Marketing in Foodservice Operations

David Hayes, PhD, has taught hospitality courses at Purdue University, Texas Tech University, The University of Houston, and Lansing Community College. He has served as the Vice President of Broadcast and Video Training for the American Hotel & Lodging Educational Institute. Jack Ninemeier, PhD, is an Emeritus Professor in the School of Hospitality Business at Michigan State University. He has many years’ experience developing and providing training and resource materials for commercial and non-commercial foodservice operations. He has also written several hundred articles for trade journals and created training monographs. Part of Wiley’s Foodservice Operations: The Essentials series.

Preface ix

Acknowledgments xiii

Dedication xv

1 Marketing for Foodservice Operations 1

The Importance of Marketing 2

Who 3

What 4

Where 4

When 5

How 5

The 4 Ps of Marketing 5

Product 6

Place 7

Price 8

Promotion 9

Operators’ Challenges in Marketing Products 11

Quality 11

Quantity 12

Delivery Method 12

Value Perception 13

Operators’ Challenges in Marketing Services 14

Intangibility 15

Inseparability 15

Consistency 16

Limited Capacity 17

2 Target Market Identification 21

The Importance of Target Market Identification 22

Why Target Markets Must Be Identified 23

How Target Markets Are Identified 24

Identifying the Needs of a Target Market 29

Internal Factors Affecting Target Markets 33

Physical Facilities 33

Staff Capabilities 35

External Factors Affecting Target Markets 38

The Economic Environment 38

Legal Requirements 39

Vendor and Product Availability 40

The Competitive Environment 40

The Social Environment 42

Technology 43

3 Creating the Marketing Message 48

The Marketing Message and Importance of Branding 49

The Marketing Message 50

Branding Defined 50

Developing a Unique Brand 51

Product-Focused Branding 54

Service-Focused Branding 54

Factors Affecting Product- Related Messages 55

Product Quality 56

Preparation Method 58

Serving Size 58

Price 59

Convenience 61

Location 62

Service Offering Messages by Type of Operation 64

Non-Commercial Operations 65

Quick Service Restaurants (QSRs) 66

Fast Casual Restaurants 66

Casual Service Restaurants 67

Fine Dining/Upscale Restaurants 68

Ghost Operations 69

4 Delivering the Marketing Message 72

Assessing Marketing Channels 73

Marketing Channel Options 73

Assessing New Communication Channels 81

Understanding Buyer Behavior 83

The Four Buyer Types 83

Buyer Behavior 86

Operator Responsibilities in Target Market Messaging 88

Legal Responsibilities 89

Ethical Responsibilities 90

Social Responsibilities 91

5 Creating the Marketing Plan 95

The Need for a Written Marketing Plan 96

Advantages of Developing a Formal Marketing Plan 98

Challenges in Marketing Plan Development 99

Creating the Marketing Plan 101

Identification of Marketing Strategies 104

Identification of Marketing Tactics 106

Creation of Marketing Plan Cost Estimates 108

Implementing the Marketing Plan 109

Determining What Will Be Done 109

Determining When It Will Be Done 110

Determining Who Will Do It 110

Importance of Staff Efforts to Implement Marketing Plans 111

Evaluation of Marketing Plan Results 115

6 The Importance of Price in Marketing Efforts 119

Pricing for Profits 120

The Importance of Pricing 121

The Operator’s View of Price 121

The Guest’s View of Price 122

Factors Affecting Menu Pricing 124

Economic Conditions 124

Local Competition 125

Level of Service 125

Type of Guest 126

Product Quality 126

Portion Size 127

Delivery Method 128

Meal Period 129

Location 129

Bundling 130

Methods of Food and Beverage Pricing 131

Cost-Based Pricing 132

Contribution Margin- Based Pricing 135

Evaluation of Pricing Efforts 137

Menu Engineering 137

Menu Modifications 141

7 The Menu as a Marketing Tool 145

The Importance of the Menu 146

The Menu as a Marketing Tool 147

Types of Menus 147

The Menu Development Team 149

Legal Aspects of Menu Design 149

Creating the Food Menu 151

Identifying Menu Categories 152

Selecting Individual Menu Items 153

Writing Menu Copy 154

Key Factors in Successful Food Menu Design 155

Creating the Beverage Menu 157

Beer Menus 157

Wine Lists 158

Spirit Menus 159

Digital Display Menus 162

On-site Digital Menus 162

On-user Device Digital Menus 163

Special Concerns for Off- Premise Menus 165

Choosing Takeaway Menu Items 166

Packaging Takeaway Menu Items 166

Holding Takeaway Menu Items for Pickup or Delivery 168

8 Importance of the Foodservice Marketing Mix 172

Advertising 173

The Purpose of Advertising 174

Developing the Advertising Message 176

Determining the Best Message Delivery Channel 178

Personal Selling 179

The Goals of In- person Selling 180

On-Premise Personal Selling 181

Off-Premise Personal Selling 182

Promotions 183

The Purpose of Promotions 183

Promotions for All Customers 184

Promotions for Loyal Customers 185

Publicity 187

Initiating Positive Publicity 187

Addressing Negative Publicity 189

Public Relations 191

Media Affiliations and Successful Public Relations 191

Community Relations and Successful Public Relations 192

Employee Relations and Successful Public Relations 193

9 Web- Based Marketing on Proprietary Sites 197

Choosing the Primary Domain Name 198

Choosing the Website Host 201

The Proprietary Website 204

Website Design 206

Website Content 208

Website Traffic Tracking 211

Search Engine Optimization 212

How Search Engines Work 213

Choosing Keywords and Phrases 214

Social Media Sites 216

The Importance of Social Media 216

Posting Content on Social Media Sites 217

10 Web-Based Marketing on Third- Party Sites and Apps 222

The Importance of Local Linkage 223

Marketing on Third-Party-Operated Websites 226

Partnering with Third-Party Delivery Apps 231

Advantages of Third-Party Delivery App Partnerships 232

Disadvantages of Third-Party Delivery App Partnerships 234

Self-Delivery Options 239

11 Marketing Management on User- Generated Content Sites 245

The Importance of User-Generated Content (UGC) Sites 246

Advertising on User-Generated Content (UGC) Sites 247

Popularity of User-Generated Content (UGC) Sites Featuring Guest Reviews 249

Historical Perspective 250

Motivation of Reviewers 252

Improving Scores on User-Generated Content (UGC) Review Sites 255

Increasing the Number of User Reviews 256

Increasing the Scores on User Reviews 259

Responding to Negative User Reviews 261

12 Assessment of Marketing Efforts 266

The Importance of Evaluating Marketing Efforts 267

Assessment of Marketing Strategies 269

Assessment of Marketing Tactics 270

Marketing Evaluation Tools 273

Tools for Financial Evaluations 274

Tools for Nonfinancial Evaluation 281

Preparing Next-Period Marketing Plans 284

SWOT Analysis 284

Setting Next-Period Strategies and Goals 288

Summary 289

Glossary G-1

Index I-1