Week-3 - Chapter

HOTE- 66 Food and Beverage Management
Week – 3
Know Your Customer & Food and
Beverage marketing
Chapter Image
Key Learning Outcomes
1. Explain the difference between demographic surveys and feasibility
studies
2. Describe how competition can influence a restaurant’s menu listing
3. Explain marketing in terms of delivering guest-pleasing service.
4. Describe the steps involved in developing a feasibility study, and list
the three types of marketing research that should follow such a study.
5. Describe the elements of a complete marketing plan, focusing on the
roles of sales, traditional and electronic advertising, public relations,
and publicity. Compare public relations and publicity for hospitality
operations.
6. Describe marketing tactics that a noncommercial food service
operation might use.
Getting Started
Who Are You?

As a food service manager, you make decision every day. But on of
the more perplexing decisions need to make is what to put on your
menu and what prices to charge. Before establish the menu and to
do this, you must have a clear idea of what your establishment is
and what identity you want to project to your customers.
Steps Toward Service Excellence

1. Recognize that service is important.
2. Develop guest-friendly processes that meet standards and
goals.
3. Assess and respond to guests’ changing preferences.
Feasibility Studies
• A feasibility study should be conducted before a

proposed food service operation is constructed
or an existing facility is purchased or leased
• Feasibility studies are usually prepared by
organizations such as public accounting firms,
real estate companies, or management
consulting organizations commissioned by the
developers or potential owners
Functions of a Feasibility Study
 Where are your customers coming from and what do they want?
 Ask yourself the following basic questions: Answering these types of
questions will help you define your objectives and identity your
potential clientele. It will also help you develop, price and manage your
menu:
 Are you a full-service buffet,  Do you use china or tablecloths

fast food restaurant or catering  Do you see as a typical
operation? customer? Families? Two income
 Is your main business at couples? Seniors?
breakfast, Lunch or Dinner?  Do people come to pick up a
 How is your restaurant quick dinner to take home? Or
decorated? special occasion eat?
 Do you serve Alcohol?  Do you have a limited menu or
an extensive menu?
Functions of a Feasibility Study
• Identify market area characteristics

• Evaluate the proposed site
• Analyze competitors
• Estimate demand
• Project operating results
Market Area Characteristics
• Demographic information i.e., customer spotting &

profiling, where are my customer coming from? What do they have in
common? Where can I find more of them?
• Retail sales volume

• Number and types of businesses
• Impact of tourism
• Available transportation
• Economic stability
Evaluating the Proposed Site
• Availability, convenience of parking

• Traffic flow
• Distances from exits
• Location of other attractions
• Site accessibility
Analyzing the Competition
• Type of service
• Location • Number of seats
• Type of restaurant • Alcoholic beverage
• Source and volume service
of business • Entertainment
• Times of operation • Promotional efforts
• Menu prices • Chain affiliation
• Check average • Other service
distinctions
Estimating Demand
• Estimating demand begins with an analysis of the market

area’s restaurant and bar sales
• Data for this analysis can be gathered by surveying
potential guests about their restaurant, banquet, and
meeting room needs
• Surveying can be accomplished through personal
interviews or direct mail questionnaires
• Third-party organizations using computer-assisted survey
technology may also be retained to conduct surveys
Projecting Operating Results
• Most feasibility studies project pro forma

financial results for the first, second, and
(sometimes) third year of operation
• Potential investors use this information to help
them decide whether to finance the project
Marketing Research
• Property analysis
• Competition analysis
• Market analysis
Property Analysis
• A property analysis is a written, unbiased appraisal of

a food service operation’s production and service
areas, products, and services
• A property analysis is used to assess the strengths and
weaknesses of an operation
• A property analysis should cover the categories used
in the feasibility study
• The property should be analyzed from the guest’s
perspective4
Competition Analysis
• Who are my competitors

• Where are they located?
• What is their market share?
• What is my share of the market?
• Market penetration/saturation analysis
• What impact would a new store have on my existing
location?
Market Analysis
Guest Profile Marketplace

Research Factors/Trends
• Age • Changes in demographics
• Gender • Events in community,
• Frequency of region, state, nation
• Cost of energy
visits • Government regulation
• Employment • Cost of travel
• Nutrition concerns
The Marketing Plan
• Select target markets

• Establish marketing objectives
• Create action plans
• Monitor and evaluate the action plans
Implementing the Marketing Plan
• Sales efforts
• Advertising
• Contemporary electronic advertising
• Public relations and publicity
Sales Efforts
• Internal selling
• External selling
• Social selling
Internal Selling
• Internal selling is any effort made to increase
revenue from guests who are already visiting
the food service operation
• Types of internal selling include suggestive
selling, internal merchandising, and special
promotions
Suggestive Selling
• Food servers can use suggestive selling to sell
additional menu items such as appetizers,
wine, premium liquors, and desserts
• Food servers who do a good job of suggestive
selling can help the operation be successful,
enhance the guests’ enjoyment of the
restaurant, and can increase their
compensation (if they are tipped employees)
Internal Merchandising
• Internal merchandising involved the use of in-

house signs, displays, and other promotional
material to increase sales
• In-house signs and displays include posters,
table tent cards, wine displays, and dessert carts
• There is a virtually unlimited variety of special
promotional materials and sales programs that
managers can employ
Special Sales Programs
• Gift cards/certificates
• Couponing • Discounting
• Product sampling
• Bonus offers
• Contests
• Packages • Product bundling
• Premiums • Frequent guest
programs
Advertising
• Outdoor advertising
• Newspapers
• Magazines
• Radio
• Television
• Direct mail
• Other advertising tactics
Outdoor Sign Advertising
Cons
Pros Limited
Low cost message length
Long life span Wasted
Broad reach coverage
Zoning laws
Newspaper Advertising
Pros
• Widely available Cons
• Flexible positioning • Skimmed quickly
• Effective coverage • Quickly obsolete
• Can be placed quickly • Poor reproduction quality
• Easy to cancel or • Wasted coverage
repeat
Magazine Advertising
Pros
• Long life span Cons
• Possibly many • High cost
readers per issue • Long
• Can target specific
audiences preparation time
• Excellent needed
reproduction quality
Radio Advertising
Pros
• Saturate local area
• Can be inexpensive
• Can target specific markets
• High message repetition possible
Cons
• Short life span
• Audio only
Television Advertising
Pros
• Combines sight and sound
• Extensive coverage
• Target markets
Cons
• High cost
• Long preparation time
• Wasted coverage
Direct Mail Advertising
Pros
• Audience selectivity
• Flexibility
• Personalized message
• Easily stopped or started
• Easily evaluated for effectiveness
Cons
• Expensive
• Junk mail image
Other Advertising Tactics
• Lobby displays
• Menu books at the front desk
• Inserts in the key slots of electronic door locks
• Ads in sporting event programs
• Name placement on a sponsored sports
team’s uniforms
Other Advertising Tactics
• Telephone book display ads

• Specialty advertising items (pencils, pens,
magnets, etc.)
• Fliers and brochures on community bulletin
boards
Contemporary Electronic Advertising
• Websites
• E-commerce
• Banner or click-through ads
• Ads on cell phones
• Twitter
• Facebook

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HOTE- 66 Food and Beverage Management

Who Are You?

Steps Toward Service Excellence

• A feasibility study should be conducted before a

 Are you a full-service buffet,  Do you use china or tablecloths

• Identify market area characteristics

• Demographic information i.e., customer spotting &

• Retail sales volume

• Availability, convenience of parking

• Estimating demand begins with an analysis of the market

• Most feasibility studies project pro forma

• A property analysis is a written, unbiased appraisal of

• Who are my competitors

Guest Profile Marketplace

• Select target markets

• Internal merchandising involved the use of in-

• Telephone book display ads

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