Transcript Chapter 15

Chapter 15
Restaurant Business and Marketing
Plans
Objectives
• After reading and studying this chapter, you
should be able to:
– Identify the major elements of a business plan
– Develop a restaurant business plan
– Conduct a market assessment
– Discuss the importance of the four Ps of the
marketing mix
– Describe some promotional ideas for a restaurant
Introduction
• Business plans
– Increase probability of success
• Communicate to financial backers
• Restaurants
– Are experiencing extreme challenges
• Difficult times
Business Plan
• Improve chances of operational success
– Assist in obtaining financing
– Communicate to potential investors
– Define operational purposes
• Key ingredient:
– Sustainability
Business Plan (cont’d.)
• Elements
– Cover sheet
– Description of the business
– Description of concept, licensee, and lease
– Market analysis and strategy
– Competitive analysis
– Pricing strategy
Business Plan (cont’d.)
– Advertising and promotional campaign
– Other information
– Financial data
– Existing restaurant balance sheet
– Appendices
Business Plan (cont’d.)
• Mission statements
– Generally do not change
• Goals
– Reviewed as often as necessary
– Established for each key operational area
• Strategies or action plans
– Who is going to do what, when, and what order
– Specific dates
Marketing
• Based on a marketing philosophy
– Patterns the way to relate to guests, employees,
purveyors, and the general public
• Fairness, honesty, and moral conduct
– Finding out what guests want and providing it at a
fair price
– Asks would-be operators:
• Who will be my guests?
• Why will they choose my restaurant?
• Where will they come from and why will they come
back?”
The Difference Between Marketing
and Sales
• Marketing
– Broad concept
– Includes sales and merchandising
– Determines who will patronize the restaurant and
what they want in it
– Ongoing effort
– Gets into psyche of present and potential patrons
– About solving guest problems
The Difference Between Marketing
and Sales (cont’d.)
• Sales
– Part of marketing
– Focuses on seller needs
– Activities that stimulate the patron to want what
the restaurant offers
– Sales mentality exists when seller thinks about
only of his or her needs
• Pushes an item on a customer
– Closely related to advertising, promotion, and
public relations
Marketing Planning and Strategy
• Marketing plans
– Must have realistic goals while leaving a
reasonable profit margin
• Guest satisfaction, market share, sales, and costs
• SWOT analysis
– Strengths, weaknesses, opportunities, and threats
• Strengths and weaknesses: internal factors and can,
over time, be controlled by management
• Opportunities and threats: external factors
Market Assessment and Market
Demand
• Market assessment
– Analyzes community, potential guests, and
competition
– Helps to answer the all-important questions:
• Is there a need for a restaurant?
• Who will be the potential guests?
• Market demand factors
– Population in the catchment area
– Demographic split of this population
Market Potential
• Estimated maximum total sales revenue of all
suppliers of a product in a market during a
certain period
– How many people in the market area are potential
customers?
– What is the potential for breakfast, for lunch, for
dinner?
– Will your restaurant attract guests from outside
the immediate market area?
– Who is your market?
Market Segmentation, Target
Market, and Positioning
• Market
– Total of actual and potential guests
– Generally segmented into groups of buyers
• Similar characteristics
– Within these groups are target markets
• Groups identified as the best for the restaurant
Typical Segmentations
• Geographic
– Country, state/province, county, city, and
neighborhood
• Demographic
– Age, sex, family life cycle, income, occupation,
education, religion, and race
• Behavior
– Occasions, benefits sought, user status, usage
rates, loyalty status, and buyer readiness
Positioning
• Once the target market is identified
– Important to position the restaurant to stand out
from the competition
• Focus on advertising and promotional messages
• Key to positioning
– How guests perceive the restaurant
• Involves tailoring an entire marketing program
Competition Analysis
• Analyzing competition’s strengths and
weaknesses
– Helps formulate marketing goals and strategies to
use in the marketing action plan
• Comparison benefit matrix
– Shows how your restaurant compares to the
competition
• You choose the items for comparison (e.g., name
recognition, ease of access, parking, curbside appeal,
greeting, etc.)
Marketing Mix: The Four Ps
• Every marketing plan must have realistic goals
– While leaving a reasonable profit margin
• Cornerstones of marketing
– Place (location)
– Product
– Price
– Promotion
Place/Location
• One of the most crucial factors in a
restaurant’s success
• Ingredients for success
– Good visibility
– Easy access
– Convenience
– Curbside appeal
– Parking
Product
• Main ingredient: excellent food
– People will always seek out excellent food
• Especially when good service, value, and ambiance
accompany it
• Three levels of restaurant product
– Core product: function part for the customer
– Relaxing and memorable evening
– Formal product: tangible part of product
– Physical aspects, décor, and a certain level of service
– Augmented product: other services
– Valet parking, table reservations, etc.
Product (cont’d.)
• Product analysis
– Covers quality, pricing, and service
• Atmospherics
– Design used to create a special atmosphere
• Experiencing greater emphasis
• Product development
– Innovative menu items
• Added to maintain or boost sales
Product (cont’d.)
• Product positioning
– Conveys the best face/image of the restaurant
• What people like most about it
• How it stands out from the competition
• Restaurant differentiation
– Owners usually want their restaurant to be different
in one or more ways
• Call attention to food or ambiance
• Product life cycle
– Introduction to decline
Price (cont’d.)
• Cost-based pricing
– Calculates cost of ingredients
• Multiplies by a factor of three to obtain a food cost
percentage of 33
• Competitive pricing
– Checks competition to see what they are charging
for the same item
• Price and quality
– Direct correlation
Promotion
• Goals of a promotional campaign
– Increase consumer awareness
– Improve consumer perceptions
– Entice first-time buyers
– Gain higher percentage of repeat guests
– Create brand loyalty
– Increase the average check
– Increase sales (particular meal or time of day)
– Introduce new menu items
Advertising
• Types:
– In-house
– Tie-ins and two-for-ones
– Loss-leader meals
– Advertising appeals
– Twitter and Facebook
– Travel guides
– Yellow pages
– Mailing lists