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MARKETING THE INDUSTRY SEGMENTS. 4.06 Explain the food and beverage industry. Food and beverage business: A business operated to prepare, serve, sell, or provide food for people to eat. Segments of the food and beverage industry. Commercial foodservice Institutional foodservice

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marketing the industry segments


4.06 Explain the food and beverage industry.


Food and beverage business: A business operated to prepare, serve, sell, or provide food for people to eat


Segments of the food and beverage industry

  • Commercial foodservice
  • Institutional foodservice
  • Foodservice in a consumer business

Commercial foodservice: Profit-driven businesses that compete for customers’ dollars by preparing, serving, selling, or providing food for immediate consumption

  • Fine dining operations
  • Fast food restaurants
  • Cafeteria operations
  • Buffet restaurants
  • Theme restaurants
  • Ethnic restaurants
  • Family restaurants
  • Catering operations

Fine dining operations

  • Service is concentrated and the ratio of servers to customers is high.
  • Dining is enjoyed over an extended period of time.
  • Chefs are highly qualified and their skills contribute to atmosphere.
  • These businesses are frequented by only a small percentage of population.
  • Customers are seated at tables, and a server takes guests’ orders.
  • Meal selections come from a set menu, with daily specials.
  • Food and service is of highest quality.
  • Prices are consistent with quality—high.
  • Atmosphere is important.
  • Food is cooked to individual order.

Fast food restaurants

  • Facilities and operations are designed for faster service.
  • Counter service and/or drive-thru window service are provided.
  • Menu choices are minimal.
  • Food preparation time is quick.
  • The customer dining area is small.
  • Atmosphere does not encourage customers to linger over meals.

Cafeteria operations

  • Consists of a long serving line with menu items on display
  • Customers move their trays along the serving line and ask food servers to plate the item they select.
  • A hot line/side and a cold line/side are often provided.
  • Dining areas are large to serve large groups.
  • Customers get food items, take trays with them, and seat themselves.

Buffet Restaurants

  • Food is displayed on special tables that keep the food hot or cold.
  • Customers get up and down from their tables to get the food they want.
  • Servers clear the dirty dishes and may provide beverage service.
  • Buffet service is capable of handling large groups of people.

Theme Restaurants

  • Carry out a common theme throughout all parts of the operation; menu items, décor, servers’ uniforms, and sometimes music are factors in setting theme
  • “Total experience”

Ethnic Restaurants

  • Most are independently owned.
  • Several notable successful chains
  • Serve needs of immigrants in the area and customers who want to try something new

Family Restaurants

  • Cater to all members of the family
  • Relaxed setting, menu provides for all ages
  • Some have salad and dessert bars
  • Special menus for children
  • All-day menus

Catering Operations

  • Provide food, beverages, and service for special occasions
  • May have their own location and cater groups there, or they may cater to groups at other locations
  • Coordinate many details and must keep in close touch with the customer
  • Weather may impact outdoor activities

Institutional Foodservice: Foodservice that is provided to customers in an institution such as a hospital, prison, school, or the military

  • In-house foodservice
  • Contract foodservice

Contract foodservice: An institutional foodservice operation that is run by an outside foodservice agency


Foodservice in a consumer business

  • A food and beverage business sometimes operates within another business.
  • The food is not the main purpose of going to these attractions or locations, but it enhances the experience.
  • These businesses have characteristics of both institutional and commercial foodservice.
  • Examples: airports and sports arenas

Factors affecting location

*Location is key factor in marketing mix

  • What are demographics of surrounding population?
  • Is there growth in immediate area?
  • What is existing public infrastructure?
  • Does the property/building have good access?
  • Is there enough parking?
  • Is the property visible from surrounding roadways?
  • Who are the competitors?

Foodservice Industry Trends

  • Americans eat approximately half of their meals away from home.
  • When dining at home, Americans want food items that are convenient and quick to prepare.
  • Take-out continues to be popular.
  • Consumers expect high-quality ingredients.
  • Theme restaurants make eating out entertaining, not just convenient.
  • Healthy choices are very important.
  • Technology has improved service.

Advertising in the food and beverage industry

  • Smaller operations can target local markets through local media.
  • National chains use television for broad exposure.
  • Magazine ads can target specific markets and geographic areas.
  • Billboards are used to direct tourists to businesses in the local area.

Personal selling in the food and beverage industry

  • Suggestive selling is important in any restaurant.
  • A server’s knowledge of the product and preparation methods helps the sales process and image of the business.
  • The one-on-one customer contact generates immediate feedback.

Sales promotion in the food and beverage industry

  • Toys in kid’s meals, t-shirts, and specialty glassware
  • Temporary plans incorporated to bring customers into the business
  • Rate cards and informal surveys
  • Table tents
  • Sales promotions are only as effective as the salesperson trying to sell them.