“With love, from my kitchen to your table”
The journey begins:
Khuliswa Mazizi, the founder of Kusta’s, started her business in 2020 in Pretoria, South Africa, when she followed her passion, believing that a delicious meal starts with the best ingredients and sauce. Having been in lockdown with the Covid-19 pandemic, Khuliswa rediscovered her passion for cooking and producing sauces made from traditional, all-natural ingredients. This is how her sauce business started. It gave her great contentment to share her passion for life through her sauces, making meals delicious, and bringing warmth and happiness to homes. Khuliswa started her sauce business with the intention to contribute to the promotion of healthy eating habits in South Africa. The surge in lifestyle diseases, such as obesity and diabetes, urged Khuliswa to use natural, plant-based products and promote healthy lifestyles. Khuliswa is the owner of the business, with one permanent employee and four part-time employees.

The vision for Kusta’s sauces is to aspire to be the preferred food partner and a reliable producer of healthy and delicious agro-processing products. Kusta’s values are as follows:

– Integrity: to be committed to being consistent and authentic.
– Quality and freshness: to continuously produce fresh and healthy products that are of good quality.
– Accountability: to be responsible for our actions and contribute to the alleviation of socio- economic issues in our society.
– Customer-centric: to always satisfy the needs of our customers through our product.

The sauces are an expression of Khuliswa’s passion and commitment to her customers and she takes pride in the following elements of her business:

– It is a 100% black female-owned company.
– It is proudly South African, and the sauce ingredients are sourced locally.
– Only fresh ingredients are harvested and used.
– It produces quality sauces, which are SABS-tested and approved.
– It produces versatile sauces.
– It promotes a healthy lifestyle (sugar-free, preservative-free and gluten-free).

Product: It is a sauce for everything
The sauces come in three different flavours: original, mild and hot. The sauce bottles are branded in such a way as to clearly demonstrate the differences in the flavours. Fresh local ingredients are used to give the sauces an irresistible, great taste. The main ingredients are tomatoes and herbs, which are known for their numerous health benefits.

The sauces are versatile and easy to use – just heat and serve. They can be used to spice up any meal; are best served with pap, pasta, bread or samp and can simmer with the protein of your choice. Khuliswa and her team continually strive to use the best nutritional ingredients and delicious flavours that contribute to a balanced diet. Khuliswa makes use of product positioning by emphasising the health benefits of her sauces. She differentiates herself from her competitors by being the healthier option, being delicious.

Marketing strategy
Khuliswa is of the opinion that all her marketing strategies must begin and end with the customer in mind. She measures her success by the satisfaction of her customers. She currently relies heavily on word-of-mouth marketing and referrals. Kusta’s has a Facebook page with 375 followers thus far. Although there are no reviews on her Facebook page, numerous photos are posted demonstrating the versatility of Khuliswa’s sauces. Kusta’s is also active on Instagram, with 64 followers. Khuliswa wants to increase her social media presence by increasing her followers on Facebook and Instagram and by creating a loyal customer base that makes use of debit orders when purchasing her sauces. Kusta’s also uses WhatsApp to communicate directly with customers. Kusta’s has a professional, eye-catching, interesting and well-designed brochure that describes the business’s products. This brochure can also easily be shared by customers following her on Facebook and Instagram.

Pricing strategy
Kusta’s sauces are priced in a way that emphasises affordability to customers. The sauces are versatile in their use; and customers get good value for money. The sauces are positioned as a health-conscious option, which will play a critical part in customers’ perception of the price. Health products are normally priced higher than your regular products, but Khuliswa has managed to price competitively in the market in which she operates. A competitive pricing strategy is the process of strategically selecting price points for your goods based on competitor pricing in your market or niche, rather than basing prices solely on business costs or target profit margins. Kusta’s also takes costs and margins into consideration and adjusts to the economic considerations, while observing the consumer habits of its current market, which play a role in its pricing. Khuliswa has identified various returning customers who are happy with the pricing and must now evaluate whether this pricing strategy will resonate with the rest of the market they are tapping into. While Kusta’s considers itself a business that uses a competitive strategy, it is important for them to constantly assess both the changes in the economy and the changes in competitor prices to keep abreast of customer expectations.

Distribution strategy
Kusta’s sauces can be ordered directly. Khuliswa has been thinking about alternative options for her distribution strategy, including the following:

– Creating an online shop.
– Placing her sauces where the health-conscious customer may be, for example at the local farmer’s market, flea markets, health shops and gyms.
– Creating awareness by placing and marketing her products in conjunction with other local businesses, such as chip and dip, tortilla or kota shops.

Ensuring that the sauces are accessible to customers is critical, and customers are more interested in products being delivered to them now than ever before. While Khuliswa accepts direct orders and personally delivers the sauces to the clients , she has experienced financial loss when a customer orders only one bottle in an area far from where she operates. Owing to this financial loss, Khuliswa considers using a set delivery fee within a 30 km radius and charging additionally for any distance further than that. Khuliswa also considers making use of delivery services to ensure consistent delivery of her sauces to consumers.

Competition
Khuliswa is faced with various competitors in the market. Being in an industry that is already developed and highly competitive, Khuliswa constantly monitors how her business competes on price, promotion, processes, distribution, and product positioning. She has identified her current competitors as Ina Paarman Foods, Chaloner, Classico, Barilla, Wellington’s, All Gold and Mrs Ball’s. Khuliswa wants to conduct a proper competitor analysis to understand the extent to which these competitors pose a threat to her business.

Challenges
Kusta’s, being a small-to-medium-sized enterprise (SME), is experiencing the following challenges:
– Sourcing: The sourcing of raw ingredients from regular suppliers, which results in an unstable stock supply.
– Price fluctuations due to the seasonality of fresh ingredients.
– A lack of financial resources with no financial backing. This leads to Khuliswa not having the budget or funds to introduce new products to her sauce range. Kusta’s therefore only has a limited range of sauces.
– Location: The sauces are produced in one location only; and Kusta’s strives to expand the business to other provinces in South Africa. Having more wide-spread business locations where the sauces can be produced, could also lower distribution costs.
– Marketing: Creating and implementing more effective marketing strategies, which are cost-effective to reach a wider audience.
– Market share: Increasing growth in various markets, like their competitors.
– Despite the fact that Kusta’s sauces are health-oriented and SABS-tested, the business wants to capitalise on this strong element in a more effective way.
– Product distribution: Lack of a consistent courier or delivery services rendering consistent services to clients.
– Despite the passion displayed by the founder, she relies much on informal business methods such as word-of-mouth and trading mainly with close associates and family members.

Target market
Broadly speaking, Khuliswa’s target market is everyone who would like to eat healthily and who falls into the lower to middle-income categories. Khuliswa, however, wants to redefine her target market and narrow her target market down. It has been suggested to her to target the following consumers/places:

Currently, the customers wield enormous power over Khuliswa, because the company relies on a circle of a few customers, resulting in them demanding lower prices in exchange for their loyalty.

QUESTION 1

Propose five actionable strategies for Kusta’s to expand its market reach and acquire new customers in different provinces of South Africa. In your answer, explain how Kusta’s can overcome location-related challenges (reconsider its distribution) and increase its presence in diverse markets to improve customer satisfaction and loyalty.

QUESTION 2

Khuliswa knows that customer loyalty can help her business boom in the best of times, but that it can also help her business survive through tough or challenging times. Khuliswa wants to retain her loyal customers and wants to attract new customers. Khuliswa wants to create a CRM plan for her business, but she is unsure about the implementation of certain steps. Your task is to come up with practical examples of how Kusta’s can implement certain steps in the CRM planning process. The steps are listed in chapter 8 of the textbook and are explained throughout the study material. Apply steps 1, 5, and 8 of the CRM planning process to Kusta’s. Let the mark allocation for each step guide you.

Note: Marks will only be awarded for the practical discussion of these three steps. Practical strategies and examples, based on the provided case study, are required to demonstrate your understanding of these steps.

Step 1: Pre-planning stage (5 marks)
(Include a practical discussion on the reasons why Kusta’s needs to plan a CRM strategy, the resources she will need to implement the strategy, and why it is important to retain existing customers and attract new customers.)

Step 5: Competitive benchmarking (10 marks)
(Include an in-depth analysis of Kusta’s competitors. You are encouraged to conduct external research to come up with an in-depth analysis of existing and/or new competitors for Kusta’s. Do not merely repeat the information stipulated in the case study)

Step 8: Selecting appropriate CRM technologies (10 marks)
(Include an in-depth discussion on suitable software and promotional technologies for Kusta’s)
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Technical care requirements (5 marks)

Referencing style (2 marks)
– The bibliography (reference list) must be in alphabetical order.
– The Harvard referencing style must be used.
– In-text references must be used correctly, according to the Unisa method.
(See the Unisa referencing guidelines, available under Additional Resources on your module site.)

MNM3712/103/2/2023
Introduction and conclusion (2 marks)
– A comprehensive introduction paragraph is provided to introduce the reader to the organisation and the questions that will be discussed.
– A comprehensive conclusion is provided to conclude the assessment.

Template and formatting issues (1 mark)
– The correct template is used.
– The declaration of honesty is included.
– The assessment is within the page limit of 8 pages.
– Correct and consistent fonts and spacing are used.
– Alignment is correct, there are no spelling mistakes, etc.
(See the template available on your modules site under Additional Resources.)

Answers to Above Questions on Kusta Case Study

Answer 1: The expansion of business to different markets requires proper development of strategies to perform successful expansion. In the given case of Kusta, the actionable strategies required by the company in order to expand its market reach and acquire new customers in different parts of South Africa includes the consideration of a diversified distribution channel, working towards adding regional partners..