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Chapter 4
Restaurant Business & Marketing Plans
The Business Plan
 The Difference Between
Marketing & Sales
 Marketing Planning &
Strategy
 Market Assessment,
Demand, Potential &
Competition Analysis
 Marketing Mix-The 4 P’s
 Promotion
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BUSINESS PLANS
Increases the probability of
success.
 Assists in obtaining financing.
 Communicates to potential
investors.
 Defines operational purpose.
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ELEMENTS OF A
BUSINESS PLAN
Cover sheet
 Description of the business
 Description of the concept licenses & lease
 Market analysis & strategy
 Financial Data
 Appendices
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BUSINESS PLANS
Mission statements generally do not change.
Goals are reviewed as often as necessary.
Goals should be established for each key operational
area (e.g., sales, food, service, beverage, labor costs,
etc.).
 Strategies or action plans are the “how to reach the
goal”. They are more specific than goals & are
generally short-term.
 Strategies are specific as to the date by which they
are to be achieved and how much should be
achieved.
 Based on strategies, a detailed action plan with
individual responsibilities should be implemented.
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MARKETING
Restaurant marketing is based on a marketing
philosophy.
Marketing philosophy patterns the way
management & ownership have decided to relate
to guests, employees, purveyors & the general
public in terms of fairness, honesty & moral
conduct.
Marketing is finding out what guests want and
providing it at a fair price.
Marketing asks would-be operators to ask
themselves, “Who will be my guests? Why will
they choose my restaurant? Where will they come
from and why will they come back?”
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MARKETING
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Includes sales and merchandising.
Determines who will patronize the restaurant &
what they want in it.
Is an ongoing effort.
Gets into psyche of present & potential patrons.
Marketing is about solving guest problems.
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SALES
A part of marketing that focuses on the
needs of the seller.
 Activities that stimulate the patron to want
what the restaurant offers.
 The actions of restaurant employees that
influence patrons after they have arrived
at the restaurant.
 Sales mentality exists when seller thinks
only of his or her needs & pushes an item
on a customer.
 Closely related to advertising, promotion &
public relations.
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THE DIFFERENCE BETWEEN
MARKETING & SALES
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SALES focuses on the needs of the seller.
MARKETING focuses on the needs of the buyer.
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MARKETING PLANNING & STRATEGY
Every marketing plan must have realistic goals for
guest satisfaction, market share, sales &
costs while leaving a reasonable profit margin.
 SWOT analysis, stands for strengths, weaknesses,
opportunities & threats.
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The strengths & weaknesses focus on internal factors
and can, over time, be controlled by management.
Opportunities & threats deal with external factors.
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MARKET ASSESSMENT
Analyzes the community, the potential guests, the
competition & helps to answer the all-important questions:
 Is there a need for a restaurant?
 Who will be the potential guests?
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How old are they?
What are their incomes?
What is their sex?
What is their ethnic origin or religion?
What are the guests’ wants and needs?
Why would people become guests?
What will they like or dislike about the proposed restaurant?
What do they like or dislike about existing restaurants?
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MARKET DEMAND
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The demand for a restaurant is calculated
using two factors:
The population in the catchment area (the area around
the restaurant from which people would normally be
drawn to the restaurant).
• The demographic split of this population by nationality,
race, age, sex, religion, employment, education, and
income.
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MARKET SEGMENTATION
The market—that is, the total of
all actual and potential guests—is
generally segmented into groups
of buyers with similar
characteristics.
 Within these groups are target
markets, which are groups
identified as the best ones for
the restaurant to serve.
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TYPICAL SEGMENTATIONS
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Geographic
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Demographic
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Country, state/province, county, city,
neighborhood.
Age, sex, family life cycle, income,
occupation, education, religion, race.
Behavior
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Occasions, benefits sought, user status,
usage rates, loyalty status, & buyer
readiness.
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MARKET SEGMENTATION
Once the target market is
identified, it is important to
position the restaurant to
stand out from the competition
& to focus on advertising &
promotional messages to
guests.
 The key to positioning is how
guests perceive the restaurant.
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Competition Analysis
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Analyzing the competition’s strengths and
weaknesses helps in formulating
marketing goals and strategies to use in
the marketing action plan.
When analyzing the competition it makes
sense to do a comparison benefit
matrix showing how your restaurant
compares to the competition.
You choose the items for comparison,
which include name recognition, ease of
access, parking, curbside appeal, greeting,
holding area, seating, ambiance, food,
service, cleanliness, value, and so on…
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MARKETING MIX
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The cornerstone of
marketing.
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The Four P’s
Place
• Product
• Price
• Promotion
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PLACE/LOCATION
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One of the most crucial factors in a
restaurant’s success.
Ingredients for success:
Easy access
• Curbside appeal
• Parking
• Convenience
• Visibility
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PRODUCT
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The main ingredient is excellent food.
People will always seek out a restaurant
offering excellent food, especially when good
service, value, & ambiance accompany it.
3 levels of restaurant product:
• Core Product: function part of the product for
the customer.
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Formal Product: the tangible part of product.
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Relaxing, memorable evening.
Physical aspects, décor & a certain level of service.
Augmented Product: other services.
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Valet parking, table reservations.
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PRODUCT
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Product analysis: Covers the quality, pricing & service of
the product offered.
Restaurateurs are placing greater emphasis on
atmospherics, the design used to create a special
atmosphere.
Product development: Innovative menu items are added
to maintain or boost sales.
Product positioning: Conveys to the customer the best
face or image of the restaurant, what people like most about
it, or how it stands out from the competition.
Restaurant Differentiation: Restaurant owners usually
want their restaurant to be different in one or more ways, to
call attention to the food or ambiance.
Product Life Cycle: Restaurants, like all businesses, go
through a product life cycle from introduction to decline.
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PRICE
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The only revenue-generating variable in the
marketing mix.
Several factors affect price:
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The relationship of demand and supply
Shrinking guest loyalty
Sales mix
The competition’s prices
Overhead costs
The psychological aspects of price setting
The need for profit
Cost-Based Pricing
Competitive Pricing
Price & Quality
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PROMOTION
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Goals of a promotional campaign:
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To increase consumer awareness of the
restaurant.
To improve consumer perceptions of the
restaurant.
To entice first-time buyers to try the restaurant.
To gain a higher percentage of repeat customers.
To create brand loyalty (regular customers).
To increase the average check.
To increase sales at a particular meal or time of
day.
To introduce new menu items.
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TYPES OF ADVERTISING
In-house
Tie-Ins and Two-for-Ones
Loss-Leader Meals
Advertising Appeals
Travel guides
Yellow pages
Mailing lists
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The End
Copyright © 2008 John Wiley & Sons, Inc.
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