Your $4,000 Marketing Plan
May/June 2010
By Richard A.L. Caldarola, D.B.A., CMA, CFM
This is not quite the question you thought it was when you saw the headline—this is not New York. No, this is a question of what might be more important to you, attracting new customers or keeping your present ones. Of course you want to do both! What restaurant operator would choose to lose valuable customers and not attract a new loyal following? But just what do you get for that $4,000 marketing investment that you made?
You have what would seem to be a plethora of choices when it comes to spending your advertising budget, from mailers and door hangers, to radio spots and print ads in newspapers and magazines, and even collateral pieces that can be distributed in hotel lobbies. If that wasn’t confusing enough, you also have to decide whether you are targeting new customers, trying to urge past customers to visit you again, or perhaps some combination of both.
Then there’s the message – should you have a percent or amount off coupon, or perhaps list your address with the menu and prices and with your restaurant’s tag line and logo prominently displayed, or should you have a special event to try to prompt an immediate response from the reader such as Come to dinner tonight! What should you do?
Perhaps we should consider first what not to do. Do you find that any of these fit your restaurant’s situation?
• We estimate our target market by intuition, past experience and sometimes by what we think just might work.
• We assume that the lack of complaints means that customers are satisfied and therefore will return for additional meal purchases.
• We expect to be able to attract the same customer (types) to every daypart.
• We think that coupons work to bring in new customers.
• We believe that marketing is just advertising.
• We have no idea how well our advertising works.
If you can answer yes to any of those statements and your sales aren’t increasing the way that you believe that they could, perhaps your message isn’t getting across the way it should.
It might be that you targeted the wrong audience or have the wrong message, or even have cannibalized your sales by offering coupons to attract new customers but find that the only ones using them are loyal, repeat customers.
So – what do you get for your $4,000? If you don’t know, it isn’t because of the marketing communications system that you use. It’s not only that coupons don’t work or print ads don’t work, or even that your image advertising spots on the radio don’t work. How would you know for sure unless you have a comprehensive measurement system? The more likely reason is that the design of the entire marketing program has a hitch in it, and the general cause for program design problems is when we equate Marketing with Advertising.
You know about the Marketing Mix, the now well argued 4 Ps of Marketing, of Product – Price – Place – Promotion. So certainly your product and service quality initiatives are well designed and implemented. Clearly you have price points for every daypart that represent a quality transaction for the customer and are very competitive. Your location was well researched and your signage is distinct and attractive. And of course you have your advertising promotions.
Those are all fine, but they all miss the 4 Ps of Strategic Marketing, the components without which even the finest products, the most competitive prices, the best location and the most creative advertising just won’t generate the results you expect. Strategic Marketing includes:
• Probing (the market) – Market Research
• Partitioning (the market) – Market Segmentation
• Prioritizing (the market) – Selecting Target Markets
• Positioning – Your special message to your Target Market in which you present your competitive advantages
Without strategic design and post implementation measures, the marketing mix is developed in a vacuum without clear direction, and there is no obvious way to know if your new product, coupon discounts, physical décor changes, or even that $4,000 in advertising have done what you intended.
Your restaurant should earn a reasonable return on all the investments that you make. That includes investments in the messages you send to your current and prospective customers, from your hostess stand, to your servers, to the print ads, radio spots and coupon mailers that you use.
Unless you first consider your Strategic Marketing program design and incorporate that fully into your Price, Product, Place and Advertising and other Promotions, you won’t know if you selected the right target markets, have the right value message for them, or even if your proposals for them—that is, your advertising messages—are telling the story that you want and need to tell. And in the end, don’t you want to know what you will get for your $4,000?
Richard is an Associate Professor of Business at Troy University’s Atlanta campus. He teaches graduate courses in Marketing, Strategy, and Managerial Accounting. As an integral part of their learning, Richard’s Marketing course students often provide Client-Based Consulting services to Atlanta area businesses. Richard can be contacted by email at rcaldarola@troy.edu.
Troy University has several graduate and undergraduate programs in business, including a BS in Business Administration degree with a concentration in Hospitality and Tourism degree and a Master of Science in Management with a concentration in International Hospitality Management.
