2 Chapter 7 What is a market? Customers What is marketing? A way of communicating a message to a marketIs there a difference between marketing and advertising? Advertising is one part of marketing – marketing is much bigger than just advertising
3 Contemporary Marketing Mix Marketing Activity for Restaurants Product-service mix – food and services offered to customer.Presentation mix – elements that make the operation look unique(color, lighting, furniture, decoration, uniforms, etc…)Communication mix – Ways an operation tries to communicate with desired customer.
4 SWOT Analysis – for understanding current situations and looking for new opportunities. StrengthsWeaknessesOpportunitiesThreatsWhere does this place excelPlaces to improve(boring menu, dirty facilities, poor service, poor reputation)Ways to increase revenues or decrease costs(delivery, take out, kid’s menus, volume discounts from supplier)Factors outside the operation that could decrease revenues or increase costs(competition, product cost, road construction)
5 Market Research Methods Experimental – try a product for a limited time or to a limited group.Observational – Observing how customers react in a natural setting toward a product.Survey – Gather information on a questionnaire – examples??Sampling – Focus group, sampling trial
6 Marketing Communications Advertising: paying to promote products, services or identity. Advertising options?Sales Promotion: limited incentives to get customers. Examples?Personal selling: Key to financial success – well trained staffPublic Relations: how an operation interacts with the community. Examples?Direct Marketing: connecting with certain segment of the market. How?
7 Types of Menus A la carte Offers food separately at separate prices Du jour“of the day” changes dailyCyclicalRepeated – institutional food servicesLimitedFew selections – quick service restaurantsFixedSame items every dayCaliforniaAll meals any timePrix fixeComplete meal grouped together for a single priceTable d’hoteComplete meal but choices of appetizers, entrees, desserts, etc… Set single price
8 Five Steps to Menu Planning List all possible itemsEliminate items that are difficult to purchase, prepare or serveFine-tune remaining items to fit operationMake sure all items can be successfully prepared at an appropriate priceIdentify winning selections and create your menu
9 Menu EngineeringAMenu ItemB# SoldMenu MixCMenu Mix %B/NDItem Selling PriceEFood Cost Per ItemFContribution MarginOverhead & ProfitD-EGTotal MenuRevenueHTotal Food CostIContributionMarginTOTALG-H orF x BJCategoryKMenu Mix CategoryLClassificationChinese Chicken Salad2106.852.05430.50Mexican Pasta Salad634.501.36283.5085.68Mexican Taco Salad3906.001.77690.30Twisted Chicken Salad1404.001.16560.00162.40Sweet and Sour Meatballs2776.251.86515.22Pasta Provencal805.501.63440.00130.40Honey glazed Chicken Stir Fry4401.35594.00TotalsN1600M(J) – M_____________/ N______________ = Average Contribution Rate, DOG – low contribution margin, low menu mix (low sales, low $$)if F is above the average J is High if F is below the average J is Low PUZZLE – high contribution margin, low menu mix (high sales, low $$)PLOW HORSE – low contribution margin, high menu mix (low sales, high $$)STAR – high contribution margin, high menu mix (high sales, high $$)
10 Menu Descriptions Entice us to buy the food Lead us to expect it will taste greatChocolate CakeBelgian Black Forest Double Chocolate Cake
11 Which menu is better? Red Beans & Rice Seafood Fillet Grilled Chicken Chicken ParmesanChocolate PuddingZucchini CookiesTraditional Cajun red beans with riceSucculent Italian Seafood FilletTender Grilled ChickenHome-Style Chicken ParmesanSatin Chocolate PuddingGrandma’s Zucchini Cookies
12 Four Basic ThemesGeographic Labels- Tex Mex Salad, Kansas City BarbequeNostalgic Labels-Grandma’s Chicken FricasseSensory- Velvety Chocolate Mousse, Smooth, silkyBrand Labels- Jack Daniels Glazed Ribs, Butterfinger Blizzard, Black Angus Beef Burger