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  1. Marketing Chapter 7 Foundations of Restaurant Management and Culinary Arts

  2. 7.1 Introduction to Marketing

  3. Market: A group of people who desire a product or service • Marketing: The process of communicating a business’s message to it’s market Introduction to Marketing

  4. 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 Advertising vs. Marketing

  5. 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 Marketing Functions

  6. 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 Current Business Operations

  7. 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 Basic Marketing Concepts

  8. Contemporary Marketing Mix: • Product-service mix • Presentation mix • Communication mix The NEW Model

  9. 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 Product Service Mix

  10. 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) Presentation Mix

  11. 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 Communication Mix

  12. 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) Market Trends

  13. 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 Plan

  14. 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 Plan

  15. Step 2- Establish Objectives • Establish objectives or goals • State goals and deadlines Marketing Plan

  16. 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 Plan

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

  18. 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? Marketing Plan

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

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

  21. 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 Analysis

  22. 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 Analysis

  23. 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 SWOT Analysis

  24. 7.2 Market Analysis, Identity and Communication

  25. 4 Basic Methods Marketers Use to Gather Research • Experimental Method • Observational Method • Survey Method • Sampling Method Market Research Methods

  26. #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 Research

  27. #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 Research

  28. #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 Research

  29. #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 4 Methods to Gather Research

  30. 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 Segmentation

  31. 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 Segmentation

  32. 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 Segmentation

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

  34. 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 4 Basic Ways to Segment the Market

  35. 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 Creating a Market Identity

  36. 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 Differentiating an Operation

  37. 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 WAYS TO ATTRACT CUSTOMERS

  38. 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 Creating an Identity

  39. 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 Communicators

  40. 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 Communicators

  41. 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 Market Communicators

  42. 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 Sales Promotions

  43. 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 Types of Sales Promotions

  44. 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 Materials

  45. 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 Materials

  46. 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) Typical Promotional Materials

  47. 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 Public Relations

  48. Create a positive image within the community • Building credibility with the community • Building relationships with other community leaders • Generating positive publicity • Promoting the restaurant Benefits of Public Relations

  49. 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 Relations

  50. 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 Public Relations