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0 AMB202 Integrated Marketing Communication IMC Final Assignment: The Flying Cock Group: Lachlan Dunk Fidel Tang Harry Yan Leo Chau Leon Tam Due Date: 31/05/2015 1 Executive Summary This report was commissioned by the owners of The Flying Cock (TFC), Fortitude Valley, to develop a marketing strategy to enhance brand equity within a budget of $10,000. A PEST and SWOT analysis draws attention to strong external factors supporting the brand in the market place. This includes a geographic location experiencing strong economic growth supported by government policy and a changing inner-city demographic with market behaviour congruent with the objectives of the business. In contrast the analysis reveals internal weakness affecting market behaviour. Poor ‘open for business’ cues are limiting the market’s daytime patronage. The report offers a marketing solution that integrates three strategies. It is recommended that TFC: increase in the presence of ‘open for business’ cues along Brunswick Street install a mobile coffee cart in the rear alleyway of McLachlan Street to create a ‘third place’ for the target market. The coffee cart could also be used at special events at other locations to broaden the market base. use an online rewards app to reinforce market behaviour and provide a communication platform for marketing purposes. A short implementation time frame of 8 weeks is recommended with costs budgeted over 24 months. It is anticipated that market behaviour will respond positively with a return on investment evident within the financial quarter. 2 Table of Contents Executive Summary................................................................................................................................. 1 Table of Contents .................................................................................................................................... 2 1. Introduction .................................................................................................................................... 3 2. Client Evaluation ............................................................................................................................. 4 2.1 Client Profile............................................................................................................................ 4 2.2 Objectives...................................................................................................................................... 4 2.3 Internal and External Situational Analysis .................................................................................... 4 3. Strategies ........................................................................................................................................ 8 3.1 Strategy 1: Outdoor “Open for Business” Cues ...................................................................... 8 3.2 Strategy 2: Rear Alleyway Coffee Cart ................................................................................... 9 3.3 Strategy 3: Apply a rewards program app to engage in direct online marketing ........................ 9 4. Budget ........................................................................................................................................... 11 5. Media Plan .................................................................................................................................... 12 6. Timeline......................................................................................................................................... 13 7. Investment Evaluation .................................................................................................................. 14 8. Conclusion ..................................................................................................................................... 17 9. References .................................................................................................................................... 18 3 1. Introduction Integrated marketing communications coordinates all elements of the marketing mix. Integral to this is a five step process that profiles the target market, employs a variety of media channels to reach the target market and delivers a consistent brand message to that target market that positively influences consumer behaviour resulting in strong customer relationships that enhance brand equity and ensure businesses and products are sustainable in the market place. This framework forms the basis of this marketing report prepared for the owners of The Flying Cock hotel in Fortitude Valley, Brisbane. 4 2. Client Evaluation 2.1 Client Profile The Flying Cock (TFC) is the current business operating at the hotel located on the corner on Brunswick and McLachlan Streets, Fortitude Valley. Since the 1980s, the venue has had three fit outs, all targeting significantly different markets. The current business opened in September 2014 and is owned and managed by a group of independent investors from the hospitality industry. The current fit out has the following features: front bar on Brunswick Street offering mainstream and crafts beers, cocktails and boutique wines sports bar with Foxtel sports, TAB and arcade machines restaurant with seating capacity for 90 offering a mix of traditional and American pub food large upstairs drinking hall open Friday and Saturday nights with live music, dance floor and bars industrial décor with a rustic feel. 2.2 Objectives The owners have identified the following objectives: Increase lunch and dinner covers Increase café and alcohol sales during or outside meal service Broaden customer base Increase brand awareness Increase bookings by either the website [email protected] or by phone (07) 3172 6109. 2.3 Internal and External Situational Analysis TFC’s current market position was evaluated by situational analysis. This was based on a PEST analysis focusing on external factors and a SWOT analysis highlighting both external and internal factors affecting market position. The results are shown in Figures 1 and 2 below. 5 Political: Economic: - The Brisbane City Council has recently completed a $4million upgrade to Brunswick Street Mall to improve safety and aesthetic appeal for patrons. - Fortitude Valley Economic Development Board was established in 2013 consisting of local, private-sector representatives, indicating there is sector support for businesses in the precinct. - There has been an Increase in commercial and residential building approvals for Fortitude Valley suggesting the area is undergoing economic growth. - There are 1847 registered businesses in the Fortitude Valley precinct, providing economy of scale and infrastructure that TFC can exploit. - Increase in commerical floor space of 11% in Fortitude Valley since 2011 - Fortitude Valley precinct has experienced increasing employment opportunities (projected 57% increase from 2011). This indicates the precinct is undergoing economic growth and business acvtivity is strong. - Fortitude Valley is Australia's first designated "Special Entertainment Precinct" indicating government by-laws and zoning regulations are favourable. - The major employment growth for this precinct has been in the business services and retail sectors. This could provide a potential market for TFC daytime patronage. - Increase in retail floor space of 8.9% in Fortitiude Vallley since 2011 - Current state government is investigating the implementation of a 1am lockout, due to recent concerns about late-night safety. This further highlights the need for a marketing strategy to increase day-time business Figure 1: The Flying Cock PEST Analysis Social: - The local Fortitude Valley population is characterised as well-educated, high-income earners, no children, appartment dwellers. This represents a strong target market. Technological: - The internet is creating new market places and opportunities in the hospitality industry. - The median age is 30.6 years, a suitable demographic for a target market. -Examples include the arrival of mobile devices on the table, online reservations, social media and new payment methods, which would appeal to the target demographic. - The precinct has a projected 82% population growth over next 20 years, suggesting target markets are viable and sustainable into the future. - Online review websites eg Dimi, Yelp, Urban Spoon could be exploited by TFC and would be read by the target market, given their age and soico-economic status. - The venue does has a history of "mixed" target markets and this could lead to misperceptions of the venue as a potential "Third Place". - False negative and false positive reviews are an issue in the early stages of the business operation but would be minimised once the reputation of the business it established with the target market. 6 Strengt Strengths: -The location on Brunswick Street near Fortitude Valley Centre and high foot traffic in the area means the venue is geographically well placed and within the range of travel of patrons - The venue already has existing hotel infrastructure from previous fit outs meaning these costs are minimised allowing more of the company budget to be allocated to marketing. Weaknesses: - There is currently a lack of day-time "open for business" street cues - Low levels of interior lighting also hinder day-time "open for business" cues and impact on day-time aesthetic appeal. - There is a public perception of the venue as a destination for night-time entatainment only. - The venue already has high weekend patronage which could be contacted to help expand day-time operations. - The venue has not fully developed its online presence with a Facebook page only and no designated website. - The venue already has received positive word of mouth reviews, as evidenced by Facebook and Yelp ratings. This means the market would receive day-time business favourably. - Parking is on-street, metred only, during the day which may restrict the market to foot traffic - Elements of decor conflict with the brand image, for example sporting memorabilia displayed in the public bar. Figure 2: The Flying Cock SWOT Analysis Opportunities: - The outdoor alleyway space presents an opportunity for cafe style business. - The venue's close proximity to shopping and cultural precincts provides potential patrons. - The profile of the large daytime market is consistent with TFC's brand image. - Given the area has high commercial and residential growth, there is existing market potential. - Favourable council by-laws given venue's location within special entertainment precinct, provide an opportunity for further development of hospitality services, which the venue could exploit. Threats: - There are many competitng restaurants and cafes in area. - There is a strong market perception of the venue having a night club only purpose - Contracts restrict the sales of craft beers - Payroll expenses such as penalty rates may impact on the company's ability to expand its hours of operation. 7 Figures 1 and 2 show substantial external advantages supporting TFC’s operations. The venue is located in an area experiencing commercial and retail growth coupled with a changing residential demographic towards high-income, young, urban professionals, both of which are consistent with TFC’s image and target market. The area experiences high foot and vehicular traffic from commuters and residents giving market exposure. Additionally, government legislation supports investment potential. Finally hospitality generally is experiencing growth from the presence of online review and rewards sites. Despite these advantages, internal weaknesses are impacting on the success of TFC. Consumer misconception and market behaviour see the venue operating primarily as a nightclub, reinforced by lack of “open for business” cues during the day. The site’s poor daytime street appeal reinforces this behaviour. Consequently marketing strategies have addressed internal weakness. 8 3. Strategies The marketing model outlines three strategies drawing on the Theory of Planned Behaviour (TpB), an attitude model that links intentions and behaviour (Solomon, 2013). When integrated the strategies give a consistent marketing message about TFC that will positively influence the behaviour of the target market. 3.1 Strategy 1: Outdoor “Open for Business” Cues This strategy involves the use of blackboards, mounted on the front, Brunswick Street pillars, to display meal and beverage prices. The blackboards act as “open for business” cues when observed by foot and vehicular traffic, raising awareness of opening hours and potentially increasing daytime sales of drinks and lunch covers. This strategy as it relates to TpB is shown in Figure 3 below. Attitude Subjective Norms Intentions: Behaviour: Attend TFC Act on intention Percieved Behavioural Control: Outdoor "open" cues Blackboards allow the consumer to register TFC to be open and therefore will shape intentions FIGURE 3: TpB AS IT RELATES TO STRATEGY 1 Current “open for business” cues are poor caused by factors such as low levels of interior lighting. A conative perception exists that the business is closed during daytime hours. As explained by the Elaboration Likelihood Model, consumers have little motivation to evaluate messages linked to business hours because an abundance of nearby open restaurants means they formulate perceptions based on a peripheral route of elaboration (Behaviour Works Australia, 2012). If individuals are conditioned to perceive blackboards as an “open” cue, this strategy would positively shape the target market’s conative perception that they are able to attend TFC during the day. This strategy has the added advantage of being cheap and easy to implement. 9 3.2 Strategy 2: Rear Alleyway Coffee Cart This strategy involves the installation of a mobile coffee cart with seating in the rear alleyway, off McLachlan Street. It draws on the inner-city trend towards popular laneway cafes with an ‘edgy’ atmosphere. It could change the behaviour of TFC’s target market and would positively influence attitudes of TFC being not only a great bar but a great café as well. Repurpose alleyway to include coffee cart Attitude: TFC has good bevarage service and therfore potentially good restaurant Intentions: Try cafe and restaurant Behaviour: Act on intention Subjective Norms Percieved Behavioural Control FIGURE 4: TpB AS IT RELATES TO STRATEGY 2 As demonstrated by third place theory, individuals seek to form personal attachments to recreational sites, such as cafes (Rosenbaum M. S., 2009). The ability of these establishments to occupy the space of a “third place” is determined by (Rosenbaum M. , 2007): Place dependency – ability of TFC to fulfil utilitarian needs food and drink Place identity – third place( that is laneway) is congruent with patrons’ self-identity of being young urban professionals with alternative tastes & Place lifestyle – patronage to TFC would form part of patrons’ routines, particularly those living and shopping regularly in the Fortitude Valley precinct. Utilising the venue’s alleyway space, would create a potentially successful “third place” for the target market. 3.3 Strategy 3: Apply a rewards program app to engage in direct online marketing This strategy involves implementing a digital rewards program such as Rewardle©. This provides an incentive for patrons to revisit TFC to gain rewards points and it gives the business access to social 10 media, mobile phone and email contacts allowing it to undertake direct marketing with patrons (Chitty, 2015). Because of the universality of rewards apps there is awareness within the target market of their potential benefits and therefore their widespread appeal. Such apps would provide TFC with social media platforms that could be utilised to target specific customers with messages relating to specials, events and booking opportunities. Targeted digital messages would raise awareness of promotions that customers could take advantage of, thereby positively influencing control beliefs which in turn will change market behaviour. Attitude Subjective Norms Intentions: Percieved Behavioural Control: Direct marketing, social media, phone and email Take advantage of rewards Raising awareness of deals customers can take advantage of such as lunch specials and venue hire FIGURE 5: TpB AS IT RELATES TO STRATEGY 3 Behaviour: Return to take advantage of ongoing deals 11 4. Budget With a campaign budget of $10,000, the marketing proposal is calculated to last for 24 months, with an initial outlay of $3378 and weekly costs of $250. Overall 86% of campaign funds are to be allocated to Strategy 2, as this is the most important strategy in addressing the business objectives outlined in Section 2. Approximately 12% of funds will be allocated to Strategy 3, direct online marketing through the application of a rewards program and the remaining 2% of funds will be allocated to Strategy 1, increasing the level of outdoor “open for business” cues through blackboard signage. A budget breakdown by strategy is shown in Tables 1 and 2 below. Strategy 1 (Outlay Costs) Blackboard (Standard/Mounted) Blackboard (Frame) Unit Cost $ $ Strategy 2 (Outlay Costs) Outdoor Tables Outdoor Seats Synthetic Grass (1x5m) Umbrellas Cart Milk Fridge # Units 20 88 Unit Cost 3 1 $/Month $ $ # Units $ 210 $ 25 $ 56 $ 85 $ 1,750 $ 347 TABLE 1: Budget outlay for Strategy 1 and 2 Strategy 2 (Weekly Costs) Total 60 88 Total 3 6 5 5 1 1 $ $ $ $ $ $ 630 150 280 423 1,750 347 Months Total Coffee Machine (Secondary) $ 187 24 $ 4,487.60 Grinder (Secondary) $ 14 24 $ 329.68 Months Total Strategy 3 (Weekly Costs) $/Month Rewardle Subscription $ 49 24 TABLE 2: Monthly expenses for Strategy 2 and 3 $ 1,176 12 5. Media Plan For each strategy the corresponding media plans are shown in Table 3 below. Strategy Mediums Used Continuity Schedule Strategy 1 Outdoor Signage/Posters Continuous Strategy 2 Outdoor Promotion (Events Promotions) Flighting Strategy 3 Social Media, Mobile and Email Pulsing TABLE 3: Media Plan Consistent with the aim of strategy 1, to provide consistent “open for business” cues, it can be seen that the blackboard outdoor signage should be applied using a continuous continuity schedule, as this will result in the greatest impact. In applying strategy 2, TFC would have the opportunity to undertake events promotions by utilising the mobile coffee cart to make appearances at community events such as Fortitude Valley markets, Powerhouse Farmers’ markets and Teneriffe Festival. Consistent with the timing of such events, TFC should apply a flighting schedule. Through the application of Rewardle©, TFC should engage in a number of direct marketing approaches to promote dining specials, special events such as Melbourne Cup and the opportunity to book space for functions such as Christmas and birthday parties. Accordingly, patrons could be targeted to receive messages based on demographic factors such as age. For example, specials including “Happy Hour” and live music would likely appeal to individuals aged 18-25. Furthermore, this form of direct marketing should be applied using a pulsing continuity schedule to account for seasonal factors affecting the behaviours of patrons and therefore the relevance of each message. 13 6. Timeline The implementation stage of all 3 strategies should take place according to the following 4 phases: Phase 1 - Initiate procurement for strategies 1 and 2 Phase 2 by the end of week 1 - complete implementation of strategy 1 Phase 3 by the end of week 6 - complete implementation of strategy 2 and initiate procurement for strategy 3 Phase 4 by the end of week 8 - complete implementation of strategy 3 14 7. Investment Evaluation Table 1 below indicates the SMART objectives that have been determined as a result of the client’s objectives and the strategies developed by this marketing team. The table shows that while no single strategy is able to successfully address each of the client’s objectives, when integrated they provide a successful marketing proposal that sets specific measureable targets that can be achieved with realistic time frames, providing not only a return on investment but an increase in business within two years, which is sustainable. 15 Table 1 Strategies Increase daytime outdoor visual cues to indicate TFC is ‘open for business’. This includes purchase of blackboards and posters with placement on Brunswick Street and improved interior lighting. Installation of rear alleyway coffee cart off McLachlan Street which could also be used off-site at other Brisbane events TFC objectives Increase lunch and dinner covers Increase brand awareness Increase café and alcohol sales during or outside meal service Broaden customer base beyond existing guests and the local geographic market Increase brand awareness SMART objectives Increase lunch and dinner covers by 25% over the financial quarter with a 100% return on investment Increase the number of likes on Facebook by 5% Increase coffee sales on-site and off-site with target sales of 50 units per day and the goal to break even within the financial quarter 150 Instagram posts within the first month Explanation Specific – addresses the issue of meal covers, particularly daytime patronage Measureable – identifies percentage increase desired Achievable – realistic target set, especially given the low cost of outlay. Relevant - addresses client’s specific objectives of increased daytime patronage and increases brand awareness Time bound – sets a time frame for performance and review. Specific – addresses the issue in increased daytime patronage Measureable – identifies rate of increase Achievable – realistic target set, given this is a new service offered by the venue Relevant – addresses client’s specific objectives of increased daytime patronage, broader customer base from off-site sale of coffee and therefore increased brand awareness Time bound – sets a time frame for 16 performance and review and costs for coffee machine hire are spread over 24 months (within the total $10,000 budget) Application of a rewards program app to engage in direct online marketing Broaden customer base beyond existing guests and the local geographic market Increase bookings for tables, functions and events via either the website [email protected] u or by phone (07) 3172 6109 Increase total bookings for tables and functions by 10%over the next financial quarter Increase online reservations by 25% over the next financial quarter Specific – addresses the issue of online bookings and provides data base for broadening customer base beyond the local geographic market Measureable – identifies realistic rate of increase Achievable – data base can be targeted by office/admin staff without going off-site and return on investment is achievable Relevant – addresses client’s specific objective of broadening customer base and increasing online bookings 17 8. Conclusion This report concludes that TFC management can successfully reach its business objectives through an IMC framework. Through a modest expenditure on visual cues and repurposing site features, the business can be re-positioned as a daytime café. When combined with the use of online media platforms to influence consumer purchasing decisions, consumer behaviour will change bringing about favourable associations with TFC brand and enhanced brand equity. 18 9. References Behaviour Works Australia. (2012). The Elaboration Likelihood Model of Pursuasion. Melbourne: Behaviour Works Australia. Brisbane City Council. (2014). Brisbane Inner City Investment Prospectus. Brisbane: Brisbane City Council. Chitty, W. L. (2015). Intergrated Marketing Communications. Melbourne: Cengage Learning Australia. Restaurant and Catering Australia. (2014). Competition Policy Review. Surry Hills: Restaurant and Catering Australia. Rosenbaum, M. (2007). A Cup of Coffee With a Dash of Love. JOURNAL OF SERVICE RESEARCH, 4359. Rosenbaum, M. S. (2009). The Restorative Qualities of an Activity-Based, Third Place Café for Seniors: Restoration, Social Support, and Place Attachment at Mather’s—More Than a Café. Seniors Housing & Care Journal, 39-54. Solomon, M. R.-B. (2013). Consumer Behaviour. Frenchs Forest: Pearson Australia Group Pty Ltd. Vardy, M. (2012). How Technology is Changing the Restaurant Industry. Retrieved May 24, 2015, from http://thenextweb.com/insider/2012/09/22/how-technology-changing-restaurantindustry/ 0