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Marketing - Essay Example

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The paper "Marketing" discusses the Cebrzynski’s article that looks at market and customer segmentation in the restaurant industry, using the real-world case examples. Marketing, pricing, promotion are discussed, with an emphasis on market segmentation and special-offer deals…
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MARKETING Cebrzynski’s article looks at market and segmentation in the restaurant industry, using Houlihan’s and other real-world case examples. Marketing, pricing, promotion, and customer and product segmentation are discussed, with an emphasis on market segmentation and special-offer deals. “Houlihans also hopes to increase its bar business with the return of "Mini Mondays," which offers mini burgers for $1 each. The burgers usually come in a flight of three, but when the chain unbundled them for a promotion in March” (Cebrznski, 2008). Research of customer bases does not stop
with market segmentation, but continues in the form of assessing whether the efforts are
working and how people are reacting, good and bad, to the product, price, distribution,
and promotion.
Cebrznski’s article shows how a restaurant can learn a lot about how to meet people’s needs better by letting customers have the opportunity to complain, and, more importantly, by listening to them. This way, the company can focus on what the customer wants directly and make the proper accommodations. Customer segmentation is not a process that stops when groups are identified as targets for the products or services offered by that company; it continues in terms of listening to how these markets are responding to marketing mix efforts and measuring the company against competitors and the markets’ perceptions of competitors. A blanket statement may be challenged in individual market circumstances.
Product differentiation is becoming more and more of a factor in restaurant services promotions (Cebrznski, 2008). Restaurants like Houlihan’s can start out with a
differentiation that is more externally based, relying on the uniqueness of its services to
separate it from competitors. But due to marketing related factors such as market saturation, the company may also have to differentiate its services internally to keep up
with an increasing focus on segmentation of consumers and product differentiation to
meet this segmentation. Thus, Cebrzynski’s article shows how a restaurant should also move laterally to provide more choices to the consumer. Houlihan’s, like other restaurant services, should also show an increasing attention to service quality as well as incorporating extra-environmental trends such as vending into its traditional service line options of two differentiations.
From a quality assurance standpoint of marketing and sales, Cebrzynski’s article shows how restaurant company marketing success has thus far mainly been due to profitable and well-timed expansion and the use of clearly-defined segmentation bases to which marketing strategies are applied with a high degree of innovation. The company has established inroads into a frustrated customer base beginning with its expansion into consumer and environmental friendly products. The company researched its customer base to find their biggest complaints and worked to serve them so that they would enjoy a higher degree of customer satisfaction and loyalty. The company focused on what the customers wanted rather than who they were in terms of status, and presented itself effectively. The company concentrated their marketing efforts on the segment of customers expecting less from a restaurant and gave them what they wanted better, faster, and cheaper in many cases. Their strategy employed customer segmentation to identify those groups who were most likely to be targeted and convince them that the main sources of their previous dissatisfaction with other restaurants.
REFERENCE
Cebrzynski, G (2008). Troubled economy creates an opening for ad overhauls. Nation’s
Restaurant News.

Troubled economy creates an opening for ad overhauls: dinnerhouse chains try completely different marketing strategies to maintain sales and attract customers watching their wallets
Nations Restaurant News ,  August 11, 2008   by Gregg Cebrzynski
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Now more than ever, creative advertising and innovative promotions are the keys to bringing cost-conscious diners into casual-dining restaurants, according to marketing executives for chains in the segment.
The obvious reward is a quick sales increase, and the longer-term benefit is an opportunity to stay top of mind with consumers so that when they become a little freer with their spending, theyll remember the restaurant that gave them something special.
That was Houlihans goal when it held a "Cinco-De-July-O" promotion targeting consumers who canceled vacation plans because of high gas prices and wanted some sort of celebration to make up for that.
The Leawood, Kan.-based chain, which has more than 90 units, sent e-mails to the 350,000 consumers in its database on July 3 to promote new beverages and a vegetarian enchilada. Houlihans timed the promotion to see how it would affect sales during the normally slow Fourth of July holiday period, said vice president of marketing Jen Gulvik.
The result: sales up nearly 26 percent on July 4, compared to the previous year, and a 16.4-percent sales increase on July 5.
The promotional material didnt even contain a price-point offer. It did show a zany character wearing a sombrero and holding portobello mushrooms for maracas. A copy block read in part, "Gas prices suck."
"It was more of an awareness message," Gulvik says. "I think the creative message resonated with consumers such that Houlihans was memorable and top of mind to help our typically slow July 4 weekend sales."
Houlihans also hopes to increase its bar business with the return of "Mini Mondays," which offers mini burgers for $1 each. The burgers usually come in a flight of three, but when the chain unbundled them for a promotion in March, bar sales increased 22 percent year-over-year and 16 percent compared with the previous 12-week period, officials say.
[ILLUSTRATION OMITTED]
Houlihans intends to keep Mini Mondays as a permanent offer to build long-term bar business, Gulvik says.
Although $1 burgers can be considered a value offering, Houlihans tries to steer clear of discounting because it erodes brand value over time, she says. Some discounting "can be good and appropriate," but the chain would rather target consumers with a new daypart, specifically brunch, which its testing in five restaurants, Gulvik says.
[ILLUSTRATION OMITTED]
That opens a new revenue stream for Houlihans without resorting to discounted meals to increase customer traffic, she says.
Other casual-dining chains have been forced to adjust their marketing efforts because of the economy.
Applebees Neighborhood Grill & Bar recently scrapped its "talking apple" campaign, which used the voice of comic Wanda Sykes, in favor of featuring customers in real-life videos for a new campaign called "Its a Whole New Neighborhood."
In May, Applebees invited consumers to submit their own videos showing the "great times theyve had at Applebees."
Earlier this year, OCharleys Restaurants dramatically changed its advertising to increase traffic from regular customers and attract new and less-frequent diners.
The new campaign focuses on the chains soft rolls as the starting point of an enjoyable meal. TV spots show people in embarrassing situations who find relief when a hand appears out of nowhere to offer them a basket of rolls.
The Cheesecake Factory Inc. is poised to place more emphasis on marketing in the midst of a management shakeup at the company following a steep drop in profits and a warning of further same-store sales declines. The company created the new position of senior vice president and chief marketing officer and hired restaurant industry veteran Mark Mears to fill it.
As The Cheesecake Factory searches for new ways to market its namesake chain and Grand Lux brand, segment rival Buca di Beppo is already changing its traditional couponing strategy to increase repeat purchases.
Using its 15th anniversary this year as the starting point, the 89-unit chain offered a specially priced menu and handed out "party favors" in the form of meal deals to bring customers back for a second visit.
As part of the celebration, the chain staged a wedding vow renewal night July 23 at its original Minneapolis restaurant. Seventeen couples renewed their vows in a ceremony covered by local TV. Other restaurants in the chain held parties that night, though not on the same scale, says Jim Macchitelli, vice president of marketing.
The wedding vow ceremony and 15 percent discounts on the anniversary menu were a way to "have a little fun," he says, but "the whole thing working together is designed to replace our traditional couponing strategy."
[ILLUSTRATION OMITTED]
Buca di Beppo has used direct-mail couponing "pretty consistently to drive traffic," he says, but now that "everyones couponing," the chains efforts are less effective in light the increased competition.
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