Marketing

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Marketing

• Chapter 7
• Foundations of Restaurant Management and Culinary
  Arts

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7.1 Introduction to Marketing
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Introduction to Marketing

• Market A group of people who desire a product or
  service
• Marketing The process of communicating a
  businesss message to its market

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Advertising vs. Marketing

• Advertising

• Marketing

• Just one component of a successful marketing
  strategy

• Determining what products and services to offer
• How to position them in the marketplace
• How to promote them to buyers
• How to price them
• How to get these to the buyers

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Marketing Functions

• 1. determine what products and services to offer
• 2. position them in the marketplace
• 3. promote them to potential buyers
• 4. price them so people will buy them
• 5. get the goods to these buyers

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Current Business Operations

• Marketing drives the operation
• An operation must
• Determine customer needs and wants
• Determine the costs, prices, and profitability of
  products and services before beginning to produce
  them
• Organize all aspects to provide what customers
  want

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Basic Marketing Concepts

• Marketing Mix combination of all factors that go
  into creating, developing and selling a product
• For years it was known as the 4 Ps
• Place
• Product
• Price
• Promotion

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The NEW Model

• Contemporary Marketing Mix
• Product-service mix
• Presentation mix
• Communication mix

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Product Service Mix

• All of the food and services offered to customers
• Restaurants can often gain a competitive edge by
  offering a greater variety of services with
  better efficiency
• Delivery, Take-out Service, Curbside Take-out

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Presentation Mix

• All of the elements that make the operation look
  unique
• Layout, furniture, decorations, color scheme,
  lighting, service uniforms
• Aesthetic- the way it looks and feels to
  customers (dimmed lighting)

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Communication Mix

• All of the ways an operation actively tries to
  reach, or communicate with its desired
  customers.
• Advertising through TV, radio, newspapers,
  FACEBOOK!
• Also, the menu, customer survey requests, other
  customer feedback requests

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Market Trends

• Aspects of contemporary marketing mix are
  constantly changing
• Operation must continually evolve with the times
• Operations should be aware of whats going on in
  area and around
• They must keep up with consumer trends (also
  known as Market Trends)

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Marketing Plan

• Marketing Plan A list of steps an operation must
  take to sell a product or service to a specific
  market.
• All must have 5 components.
• Research the Market
• Establish Objectives
• Develop a Market Strategy
• Implement an Action Plan
• Evaluate/modify the Action Plan as Needed

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Marketing Plan

• Step 1- Research the Market
• Know the ins and outs of the market and what
  youre up against
• Gather information
• Know strengths and weaknesses of your own
  operation

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Marketing Plan

• Step 2- Establish Objectives
• Establish objectives or goals
• State goals and deadlines

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Marketing Plan

• Step 3- Develop a Marketing Strategy
• Brainstorm ways to achieve objectives
• Its helpful to come up with a variety of
  different strategies and then evaluate each

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Marketing Plan

• Step 4- Implement an Action Plan
• The action plan is the way the market strategy is
  put into action

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Marketing Plan

• Step 5- Evaluate/Modify the Action Plan
• This stage is an ongoing process of monitoring
  actions and gauging how successful they are
• Is the plan working? Are there ways it is missing
  the mark? What can we be doing better? How can
  this be improved?

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SWOT Analysis

• SWOT Analysis- also called situation assessment
• Identify Strengths, Weaknesses, Opportunities and
  Threats

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SWOT Analysis

• Strengths
• List all strengths of the operation- areas where
  it excels
• Well trained Staff
• Good location
• Well kept facilities
• High food quality

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SWOT Analysis

• Weaknesses
• Identify weaknesses so they can be eliminated or
  even turned into strengths
• Boring Menu
• Dirty facilities
• Limited abilities or resources
• Poor service
• High staff turnover
• Poor reputation

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SWOT Analysis

• Opportunities
• Areas where the operation could increase revenues
  or decrease costs
• Launching a delivery or take-out service
• Recognizing weak competition
• Gaining volume or discount from a supplier

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SWOT Analysis

• Threats
• Factors outside the operation that could decrease
  revenues or increase costs
• Identifying threats helps control them
• Increased competition
• Increased taxes
• Increased costs of certain products
• Road construction

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7.2 Market Analysis, Identity and Communication
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Market Research Methods

• 4 Basic Methods Marketers Use to Gather Research
• Experimental Method
• Observational Method
• Survey Method
• Sampling Method

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4 Methods to Gather Research

• 1 Experimental Method
• Try out a product for a limited time or with a
  limited group of people
• If response is favorable, operation might think
  about using product on larger scale
• If product is not well received, operation knows
  that more work will be required

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4 Methods to Gather Research

• 2 Observational Method
• Observing how customers react in a natural
  setting toward a product
• Example manager tells service staff to present
  daily special in 3 different ways and record
  which was most successful

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4 Methods to Gather Research

• 3 Survey Method
• Marketer gathers information using questionnaires
• Can administer by telephone, email or feedback
  cards presented tableside
• Often they offer an incentive (coupon for free
  dessert)

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4 Methods to Gather Research

• 4 Sampling Method
• Testing a product with a specific small group of
  people, sometimes called a focus group
• REMEMBER- MARKETING STRATEGIES ARE GUIDED BY
  RESEARCH RESULTS

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Market Segmentation

• Target Market- People an operation intends to
  pursue as customers
• Every operation should be customer driven.
• Customer Driven- making sure that satisfying all
  needs and wants of the customer drives the market
  strategy

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Market Segmentation

• Mass Marketing- treats everyone in the market as
  having the same needs and wants
• Target Marketing- treats people as different from
  each other and tries to make a focused appeal to
  a distinct group of customers
• Identifying a target market enables an operation
  to avoid mass marketing and focus on a target
  market

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Market Segmentation

• Market Segmentation- when marketers break down a
  large market into smaller groups of similar
  individuals that make up the market
• Like looking at the market through a microscope
  to see what parts make up the whole
• Segmenting will help identify target demographics
  in any given location

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Market Segmentation

• Demographics- refers to the ways in which
  researchers categorize or group people and can be
  done in any number of ways

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4 Basic Ways to Segment the Market

• Demographic Segmentation
• Gender, ethnicity, marital status, income, size
  of household
• Geographic Segmentation
• Where consumers live, work, and transportation
• Product Usage Segmentation
• Lots of coffee houses in area, add desserts that
  have coffee flavor
• Lifestyle Segmentation
• Activities, hobbies, interestes

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Creating a Market Identity

• Positioning- creating within the marketplace a
  clear, specific identity for both a product and
  the operation that offers that product.
• Three steps to positioning
• Identify ways to differentiate the operation
  within the market and create a unique identity
• Select the right mix of differentiating aspects
• Communicate the chosen identity to a specific
  target market

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Differentiating an Operation

• There are many ways to do this
• Product
• Unique items or traditional items in a unique way
• Physical Appearance/aesthetics
• Use the actual appearance to create an image
• Service
• How will the service staff be dressed? Delivery?
• Location
• Steakhouse in area with lots of vegetarians? Not
  good idea.
• Image
• Decide on image first, then create products and
  services to work toward that image

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WAYS TO ATTRACT CUSTOMERS

• Educational Promotions such as wine tastings
• Specials, such as buy 1 get 1 free
• Signature items, such as special desserts or
  secret recipes
• Frequent shopper cards that offer discounts or
  other incentives
• Themes, both as operation-wide celebrations or
  special events
• Merchandising techniques at the table such as
  unique garnishing or flambe

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Creating an Identity

• Selecting the Right Mix
• Decide the best route to take
• Finding the right mix takes a lot of time and
  research
• Communicating the Chosen Identity
• The message needs to be clear

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Market Communicators

• Promotional Mix The way a company communicates
  with an operations market
• It can consist of any or all of the following
• Advertising
• Sales Promotions
• Personal Selling
• Public Relations
• Direct Marketing

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Market Communicators

• Advertising- paying to promote an operations
  products, services or identity
• Can be conducted through TV, radio, newspapers,
  internet
• Effective ads can be powerful tools
• Sales Promotions- limited, or short-term
  incentives to entice customers to patronize an
  operation
• Happy hour at Sonic, Kids Eat Free, Half price
  appetizers

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Market Communicators

• Personal Selling-well trained service staff.
• Professionalism, politeness, efficiency
• Public Relations- the process by which an
  operation interacts with the community at large
• Sponsoring little league teams
• Direct Marketing- making an effort to connect
  with a certain segment of the market
• Direct mailing or emails, telephone calls,
  tableside feedback

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Sales Promotions

• Sales Promotions provide special incentives for
  customers to patronize an operation.
• There are many types
• All are designed to give customers the extra
  boost to get them into the operation or to get
  them to purchase certain items
• They are the focus of advertising because they
  are only useful when customers know about them

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Types of Sales Promotions

• Special Pricing
• Specials, deals, coupons
• Frequent Shopper Program
• Free food items or substantial discounts, Cafe
  Rio
• Premiums
• Free or reduced price merchandise, pen or cup
• Special Events
• One time or periodic occasions
• Samples
• Free tastes of food items, Sams Club
• Contests and Sweepstakes
• Games and other programs that involve customer
  and provide a prize

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Typical Promotional Materials

• Signage- menu boards, directional signs
• Flyers- paper notices
• Premiums- token gifts or giveaway items, pens,
  toys, mugs, t-shirts
• Carryout and Door Hanger Menus- paper menus, door
  hanger menus for doorknobs

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Typical Promotional Materials

• Apparel and Branded Merchandise- name and/or logo
  on t-shirts, mugs, pencils, stuffed animals
• Point-of-Purchase (POP) materials- display items
  near the point of purchase where customers make
  their decision about what to buy.

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Typical Promotional Materials

• Merchandising Materials- table tents and other
  items in the restaurant
• Direct Mail- mass mailing of coupons, menus, etc.
  
• Email- electronic mail targeted to a particular
  market
• Complementary Promotions- 2 or more sponsors
  develop complementary promotional materials
  (restaurant gives free tickets to a sports event,
  and sports event gives free appetizer at
  restaurant)

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Public Relations

• Public Relations- purpose is to generate positive
  public publicity
• Publicity- the attention the an operation
  receives
• Community Relations- involve interacting with the
  people in the local area to create awareness of
  and trust for an operation

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Benefits of Public Relations

• Create a positive image within the community
• Building credibility with the community
• Building relationships with other community
  leaders
• Generating positive publicity
• Promoting the restaurant

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Public Relations

• Media Relations- relationships that marketers
  maintain with the media outlets
• Newspapers, magazines, TV, and radio
• Press Release- is a brief presentation of
  promotional info written to sound like a news
  article
• A well written one presents marketing info as news

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Public Relations

• Press Kit- a packet of info given to media
  representatives to answer questions they might
  have about a business or organization
• Folder containing the following
• General info about the organization
• Menus
• News articles
• Awards
• Photos
• Operations mission or goals
• Contact info

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7.3 The Menu As A Marketing Tool
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Importance of a Menu

• A menu serves two purposes
• Planning
• Communication
• Planning- the menu gives an operation an end goal
  to work toward
• Communication- informing customers, selling
  products, and creating identity

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Menu Types

• A la carte (AH le CART)
• Du juor (doo-ZHEUR)
• Cyclical
• Limited
• Fixed
• California
• Prix Fixe (PREE FIX)
• Table dhote (tah-buhl DOHT)

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Menu Types

• A la Carte- menu prices each item separately,
  everything has its own price and is paid for
  separately
• Du jour Menu- Du jour is a French term, it means
  of the day
• A du jour menu lists items that are available on
  a particular day
• In the USA, its often presented as a Daily
  Specials Menu

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Menu Types

• Cyclical Menu- chefs or managers change the menu
  after a period of time
• Four menus for four seasons
• Can change on a daily, weekly, or monthly basis
• Limited Menu- limited menus are just that-
  limited
• These menus make it easy to keep track of costs

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Menu Types

• Fixed Menu- offers the same items everyday
• Customers know what to expect
• Sometimes they supplement with a de jour menu to
  offer variety
• California Menu- lists all meals available at any
  time of day
• Diners that are open 24 hours often use
  california menu

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Menu Types

• Prix Fixe Menu- opposite of an a la carte menu,
  offers multiple menu items at one price
• Choice of appetizer, full entree with sides, and
  dessert for one price
• Table dhote menu- similar to prix fixe menu,
  bundles various menu items into one package
• Often offered at banquets

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Organizing a Menu

• Often organized by the order of courses
• Appetizers
• Soups
• Salads
• Sandwiches (can be offered before or after
  salads)
• Entrees
• Vegetables
• Desserts
• Beverages
• Variations depend on what an operation offers and
  the image it wants to promote
• An Italian restaurant might offer a pasta course
  separate from the rest of the entrees

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Creating a Menu

• A menu should reflect the character and goals of
  the operation
• Two steps in menu creation
• Planning
• Design

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Creating a Menu

• Planning
• Managers must keep the following in mind
• Physical Layout of the Facility
• Size of storage, service and dining areas
• Skill of Personnel
• Operations personnel must fit the menu that
  planners create
• Availability of Ingredients
• How cost efficient are items to produce
• Target Markets Wants and Needs
• Management can never forget who the operation is
  supposed to be serving
• Target Markets Expectations
• Consistency is important
• Profit Margin
• Planners should create the menu with
  profitability in mind throughout the entire
  process

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Creating a Menu

• Designing
• Designers must consider the following elements
  when laying out a menu
• Medium
• Paper, menu boards, spoken menu
• Layout
• How it is categorized and sequenced
• It can help further an operations identity and
  work to sell menu items at the same time
• Color
• Designers need to think about the feeling they
  want customers to get when considering the
  operation
• Font
• Different fonts have different connotations
• Art
• Art can say a lot about an operation

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Pricing the Menu

• A critical process for any operation
• Price serves two main purposes
• Provides information to customers
• Determines profitability
• Price speaks to the market category in which the
  restaurant falls

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Pricing the Menu

• Profitability- amount of money remaining for an
  operation after expenses, or costs are paid
• Target Margin- The difference between the amount
  of money left over from the sale of food or
  beverages (after preparation costs) and the
  amount needed to pay for other overhead, like
  rent or heat.

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Analyzing the Menu

• It is crucial to success of any operation that
  management have the knowledge and means to
  analyze how well items on the menu are
  performing.
• One of the most popular methods is menu
  engineering
• Menu engineering- systematically breaks down a
  menus components to analyze which items are
  making money and which items are selling

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Menu Items According to Popularity

• Stars
• Menu items that are profitable and popular
• Plow Horses
• Menu items that are popular but less popular
• Puzzles
• Menu items that are unpopular but very profitable
• Dogs
• Menu Items that are unpopular and unprofitable

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DID YOU KNOW?

• Carbonated Soft Drinks are one of the most
  frequently ordered items in the US. Their low
  cost and high profitability makes them a STAR on
  any menu

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Any Questions?