foodpanda depends merely on other businesses. Here, it is about

the restaurants which cannot function because of the pandemic. We cannot assume that the

things will be the same suddenly and the business will start functioning like before. Thus, the

first major problem is take initiative to survive in such a novel issue.

2. Heavy Financial Losses from the Corporation:

As mentioned in the financial statement, the business as a whole is not profitable at all.

Instead, a huge loss can be seen. This problem is connected to various other issues. However,

it can be assumed that improvement in the major processes like delivery of food and

customer service can increase the overall revenue and also bring positive change in the

financial state of the company.

3. Low Loyalty in the Segment

Although Foodpanda has a dedicated team to deal with the issues faced by the customers

whose only objective is to keep the customer happy and not let them such an experience that

would break the relationship. Still Foodpanda loses a customer whenever there is one mistake

regarding customer care or food delivery. As discussed before, restaurant businesses have

Page | 27
 Foodpanda: Marketing Management Report

been promising absolute customer service and accurate delivery time. However, not a single

business has successfully delivered the exact promised. Thus customers do not remain loyal.

4. Lack of Discounts on Preferred Restaurant

The sole purpose why customers choose to order food through Foodpanda is because of the

price discounts. Foodpanda does not have a control over the discounts offered by the

restaurants. Customer complain that they do not get discount on their favorite restaurant and

this is hindering the customer retention ratio of the company.

5. Economic Instability:

The increasing rate of inflation has decreased the buying power of the customers. The

customers who were habitual of enjoying this “luxury” are now giving it second thoughts.

6. Lacking Complete Market Penetration:

Foodpanda does not cater all areas in a city. This results in losing a fair amount of potential

customers who remain untouched. Also, Foodpanda is only available in 12 cities of Pakistan

including Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad, Multan, Hyderabad, Sialkot,

Peshawar, Sukkur, Murree and Mangla. This keeps a lot of market untapped and costs a lot

of potential revenues.

7. Potential Competition:

Foodpanda’s competitors providing similar applications suggest that growth is limited. They

will have to come up with a strong USP other than giving discounts in order to maintain or

Page | 28
 Foodpanda: Marketing Management Report

increase their market share. The strategy of acquiring the competitors is not enough if an

equally financially strong competitor enters the market, which in this case is CareemNow.

8. Lack of consistency:

The customer service all over the country is inconsistent. While customers in Karachi are

very satisfied with Foodpanda’s services, there are some customers in Rawalpindi and

Islamabad who are dissatisfied and do not even use the application.

9. Excess of Human Capital:

The financial statements from past few years have shown a relatively low profit margin. This

is because the excess of human capital. Foodpanda, since the beginning, was more inclined

towards focusing on technology rather than investing in human capital. But due to the

penetration in Pakistani market, generated the need of more human resources. The Company

has around 300 full-time employees and 7,000 riders in Pakistan which have been largely

acquired over the past 6 months.

10. Increasing Rate of Negative Feedback:

Negative feedback can spread like a grassfire. Especially in this this digital era the bad word

of mouth actually reaches the target market faster than any other platform through social

media.

11. Absence of R&D Department:

Page | 29
 Foodpanda: Marketing Management Report

Foodpanda Corporate office which is in Berlin Germany has a department which mainly

focuses on bringing new technology to the company. The department works very closely

with the IT department to ensure that all the technical aspects are taken into consideration.

This lacks in Pakistan and hence hinders the growth of the business.

6. ALTERNATIVES

Introducing Customer Reward Programs:

Foodpanda only offers discounts on restaurants. The customer does not feel sense of loyalty in

this unless there is something especially designed for him. If customers are given offs, offers a

discounts based on their purchase or usage history, they’ll feel more encouraged and inclined

towards using the service. Careem plays on this strategy. It offers 50% off on first five orders

only if the customer syncs the CareemNow app with his Careem app. This way only Careem

users can avail the CareemNow discount.

Complete Penetration in the Existing Market:

Instead of running after spreading all over the country, Foodpanda should first completely

penetrate in its existing city. Introducing and advertising of the service will be easier and less

costly as most of the potential customers must have seen or heard about it from somewhere

somehow. Plus, it will increase the number of customers in the same region.

Shift Marketing Focus:

Page | 30
 Foodpanda: Marketing Management Report

Foodpanda should shift its marketing focus to “low prices, exclusive deals, discounts, and all-

time offs.” This will affect two factors: first, all the three target audiences are inclined towards a

“less expenditure and more savings” phenomenon and will be highly attracted to it. Second,

people affected by inflation and economic conditions can still have an option in their minds.

Value Addition:

Customers will always root for value added product and services more than anything. Foodpanda

can add value by bringing to practice what the customers want. The food to be delivered hot and

fresh within 30 minutes. The rider should always have change. There should be a feedback

option not only to just rate the restaurant but to ask the customers to rate Foodpanda and suggest

what are their shortcomings and benefits. Then work on the brand offerings as per the

suggestions. This way the customer will feel listened to.

Explore More Vendor Avenues:

Foodpanda has added “Ghar ka khana” and other local food chains in their menu. They are

exploring different avenues to add variety of choice for its customers and not just stick to the

same old restaurants that its competitors are also providing.

More Delivery Options:

Foodpanda has now spread its vicinity by providing restaurants with the facility to deliver orders

themselves. The order may come through Foodpanda but the restaurants now have the allowance

Page | 31
 Foodpanda: Marketing Management Report

to deliver and get feedback from the customers directly. Initially, Foodpanda handled the

deliveries itself which as stated before has increased the human resource costs resulting in low

profits.

7. RECOMMENDATIONS

The recommendations are based on the above mentioned problems.

1. Covid-19

The pandemic is going to change the way everything is done in the world. This will also include

the way people prefer food. The fear of unhygienic food will increase and definitely decrease the

frequency of eating outside. In this issue, Foodpanda can start a campaign on hygienic food to

communicate to the world that the company is really concerned about this plague.

2. Finding: Low loyalty in the segment

Foodpanda can offer its customers the option of comparing different menus in terms of the

price and rating. This will decrease the customer indecisiveness and help them choose the

best alternatives from the wide change of menus. Such options have become very old in the

gadget market where customers can easily compare the specs of the products easily. It can

become a platform for advertising new food idea all around the world. The company can

play a role of market leader to bring the entire food industry issues on one platform.

Foodpanda also needs to work on cultivating its customer relationship management. They can

provide extrinsic rewards to customers in order to compensate for a negative feedback and hence

work on retention.

Page | 32
 Foodpanda: Marketing Management Report

3. Lack of discounts on preferred restaurant

The third recommendation is built around increasing the metric of discounts which will in turn

lead to an altered value proposition and advocacy system and that will help in strategy building by

allowing Foodpanda to maintain its point of parity. The recommendation is to offer customized

discounts based on a rewards system. As mentioned by some of our focus group participants, we

have observed that they feel that even though there are discounts, those are not as relevant. The

discounts are on eateries that are less popular, and the discounts are often useless for the

consumer. As a remedy to this issue, Foodpanda can offer rewards systems in addition to

discounts.

These rewards can work by either offering discounts on orders above a certain amount,

by offering discounts of repeat orders or giving discounts on the restaurants that a particular

consumer orders most frequently from. Doing this, will achieve multiple objectives. By giving an

incentive to the consumer to order larger quantities and discounts on repeat purchases, Foodpanda

can achieve its goals of increasing customer relations through repeat purchases and engagement

as well as brand awareness through recall and salience.

Consumers will be less likely to order from elsewhere if they are motivated to stick with

Foodpanda to get more and more rewards. The tactical strategy be based on advocacy systems and

will include offering referral codes to influencers or celebrities who can give them out to their

followers or can give them out during giveaways. The referral code will lead to rewards for

influencers who will recommend the brand to prospects and eventually those prospects will lead

to revenue for Foodpanda.

4. Economic Instability

Page | 33
 Foodpanda: Marketing Management Report

Foodpanda has to deal with the unstable economic condition of Pakistan. This issue can only be

catered by bring innovation to the processes and ensuring that the cost of the processes is

minimized. The company can also collaborate with the restaurants and help them adopt newer

and better ways to reduce cost and offer better rates to the customers.

Page | 34
 Foodpanda: Marketing Management Report

5. Lacking Complete Market Penetration

Customer Expansion – Foodpanda must expand its horizon to meet more customer requirements.

It will have to tie with many restaurants and bring more customers to the website. This will

provide more opportunity for the business. They need to cater to all the cities in Pakistan not just

the 12 big ones and also penetrate in them completely, not leaving any area untapped.

6. Potential Competition

Foodpanda has to come up with a certain offer that make it stand out and remain strong in the

competition. The company can set up may customer loyalty programs to make the customer stay

with them. They could initiate some offers, some reward programs, to make them sustain with

them. This would provide a huge opportunity for them. They could initiate some offers, some

reward programs, to make them sustain with them. This would provide a huge opportunity for

them. CAREEMNOW example.

7. Lack of consistency

There needs to be a lot of work done on improving the customer service and making their

communication not forcefully funny (Also they need better influences/celebrity endorsers).

Just price cuts can be only a short term tactic to stay in the market and they really need to

improve upon things and have USPs which can’t be easily copied or imitated by competition.

Page | 35
 Foodpanda: Marketing Management Report

8. Controlling the Negative Feedbacks:

The best way of controlling the negative feedback is by spotting the root customer who is

unsatisfied and provide him with a positive experience. This can be done by complimentary food

deliveries, solving the issue that the customer faced, compensating him in monetary terms, or

even providing with gift vouchers etc. a positive response on the social media from him would

boost Foodpanda’s goodwill

9. Developing an R&D Department:

This department will bring out the innovation that currently lacks in Foodpanda. The new

innovations might make it easier to retain the present customers and might also bring in the

potential ones. Hence, growth is guaranteed.

10. Product Differentiation:

Foodpanda can increase its avenues by adding more products and not limiting to restaurants only.

For example, they can offer delivering groceries to the customers. This could be a point of

differentiation for Foodpanda as no other competitor is offering these services. Especially in a

time like this, the lockdown due to COVID-19 is making it hard for the customers to step outside

their homes. This can be taken as an opportunity for this service successful and popular in the

market.

Page | 36