Marketing Food Service

Marketing Concepts

Production Concept

  • Definition: Based on the belief that customers prefer products that are:
      - Widely available
      - Affordable

  • Organizational Focus:
      - Efficient production
      - Efficient distribution

Selling Concept

  • Definition: Based on the belief that customers will not buy enough of a product unless the organization:
      - Uses strong selling efforts
      - Uses extensive promotion

Marketing Concept

  • Definition: Based on the belief that organizations should:
      - Identify the needs and wants of target markets
      - Deliver desired satisfaction
      - Do this more effectively and efficiently than competitors

Societal Marketing Concept

  • Definition: Based on the belief that organizations should:
      - Identify the needs and wants of target markets
      - Deliver desired satisfaction more effectively than competitors
      - Consider consumer well-being
      - Consider society’s long-term well-being

Chapter 14 - Marketing Food Service

Marketing Concepts

  • Management Philosophy: About how an organization:
      - Views its customers
      - Approaches the sale of its products

Product (Marketing Definition)

  • Definition: In marketing, a product can be:
      - A good
      - A service
      - An idea

Managing Marketing Activities

Key Variables

  • Marketing Managers Must Manage:
      - Marketing mix
      - Marketing environment

Marketing Mix

  • Definition: Combination of marketing elements used to achieve an organization’s objectives & satisfy the target based on buyer preferences

Components of Marketing Mix

  1. Product
       - A product can be:
         - A good
         - A service
         - An idea
       - Marketing Activities Related to Product Include:
         - Researching customer needs
         - Product design

  2. Price
       - Definition: The amount of money charged for a product
       - Key Point: Price competition is very common in foodservice operations
       - Managerial Role:
          - Establish pricing policies
          - Ensure the price reflects the value customers receive

  3. Promotion
       - Definition: Includes activities that:
         - Communicate the benefits of a product
         - Persuade customers to buy it
       - Purpose of Promotion:
         - Increase public awareness of new products or brands
         - Renew interest in products that are losing popularity

  4. Place
       - Definition: Refers to the location where food or services are offered
       - Modern Foodservice Trend: Food is increasingly prepared in different locations from where it is served

Marketing Environment

Definition

  • Definition: The marketing environment surrounds:
      - The buyer
      - The marketing mix

  • Environmental forces influence:
      - Customer preferences and needs
      - How managers perform marketing activities

Types of Environmental Forces

  1. Political
       - Influence a country’s:
         - Economic stability
         - Political stability
         - Government decision-making
       - Impact on:
         - Domestic policies
         - Trade agreements
         - Foreign policy

  2. Legal
       - Responsible for:
         - Creating legislation
         - Interpreting laws
       - Regulation Aim: Preserve competition and protect consumers
       - Interpretation of Laws:
         - Done by marketers and courts
         - Affects marketing mix decisions

  3. Societal
       - Encourage organizations to act responsibly in their decisions
       - Consumer groups often address issues such as:
         - Environmental pollution
         - Use of pesticides in food production
         - Food labeling practices

  4. Economic
       - Strongly influence competition
       - Competition Is Affected by:
         - Number of industries controlling product supply
         - Ease of entering the industry
         - Demand compared to supply
       - Demand Depends on Buyers’:
         - Ability to purchase
         - Willingness to purchase

  5. Technological
       - Influence everyday life and consumer expectations
       - Affect:
         - Consumer demand for products
         - Stability of the marketing mix
       - Technologies that influence marketing include:
         - Communication
         - Transportation
         - Computers
         - Packaging
       - Impact of Technologies: Affect the types of products produced

Market Segmentation

Definition

  • Definition: The process of dividing a total market into groups of people with similar needs, wants, values & buying behaviors

  • Market: A group of people who have the ability, willingness & authority to purchase

  • Market Segment: Group of individuals, groups & organizations that share one or more characteristics that lead to similar product needs

Segmentation Variables

  1. Geographic
       - Factors:
         - Nation
         - Region
         - Climate
         - Terrain
         - Natural resources
         - Population density
         - Subcultural values
       - Influence on Product Needs: Customers’ product needs vary based on these factors
       - Additional Considerations:
         - Size of the region, city, county, or state
         - Urban vs. suburban vs. rural
         - Population size
         - Customer preferences
         - Spending patterns

  2. Demographic
       - Factors:
         - Age
         - Gender
         - Race
         - Ethnicity
         - Income
         - Education
         - Occupation
         - Family size
         - Family life cycle
         - Religion
         - Social class
         - Price sensitivity

  3. Psychographic
       - Factors:
         - Social class
         - Personality
         - Lifestyle
       - Lifestyle Segmentation: Groups people based on what is important to them & how they live their lives

  4. Behavioristic
       - Factors:
         - Purchase volume
         - Purchase readiness
         - Customer loyalty
         - Shopping behaviour

Characteristics of Services

  • Intangibility:
      - Services are intangible, meaning they:
        - Cannot be seen
        - Cannot be touched
        - Cannot be tasted
        - Cannot be smelled
        - Cannot be possessed
      - Comparison: Services are considered performances, while goods are tangible products
      - Tangible Elements: Although services are intangible, they may include some tangible elements

  • Inseparability:
      - Production and consumption occur at the same time
      - Services are usually produced while they are being consumed
      - Examples in Foodservice:
        - Waitstaff knowledge and efficiency when taking orders and serving meals
        - Bartender’s ability to prepare drinks exactly as requested
        - Maître d’hôtel ensuring customer satisfaction

  • Perishability:
      - Services cannot be stored for later sale
      - Unused service capacity cannot be saved for the future
      - Consequences:
        - Services are perishable
        - Service providers must try to manage customer demand and create consistent demand across different time periods

  • Heterogeneity:
      - Refers to variation in service performance
      - Reasons for Variations:
        - Employee skill levels
        - Customer perceptions
        - Customer interactions
      - Service Quality may vary:
        - Between different locations within the same organization
        - Between employees
        - From day to day
        - From customer to customer

Situation Analysis

Definition

  • Definition: Process of identifying marketing opportunities & potential problems facing an organization; managers need to understand current condition of the organization & the direction on where it is heading

Marketing Objectives

Definition

  • Definition: A statement describing what the organization wants to achieve through marketing activities

  • Expression of Objectives:
      - Usually expressed in:
        - Quantitative terms (measurable):
          - Dollar sales
          - Percentage profit growth
          - Market share
        - Qualitative terms (non-numerical):
          - Company image
          - Product uniqueness
          - Customer service quality

Strategic Planning for Marketing

Steps

  1. Conduct a situation analysis

  2. Set objectives

  3. Identify customers

  4. Develop overall strategy

  5. Determine specific objectives

  6. Implement controls

  7. Monitor results and provide feedback to the next situation analysis

Marketing Research Process

  1. Problem Definition

  2. Data Collection

  3. Data Analysis

  4. Recommendations

  5. Report Preparation

Key Principles of Good Research

  • Objectivity:
      - Research should be conducted in an:
        - Unbiased
        - Open-minded manner
      - Conclusions should be based on:
        - Data
        - Analysis

  • Accuracy:
      - Use carefully designed research tools
      - Ensure tools are properly implemented

  • Thoroughness:
      - Ensure the sample represents the population
      - If a questionnaire is used:
        - It should be pretested
      - Data analysis should be statistically correct

The Marketing Plan

Components of Marketing Plans

  • Should include:
      - Executive summary
      - Corporate connection
      - Environmental analysis and forecasting
      - Segmentation and targeting
      - Next year’s objectives and quotas
      - Action plans, strategies, and tactics
      - Resources needed
      - Marketing control
      - Presenting and selling
      - Preparing for the future