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Chapter 14 Marketing Foodservice Marketing The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Marketing Concept Manufacturing/Production concept – belief that customers favor products that are available and highly affordable. Product concept – belief that customers prefer existing products and product forms. Selling concept – belief that customers will not buy enough of the organization’s product unless the organization undertakes a large selling and promotion effort. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Marketing Concept Marketing concept – belief that organizations should determine the needs/wants of target markets and deliver desired satisfaction more effectively and efficiently than competitors. Social Marketing concept – belief that organizations should determine needs/wants of markets and deliver satisfaction more effectively and efficiently than competitors in a way that maintains or improves the consumer’s and society’s well-being. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Marketing Management Process of planning, organizing, implementing, and controlling marketing activities to facilitate and expedite exchanges effectively and efficiently. Effectiveness – the degree to which an exchange helps to achieve an organization’s objectives. Efficiency – the minimization of resources that an organization must spend to achieve a specific level of desired exchanges. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Marketing Mix Combination of Marketing Mix variables to satisfy target market. Product Price Place Promotion Target market – Customers with common characteristics for which an organization creates products/services. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Product A good, a service, an idea, or any combination of the three. New product – a genuine innovation that has not been served commercially. New to the chain – an imitation of a successful product offered by another chain. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Price The amount of money charged for a product. A critical component of the marketing mix. Often used as a competitive tool. Helps establish a product’s image. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Promotion Used to increase public awareness about a new product or brand. Used to renew interest in a product that is waning in popularity. Used to facilitate exchanges by informing prospective customers about an organization and its products. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Place The location where food or services are offered ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Environmental Forces Political Legal Regulatory Societal Economic Competitive Technological ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Marketing Segmentation Division of total market into groups of customers who have similar needs, wants, values, and buying behavior. Market – a group of people who need products and possesses the ability, willingness, and authority to purchase them. Homogeneous market – individuals with similar product needs. Heterogeneous market – individuals with dissimilar product needs. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Market Segmentation Geographic variables – climate, terrain, natural resources, population density, and subculture that influence customers’ product needs. Demographic variables – population characteristics that might influence product selection. Psychographic variables – motives and lifestyles characteristics. Behavioristic variables – the basis of some feature of consumer behavior toward a product. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Values and Life-Styles (VALS) Attempts to predict customer behavior by defining segments, based on resources and self-orientation. Resources: Psychological Physical Demographic Materials means and capabilities ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Values and Life-Styles (VALS) Self-orientation: Principle-oriented – consumers make choices based on their beliefs and principles. Status-oriented – consumers make choices based on what they perceive will show their success to their peers. Action-oriented – consumers make choices based on a desire for social or physical activity, variety, or risk. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Consumer Groups Actualizers active, take-charge individuals with a wide variety of interests and interest in growth and change. Fulfilleds mature, reflective individuals who value order, knowledge, and responsibility and base decisions on their principles. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Consumer Groups Achievers work-oriented, conservative, and value-conscious consumers who favor established, prestige products that demonstrate success to their peers. Experiencers young, impulsive, and rebellious individuals who spend much of their income on products such as clothing, fast food, music, and movies. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Consumer Groups Believers conservative, follow established routines, organize their lives around home, family, and social or religious organizations. Strivers tend to be somewhat unsure of themselves, seek approval from those around them, often emulate those around them with more impressive possessions, usually lack financial resources to purchase what they would like. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Consumer Groups Markers practical, self-sufficient, and traditional individuals who experience the world by working on it. Strugglers tend to be poor, ill-educated, low-skilled, and without strong social bonds. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Behavioristic Variables The basis of some feature of consumer behavior toward a product. A special product produced for a specific group of customers (caffeine-free diet cola). A product is produced for how a customer uses it (single serving frozen meals). ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Service Marketing Good – a tangible product that a customer can physically touch. Service – the application of human or mechanical efforts to people or objects. Services account for: 67% of the Gross Domestic Product (GDP) 57% of consumer expenditures. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Characteristics of Services Intangibility Inseparability of production and consumption Perishability Heterogeneity Services generally are sold before they are produced. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Intangibility Inability of services to be seen, touched, tasted, smelled, or possessed before buying. Atmospherics – physical elements in an operation’s design that appeal to customers’ emotions. Appearance Color Sound Odor ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Inseparability Inability to separate production and service. Services are normally produced at the same time they are consumed. The waitstaff, bartender, and maître d’hôtel produce services at the same time the customer is consuming them. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Perishability Services cannot be stored for future sale. Unused capacity cannot be shifted from one time to another. The service operation must have the capacity and capability to produce when demand occurs. The cost of keeping a customer is far less than that of creating a new one. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Heterogeneity Variation and lack of uniformity in the performance by different service employees. Fluctuations in service caused by unskilled employees, customer perceptions, and the customers themselves. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Components of Service Products Goods – mostly physical factors over which management has direct, or almost direct, control and are usually tangible. Service – nonphysical, intangible attributes that management should control. Important components of service: Friendliness Speed Attitude Responsiveness. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Strategic Planning Process Strategic planning process for marketing: Define the organizational mission statement – summation of the organization’s purpose, competition, target market, product, and service and of the recipients of the service. Establish strategic business units (SBUs) – organizational components with specific market focus and a manager. Set marketing objectives – a statement of what is to be accomplished through marketing activities. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Strategic Planning Process Strategic planning process for marketing: Perform a situation analysis – the identification of marketing opportunities and potential problems confronting an organization. Develop a marketing strategy – selecting and analyzing a target market and creating and maintaining an appropriate marketing mix that will satisfy that market. Implement tactical plans – specific action implementing a marketing strategy. Monitor results – comparison of performance standards against actual performance over a definite time. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire SWOT Analysis Identifies: Strengths – unique resources a company can provide. Weaknesses – aspects of a company that limit their ability to achieve their goals. Opportunities – areas where competitive advantage exists or where new markets could be developed. Threats – elements that might prevent accomplishment of objectives. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Marketing Research Function linking the consumer, customer, and public to the marketer through information that is used to: Identify and define marketing opportunities and problems. Generate, refine, and evaluate marketing actions. Monitor marketing performance. Improve understanding of marketing as a process. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Marketing Research Research should have: Objectivity – conducted in an unbiased, open-minded manner; conclusion based on data and analysis. Accuracy – use of research tools that are carefully constructed and implemented. Thoroughness- ensuring that the sample represents the population; a questionnaire, if used, is pretested; and the analysis of date is statistically correct. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Marketing Research Process ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire The Marketing Plan A written document or blueprint governing an organization’s marketing activities. Marketing planning – a systematic process involving: The assessment of marketing opportunities and resources. The determination of marketing objectives. The development of a marketing strategy. Planning for implementation and control. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Development of Plan A marketing plan should be: Real and workable. Easy to execute. Flexible but have a certain amount of stability. Composed of specific responsibilities with times and dates for accomplishment. Constantly reviewed and evaluated to keep it current. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Types of Plans Marketing plans categorized according to Duration – short range, medium range, or long range Scope – varies tremendously Separate marketing plans may be developed for individual menu items & special service Method of development – bottom-up, topdown, or combination of two ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire Control and Evaluation Evaluation – sales analysis used for evaluating actual performance of marketing strategies Sales analysis – the detailed study of sales data, either volume or market share. Market share – the percentage of industry sales for a product. ©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458 Foodservice Organizations, 5th edition Spears & Gregoire