Marketing
Chapter 7
Foundations of Restaurant Management and Culinary Arts
7.1 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
Advertising

Just one component
of a successful
marketing strategy
Marketing
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

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

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

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

Contemporary Marketing Mix:
◦ Product-service mix
◦ Presentation mix
◦ Communication mix
The NEW Model

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 Takeout
Product Service Mix

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

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

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



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

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

Step 2- Establish Objectives
◦ Establish objectives or goals
◦ State goals and deadlines
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

Step 4- Implement an Action Plan
◦ The action plan is the way the market strategy
is put into action
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

SWOT Analysis- also called situation
assessment

Identify Strengths, Weaknesses,
Opportunities and Threats
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

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

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

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
7.2 Market Analysis,
Identity and
Communication

4 Basic Methods Marketers Use to Gather
Research
◦ Experimental Method
◦ Observational Method
◦ Survey Method
◦ Sampling Method
Market Research Methods

#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

#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

#3 Survey Method
◦ Marketer gathers information using
questionnaires
◦ Can administer by telephone, email or
feedback cards presented tableside
◦ Often they offer an incentive (coupon for free
dessert)
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

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

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

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

Demographics- refers to the ways in
which researchers categorize or group
people and can be done in any number of
ways
Market Segmentation

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

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

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

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

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
Promotional Mix: The way a company
communicates with an operation’s market
 It can consist of any or all of the
following:

◦
◦
◦
◦
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Advertising
Sales Promotions
Personal Selling
Public Relations
Direct Marketing
Market Communicators

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

Personal Selling-well trained service staff.

Public Relations- the process by which an
operation interacts with the community at
large
◦ Professionalism, politeness, efficiency
◦ Sponsoring little league teams

Direct Marketing- making an effort to connect
with a certain segment of the market
◦ Direct mailing or emails, telephone calls, tableside
feedback
Market Communicators

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

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

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

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

Merchandising Materials- table tents and other
items in the restaurant

Direct Mail- mass mailing of coupons, menus,
etc.

Email- 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

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

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

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

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:
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General info about the organization
Menus
News articles
Awards
Photos
Operation’s mission or goals
Contact info
Public Relations
7.3 The Menu As A
Marketing Tool

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

A la carte (AH le CART)

Du juor (doo-ZHEUR)
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Cyclical
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Limited
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Fixed

California
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Prix Fixe (PREE FIX)
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Table d’hote (tah-buhl DOHT)
Menu Types

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

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

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

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
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Often organized by the order of courses
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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
A menu should reflect the character and
goals of the operation
 Two steps in menu creation:

◦ Planning
◦ Design
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

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
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

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

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

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
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
Any Questions?