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Marketing gives life to your restaurant. Well-planned and -executed
marketing will bring customers to your restaurant. And it will
bring them back. It will help keep them happy. And you’ll be pretty
happy, too.
Although this book is written for owners and managers,
restaurant marketing is the job of all restaurant employees. An
owner or manager must get excited about marketing and transfer
that excitement to the staff. Everyone must be engaged every day
in your restaurant’s marketing efforts.
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The essence of marketing is creating an experience that delivers
exceptional value to your target market and communicates
this message to the target market and your employees.
Successful restaurant owners and managers share a common
trait: they are customer focused and strongly committed to marketing.
Due to its dynamic nature, marketing is always exciting and
challenging. The marketing plan that creates maximum value for
your customers today will not necessarily be the one that does this
two years down the road. Your customers are forever changing.
You must change with them.
WHY SHOULD YOU READ THIS BOOK?
In 1971, the National Restaurant Association (NRA) published the
book, How to Promote Your Restaurant, which comments, “The most
under-promoted product in America today is the restaurant meal.”
Things have certainly changed since then.
At that time, independently owned and operated restaurants
ruled the restaurant landscape. They sold most of the meals eaten
away from home. Today, big restaurant chains have displaced them.
The entry of corporate giants into the restaurant industry has transformed
it from a mom-and-pop industry into an industry dominated
by large chains, in which fewer than 25 companies account for
over one-third of restaurant sales in this country. If you are working
for one of these conglomerates, you have the edge. If you aren’t part
of any of these organizations, read on.
Marketing was an option in 1971. Today, it is essential to gaining
and keeping a competitive edge. You must use marketing to attract
customers, give them a good experience, and capture their future
dining business. To do this, you must understand your
customers and create a marketing mix that provides value for your
target market.
2 R E S TAURANT MARKETING FOR OWNERS AND MANAGERS
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To illustrate how competitive the restaurant industry has become,
our research shows that when customers give a restaurant an
excellent rating, 80 percent say they will return. However, only 40
percent of those who give it a good rating actually plan to return.
Today, it’s not enough to be good. You have to be excellent.
Recall the last time you went to a restaurant.When you left, did you
say, “It was good”? If so, you’re probably not thinking about going
back anytime soon.Why should you? In most communities, there are
many good restaurants. On the other hand, if you left and said, “That
was excellent,” not only are you likely to return, you will probably tell
others about the great time you had.
Reading about and applying the ideas presented in this book
will help you achieve those excellent ratings. You will also be more
successful in attracting customers. If you can look up most times of
the day and see a waiting line for a table in your restaurant, then
we’ve done an excellent job.
The two dozen or so gigantic restaurant chains operate in a
highly competitive environment, where aggressive marketing skills
are needed to win customers. They employ corporate directors of
marketing who work with advertising agencies and public relations
firms. They spend millions of dollars on marketing. If they sneeze,
we independent operators catch a cold.
Earth to restaurant owners and managers: This is your competition.
Many independent operators and small chains do not have
these kinds of marketing resources. Managers of these operations
have to use their resources more effectively. This book will show you
how to do that.
According to management guru Peter Drucker in Business
Week, “Marketing encompasses the entire business. It is the whole
business seen from the point of view of the customer. Without an
understanding of marketing, you do not have a good understanding
of business.” This book is designed to help you understand and use
marketing to increase the profitability of your restaurant.
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This is not a textbook. It is more along the lines of what some
people refer to as a “self-help” book. It’s intended to pass along some
good ideas—things you can use right now to make a difference. It’s
also intended to excite and motivate you.
We intend this book to be accessible. It is written in a conversational
manner and is filled with examples of the ways in which other
restaurants are using the marketing mix. In order to preserve the flow
of this conversation, the book does not contain figures, sample
menus, copies of advertisements, or photos.
We are fortunate to have an Internet expert on our team. Patti
has won national awards for the development of informational Web
sites. She developed and maintains a companion Web site for this
book. Instead of showing a black-and-white copy of a year-old menu
reduced to illegibility in the book, the Web site offers currently used,
full-color menus. The Web site also includes advertisements, promotions,
examples of publicity, and other sources that will assist you in
developing your marketing mix.
This book will start you on your journey to maximizing the
value created by your marketing mix. The Web site will help you to
continue that journey.
THE SEVEN Ps OF MARKETING
Marketing involves managing the marketing mix, which consists of
the seven Ps:
■ Price: This is the dollar amount you
place on your products.When combined
with the other Ps, it denotes a certain
value. This value should be consistent
with the perceived value the target market
places on your products.
4 R E S TAURANT MARKETING FOR OWNERS AND MANAGERS
MARKETING MIX Price, product,
promotion, place,
process, participants, physical
evidence.
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■ Product: This includes your menu items and the other
products and services that you buy, prepare, and sell.
■ Promotion: This is the overall message you relay to your
target market, including advertising, sales promotions, personal
selling, and public relations efforts.
■ Place: This includes the location of your restaurant, the surrounding
neighborhood, and its accessibility and visibility.
■ Process: This consists of the way in which you deliver your
service. Do you have a buffet? Do your customers get their
own soft drinks? How do you handle take-out orders? Do
you place the wine jug on the table and let the customers
pour their own?
■ Participants: These are the people you want to participate
in your operation. You choose them. They are your customers,
employees, and other stakeholders, such as purveyors
and other outside service providers.
■ Physical evidence: Your physical facilities create a particular
atmosphere. They provide tangible clues to the customer.
For instance, the exterior appearance of Bennigan’s
lets people know it is a casual restaurant. A neat and clean
dining room gives the customer evidence that the restaurant
is well managed.
The first four are the traditional Ps, developed for marketing
tangible products, such as washing machines and underwear. The
other three are unique to restaurants.
Managers often think of marketing and advertising as the same
thing. However, advertising is just one form of promotion, which in
turn is just one element of the marketing mix. And, depending upon
the situation, you may not even use advertising in your mix. For example,
some restaurant managers may do an excellent job of crafting
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the other elements of the marketing mix to create value for their customers.
After being in business for several years, the positive word of
mouth from customers replaces their paid advertising. In order to
maximize the benefits you receive from marketing, you need to understand
and use all seven elements of the marketing mix.
Just as you do with ingredients in a menu item, you must determine
how you will use the seven Ps as ingredients in your marketing
plan. They are interrelated. For example, the mix needed for a
successful quick-service restaurant will differ significantly from the
one used by an upscale steak house.
Charley Brown’s Steak and Lobster opened its first unit in 1965.
The concept had seven unique features: display cooking, gaslights,
waitress uniforms with short skirts and push-up bras, water view,
USDA Prime steaks, signature liquor service and glassware, and
sourdough bread flown in daily from San Francisco. Eventually, six of
these unique attributes were copied by competitors (all except the
water view)—but it took them several years to do it.
This book will help you develop the right marketing recipe. It will
give you the tools needed to create a successful mix for your restaurant
and will help you create something unique, something that sets you
apart from your competition. However, it will also suggest ways to go
beyond simply offering a different experience for your guests.
Differentiation is important, but sooner or later your innovations
can be copied by your competition—though by that time you’ll be on
to something else, right? The key is to latch on to a differentiation strategy
that renders you unique. It is impossible to copy uniqueness.
CREATING VALUE FOR THE GUEST
Ray Kroc, the founder of McDonald’s, created value for the family
market with his formula of quality, service, cleanliness, and lowpriced
food.He referred to his low prices as value and his formula for
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success as Q, S, C, and V. In the case of McDonald’s, value was related
to low price. But value does not always mean low price.
Instead of thinking about value, you might want to focus on
perceived value. It is critical to get inside the customer’s mind, to uncover
his or her definition of “value” or “great value” or “mediocre
value,” and so on. It’s not what we think, but what customers think
that will make the difference. For instance, customers typically perceive
a greater value if the quality of the products you sell and the services
you provide are attractive and the prices are reasonable. But the
perceived value would tend to decline if your prices are thought to be
excessive. You will need to play around with the elements of quality,
service, and price to develop the best possible combination that will
exceed your guests’ expectations. In the end, you want your customers
to say, “I got my money’s worth.” If they say that, they’ll be back. And
they’ll make sure other people know about your restaurant.
As Chapter 6 notes, when pricing a
product, guests will tend to consider the
product’s quality and the service provided,
along with the price you’re charging. These
things are generally uppermost in your
mind when you’re wracking your brain to
come up with the appropriate price points.
But when looking at the big picture, when viewing your operation
as one of many restaurants in the community, you should consider
other tangible and intangible benefits you can offer that may attract
guests and cause them to view value in a different light.
For instance, some guests may be attracted to your operation
because of its unique atmosphere, the convenience of valet parking,
or the extended hours of operation. Some may fall in love with
your willingness to prepare off-menu items. The list of possibilities
is endless. All these things can create value. The trick is to find
out what they are and how much customers are willing to pay for
them.
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PERCEIVED VALUE Perceived
value is directly related to
perceived quality of the
goods and services you provide,
but is indirectly related
to the prices you charge.
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Although you know that customers will pay for these elements
of value, you cannot put a price tag on them unless you take the
time to research your customers’ needs and desires. For example,
chatting with your steady customers may lead you to conclude that
most of them have more money than time.Waiting is a cost that can
reduce value. Some customers will not wait more than 30 minutes;
to them, this wait reduces the value of their experience in your
restaurant.
Some restaurants have only one location. The value of the
restaurant is reduced as the drive time lengthens.What to do? Often,
you can reshuffle the entire marketing mix to create more value, but
in this situation there are fewer options. An excellent solution is the
Outback Steakhouse call-ahead program. This program allows
guests to call the restaurant and put their names on the waiting list
before they start out on their trip. This reduces the wait time, which
creates more value.
Another way to create value is to be
different. Provide something no one else
has. In today’s society, boring is bad for your
financial health.
A tried-and-true technique used to
create value is to put a new spin on an old
product. McDonald’s differentiated itself by
creating a national chain that was clean and
offered a consistent product. Burger King differentiated its restaurants
from McDonald’s by flame-broiling the product, thereby
adding value for some customers. Wendy’s differentiated itself by
adding a number of unique features, such as using fresh hamburgers
instead of frozen ones, providing tables with nonattached chairs, and
including other similar features that appealed to, and thus created
value for, adults. In these ways, each of these quick-service hamburger
restaurants differentiated itself and gained a competitive
edge.
8 R E S TAURANT MARKETING FOR OWNERS AND MANAGERS
CALL-AHEAD PROGRAM This
program allows guests to
call the restaurant and put
their names on the waiting
list before they start out on
their trip. This reduces the
wait time, which creates
more value.
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The service delivered by your employees is a very important element
of value. It is also an area where you can distinguish yourself.
If you do it well and do it consistently, you will also differentiate
yourself and stand out from the crowd.
To be successful at marketing, you must create a service culture
in your organization. Your culture should be focused on serving and
satisfying your customers. All employees should embrace this culture,
which means you must recognize and reward employees who
help create value for your customers.
In Service Management and Marketing, Christian Gronroos relates
a comment from Roger Dow, Marriott’s vice president of sales
and marketing services: “We used to reward restaurant managers for
things that were important to us, such as food costs.When have you
heard a customer ask for the restaurant’s food costs? You have to reward
for what customers want from your business.” Today, measuring
and rewarding customer satisfaction is
part of Marriott’s reward system.
All in all, in order to provide excellent,
consistent value to your guests, you need to
adopt the marketing concept. This concept
consists of three parts:
1. Everyone in the operation must be customer oriented.
Restaurants sell service; supermarkets sell food.
2. Marketing must be integrated throughout the organization.
Everyone must embrace marketing and its concomitant
customer orientation.
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THOUGHT FOR TODAY
Differentiation is a journey toward uniqueness. It requires considerable dedication.
Providing customers with what they value and doing this better than the
competition creates excellence.
MARKETING CONCEPT This
consists of customer orientation,
integrating marketing
throughout the organization,
and meeting company
objectives.
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3. You must meet company objectives. Roger Dow is not suggesting
that we shouldn’t be concerned about costs.
However, managing costs, producing profits, and creating
and maintaining customer counts are equally important. If
you create temporary profits by reducing customer value,
you will eventually see a steady decline in cover counts and
profits.
When creating customer value, you need to add benefits that
are worth more to customers than what it costs you to create them.
These benefits don’t have to be overly elaborate or expensive. A benefit
might be something simple, such as putting a special sauce on a
grilled salmon dish, making it a house special, and charging $2 more
for the item. It might involve developing a specialty dessert at a cost
of 75 cents and selling it for $5. Or it might mean developing a service
delivery system that reduces your costs but does not reduce customer
value.
Good marketing is not an expense. It is an investment. It will
generate excitement, enthusiasm, and electricity. It will pay for itself
many times over.