F & B Marketing

1. Food & Beverage Marketing
Food and Beverage Operations
Food and Beverage Operations
Tuesday, May 19, 2009 1

2. Chapter Objectives
• Explain marketing in terms of delivering guest-
pleasing service
• Describe the steps involved in developing a
feasibility study and list the three types of
ongoing marketing research
• Describe the elements of a complete marketing
plan, focusing on the roles of sales, advertising,
PR, and publicity
• Identify marketing tactics for noncommercial
food service operation
Tuesday, May 19, 2009 2
Why do we do the things we do?
The most valuable asset of any company is repetition and growth: Guest Service
Market Research what drives data? People, popularity, trends, Starbucks is one example of a coffee shop gone global
Tactics of business

3. Managers Concerned about
Guests
• “Moments of truth”
• Recognize that service is as important as the
product
• Develop guest-friendly procedures that meet
the operation’s standards and goals
• Assess and respond to guests’ ever-changing
preferences and needs
Tuesday, May 19, 2009 3
Moments of Truth: Some can be tired sayings Ritz-Carleton: Our motto states that “We are Ladies and Gentlemen serving Ladies
and Gentlemen,”
Moments of Truth: How are you going to “Wow” me today?
Includes employees as well as the guests

4. Functions of a Feasibility
Study
• Identify market area characteristics
• Evaluate the proposed site
• Analyze competitors
• Estimate demand
• Project operating results
Tuesday, May 19, 2009 4
Gambling 101
Not considering a feasibility study 95% FAIL RATE
Who is your customer/guest?
Demographics
Area and amenities, flow of traffic: Restaurant is on side street or on a busy corner. In a high rise penthouse or in the basement
without windows?
Who is the competition with your concept? Do you have superior products or service? Nordstomʼs vs Macyʼs
Demand shapes hours of operation, labor and product usage
Honeymoon- Estimate how your F&B operation will consistently be able to preform after the popularity wears off.
Consideration of a feasibility study 50% SUCCESS RATE

5. Market Area Characteristics
• Demographic
information
• Retail sales volume
• Number and types of
business
• Impact of tourism
• Available
transportation
• Economic stability
Tuesday, May 19, 2009 5

6. Evaluating the Proposed Site
• Availability and
convenience of
parking
• Traffic flow
• Presence of other
attractions that may
bring in guests
• Site accessibility
Tuesday, May 19, 2009 6

7. Analyzing the Competition
• Location • Availability of Liquor
• Type of establishment Service
• Times of operation • Entertainment
• Menu prices • Promotional efforts
• Average Guest Check • Chain affiliation
• Type of Service • Other service
distinctions
• Number of Seats
Tuesday, May 19, 2009 7

8. Estimating Demands
• Surveying potential guests by
– Personal interview
– Direct mail questionnaires
– Computer-assisted survey
• What to ask:
– Food preferences
– How often…
– How far…
– How much time…
– How much money…
Tuesday, May 19, 2009 8

9. Projecting Operating Results
• Financial results
– Forecasts of food & beverage revenue
– Overhead Expenses:
• Administration
• Labor
• Facility maintenance
• Energy
• Rent
• Insurance Stay Current!
• Taxes
Tuesday, May 19, 2009 9

10. Ongoing Marketing Research
• Property Analysis
– Appraisal for production, service areas,
products, and services
– Outsiders’ viewpoint
• Competition Analysis
– cover the same categories listed in the
feasibility study
– Visit competitor’s operations at a variety of
times
• Market Analysis
• Government Statistics and Data
Tuesday, May 19, 2009 10

11. Market Analysis
• Guest Profile Research
– Age
– Gender
– Frequency of visits to the
property
– Employment
• Data Gathering Tools
– Guest surveys
– Guest comment cards
NRA website
http://www.restaurant.org/research/
Tuesday, May 19, 2009 11

12. Market Analysis
• Marketplace Factors/Trends
• Changes in demographics
• Positive and negative events in the
community, region, state, and nation
• Cost of energy and other utilities
• Government regulations
• Cost of travel
Tuesday, May 19, 2009 12

13. Steps in a Typical Marketing
Plan
Select target market
Determine Objective
Create action plans
Evaluate and revise
Tuesday, May 19, 2009 13
Also related to a Business Plan

14. Implementing the Marketing
Plan
• Sales efforts
• Advertising
• Public
relations
• Publicity
Tuesday, May 19, 2009 14

15. Special Promotions
• Cut-out Coupons
• Product Sampling
• Contests
• Package
• Premiums
• Gift Certificates
• Discounting
• Bonus Offers
• Frequent Diner program
Tuesday, May 19, 2009 15
Depends on your demographic
Fast food chains do this alot
Incentive needs to be built with a message to return
Concerns not to cheapen your business with frequency
What are you trying to accomplish? One time diner or repeat?
If repeat you have one moment to have them consider you again and return

16. Outdoor Sign Advertising
•Pros
– Low cost
– Long life span
– Broad reach
•Cons
– Limited message
length
– Wasted coverage
– Zoning/posting
Tuesday, May 19, 2009 16
Needs to be read from a distance with contrasting colors and shade-Night AND Day

17. Newspaper Advertising
• Pros
– Low cost
– Broad reach
– Effective coverage
– Immediacy
– Flexibility
• Cons
– Read or skimmed quickly
– Usually seen by only reader per
issue
– Poor reproduction quality
– Wasted coverage
Tuesday, May 19, 2009 17
Most Popular restaurant News Ad Holidays;
New Years Eve, Valentineʼs Day, Easter, Motherʼs Day, Fourth of July, Thanksgiving, Christmas

18. Magazine Advertising
★ Pros
– life span
– Several readers per issue
– Can target specific audiences
– Excellent reproduction quality
★ Cons
– High cost
– Long preparation time needed
– Inflexibility
– Some wasted coverage
Tuesday, May 19, 2009 18
Wow! Maui as travel destination has over 6 different menu publications.
Lots of advertising dollars being spent. You SHOULD get a 10% return on your investment!!
One full page ad cost an average of $4000 for a full year, not including set up and photos.
The cover and back costs a premium of $8,000-$10,000 per year

19. Radio Advertising
• Pros
– Potentially saturate an entire area
– Low cost
– Produced quickly and used
immediately
– Sponsorship
– Drive time
• Cons
– Short life span
– Audio only
Tuesday, May 19, 2009 19
Radio is repetitive, lively but disappears quickly after itʼs heard
DJ can flub up your message
Need to determine your station and demographic.

20. Television Advertising
• Pros
– Appealing presentation of sight
and sound
– Viewers retain message
– Extensive coverage
– Target market
• Cons
– Highest cost!
– Long preparation time
– Wasted coverage
Tuesday, May 19, 2009 20
If you can afford it this is the way to go

21. Direct Mail Advertising
• Pros
– Audience selectivity
– Flexibility
– Personalized message
– Easily stopped or started
– Easily evaluated for effectiveness
• Cons
– High cost
– “Junk mail” image
Tuesday, May 19, 2009 21
Targets Shut Inʼs and Senior Citizens
Use this for marketing lunch; many offices and businesses are locked in to an hour and are on a budget

22. Internet Advertising
• One-on-one guest
relationships
• E-newsletters
• Online reservations
• Banner ads
Tuesday, May 19, 2009 22
Fastest growing area in the world but yet to be exploited
World wide 1.5 billion have access to internet
China 23% Growing 1000% from 2000-2008 250 million
US 73% 250 million
http://www.internetworldstats.com/stats2.htm

23. PR and Publicity
• Public Relation:
– communicating favorable info about the operation to
the public to create a positive impression
– Word of mouth
– Charity work
• Publicity:
– Free media coverage of an operation, its staff, or
special property events by the media
– Editorial page
– Medium controls the message
Tuesday, May 19, 2009 23
Promotional, Concierge, Participation in Events, Charity, Associations, Face time and Demonstrations, Teaching

24. Marketing Review
• Explain marketing in terms of delivering guest-
pleasing service
• Describe the steps involved in developing a feasibility
study and list the three types of ongoing marketing
research
• Describe the elements of a complete marketing plan,
focusing on the roles of sales, advertising, PR, and
publicity
• Identify marketing tactics for noncommercial food
service operation
24
Tuesday, May 19, 2009 24
F & B Marketing focuses on one main thing: repeat guest experiences.
In order to do that...
Identify market area characteristics, Evaluate the proposed site, Analyze competitors,
Estimate demand, Project operating results
Property Analysis, Competition Analysis, Market Analysis, Government Statistics and Data
Media
Coupons, Magazines, Radio, Newspaper, TV, Outdoor Signage, Internet, Direct Mail, Media
Events/PR