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

2. 7.1 Introduction to Marketing

3. Introduction 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
Introduction to Marketing

4. Advertising vs. 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. 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
Marketing Functions

6. 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
Current Business Operations

7. 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 P’s
Place
Product
Price
Promotion
Basic Marketing Concepts

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

9. 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
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. Marketing 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 Plan

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

16. 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 Plan

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

18. 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?
Marketing Plan

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

20. SWOT Analysis 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. 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
SWOT Analysis

22. 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
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. Market Research Methods
4 Basic Methods Marketers Use to Gather Research
Experimental Method
Observational Method
Survey Method
Sampling Method
Market Research Methods

26. 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
4 Methods to Gather Research

27. 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
4 Methods to Gather Research

28. 4 Methods to Gather Research
#3 Survey Method
Marketer gathers information using questionnaires
Can administer by telephone, or feedback cards presented tableside
Often they offer an incentive (coupon for free dessert)
4 Methods to Gather Research

29. 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
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. 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
4 Basic Ways to Segment the Market

35. 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
Creating a Market Identity

36. 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
Differentiating an Operation

37. 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
WAYS TO ATTRACT CUSTOMERS

38. 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
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. 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 s, 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. 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
Types of Sales Promotions

44. 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
Typical Promotional Materials

45. 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.
Typical Promotional Materials

46. Typical Promotional Materials
Merchandising Materials- table tents and other items in the restaurant
Direct Mail- mass mailing of coupons, menus, etc.
- 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. 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
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

51. 7.3 The Menu As A Marketing Tool

52. 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
Importance of a Menu

53. Menu 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 Types

54. 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 Types

55. 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 Types

56. 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
Menu Types

57. 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
Menu Types

58. 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
Organizing a Menu

59. A menu should reflect the character and goals of the operation
Two steps in menu creation:
Planning
Design
Creating a Menu

60. 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
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 Menu

61. 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 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
Creating a Menu

62. 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
Pricing the Menu

63. 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.
Pricing the Menu

64. 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
Analyzing the Menu

65. 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
Menu Items According to Popularity

66. 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

67. Any Questions?