Marketing Distribution and Pricing - Coursework Example

Marketing Distribution and Pricing Distribution Being the Marketing manager of a restaurant, the first things that needs to be focused is the type ofthe restaurant for which the distribution has to be done. It can be a single establishment or a chain of restaurants. In both the case the distribution will be different. If it is a single entity then the distribution will mainly be supply the prepared food to the customers. That will be the main delivery issue which has to be decided upon. The best way to distribute the product to the end customer would be to have a home delivery system which is a very common and easiest approach. Pricing In order to decide on the pricing strategy of the restaurant, let us first decide on the type of the restaurant we will be operating with. In this scenario, let us consider that I am handling a fast food restaurant. In this case, the target market will not be very specific and we can target each and every income group. So we will be going ahead with a generic pricing strategy for this restaurant. Restaurants are doing great in the event that they have a 5 percent profit edge, as indicated by "Forbes" magazine. Since restaurants have a little profit edge, they have to execute successful sustenance pricing procedures to stay ready to go. Inquiring about variances in nourishment costs, the costs of contending restaurants and client interest will help to set menu costs and manage what kind of profit could be normal (Von Matterhorn, n.d.). Restaurants ought to utilize cost-in addition to pricing to surety a profit. Cost-in addition to pricing incorporates all the overhead expenses that happen when running a restaurant, including rent, compensation for holding up staff and cooks, and gas and power to power the kitchen and lounge area. Next the profit edge needs to be considered. The manager needs to procure a profit to make the business advantageous to keep open. This profit incorporates compensation for the holder, and in addition the capacity to lead repairs on the restaurant and stretch the restaurant, if fundamental. Add the fancied profit rate to the overhead expenses rate. This rate ought to be included onto the expense of any sustenance thing, prompting costs that pay for nourishment and overhead expenses, and bring about a profit. Website Sales When selling online, the pricing of the product plays a major role. The price of the food product will be decided based on the production cost of the item. As discussed earlier, it was decided that restaurants do well if they manage to keep a 5% profit margin. However in this scenario, the pricing has to be lower in order to address the competition online. Moreover by selling online we are avoiding the broker charges and the maintenance fee for managing a website is very nominal now a days. When selling through website we have to be very creative and marketing tactics have to be mainly interactive with our customers. The pricing will be cheaper than that of the regular price when the food item is being sold in the restaurant. Though, this approach might hamper the direct sales at the restaurants. Customers will be given exclusive combo offers when they go on to buy the food products online which will mainly help in driving the sales online. Alternative sales venue/Price Now let us discuss a situation where we will be selling 1000 pieces of pie to a convenience store instead of selling it online. In this situation the pricing will differ slightly as we cannot plan to earn the total profit. The convenience store selling our pie will also have to be given a decent share in order to do business with them. The general pricing for a pie would be around $8 if sold through our restaurant which includes the profit margin of 5%. So the production cost of the pie would be $7.6. In this case the price would be reduced to $7.8 so that the convenience store can offer the pie for $8 to the general public. In this scenario, it will be important to standardize the price for the customer so that we don’t hamper our sales in the restaurant (Shock, Bowen & Stefanelli, 2004). The second alternative for selling our pie is to do that through a third party online. Let us say we plan to sell our pie through eBay stores or at a food fair. Again the situation will become different so the pricing will differ accordingly (Bernstein & Paul, 1994). EBay stores are known for offering products at a very cheap rate. The same is applicable for food fairs because in there kind of setups the main idea is to attract the customers by offering the best of the product at a very competitive rates. So based on this approach the pricing rates for 2000 pies will be $7.75 each. It has been kept in this way to create a slight difference in the pricing between the convenience stores and that of eBay. The marketing strategy that will be applicable in this situation is that of to attract all the segments of the people by offering a competitive pricing. This will help us in creating our recognition and at the same time building our brand in front of the consumers. Conclusion Throughout the report, I discussed the various strategies that will be implemented in the distribution and pricing strategies of out restaurant. We saw that in order to accomplish our profits we will have to keep a standardized pricing approach and we will not be concentrating on any particular segment. As per research it was seen that ideally we should maintain a 5% profit margin in order to maintain steady revenue. Website selling will be encouraged as it does not involve a huge expenditure yet it can help in creating a good exposure for our restaurant and at the same time sell the various food products. In case of alternative sales we have to give a competitive pricing by offering the lowest possible price for our food products in order to stand in the competition and become recognized by our future customers. References Bernstein, C., & Paul, R. (1994). Winning the chain restaurant game (1st ed.). New York: John Wiley. Shock, P., Bowen, J., & Stefanelli, J. (2004). Restaurant marketing for owners and managers (1st ed.). Hoboken, N.J.: J. Wiley & Sons. Von Matterhorn, L. (n.d.). Restaurant Food Pricing Strategies. Small Business - Chron.com. Retrieved from: http://smallbusiness.chron.com/restaurant-food-pricing-strategies-14229.html Read More