Cha4 Marketing

Food & Beverage Marketing

Food and Beverage Operations

Food and Beverage Operations

1Tuesday, May 19, 2009

Chapter Objectives• Explain marketing in terms of delivering guest-

pleasing service• Describe the steps involved in developing a

feasibility study and list the three types of ongoing marketing research

• Describe the elements of a complete marketing plan, focusing on the roles of sales, advertising, PR, and publicity

• Identify marketing tactics for noncommercial food service operation

2Tuesday, May 19, 2009Why do we do the things we do? The most valuable asset of any company is repetition and growth: Guest Service

Market Research what drives data? People, popularity, trends, Starbucks is one example of a coffee shop gone global

Tactics of business

Managers Concerned about Guests

• “Moments of truth”• Recognize that service is as important as the

product• Develop guest-friendly procedures that meet

the operation’s standards and goals• Assess and respond to guests’ ever-changing

preferences and needs

3Tuesday, May 19, 2009Moments of Truth: Some can be tired sayings Ritz-Carleton: Our motto states that “We are Ladies and Gentlemen serving Ladies and Gentlemen,”

Moments of Truth: How are you going to “Wow” me today?

Includes employees as well as the guests

Functions of a Feasibility Study• Identify market area characteristics• Evaluate the proposed site• Analyze competitors• Estimate demand• Project operating results

4Tuesday, May 19, 2009Gambling 101Not considering a feasibility study 95% FAIL RATE

Who is your customer/guest?Demographics

Area and amenities, flow of traffic: Restaurant is on side street or on a busy corner. In a high rise penthouse or in the basement without windows?

Who is the competition with your concept? Do you have superior products or service? Nordstomʼs vs Macyʼs

Demand shapes hours of operation, labor and product usage

Honeymoon- Estimate how your F&B operation will consistently be able to preform after the popularity wears off.

Consideration of a feasibility study 50% SUCCESS RATE

Market Area Characteristics• Demographic

information• Retail sales volume• Number and types of

business• Impact of tourism• Available

transportation• Economic stability

5Tuesday, May 19, 2009

Evaluating the Proposed Site• Availability and

convenience of parking

• Traffic flow• Presence of other

attractions that may bring in guests

• Site accessibility

6Tuesday, May 19, 2009

Analyzing the Competition• Location• Type of establishment• Times of operation• Menu prices• Average Guest Check• Type of Service• Number of Seats

• Availability of Liquor Service

• Entertainment• Promotional efforts• Chain affiliation• Other service

distinctions

7Tuesday, May 19, 2009

• Surveying potential guests by – Personal interview– Direct mail questionnaires– Computer-assisted survey

• What to ask:– Food preferences– How often…– How far…– How much time…– How much money…

Estimating Demands

8Tuesday, May 19, 2009

Projecting Operating Results• Financial results

– Forecasts of food & beverage revenue– Overhead Expenses:

• Administration• Labor• Facility maintenance• Energy• Rent• Insurance• Taxes

Stay Current!

9Tuesday, May 19, 2009

Ongoing Marketing Research • Property Analysis

– Appraisal for production, service areas, products, and services

– Outsiders’ viewpoint• Competition Analysis

– cover the same categories listed in the feasibility study

– Visit competitor’s operations at a variety of times

• Market Analysis• Government Statistics and Data

10Tuesday, May 19, 2009

Market Analysis• Guest Profile Research

– Age– Gender– Frequency of visits to the

property– Employment

• Data Gathering Tools– Guest surveys – Guest comment cards

NRA website http://www.restaurant.org/research/

11Tuesday, May 19, 2009

Market Analysis• Marketplace Factors/Trends • Changes in demographics• Positive and negative events in the

community, region, state, and nation• Cost of energy and other utilities• Government regulations• Cost of travel

12Tuesday, May 19, 2009

Steps in a Typical Marketing Plan

Select target market

Determine Objective

Create action plans

Evaluate and revise

13Tuesday, May 19, 2009Also related to a Business Plan

Implementing the Marketing Plan

• Sales efforts• Advertising• Public

relations• Publicity

14Tuesday, May 19, 2009

Special Promotions• Cut-out Coupons• Product Sampling• Contests• Package• Premiums• Gift Certificates• Discounting• Bonus Offers• Frequent Diner program

15Tuesday, May 19, 2009Depends on your demographicFast food chains do this alot

Incentive needs to be built with a message to return

Concerns not to cheapen your business with frequency

What are you trying to accomplish? One time diner or repeat?If repeat you have one moment to have them consider you again and return

Outdoor Sign Advertising•Pros

– Low cost– Long life span– Broad reach

•Cons– Limited message

length– Wasted coverage– Zoning/posting

Outdoor Sign Advertising

16Tuesday, May 19, 2009Needs to be read from a distance with contrasting colors and shade-Night AND Day

Newspaper Advertising• Pros

– Low cost– Broad reach– Effective coverage– Immediacy– Flexibility

• Cons– Read or skimmed quickly– Usually seen by only reader per

issue– Poor reproduction quality– Wasted coverage

17Tuesday, May 19, 2009

Most Popular restaurant News Ad Holidays;

New Years Eve, Valentineʼs Day, Easter, Motherʼs Day, Fourth of July, Thanksgiving, Christmas

Magazine Advertising★Pros– life span– Several readers per issue– Can target specific audiences– Excellent reproduction quality ★Cons– High cost– Long preparation time needed– Inflexibility– Some wasted coverage

18Tuesday, May 19, 2009Wow! Maui as travel destination has over 6 different menu publications.

Lots of advertising dollars being spent. You SHOULD get a 10% return on your investment!!

One full page ad cost an average of $4000 for a full year, not including set up and photos.

The cover and back costs a premium of $8,000-$10,000 per year

Radio Advertising• Pros

– Potentially saturate an entire area– Low cost– Produced quickly and used

immediately– Sponsorship– Drive time

• Cons– Short life span– Audio only

19Tuesday, May 19, 2009Radio is repetitive, lively but disappears quickly after itʼs heardDJ can flub up your message

Need to determine your station and demographic.

Television Advertising• Pros

– Appealing presentation of sight and sound

– Viewers retain message– Extensive coverage– Target market

• Cons– Highest cost!– Long preparation time– Wasted coverage

20Tuesday, May 19, 2009If you can afford it this is the way to go

Direct Mail Advertising• Pros

– Audience selectivity– Flexibility– Personalized message– Easily stopped or started– Easily evaluated for effectiveness

• Cons– High cost– “Junk mail” image

21Tuesday, May 19, 2009Targets Shut Inʼs and Senior CitizensUse this for marketing lunch; many offices and businesses are locked in to an hour and are on a budget

Internet Advertising

• One-on-one guest relationships

• E-newsletters• Online reservations• Banner ads

22Tuesday, May 19, 2009Fastest growing area in the world but yet to be exploited

World wide 1.5 billion have access to internet

China 23% Growing 1000% from 2000-2008 250 million

US 73% 250 million

http://www.internetworldstats.com/stats2.htm

PR and Publicity• Public Relation:

– communicating favorable info about the operation to the public to create a positive impression

– Word of mouth– Charity work

• Publicity: – Free media coverage of an operation, its staff, or

special property events by the media– Editorial page– Medium controls the message

23Tuesday, May 19, 2009Promotional, Concierge, Participation in Events, Charity, Associations, Face time and Demonstrations, Teaching

Marketing Review

24

• Explain marketing in terms of delivering guest-pleasing service

• Describe the steps involved in developing a feasibility study and list the three types of ongoing marketing research

• Describe the elements of a complete marketing plan, focusing on the roles of sales, advertising, PR, and publicity

• Identify marketing tactics for noncommercial food service operation

24Tuesday, May 19, 2009

F & B Marketing focuses on one main thing: repeat guest experiences.

In order to do that...Identify market area characteristics, Evaluate the proposed site, Analyze competitors, Estimate demand, Project operating results

Property Analysis, Competition Analysis, Market Analysis, Government Statistics and Data

MediaCoupons, Magazines, Radio, Newspaper, TV, Outdoor Signage, Internet, Direct Mail, Media Events/PR