Lecture 11Outline of Last LectureOutline of Current LectureI. Marketing Strategya. What does marketing mean?b. Market SegmentationII. SWOT AnalysisIII. 4 P’s of MarketingIV. Pricing Strategya. Segmentation ProcessCurrent LectureLecture 11Outline of Last Lecture I. Interviewing Applicantsa. Relevant Interview Questionsb. Screening ApplicantsII. Tax Issues involved in hiring workersIII. Staff Traininga. Employee HandbookIV. Managing Staffa. Performance ReviewsOutline of Current LectureI. Marketing Strategya. What does marketing mean?b. Market SegmentationII. SWOT AnalysisIII. 4 P’s of MarketingIV. Pricing Strategya. Segmentation ProcessCurrent LectureI. Marketing Strategy – describes how you’re going to get the word out about your new venture of Catering businessa. Part of your business plan; must have to succeed – doesn’t matter if your operation is off-premise, mobile, or on-premise fine diningb. What does Marketing mean?i. Showcasing your business and all it has to offer in appealing ways in order to attract the maximum amount of viable customers to itHTM 2514 1st Editionii. Marketing involves ability to:1. Recognize industry trends2. Identify customer needs3. Formalizing sales plans4. Develop products, prices advertising promotions and salesiii. Caterer’s marketing program should communication to targeted potential clients that the food, beverages and services provided by that caterer will be of the highest quality and a step above the competition’siv. American Marketing Association Definitions1. “Marketing is organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders2. “Sales are any number of activities deigned to promote a customer’s purchase of a product or service”c. When should I start marketing my new catering business?i. Prior to opening – this is when most caterers begin the marketing process – VERY important to have sufficient funds in place to continue the marketing campaign after thebusiness has opened1. Advertising AFTER business has opened is more effective because the customer will now have a physical entity to attach to the images of the business conveyed through advertisingii. Many different ways to market a business – the smart businessperson will use a VARIETY of methodsd. Market Segmentation- market may be too large to serve and companies usually have limited resources to target entire marketi. Market must be divided into different groups, with similar characteristics in common, and a profile for each segments is needed to be developedii. Select your target segment and develop strategies to attract your target segmentiii. Types of segmentation variable:1. Geographic segmentation – nations, states, regions, counties, cities or neighborhoods2. Demographic segmentation – age, gender, income, race3. Psychographic segmentation – social class, lifestyle or personality4. Behavioral segmentation – special occasion segmentation, benefits sought, user status, usage rate, loyalty statusII. SWOT Analysis – strategic management tool which is used to empower a caterer to interpret an overall business positiona. Used to match strengths to a specific niche in the competitive catering marketi. The External analysis examines Opportunities/Threats created by environment1. These are things you CANNOT controlii. Internal Analysis examines Strengths/Weaknesses of the company1. CAN controlb. 4 elements:i. Strengths – positive attributed, skills, characteristics, assets of the company that are internal issues1. Create a tactical, defensible competitive position for the caterer to use as an offensive or defensive weapon2. Factors within the company which are controllable by the company (opportunities are not controllable by company, created by forces outside of company)3. Examples: excellent employees (human resources), outstanding services and products (food), facilities, management, etc.ii. Weaknesses – deal with internal factors, things that are in need of improving within the company1. Caterer must REGULARLY monitor weakness of the company and try to improve them2. Examples: inexperience of employees, poor services and food, lack of physical endurance, insufficient operating capital, lack of leadership, etc.iii. Opportunities – positive things for the company that stem from the outside environmentinstead of the inside 1. You CANNOT control these2. Seizing opportunities and acting fast is necessary for caterer3. Examples: potential economic growth with high demands, lack of competitioniv. Threats – negative things in outside environment that affect company’s sales or overall performance1. CANNOT control 2. Caterers must scan the environmental threats because if they are detected in time, the company gets a chance to act and prevent losses3. Examples: governmental regulations, poor economy condition, low demands, increased costs, high competitionIII. The Four P’s of Marketing: four basic categories affect marketing decisionsa. Also known as the “marketing mix” (coined by Neil H. Borden, 1964)b. These areas are controllable and can be changed according to constraints that arise in marketplace, including new trends and product availabilityc. This format can be used to formulate and organize even the simplest of marketing campaigns – use these as a checklist to ensure that each area is considered before you invest your advertising dollarsd. Four P’s in detail:i. Product – both specific products and services; marketing decisions on products should be based on quality, style, safety, functionality, and uniqueness1. Must suit wants and needs of target market2. In catering operations, product includes foods and serviceii. Price – marketing decisions in this area can be affected by seasonality, availability, volume discounts, wholesale vs. retail pricing, and pricing strategy of competition1. Price must be selected based on costs and target market2. Low price –> high demand – > low margin3. High price --> low demand --> high marginiii. Place (Distribution) – involves how products or services get to the customer1. Can be affected by: transportation considerations, perishability, packaging, inventory management and order processing2. This is about availability, distribution, including ease of access, traffic flows, and the like3. If off-premise = focus on distributioniv.