1. In 200-300 words, explain the Public Relations plan for the organization. Cas
ID: 408268 • Letter: 1
Question
1. In 200-300 words, explain the Public Relations plan for the organization.
Case Study
One of your neighbors has just inherited a restaurant in a small town about 75 miles away. They’ve never owned or operated a business before, and know very little about marketing or the restaurant business. They now have a Marketing Plan, but need help with the Marketing Communications Plan. General Restaurant Information Provided by Your Neighbors: They want to keep the “family’s” restaurant as a legacy to their family members who left it to them. However, they will need to make money immediately in order to replace the income they lost when they quit their jobs to run the restaurant. The restaurant has been losing sales/profits over the past few years. Family members have had some health issues (and have since passed away) and have not had the time to manage the restaurant effectively. For the past few months, the Chef and some of the servers have been keeping the restaurant open. The restaurant has a good reputation in the small community. The town has a population of 6,000 people. It is in a good location (right off an interstate) and does additional sales catering to local businesses in the area. Over-the-road semi-drivers say it is the best cup of coffee in town and town’s people know that you can always find the local sheriff and highway patrol officers eating there. People are allowed to smoke at their tables and some people have stopped eating there because of the smoke in the dining room. Also, you can see serving staff smoking between orders. The restaurant has a good menu. It has a lunch menu and a dinner menu. They open at 11:00 am and they close at 7:00 pm CST seven days a week except major holidays. They have daily “specials”. For instance, on Monday it is meatloaf, Tuesday; roast beef, Wednesday; turkey breast, Thursday; pot pies, and Friday; fish. The restaurant is famous for its homemade pie menu. The Chef makes 15 varieties of homemade pies daily. Customers can also order pies for holidays. People have asked to order pies online and pick them up at the store…but so far no online sales exist. The restaurant is in the low to mid-price range. But due to changes in the local community demographic may need to update/expand the menu. Baby boomers are leaving the area and are being replaced by Generation X individuals and their young families. When eating there, you will see a wide range of customers from older truck drivers to young families, and even teenagers on a date. The chef has been with the restaurant for over 25 years and has done a good job but is thinking about retiring in the next 3 years. He believes in the local food movement and buys produce from local farmers. The serving staff is composed of women (most in their late 60s) who call each customer by the name “honey” and have been with the restaurant for years. It is a well known secret that their grandchildren come by each day for a soda pop and pie (most times they leave without paying). The restaurant is located next to an interstate exit and is the only “family” style restaurant in a 20 mile radius. However, there are a McDonalds, Subway and Sonic Drive-in restaurants located nearby. McDonalds, Subway, and Sonic offer special deals throughout the week…for instance, McDonalds runs Shamrock Shakes in March, Subway offers $5.00 foot long sandwiches, and Sonic has happy hour soft drinks each day. The family restaurant has relied exclusively on word of mouth advertising, but do support a local little league baseball team each summer which costs them $500. The name of the restaurant is The Family Diner. While they are not open to changing the name, they are willing to review any changes to the brand and logo that might help the business. Right now, the logo is simply the name of the diner underlined in Veranda font using a light blue color. The new owners are younger and while they want to maintain the legacy of the family, they are computer-savvy. There has been talk of starting a web site and using social media, but those steps have not been taken. There are no loyalty programs or special promotions except for the daily specials. Sales (revenue) for last year were $900,000, which is a 15% share of the market. The other eating and drinking establishments in the area spend approximately $500,000 a year (total for all) in advertising.
Explanation / Answer
This marketing plan will help to better understand why customers choose to eat at this business over the competitors as it will also provide the business with a blue print of how to grow this small town restaurant. It has been successful in the past and is barley getting by. The business has been in business over 25 years and is very well known
This restaurant is the “Family’s” restaurant and is run as a legacy to their family members who left it to them. This small town restaurant had been successful though, over the last months has fallen short. Restaurant has been in business twenty five years and is very well known. The restaurant is famous for the variety of pies and for serving the best cup of coffee around. The company has found a great deal of success by only word of mouth and by referrals. They feel they have a good background reputation and would like to get it efficient to suit the needs of their customers’ existing and new customers.
The current marketing strategy used for this restaurant;
The restaurant is in the low to mid-price range. Their marketing strategy is none existent as for advertising they have gotten by on word of mouth .They do have daily specials and offer catering service to local businesses. They are known for their varieties of pies and Customers can also order pies for holidays. They also support a local little league baseball team each summer.
The elements of the current marketing strategy I would change or recommend are the Family Business can extend their hours of operation .Update their menu and expand the variety .As well as bring in some new faces to help extending their hours of operation. Create an online website for their menu so the pies can be ordered online and picked up at the store. They will also need to add a designated area outside for those that smoke and do don’t allow the servers to smoke in-between orders only on breaks and not wear customers can see them.
Analyze the business goals and objectives and discuss specific strategies to attain them
In order to attain these goals they need to set up interviews to hire more staff .Have a website created for them. Decide where they can place tables outside in a designated area to be able to have their smoking customers still have a spot if they smoke and a designated spot outback were employees can smoke and not be seen
Analysis of the current marketing plan
The current marketing strategy used for this restaurant; The restaurant is in the low to mid-price range Their marketing strategy is not much they do have daily specials and offer catering service to local businesses They are known for their varieties of pies and Customers can also order pies for holidays. They do not promote their business it has gotten by on word of mouth and reputation they also support a local little league baseball team each summer
Recommended changes to current marketing plan.
The elements of the current marketing strategy I would change or recommend is the Family Business can extend their hours of operation .Update their menu and expand the variety .As well as bring in some new staff equals new faces in the restaurant. Plus new faces will generate more word of mouth promoting for the business .Hire a new chief .Also add a designated area outside for those that smoke and do don’t allow the servers to smoke in-between orders only on breaks and not wear customers can see them.
These changes will help meet the strategic goals of the current owners.
By extending their hours of operation creating an online site that allows customers to order pies online and pick them up at the store will generate more sales and profit .By updating their menu and expanding the variety of the menu it will attract more customers. As well as bring in some new faces in the restaurant. Hiring a new chief will also help in bringing in a variety for the menu. Also add a designated area outside for those that smoke and do don’t allow the servers to smoke in-between orders only on breaks and not wear customers can see them
Action items needed to complete the recommended marketing strategies.
In order to meet these goals to allow these changes we need to set up interviews to hire new staff .Create an online website so customers can order pies online and pick them up in the store .See what options we have as to adding to the menu .Hire a new chief
A statement of the key value the organization is committed to
To better understand how customers choose to eat at this business over the competitors there, as it provides a company with a blue print of how to grow This small town restaurant had been successful in the past and is a successful little town restaurant business. The business has been in business over 25 years and is very well known. The restaurant is famous for the variety of pies and best cup of coffee. The company has found a great deal of success by only word of mouth and by referrals. They feel they have a good background reputation and would like to get it updated to fit the needs of their customers
Analysis of the current marketing plan
The current marketing strategy used for this restaurant; The restaurant is in the low to mid-price range Their marketing strategy is not much they do have daily specials and offer catering service to local businesses They are known for their varieties of pies and Customers can also order pies for holidays. They do not promote their business it has gotten by on word of mouth and reputation they also support a local little league baseball team each summer.
Recommended changes to current marketing plan.
The elements of the current marketing strategy I would change or recommend are the Family Business can extend their hours of operation .Update their menu and expand the variety .As well as bring in some new staff equals new faces in the restaurant. Plus new faces will generate more word of mouth promoting for the business .Hire a new chief .Also add a designated area outside for those that smoke and do don’t allow the servers to smoke in-between orders only on breaks and not wear customers can see them.
These changes will help meet the strategic goals of the current owners.
By extending their hours of operation creating an online site that allows customers to order pies online and pick them up at the store will generate more sales and profit .By updating their menu and expanding the variety of the menu it will attract more customers. As well as bring in some new faces in the restaurant.Hiring a new chief will also help in bringing in a variety for the menu. Also add a designated area outside for those that smoke and do don’t allow the servers to smoke in-between orders only on breaks and not wear customers can see them
Action items needed to complete the recommended marketing strategies.
In order to meet these goals to allow these changes we need to set up interviews to hire new staff .Create an online website so customers can order pies online and pick them up in the store .See what options we have as to adding to the menu .Hire a new chief
A statement of the key value the organization is committed to
To better understand how customers choose to eat at this business over the competitors there, as it provides a company with a blue print of how to grow This small town restaurant had been successful in the past and is a successful little town restaurant business. The business has been in business over 25 years and is very well known. The restaurant is famous for the variety of pies and best cup of coffee. The company has found a great deal of success by only word of mouth and by referrals. They feel they have a good background reputation and would like to get it updated to fit the needs of their customers.
Consumer Purchase Decision
The Family Restaurant is a local establishment, having remained open for over fifty years in the same location. However, recent economic changes have caused a downturn in the Family’s restaurant’s profits, creating a need for a new business and marketing plan in addition to the word-of-mouth advertising the restaurant normally uses to promote itself. A revamp of the restaurant’s menu would provide the necessary update to keep customers coming back, while maintaining the traditional feel of the location.
Although spaghetti and meatballs were perfectly fine as Italian food fifty years ago, consumers in the area now enjoy more refined, local food. Incorporating as much local meat and produce as possible into the menu, making all pasta in-house, and narrowing the menu in order to focus on house specialties would upgrade The Family’s Restaurant from a greasy-spoon diner to one of the better restaurants in the city. In order to preserve the heritage of the restaurant, traditional recipes will be used, and local favorites will remain on the menu. Maintaining The Family’s Restaurant’s reputation and tradition is critical to its continued existence, and no change would stray far from the founders’ ideals .
Many restaurants in the area have become slick and experimental, all gravitating towards the same type of food. The Family’s Restaurant would separate itself from competitors by maintaining its commitment to home-cooked Italian food, while changing its sourcing and menu to better fit consumers’ modern tastes. This mix of traditional recipes and local sourcing more closely matches how residents see Italian food, promoting authenticity as well as sustainability. The overall goal is to elevate The Family’s Restaurant above typical diners and fast-food restaurants, while keeping it below an elite-level plane.
The initial changeover from the previous iteration of The Family Restaurant will be costly, but maintaining its new image afterward would be less expensive than current operating costs. The Family’s Restaurant already owns a pasta maker, so no new equipment need be purchased. Local suppliers for meat, produce, and dairy may be more expensive than current suppliers, but the elimination of long-distance transportation costs offsets the increased price of the products. There is significant reason, based on local market research, to believe these changes would result in an increased customer base, as The Family’s Restaurant would appeal to a wider range of consumers than currently, resulting in increased revenue as well .
The Family’s Restaurant’s menu will be pared down, focusing on the chef’s talents in lasagna, risotto, and traditional meat and pasta dishes. Seven main course options, rather than the current twenty, will more than satisfy customers as well as allow the kitchen staff to produce better-quality food. Menu prices will remain the same, with no single item topping $25. These changes will be phased in gradually, in order to test the success of each new dish with customers, as a complete overhaul would be more expensive and less customer-friendly.
Garnering positive reviews, both from customers and professionals, will be critical to The Family’s Restaurant’s success. A marketing campaign to promote Yelp reviews will be central, as well as taking out ads in the entertainment section of local papers. Additional marketing will be developed as needed .
Continuing The Family restaurant’s legacy as a hometown establishment, while updating its reputation as a greasy spoon, is critical to the restaurant’s survival. The changes proposed would increase revenue, revamp The Family’s Restaurant’s image, and ensure its success for many years to come.
References
Butler, Cherryh. "Restaurant Trend Mashup: What to Expect in 2014." FastCasual.com. Networld Media Group, 2 Jan. 2014. Web. 02 Apr. 2014.
"What's Hot in 2014 Culinary Forecast Confirms Sourcing, Nutrition Trends." National Restaurant Association. National Restaurant Association, 3 Dec. 2013. Web. 02 Apr.
Promotion Strategies & Public Relations
Creating a product is all well and good, but the product is useless if it cannot reach its target audience and unprofitable if the price does not fit the market. In this instance, we must find the best means of distributing our pies at a price that consumers will pay, while creating a profit for ourselves as well. It is a careful balance, but with the right market research and strategic distribution, our pies have the potential to turn our idea into a highly profitable business.
To establish the most effective distribution methods, we must first explore our target market’s shopping habits. The average pie-purchasing consumer shops at both traditional grocery stores and big-box stores such as Costco. Refrigerated and frozen pies both experienced a market expansion last year, which cuts down on storage costs significantly. We will distribute to large-name national grocery stores, including Wal-Mart and Safeway, and maintain a significant online sales presence to reduce storage costs even further. Warehousing will be briefly necessary, but as the pies will be frozen, there is no need to take special care to see that they do not spoil. A standard industrial freezer will suffice as a temporary storage unit, and refrigerated trucks will provide the necessary transportation to our distributors .
Setting our price will involve careful research into both our target demographic and our own costs. We must at least break even, and preferably turn a profit, so our price must be high enough to accomplish this. However, our prices must also fit what our consumers expect. Charging $30 per pie in a market where the average price is around $10 is not feasible. To calculate the appropriate cost of a pie, we must take into account our costs as well as the price a consumer would pay for the convenience of a frozen pie over the effort to make one from scratch. We estimate this price to be around $12 per pie, as production costs run to $5 per pie (including ingredients and packaging) and transportation and storage costs add an additional $4. This leaves $3 in profit per pie, a 25% profit rate .
Pies sold online will be at a reduced price, due to the lack of distribution costs. In this case, the consumer will pay these, allowing us to sell each pie for $10 with shipping dependent upon location. This results in a 50% profit rate, more than enough to cover costs of running a website. Not much online advertising will be necessary, as our website will be printed on every pie box sold in a retail environment. This significantly reduces advertisement and promotion costs, increasing our profit margin .
In-person pie sales will have higher pricing than online pie sales, for the reasons explained above. A bulk order to a convenience store of 1000 pies would cost the store $11,000, or $11 per pie. The store is then free to adjust its pricing as it sees fit to turn its own profit. Individually selling 2000 pies on the street or at a food fair would result in an increased cost, estimated at $15 per pie, in order to compensate for time and travel not present in other distribution methods. We do not anticipate selling pies on eBay, as the market for food items is very small within that community. In order to increase sales in these alternative venues, we will promote upcoming appearances on our website to raise consumer awareness and encourage a larger purchasing population.
Based on our distribution and pricing research, we believe that selling our pies within a $10-15 range depending on the sales venue is enough to create profit while maintaining a low enough price for consumers. We will encourage website sales as much as possible, as these will result in the most profit for our company, and receive free advertising from our own packaging. We believe the strategy outlined above will be the most effective in maximizing sales and profit while minimizing distribution costs.
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