MARKETING PLAN PIZZA COTTAGE Market Masters I. Executive Summary Pizza Cottage is a restaurant local to central Ohio since 1972, with 5 facilities in the area. They specialize in convenience, comfort foods, service, and atmosphere. The menu consists of various pizzas, subs and appetizers. Continued success is achieved by maintaining focus on quality, customer satisfaction and a relaxed atmosphere. Evaluation of current practices revealed a solid customer base and continuing growth. Our research that focused on ways to bring in new customers showed popularity among friends referrals were the strongest motivator (survey results, question #4) for customers to try a new dining experience. Overall, Pizza Cottage has built a positive growing business in a turbulent economy. Drastic changes in practices are not necessary. The marketing strategy addresses opportunities to present greater value while highlighting various menu items on specific days. This opportunity to experience the quality products, great service and relaxed atmosphere will add new customers to the Pizza Cottage base, thus increasing market share. Alternative market strategies are presented that may further increase market share at additional costs. II. The Challenge Pizza Cottage is a local chain restaurant serving pizza, subs, salads, appetizers, soft drink, beers, and select wines. Their focus is to provide a quality product, good services and a pleasant atmosphere. The goal of this plan is to offer marketing strategies that may increase brand recognition, product value, and increase overall sales. Currently Pizza Cottage has positive growth in the Central Ohio area. This plan will present ideas that may assist in this growth by generating new customers surrounding the current Pizza Cottage locations. A positive experience with these new customers will lead to a broader customer base, higher profits, and continued growth possibly leading to further expansion. III. Situation Analysis Company Analysis Goals: The goals of the company include keeping present day customers happy, as well as potential new customers. Our overall goal is to answer the question: What motivates a person to try a new dining experience? Through research and analysis, we will be able to understand the approach needed in order to gain new customers. Focus: The main focus will contain the ways to intrigue new customers to try our business. We will use strategies we find best fitting to fulfill our goals. Culture: Since our company produces pizza, which is a huge part of American culture, there should not be any problem with the overall culture. MARKETING PLAN Strengths: The strengths of the company are based upon the fact that it is a family owned business that looks to expand within the state of Ohio. We guarantee great customer service skills and we treat every customer as if they were a part of our own family. We use locally grown fresh ingredients to ensure quality products, all while helping local farmers. We have a powerful menu that offers a great variety of products, all which is available online. Weaknesses: A major weakness in our company is that we are family owned and not a corporation. If we were a corporation, we would have access to much more advertisement on a national level. We also have to build our reputation on our own. The only way to achieve that is to keep customers happy and returning to our business. We do have a small market area considering we only have a few locations, all of which have competitors who are national pizza chains. Market share : There are quite a few powerful chain pizza companies within our market area. Competing with such chains can be difficult, but we will use our marketing strategies and statistics to help ensure that we are remaining competitive in the market and creating an increase in our market share. It is very difficult to compete as an individually owned restaurant in any market, especially pizza chains. I am confident that we have the ability to compete against such chains and be successful in doing so. Customer Analysis Number: The Pizza Cottage is a family owned business that has been a popular place to eat in Buckeye Lake since 1972. Their current customer base averages 500 customers a night, and since expanding to four nearby towns, it will likely continue to increase. Type: They attract a wide variety of customers such as families, high school and college students, and people who like the sports bar atmosphere. In addition, it is also a popular spot for people that are visiting or vacationing at Buckeye Lake. Value drivers: Pizza Cottage’s choice of quality ingredients, variety in menu items (i.e. great variety of pizzas and beers, wings, subs, salads and more), and competitive prices keep the customers coming back. Decision process: According to a recent survey, the majority of people choose to eat at establishments based on recommendations from regular customers and personal contacts. So it is safe to assume that most of Pizza Cottage’s diners choose to eat there based on word of mouth. Concentration of customer base for particular products: Pizza cottage’s concentration of customer base is pizza lovers. People who not only love pizza, but like the varieties of pizzas offered. MARKETING PLAN Competitor Analysis Donatos – A well-developed pizza franchise restaurant but located mainly in the Northern Region of the country. Famous for its thin crust pizza but also offers a variety of wings, salads, subs and deserts. Donatos pizza and such are offered at reasonable prices and they offer delivery but usually within 45 minutes to an hour. Little Caesars- A Nationwide pizza chain well known for its “$5 Hot and Ready Pizza” Offering a convenient option for pizza having the pizza ready when the customer comes in has allowed Little Caesars to have an advantage over its competitors. A disadvantage for this restaurant is that unlike their competitors do not offer much of a variety, only wings and breadsticks. They do not offer the convenience of delivery. Debra’s Pizza- A local pizza restaurant, in Newark Ohio, this is family owned and is not a franchise or popular chain. Debra’s pizza offers things like subs, salads, wings and breadsticks but are on a higher end of pricing. Higher pricing is probably due to them not being a franchise or major chain restaurant. They like Donatos offer delivery and also takes between 45 minutes to an hour. Collaborators Pizza Cottage is a family owned business; they are not a subsidiary of another company, nor do they have any subsidiaries. And they are not part of a joint venture. Their distributors are: Pepsi, Midwest Fresh (produce), RDP Food Services (all other foods, including pizza toppings), Cintas (linens), Matesich Distributing and Brown Distributing (beer/alcohol). They support a variety of area sports teams including: little league, girl’s softball, boy’s flag football and men’s basketball. Although they do not support any area charity events, they do donate pizzas to the area Red Cross for blood drives. Climate Political and legal environments o New tax laws for 2012 governing small business o Zoning laws for future locations o Wages are lower in Newark and other outlying communities compared to Columbus and surrounding metros o Governments in these smaller communities encourage and offer greater support of businesses to provide jobs and taxes Economic environment o Current unemployment rate in Newark is 8.7% compared to the national rate of 9.1% o Inflation of produce due to seasonal issues o Fluctuation of gas prices to ship products MARKETING PLAN Social and cultural environment o New diet fads and trends toward healthy eating are impacting traditional sales o Organic and all natural food craze preventing people from eating pizza Technological environment o New and improved ovens use to bake pizza o Improvements to keep items hot while getting it to customers o Computer software to run the company communications SWOT Analysis Strengths: Family owned- Local small business that is known locally for being family oriented and making customers feel as though they are family Superb customer service- personal touch and interaction with customers, creating customer loyalty Convenience- they have a drive up window for customers to pick up orders Fresh ingredients- have always used fresh ingredients to ensure better quality Free business delivery- currently help support local businesses by offering free delivery to other businesses within the delivery area Local advertisement- Advertise locally through flyers, cars, word of mouth, signs, and commercials Specials- Daily specials are advertised, as well as lunch specials Website- The website is easily navigated and detailed Weaknesses: Not a franchise- Less people know about it and become more reluctant to experience it Higher production costs- Being an independent restaurant, they have less access to capital and no franchise support. Lack of advertising- Unless you are in the serving area, most people have never heard of it due to lack of advertising outside of market area Small market area- Pizza cottage is only known in Central Ohio and have not expanded from there Customer service training expense- It costs a business a lot of money to train individuals how to treat and handle customers MARKETING PLAN Reputation- It is harder to build in some communities where customers are already set in their ways. Competition- They compete against major chain pizza places such as Pizza Hut and Dominoes. These places have online ordering and payment, which is also more convenient for some Pricing- It is independently owned and uses fresh, local ingredients, which causes the prices to be higher than the bigger chains. Specials- buying locally and fresh ingredients limits profitability Customer perception- Defining themselves as unique, they have to rise above the traditional pizza place perception Opportunities: Advertising- Flyers, inserts in Sundays papers with coupons Atmosphere- Introduce juke boxes, and/or games to create another atmosphere Expansion- Open new stores in different areas, such as malls, more stores in each county that already have one Online ordering- Expansion- new store opening, total of 5 stores open in the region. More opportunities for public to experience the products and build repeat business. Solicit feedback – highlighting continued customer satisfaction and good reviews will build a positive image of business New menu items – subs add customer requested items and variations within the scope of the current menu and style Expanding the menu to maybe accommodate vegans (no milk or egg products) Matching competitor’s coupons- matching local pizza place coupons Expanding the variety of pizza crusts- offering more than the 2 crusts now offered, such as a thick crust, herb flavored crust etc. Expanding the pasta menu – including lasagna and other Italian pastas No charge Deliveries – currently providing service to businesses, is it a possibility for households MARKETING PLAN Take and bake pizza – promote the opportunity to have fresh baked products available at home Multiple themes “sports bar atmosphere”, “family friendly”, “patio party” – Highlight the diversity Website business – opportunities exist with online ordering and online payment to make ordering faster, and less hassle Expand electronic advertising with facebook and twitter – place ads in borders or offer other promotions Continue pizza competitions – win pizza taste competitions and promote the superior taste Involvement in community to increase awareness – name recognition and show community support Better product promotions – Highlight products individually, specialties, wings, subs, etc. Specialty sampling – have a sampling hour during a current slow time, for customers to try small portions of a specialty product as a complimentary appetizer, an attempt to increase a lagging business timeframe. Bargain meals or coupons. Competition- Other local major pizza places have Economy – tight budgets consumers do not have as much disposable income to spend eating out. High prices could drive customers to cheaper restaurants. National chains – Competition for customers from recognized chains Pizza Hut, Dominoes, Donatoes, their television advertising, discount meals, and multiple locations create more customer recognition Competing prices- Keeping prices down to compete with area pizza places Supply cost increases – as the economy remains unsteady, increases in the cost of supplies will lower profit margins or drive prices up Limited low cost capable labor – Finding and retaining capable, efficient workers in and increasing expensive economy. Location – not in the main shopping district of Newark Threats: MARKETING PLAN IV. Market Segmentation Geographic Pizza Cottage serves the East Central Ohio area with 5 locations in towns with populations less than 50,000 including Buckeye Lake, Newark, Lancaster, Pickerington, and Zanesville. Stores locations are easily accessible close to business, shopping, and residential areas. Customers desire a convenient location to purchase the Pizza Cottage product. The East Central Ohio area has continued to provide opportunities to expand. Customers choose have dinner in the dining rooms, bar or patio. They may call in or order in for pick up or drive thru pick up. Others still may call in for home or business delivery. Surveys of general public have shown that potential customers may be willing to travel between from 0 to 5, and 20 + miles for dinner (Survey Results, question #6). Demographic Pizza Cottage customers typically include working class families, sports fans, and local business employees. Families enjoy the pleasant atmosphere, large dining area, kid’s menus and reasonable prices. Sports fans are able to view televised sporting events on one of the many wall mounted televisions throughout the dining room and the bar. They are able to enjoy drinks from the bar with their meals along with the reasonable prices and pleasant atmosphere. Local business employees are able to take advantage of the free delivery to their business. General public surveys have shown that the majority of 16 to 29 year olds eat out less than twice a week, where people over 30 tend to eat out more than twice a week (Survey Results, question #1). Psychographic Pizza Cottage appeals to customers who may enjoy watching sporting events or other programs while dining. There is a patio for patrons who desire the atmosphere provided with outside dining in pleasant weather. The pricing strategy appeals to working class customers who want a value for their money. Customers wishing for convenience have multiple choices; pick up, delivery, drive thru, and dining room usually with minimal waiting. Pizza Cottage strives for quality, and participates in product competitions to remain competitive in the industry. Fresh ingredients contribute to the high quality product produced for customers. 40 years of business serving customers high quality food with friendly customer service is a value to many customers. Pizza Cottage is also an active part of the community. General public surveys show that majority of individuals value recommendations from personal contacts, word of mouth referrals. MARKETING PLAN Behavioral Pizza Cottage provides a large dining area to accommodate groups, teams, and parties. Staff focuses of providing quality customer service and an enjoyable dining experience. Management maintains staffing levels to provide quality service and high quality products to meet the expectations of the customer. General public surveys show the majority of 16 to 29 year olds are influenced by friends more often when choosing a restaurant. 30 year olds and older typically make their choice from the choice of menu (Survey Results, question #4). The majority of surveyed individuals pay more attention to TV advertising (Survey Results, question #8). Finally the majority would dine at a restaurant that was recommended to them on a Friday or Saturday night even if it is crowded (Survey Results, question #10). V. Alternative Marketing Strategies Advertising Promotions o Children eat free – An effective sales promotion for a family style restaurant like Pizza Cottage would be children always eat free with an adult purchase. When a company offers a family friendly atmosphere it allows parents to be assured of a family oriented place, whereas sometimes they have to be a little cautious where they take their children. o Coupons - To increase pizza sales both carry out and dine in, print coupons on the sales receipt and the boxes; also provide coupons that can be printed from the website. Advertising Campaign o Pizza Cottage Date Night Objective: Create a campaign that people relate to, and can associate with on a personal level. What is your “Date Night” at Pizza Cottage? How can they relax and enjoy good food, good service and good atmosphere? Strategy: Present different “Slice of Life” “DATE NIGHT” scenarios for people to relate to. Give examples to seed the association process. Family – Instead of going to the grocery at the end of your work day, then home to cook dinner and clean up, have a family “DATE NIGHT” at Pizza Cottage. Bring the spouse and kids to Pizza Cottage. We will prepare your favorite pizza, salad, appetizers, or subs. Our servers will give your great service, and you can relax and enjoy the company of your family. Busy workers – Do you and your other half seem to be passing each other? Does it seem like too much is going on to just relax? Come to Pizza Cottage for a “DATE NIGHT”. Students – Class load got you stressed. Studying getting to you? Relax with your friends. Make a “Pizza Cottage Date Night”. MARKETING PLAN Get to know you dates – We all have had the first date. We don’t want it to be too intimate, too boring, or too much activity. We want it to be comfortable with a pleasant atmosphere and a good experience. Make your first date a “Pizza Cottage Date Night” and share some good conversation, good service and good food. Keep it simple. Friends – After work, after the kids events, after a round of golf, getting together with friends you have not seen for a while. Make a “Pizza Cottage Date Night” to share the experience. You can talk, laugh, and catch up. Game on – Game night going to a game, or catching one on the box a “Pizza Cottage Date Night” will give you the opportunity. Good food before or after the game, or catch a televised game on one of the many monitors. o Media Selection: Billboards, local radio, maybe ads in local game bills and student accessed media. o Evaluation: Customer surveys at table. A survey card of “What is your Pizza Cottage Date Night?” This could add to the examples to use in the campaign. Possibility of using the survey as a contest with wait staff to generate responses, thus adding to the positive experience by staff showing an interest in customers when they inquire and respond to the customers Pizza Cottage Date Night experience. Loyalty Promotions o Reward punch card - customers’ incentive to return is buy 4 pizzas and get the 5th free. This would be a good idea because the cost of production versus the sales price would still create profit even giving one away free. For example if it costs 5 dollars to make our pizza and we are selling them for 15 dollars that means for every 10 we sell we spend 50 dollars and make $150. If we gave one away for free costing us $5 to make then we are still making a profit of $145. Customers respond well when they are working towards a goal such as buying that 10th pizza. The idea that they get one free makes them feel rewarded. This has worked at other competitive restaurants such as Subway. Every 5 subs you bought there got you a free sub and sales almost doubled. o Points cards - It can be scanned each visit, much like rewards cards of larger companies, and can process coupons and discounts to those using the card. This can be a way to profile each individual customer and give them the deals through data mining that are best fit for their past expenditures. This is a way to ensure that each customer is receiving deals and coupons that are fitting for what they want rather than garbage that will not help them return or bring them deals. MARKETING PLAN VI. Selected Marketing Strategy Day of the week specials to highlight products: “Munchie Monday”- Each Monday, the “Munchies” (Appetizers) will be available at a discounted price of 25% off. “Toppings Tuesday”- Each additional topping is half off. This will be very appealing to those who love to load a pizza up with the good stuff! “Wing-it Wednesday”- Every Wednesday, each order of wings will be available for $1.50 off the menu price. “Thirsty Thursday”- Thursday’s special includes a large pizza and a pitcher of beer at a discounted price to help lure in the avid customers who enjoy beer with pizza. “Free-bee Friday”- Every dessert pizza ordered is buy one get one free. “Submarine Saturday”- All Subs are $2 off each Saturday MARKETING PLAN “Munchie Monday” “Toppings Tuesday” MARKETING PLAN Product Opportunity to highlight products, toppings, appetizers, subs, beers, salads and other items Price Multiple options, discounts on toppings or packages of products o Creates opportunities for consumers to experience additional products at a value price o Discounted pricing on specific days for specific products will generate additional consumer favorites that may be purchased at regular prices in the future Distribution (Place) In house Pick up and take out Delivery Promotion Majority can be in store Print promotions in local newspapers Flyers on packaging Radio advertising Billboard advertising Local event sponsorship VII. Short & Long-Term Projections By creating specials, Pizza Cottage is showing the public what they have to offer at a discounted price for each day of the week. This may be a method that is slow to start and may only show a minimal profit in the short term aspect. As time passes, loyal customers will be created and they will help increase the total profit by passing on the specials by word of mouth to friends and family. The process of creating specials will appear more profitable after a period of time, creating a long term projection. The specials are expected to constantly create new customers, as well as holding on to those who have been loyal since the beginning. MARKETING PLAN VIII. Conclusion The marketing plan for Pizza Cottage is an in depth analysis of how we plan to make the business a household name, as well as increasing profit. A Buckeye Lake icon for many years, we are confident in our ability to market our brand effectively. This plan discusses our goals in the market, as well as customer value and analysis. We have evaluated what attracts new customers and how to maintain our current customers and to increase sales profits. We discussed local competitors and national chains, as well as how Pizza Cottage can stand out from the competition by collaborating with other businesses. Our research has revealed current customers appreciate the food, service and atmosphere. Communicating our strengths to new customers will help increase our market share. The included SWOT analysis is an in depth view of what we believe are the company’s strengths, weaknesses, opportunities, and threats. The plan displays our selected marketing strategy, as well as alternatives that may or may not be used throughout the course of the business cycle. Using a daily special program to highlight our products and continuing quality service with a comfortable atmosphere will enhance the customer experience leading to positive appraisals from customers. MARKETING PLAN Survey Results What motivates a person to try a new dining experience? Survey questions 1. How many times a week do you eat out for your evening meal? 16-29 o o o o Less than 2 2 to 3 4 to 6 More than 6 25% 45% 15% 10% 57% 28% 0% 14% 30-44 45-59 60+ 67% 33% 40% 60% 25% 50% 25% 2. When a new restaurant opens in your area, what is the likelihood that you will visit it? o Not at all o Possibly o Definitely will visit 25% 30% 35% 43% 29% 29% 25% 20% 60% 25% 3. When looking to go out for dinner what kind of food are you likely to try? o o o o o Steak Italian Burgers Seafood Pizza 10% 20% 25% 20% 20% 25% 14% 43% 20% 75% 50% 43% 40% 20% 20% 25% 4. When choosing a restaurant, which of the following influences the decision? o o o o Brand name (ie AppleBee's etc) Popularity amongst friends Customer reviews Menu 30% 35% 5% 25% 57% 43% 25% 25% 25% 25% 20% 60% 25% 20% 75% 5. What is your age range? o o o o 16-29 30-44 45-59 60+ 30% 20% 25% 20% 6. How far from home do you typically travel to go eat at a restaurant? o o o o 0-5 miles 5-10 miles 10-20 miles 20+ miles 35% 20% 15% 25% 29% 43% 29% 25% 25% 25% 20% 50% 20% 60% 50% MARKETING PLAN 7. Are you more likely to try a new dining experience that is located: o o o o in an area close to work or home close to shopping or retail close to the highway does not matter 15% 40% 5% 35% 14% 86% 50% 50% 40% 20% 20% 20% 100% 8. Do you pay attention to any of the following advertising mediums: o o o o o from the radio in the newspaper online on billboards on TV 15% 20% 15% 20% 30% 9% 27% 64% 50% 50% 20% 20% 20% 40% 50% 50% 9. Do you value recommendations from: o o o o Celebrities Critics regular customers personal contacts 40% 25% 15% 15% 71% 14% 14% 50% 25% 25% 20% 20% 20% 40% 75% 25% 10. Which restaurant would you dine at on a Friday or Saturday? o o o o recommended and crowded recommended and empty unknown and crowded unknown and empty 35% 36% 10% 20% 57% 29% 14% 25% 75% 40% 40% 20% 25% 75%