HBM 131 1st Edition Lecture 28Outline of Last Lecture:I. World Street Food Presentation Outline of Current Lecture:I. Marketing Current Lecture:I. Marketing A. Marketing Overview 1. Market: A group of people who desire the product or service provided by a business.2. Marketing: The process of communicating a business’ message to its market3. Marketing determines:–What products and services to offer, and how to position them in the marketplace–How to promote them to potential buyers–How to price them so that people will buy them–How to deliver the goods to buyersB. Marketing FunctionsC. Marketing Concept1. In the current business environment, marketing drives the operation. -To successfully market:•Determine customer needs and wants before doing anything else. •Determine the costs, prices, and profitability of products and services before starting toproduce them.•Organize all aspects of the operation to provide what the customers want, and not other things.D. The P’s of Marketing1. Product - what you are selling2. Price - how much you are charging for your product3. Promotion - how you tell people about your offer e.g., your product and price4. Place - how people can buy your productE. More P’s1. People - services are performed by people whose performance influences the quality of the experience thus influences the concept of value and satisfaction. 2. Process - it's not just the attitudes of the person that matters but the process they useto provide the service. We discuss the concept of a service sequence in earlier chapters and they help guide the service experience.3. Physical evidence - services are intangible so the customer looks for physical clues about the qualityF. Marketing Plan1. Marketing plan: A list of steps an operation must take to sell a product or service to a specific market2. A marketing plan has five main components:-Research the market-Establish objectives-Develop a market strategy-Implement an action plan-Evaluate and modify the action plan as neededG. SWOT1. SWOT analysis (also called a situation assessment) is used to identify an operation’s strengths, weaknesses, opportunities, and threats.2. Strengths: All of the strengths of the operation; areas where it excels3. Weaknesses: The operation’s shortcomings4. Opportunities: Areas where the operation could either increase revenues or decrease costs5. Threats: Factors outside the operation that could decrease revenues or increase costsH. Market Segmentation 1. Target market: The group of people an operation intends to pursue as customers2. Identifying a target market enables organizations to:–Provide the products and services needed–Avoid mass marketing, in which everyone in the market is treated as having the same needs and wants–Focus on target marketing, which treats people as different from each other and tries to make a focused appeal to a distinct group of customersI. Creating a Market Identity1. Positioning creates a clear, specific identity for both a product and the operation within the marketplace. The goal is to stand out in the crowd.2. Positioning consists of three steps:–Identify possible ways to differentiate the operation within the market, to create a unique identity.–Select the right mix of differentiating aspects.–Communicate the chosen identity to a specific target market. J. Ways to Differentiate an Operation 1. To differentiate an operation from its competitors and create a unique identity, managers can look at the following:2. Product: The first and most obvious way to position an operation in the market is through the product it offers.3. Physical appearance/aesthetics: Use the actual physical space of an operation to create an image.4. Location: Location can play a big part in creating an identity. 5. Image: Another way to differentiate an operation is through its image.K. Ways to Attract Customers1. Merchandising techniques at the table, such as unique garnishing or flambé2. Themes, both as operation-wide celebrations and special events3. Frequent-shopper cards that offer discounts or other incentives4. Signature items, such as special deserts or “secret” recipes5. Specials, such as “buy one, get one free” nights6. Educational promotions, such as wine tastingsL. Market Communications1. Promotional mix: The ways an operation communicates with its market 2. Advertising: Paying to present or promote an operation’s products, services, or identity3. Sales promotions: Limited or short-term incentives to entice customers to patronize an operation4. Personal selling: Always key to an operation’s financial success, but well-trained service staff can also go a long way in communicating an operation’s message5. Public relations (PR): The process by which an operation interacts with the community6. Direct marketing: A concerted effort to connect directly with a certain segment of the marketM. Menu Overview1. There may be no stronger marketing tool for a restaurant than its menu.2. It provides two functions: planning and communication.3. It presents an opportunity to distinguish food items from those of the competition. 4. The menu may be an operation’s best sales tool, as it can greatly influence what customers decide to order.5. It helps create the image or identity of an operation. N. Analyzing Menu Sales1. Sales mix analysis measures the popularity and the profitability of a group of menu items. Conducting a sales mix analysis helps managers maximize profits. 2. Sales volume is the number of times a menu item is sold in a time period.3. Menu engineering systematically breaks down a menu’s components to analyze whichitems are making money and which items are selling.O. Ways to Advertise1. Print2. Radio3. TV4. Social Media–Facebook–Web site–Twitter–Etc5. Community involvementP. Marketing, Internal Vs. External 1.Internal–Loyalty programs–Servers–Bounce backs–FishBowl–Single Platform 2. External–Radio, Print, Social Media, Community Involvement–Groupon–Living