RESTAURANT MARKETING STRATEGIES

"Every business needs a marketing plan, and the food-service business is no exception"
(Lynn, 2001, p. 209). A marketing plan helps a business to stay on the right course to
achieve its goal. When communicated to employees, a marketing plan can create a team
spirit that brings out the best performance from everyone and focuses efforts on the
achievement of the restaurant's goal.

Marketing is the process of facilitating and exchange. A key component of successful

restaurant marketing is promotion, which includes personal selling, advertising, consumer
and trade promotions, and public relations. Essentially, the promotion mix deals with the
message restaurants want to communicate that is consistent with other marketing
strategies designed for their target market (Cannon & Tarcy 2002). For example, if senior
citizens are the target markets, the menus, and signs would be created with
consideration of their physical changes, such as employing larger print and menu
selections that are appropriate for various diets.

The first step in creating a marketing plan is. Understanding the market. Markets change
constantly, and food-service businesses that do not change their strategies with
population shifts are missing critical growth opportunities. Next, step back and take a
look at each element in the facility. Everything from the parking lot to the interior decor
to the printed items contributes to the main message. Each should be an accurate
reflection of how the restaurant should be positioned. It is not enough for each marketing
component to be relevant to the audience; but the elements must also create a sense of
continuity. Color and textures should blend comfortably, and printed materials should
have common elements to enhance the restaurant’s message and positioning in the
marketplace (Lynn, 2001).

Market Research

The more a business knows about its target market, the better it will be to serve them.
Three types of information about prospective customers can help restaurants identify
their target audience (Alonzo 1996). They are:

1. Demographic information,
2. Geographic information, and,
3. Psychographic information.

Grand Opening

According to Cannon and Tarcy (2002), a grand opening is a powerful and common
marketing tool used by restaurants. A restaurant should open for business a few weeks
before the grand opening. This allows the owner to get things arranged properly in the
facility and train employees. At the time of the opening, the owner should have business
signs up and most or all of the inventory in stock. Customers will wander in, and if they
are pleased with the business, they will start spreading the word. A business should use
every possible means to attract customers during the grand opening (Lynn, 2001). Sales
promotions such as daily drawings for door prizes, free meals, or dessert with a meal
purchase have been employed with success. Keep liberal supplies of promotional flyers,
business cards, gift certificates, and specialty advertising items in the restaurant.
Complimentary coffee, refreshments, and breakfast also add to the excitement. Owners
might even consider throwing a party and inviting local dignitaries and celebrities.
Promotions

Another way to promote food-service businesses is by giving away gift certificates such
as dinner for two, coffee, bagels for ten, or a free pizza (Lynn, 2001). Restaurant
managers can call local radio stations that reach the demographics of their target
markets and offer to provide gift certificates or coupons to use as prizes for on-air
contests and promotions. The restaurant names and locations will be announced several
times on the air during the contest, providing businesses with valuable, free exposure
and the possibility that the winner will become a paying customer (Alonzo, 1996).
Managers can also donate coupons and gift certificates to be used as door prizes at
professional meetings or for nonprofit organizations. Every coupon or gift certificate
should identify business names, locations, hours of operation, and any restrictions. Some
other sales promotional methods include:

• Sponsorships: by sponsoring a local event or sports team, a manager can put the
restaurant's name in front of a whole new group of customers. The name will
appear on advertisements promoting the event or on team members' uniforms.
This constant exposure will keep the name in customers' minds. Because people
are typically drawn to establishments they are familiar with, managers may attract
customers who have never visited the restaurant but feel familiar with it due to
various sponsorships.
• Discount coupon books will get people to try a new establishment if they know
they are getting a significant discount and may return as full-paying customers if
they have had a good experience.
• Frequent dining clubs: reward regular customers with free food. For example, the
manager can issue a card with 12 spaces so they can mark off each visit. When
customers have purchased 12 entrees, the individual gets a free entree.
• Menu promotions, through offering lunch or dinner specials, can appeal to those
who are on a limited budget or who just like saving money. A manager can also
offer early-bird specials or two-for-one specials during certain periods. These
specials not only attract customers but can also help managers reduce inventory of
over-stocked items.
• Contests: the most common restaurant contest involves placing a glass container
near the cash register where patrons can drop their business cards for a drawing
for a free lunch or dinner. The winners may bring along friends when they come in
for their free meal. Also, the cards provide a list of customers to use for direct mail
campaigns.

Studio Thai Restaurant Marketing Plan

Situation Analysis

1. Market Summary
1.1. Market Size
According to the National Restaurant Association report (2004), the food service
business is the third largest industry in the country. It accounts for over $240
billion annually in sales, of which the independent restaurant accounts for 15%
of that total. The average American spends 15% of his/her income on meals
away from home, and this number has been increasing for the past seven
 years. In the past five years, the restaurant industry has outperformed the
national GNP by 40%. The reasons are
1. lifestyle changes
2. economic climate, and an increase in product variety.
3. "600 new restaurants are opening every month, and over 200 more are
needed to keep pace with increasing demand" (Lynn, 2001, p.5).
1.2. Market Needs
According to California Restaurant Association News & Info (2004), the
consumer needs we will focus on are:
• Seeks strong value.
• Wants variety and flavor in its food.
• Looks for speed of service.
• Insists upon a clean, friendly, and attractive dining environment.
1.3. Market Growth
According to a statistics report provided by the National Restaurant Association
(2004), the projected growth in restaurant sales from 2003 to the end of 2004 is
5.2%. 602
2. SWOT Analysis
2.1. Strengths;
• Co-owners have experience in the restaurant business.
• Owners are passionate about their work.
• Co-owners have strong relationships with vendors that offer high-quality
ingredients and fast/frequent delivery schedules.
2.2. Weaknesses
 Has a limited marketing budget to develop brand awareness.
2.3. Opportunities
 Desire for foreign foods.
2.4. Threats
 Competition from local restaurants.

3. Competition
A few Thai restaurants are in the area and are considered direct competitors.
3.1. Thai Dining Restaurant
Strengths:
 The restaurant has been serving customers in Mission Viejo for 12 years.
 Big facility: The maximum capacity is 80 seats.
 Has a lot of dinner business.
Weakness
 Pricing is high to offset high rent.
 Limited lunch business.
 Use Mexican chefs who cannot provide authentic Thai recipes.
3.2. Thai Nakorn Restaurant
Strengths:
 The chefs are also the owners and have 20 years of experience in the Thai
restaurant business.
 They differentiate their food by offering an Eastern style of Thai food.
 They target Asian customers in the area.
 They offer high-quality, low-price dishes.
Weakness
 Small facility with a maximum seating of 35.
 Limited parking spaces.
3.3. Diho Siam Restaurant
Strengths:
  The owner has been in the restaurant business for 16 years.
 Provides 4 locations in Mission Viejo, Lake Forest, Costa Mesa, and Fountain
Valley.
 Offers Thai and Chinese food.
 The Mission Viejo location has more take-out business than the competitors.
 The chefs have experience in both Thai and Chinese food for about 16 years.
Weakness
 .Small facility: The Mission Viejo has a maximum seating of 40.
 Long wait time for take-out orders on Friday and Saturday nights at the
Mission Viejo location.
4. Keys to Success for Studio Thai
 Product quality: Not only great food but great service.
 Controlling costs at all times, in all areas, without exception.
 Hiring, training, motivating, and encouraging the best people available is key to
retaining the friendliest, most efficient staff possible.
 Differentiating products by offering a variety of great curry dishes.

Marketing Strategy

1. Mission
Studio Thai is a great place to eat, combining an intriguing atmosphere with
excellent, interesting food that is also very nutritious. We want a fair profit and a
rewarding work atmosphere for employees.
2. Objectives
 Generate at least $30,000 in sales per month in the first year.
 Become profitable in year two, with profits of more than 7.5% profits on sales
by year three.
 Create an environment that will bring people with diverse interests and
backgrounds together in a common forum.
 Provide affordable fresh and healthy food at reasonable prices.
 Be perceived as a reasonably priced, upscale restaurant for individuals who
appreciate high-quality food.
3. Target Markets
 Age: Seniors, baby boomers, young married couples with children, and young
professionals.
 Family Unit: Young families with new babies or mature families with children
under the driving age. Most family units will have two wage earners.
 Gender: Males and females.
 Income: Appeal to target customers in the $25,000-$50,000 range.
 Occupation: Target young professionals with a family.
 Education: High school graduates or individuals with some college.
4. Positioning Statement
Studio Thai is a reasonably priced, upscale Thai restaurant for individuals who
appreciate high-quality food and desire value and unique offerings.
5. Marketing Mix
5.1. Products and Services
Studio Thai will provide delicious Thai cuisine with friendly, efficient service and
atmosphere. The focus will be on providing a unique environment for people to
dine and meet. We will be offering a menu of food and beverages with a
distinctive image. The uniqueness of our menu is that there is a majority of rare
and different curry dishes.
5.2. Pricing
 All menu items will be moderately priced. While the restaurant is not striving to
be the lowest-priced restaurant around, the aim is to be a value leader. The
price range per item will be $5.95-$7.20 for lunch and $7.95-$12.95 for dinner.
5.3. Distribution
There will be two ways to purchase these products, which are via the restaurant
seating and take-out. We will provide delivery service in the second year of
operation.

5.4. Promotion
Grand opening:
 Have a "Choose your own curry" campaign during the grand opening by
offering a variety of free samples of curry sauce to dine-in customers.
 Have daily drawings for a free meal or a free dessert with a meal purchase.
 Provide discount coupons for the next visit with the first purchase.
 Complimentary Thai iced tea for dine-in customers during the grand opening
period.

In-store marketing:

Let customers gamble for a free meal. Keep a set of dice by the cash register and put up
a few signs that read:

 Win a Free meal today!

 Roll the dice and win!
 Two sixes - your meal is free!
 Two fives - take 55% off.
 Two fours - take 44% off.
 Two threes - take 33% off.
 Two twos - take 22% off
 Two ones - take 11% off.

The contest will produce excitement and spread word-of-mouth. Winners will be likely
to come in with at least one friend to claim their prizes.

Local media:

 Newspaper campaign - place several ads throughout the opening month in OC

Weekly, Orange County Register.
 Yellow pages - provides address phone number, and highlights some interesting
items.

Gift certificates: Sell gift certificates to current customers. They may give them to
friends or relatives who have never tried our restaurant. Discount coupon books:
Participate in Entertainment Books that schools and nonprofit organizations sell as
fund-raisers. And finally, a frequent dining club: Reward regular customers with
free food by issuing a card with 12 spaces. When a customer has purchased 12
entrees, he or she will get a free entree. Public Relation Invite the press to dine for
a write-up critique in Orange County Register.

Contingency Planning

1. Difficulties and Risks -

 Significant economic downturns.
 Problems generating enough funds.
 The entry of another already established competitor that recognizes the market
potential.