Marketing Marketing Chapter 7 Foundations of Restaurant Management and Culinary Arts
Dec 22, 2015
MarketingMarketingChapter 7
Foundations of Restaurant Management and Culinary Arts
7.1 Introduction to 7.1 Introduction to MarketingMarketing
Introduction to MarketingIntroduction to Marketing
Market: A group of people who desire a product or service
Marketing: The process of communicating a business’s message to it’s market
Advertising vs. MarketingAdvertising 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 themHow to get these to
the buyers
Marketing FunctionsMarketing 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
Current Business OperationsCurrent 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
Basic Marketing ConceptsBasic 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 P’s◦Place◦Product◦Price◦Promotion
The NEW ModelThe NEW Model
Contemporary Marketing Mix:
◦Product-service mix
◦Presentation mix
◦Communication mix
Product Service MixProduct 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
Presentation MixPresentation 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)
Communication MixCommunication Mix
All of the ways an operation actively tries to reach, or communicate with it’s desired customers.
Advertising through TV, radio, newspapers, FACEBOOK!
Also, the menu, customer survey requests, other customer feedback requests
Market TrendsMarket Trends
Aspects of contemporary marketing mix are constantly changing
Operation must continually evolve with the times
Operations should be aware of what’s going on in area and around
They must keep up with consumer trends (also known as Market Trends)
Marketing PlanMarketing 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
Marketing PlanMarketing Plan
Step 1- Research the Market
◦Know the ins and outs of the market and what you’re up against
◦Gather information
◦Know strengths and weaknesses of your own operation
Marketing PlanMarketing Plan
Step 2- Establish Objectives
◦Establish objectives or goals
◦State goals and deadlines
Marketing Plan Marketing Plan
Step 3- Develop a Marketing Strategy
◦Brainstorm ways to achieve objectives
◦It’s helpful to come up with a variety of different strategies and then evaluate each
Marketing PlanMarketing Plan
Step 4- Implement an Action Plan
◦The action plan is the way the market strategy is put into action
Marketing PlanMarketing 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?
SWOT AnalysisSWOT Analysis
SWOT Analysis- also called situation assessment
Identify Strengths, Weaknesses, Opportunities and Threats
SWOT AnalysisSWOT Analysis
Strengths◦List all strengths of the operation- areas where
it excels Well trained Staff Good location Well kept facilities High food quality
SWOT AnalysisSWOT 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
SWOT AnalysisSWOT 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
SWOT AnalysisSWOT 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
7.2 Market Analysis, 7.2 Market Analysis, Identity and Identity and
CommunicationCommunication
Market Research MethodsMarket Research Methods
4 Basic Methods Marketers Use to Gather Research
◦Experimental Method
◦Observational Method
◦Survey Method
◦Sampling Method
4 Methods to Gather Research4 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
4 Methods to Gather Research4 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
4 Methods to Gather Research4 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)
4 Methods to Gather Research4 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
Market SegmentationMarket 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
Market SegmentationMarket 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
Market SegmentationMarket 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
Market SegmentationMarket Segmentation
Demographics- refers to the ways in which researchers categorize or group people and can be done in any number of ways
4 Basic Ways to Segment the 4 Basic Ways to Segment the MarketMarket
Demographic Segmentation◦Gender, ethnicity, marital status, income, size of
householdGeographic Segmentation
◦Where consumers live, work, and transportationProduct Usage Segmentation
◦Lots of coffee houses in area, add desserts that have coffee flavor
Lifestyle Segmentation◦Activities, hobbies, interestes
Creating a Market IdentityCreating 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
Differentiating an OperationDifferentiating 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
WAYS TO ATTRACT CUSTOMERSWAYS 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
Creating an IdentityCreating 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
Market CommunicatorsMarket Communicators
Promotional Mix: The way a company communicates with an operation’s market
It can consist of any or all of the following:◦Advertising◦Sales Promotions◦Personal Selling◦Public Relations◦Direct Marketing
Market CommunicatorsMarket Communicators
Advertising- paying to promote an operation’s 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
Market CommunicatorsMarket 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
Sales PromotionsSales 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
Types of Sales PromotionsTypes 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
Typical Promotional MaterialsTypical 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
Typical Promotional MaterialsTypical 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.
Typical Promotional MaterialsTypical 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)
Public RelationsPublic 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
Benefits of Public RelationsBenefits 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
Public RelationsPublic 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
Public RelationsPublic 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 Operation’s mission or goals Contact info
7.3 The Menu As A 7.3 The Menu As A Marketing ToolMarketing Tool
Importance of a MenuImportance 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
Menu TypesMenu Types
A la carte (AH le CART)
Du juor (doo-ZHEUR)
Cyclical
Limited
Fixed
California
Prix Fixe (PREE FIX)
Table d’hote (tah-buhl DOHT)
Menu TypesMenu Types
A la Carte- menu prices each item separately, everything has it’s 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, it’s often presented as a Daily
Specials Menu
Menu TypesMenu 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
Menu TypesMenu 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
Menu TypesMenu 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 d’hote menu- similar to prix fixe menu, bundles various menu items into one package◦Often offered at banquets
Organizing a MenuOrganizing 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
Creating a MenuCreating a Menu
A menu should reflect the character and goals of the operation
Two steps in menu creation:◦Planning ◦Design
Creating a MenuCreating 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◦Operation’s personnel must fit the menu that planners
create Availability of Ingredients
◦How cost efficient are items to produce Target Market’s Wants and Needs
◦Management can never forget who the operation is supposed to be serving
Target Market’s Expectations◦Consistency is important
Profit Margin◦Planners should create the menu with profitability in mind
throughout the entire process
Creating a MenuCreating 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 operation’s 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
Pricing the MenuPricing the Menu
A critical process for any operationPrice serves two main purposes:
◦Provides information to customers◦Determines profitability
Price speaks to the market category in which the restaurant falls
Pricing the MenuPricing 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.
Analyzing the MenuAnalyzing 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 menu’s components to analyze which items are making money and which items are selling
Menu Items According to Menu Items According to PopularityPopularity
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
DID YOU KNOW?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
Any Questions?Any Questions?