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Marketing Plan
for
Italy’s Pizza Deli
Mkt 516, November 28, 2006
By
Jennifer Usher
Abdullah Alnahdi
Jack Palmer
Abraham Kirunga
Hsiang-Ying Wu
Executive Summary
Italy’s Pizza Deli aims to provide the best pizza, subs, wings and
other foods alongside services to targeted business environments in the
Deland region. This plan seeks to generate a significant increase in
company sales and profits from the delivery of pizza, increased catering
services, retaining of new and old customers, and increased customer
awareness compared to the preceding year. Enzo, the owner, is au fait
when it comes to pizza. He has been doing it for over 30 years.
The highlights of this plan are the targets: retain customers, increase
catering and delivery, improve ambience at the restaurant which all lead to
increased sales-revenue. These targets are attainable through a proactive
approach to the retaining of clientele, teaming-up with technology
providers, and partnering with reputable local and regional food suppliers
while we improve pricing, and reduce risks. The projected marketing
budget for each month will be $5,000.
This business plan has been created on the basis of three months of
market research, which spanned September of 2006 to November of 2006.
Data conclude the size and growth of the market and geographical
segments, customer needs, perception, and buying behavior trends have
been on the upswing, and are expected to continue in this trend for the
next several years. Italy’s pizza Deli feels that it is able to fill the hole in the
family restaurant niche, and will benefit from continuing operations and
revamped marketing.
Environmental Analysis
The Marketing Environment
The marketing environment in the food industry is very competitive.
Our major competitors are larger chains such as Domino’s, Papa John’s
and Pizza Hut. The strength of the larger companies is their marketing
dollars. They can afford to advertise nationwide on TV. On the downside
the weakness of the larger chains is the depth of their product line and the
quality of the product. They do not carry as many products on the menu,
and can’t compete with the freshness and grade of our ingredients. The
larger chains have a set marketing mix which is controlled by the franchise
and therefore will have little to no response to our marketing mix if
changed. However, we also have smaller competitors such as Tony’s New
York Pizza, Bellini’s, and Milone’s. These competitors have more similar
strengths such as a deep product line and will compete, using price wars
or other promotional events if our marketing mix is altered.
Many substitute products are available in the dining industry, having
an effect on the attractiveness of our product and in the future there is also
a possibility of new competitors entering when new local restaurants with
quality products open in the Deland area. While the larger companies have
an advantage entering the market over the smaller ones due to marketing
power and the ability to bargain with suppliers, smaller companies still
have the ability to enter the market if a niche is found.
Some advances in technology can help operations as well as marketing
efforts. Most well known restaurants today have websites, carrying their
menu, directions to the place and other important information. Some
places also allow customers to order their pizza online. Another technology
becoming standard in the pizza industry is delivery bags with a heater build
in. These pizza bags keep pizza warmer and longer and make deliveries
more efficient since more deliveries can be made at once and save gas
money.
The values of our society have changed in the way that life has
become fast paced and family dinners are seldom cooked at home
anymore. Longer working hours and mothers going to work instead of
staying at home anymore has opened up new markets for many dining
places to create pick up meals which moves towards the general attitude
of convenience. Cooking takes too much time, ordering food from a place
is faster and does not involve much hassle.
Target Market
Our target market consists of people from different demographics. Because
everybody needs to eat we technically target everyone in our environment, regardless of
sex, age, and ethnicity. However pizza is especially popular with kids, teens and college
students. This means that people living in the couples, launching, and retirement stage of
the Family Life Cycle don’t feel the need to eat pizza at a regular basis, whereas people
in the Independence and Parenting Stage do. The location of the restaurant is close to
downtown Deland and is situated next to New York Avenue, a high traffic road. It is
easily accessible to Deland residents located within 4 mile radius of the restaurant and is
also accessible for handicapped people in its plaza location. Our target market usually is
open to fast food atmosphere and pizza. They don’t mind substituting pizza for a meal,
such as students looking for a snack or party host, which excludes very health oriented
customers. Even though our business is capable of offering a great quality
product to satisfy target market needs, competitors are faster when it
comes to food production. Nevertheless the affordability and specials are
enticing enough to wait a little longer. The needs of our target market will
change with time. Later operating hours and more frequent deliveries will
be in demand. A faster service and better service will be expected from our
customers.
SWOT Analysis
Strengths
Italy’s Pizza Deli main strength is the quality of their product. The
owner of the business has been in the pizza business all his life and knows
how to produce quality pizza at good price without sacrificing superior
ingredients.
This strength has helped the business differentiate their products from
competitors and satisfy the demand of their target market.
Another strength of Italy’s Pizza Deli is the dine-in area rented. It is very
clean and has open space to host bigger groups of people. This strength
welcomes a strong walk in customer base and helps when special events
want to be held at the restaurant.
The menu offers a vast variety of products including pasta meals, subs,
meats, pizza, and salads. The depth of the product line and the size of the
pizzas are another strength of the restaurant.
Weaknesses
One weakness of Italy’s Pizza Deli is it is difficult to locate visually.
First time visitors will not see the place right away, since it is located in the
corner of the plaza and signs are overshadowed by the post office sign.
The interior of the restaurant though clean and open lacks decoration and
is very bland; there is a lack of a particular aesthetic.
Opportunities
The major market which Italy’s Pizza Deli has not entered yet in
Deland is the Stetson University student body. There are around 2400
students which can be potential customer of the business if marketing is
successful. Another opportunity is increasing marketing efforts towards
delivery business. The majority of our business is walk in and by
increasing deliveries we will gain more customer base and increase profits.
Another opportunity is making the interior a theme such as an Italian home
which helps with the atmosphere of the place. Together with the theme
beer sales can be advertised which helps customer retention.
Threats
The threats in this industry are other Italian restaurants such as
Milone’s Pizzeria & Subs, Angelina’s Pizzeria, Domino’s Pizza, Papa
Johns, Pizza Hut, etc. While Milone’s and Angelina’s are in direct
competition with Italy’s Pizza Deli and fighting over the market share of
dine-in guests, Domino’s and Papa John’s only compete over take outs.
The chain companies have more advertising dollars and have the ability to
overshadow our advertisements and take away customer base.
Another threat that can hurt business is the food trend. If all of a sudden
Chinese food is the trend and everybody is eating it, then Italy’s Pizza Deli
will lose customers due to this trend. In order to prevent this threat Italy’s
Pizza Deli has to continuously advertise and change their menu according
to trends.
Marketing Objectives
Our main marketing objectives are to increase the sales of business,
create a strong brand name, and inform people about our catering ability.
One way of doing this is by increasing the number of repeat
customers. Many walk-in customers exist from the surrounding
establishments but not many are repeats. By establishing a “punch” or
“stamp” card, giving customers’ incentive to return and work towards a free
pizza will allow us to see how many customers are returning and how
many of those are new customers. It will take about two to three months to
launch the cards and being able to track the progress. By introducing the
cards you are taking advantage of the fact that a quality product is sold
and customers return to use their cards and in turn increase business.
Also by utilizing the card he can counter one of his weaknesses and
reach the customers creating brand recognition and maybe entice them
into becoming brand loyal consumers. This objective is consistent with his
goals in that he wants to increase his customer base and make his
restaurant more brand recognizable.
When considering the marketing channels that are involved with
Italy’s, it is apparent that there are too many distributors involved in the
delivery of the food. This seems to affect the meat and cheese portion of
the menu the most which is important to achieve more production in his
catering business. By increasing the quality of the menu by purchasing
premium meats and cheeses, it should increase the quality catering market
share percentage as well. Boars Head is the brand that was on the menu
until managerial discrepancies lead to the use of a more diverse and
possibly less reputable brands. By increasing the number of distributors
Italy’s is ultimately increasing delivery dates, shrinkage (loss of product),
distribution efficiency, and rates that may be achieved by ordering larger
amounts of product from a smaller number of distributors. By allowing the
Boars Head brand back into the menu and decreasing the number of
distribution channels, Italy’s will see long-term benefits in rates and profits.
Marketing Strategies
Target market & Marketing Mix
One of the most important markets we are trying to gain a larger
share of would be the student population, the majority being Stetson
students. Targeting students is an important market because this would
include the large number of both high school and college population
combined with the ability to match the price range for these students with
cheap food. The second target market is the business district that is
surrounding the location of the restaurant. By focusing on the potential
business that is within walking distance of the location, Italy’s has made
lunch quick, easy, and inexpensive which has, over time, increased this
lunch time walking distance market share. The other target market that we
are trying to tap into is the larger business district. Deland offers a highly
saturated business area that is very close to Italy’s Pizza Deli. We are
hoping to reach this market on a level where he can get his foot into the
door for larger catering events in the near future. By creating a relationship
with these businesses, there are many potential customers that would
diverge from the catered food and become more regular customers.
By applying the marketing mix to these target markets, it helps to
realize the needs of the target markets and what needs to be applied for to
generate a larger market share. The product and pricing strategies for the
student market is a simple one. The idea here is to supply students with a
quality food at a cheap price. This is something that is already offered by
Italy’s; therefore the goal is simply to get this message to the student
population. Delivery times are important when it comes to this market
because students do not like to wait. Delivery efficiency is important
because many students might be willing to sacrifice time for price or even
food quality. Promotions are a must when dealing with this market.
Themed nights of the week where certain items or alcohol is cheaper
would help to boost the productivity of many nights that seem to be slow.
Also, anything free will attract many students attention. This will help by
promoting product awareness and accessibility while increasing brand
recognition and ultimately profit among the student market. All of this is
necessary to maintain a competitive advantage.
The product strategy for the second target market is just to maintain
quick and quality food for the lunch rush. People get little time for lunch
break so the faster they get their food, the more likely they are to return as
a customer. The pricing strategy will have little fluctuation as the lunch
hours tend to offer a daily special. Other specials could be added to the
menu over time for diversity. Again, the distribution is very important to this
target market. It is important that the restaurant is properly staffed for the
lunch rush and that people do not find themselves waiting for long periods
on any given day. Promotional value can only hold so much weight in this
market because specials are already given daily at a low price. Other
specials may be created or systems of rewards may be set up to
encourage maximum repeat customers.
The third large target market that is trying to be penetrated is the
large business district. There are a couple of things that may be taken out
of this market. The first is the possibility of growing the catering side of
Italy’s business. By bringing in large scale portions of food for business
luncheons or parties, we would be raising brand awareness exponentially.
It is important to get people to taste the food for the first time. This brings
us to the second benefit which would be ambient business created through
the people from these business outlets. If people try it at work, they might
begin to continue the business outside of work. Product strategies for this
market would include the diversifying the large ticket items past pizza,
such as pasta and sandwich trays. The pricing should be reasonable but
not too cheap. Businesses tend to feel that they get what they pay for
which might deter a business from having the initial tasting of the food.
Having the ability to staff any given catering party is also important.
Businesses demand efficiency and speed when it comes to catering.
Promotions may include business raffles, free lunches or discounts to
certain businesses on certain days, company specials, and more.
Whatever it takes to get people to try the product for the first time is
important to increasing the share of this given market. Increasing brand
awareness is very important in hopes of increasing the market share of all
of these mentioned markets.
Market Implementation
Italy’s Pizza Deli has to organize their business to align with their
marketing objectives. In order to achieve this, several activities can be
done.
A salad bar should be introduced to the restaurant. This would
attract another segment of the market of people who eat out, the health
conscious type. Adding a salad bar would turn the restaurant into more of
a full service restaurant. It would then attract more customers and have
more options for customers to choose from. A salad bar would fit easily in
the back area of the restaurant or the front as you walk in. There is a low
maintenance need for the upkeep of the salad bar, however it would need
to be monitored to ensure that it was stocked and fresh. This would not
require a new employee and would be beneficial if it was implemented by
January 2007 because salads are a popular item when spring approaches
for those who are looking to lose weight for the warm weather activities in
the spring.
Another product activity would be to enhance the atmosphere of the
inside of the restaurant with TV’s, more tables, and the development of the
Italian theme in the restaurants name. The TV’s would draw more people
because people like to be entertained and kept busy; this would cause the
people to stay and then in turn purchase more food and beer. Adding
more tables would allow more people to eat there and thus give the
restaurant an opportunity to make more money of walk-in customers.
More tables would also make the customers feel less likely to leave right
away after they eat. This way they can watch TV and be more inclined to
order a dessert or another beverage. This would be more beneficial if it
was implemented by the first of the year as well. It would be a great way
to start the third year of the business.
The last product activity we thought would be beneficial would be to
have the menu posted largely on the wall. It can even be one that is
adjustable so you can alter prices and new items that are offered. There
are many little menus but if it were larger people would be more prone to
try something new because they might not turn to the side of the menu
with the dinners on it. However, if it is right there in front of them, they see
it and maybe they will order another item. It just allows you to put it all out
there and offer everything to the customers. Leave nothing for them to
have to do in searching for your products. This can be implemented at
anytime but the sooner the better because of the benefits mentioned
earlier that it would bring in.
Distribution Activities:
To try and increase sales through distribution they need to extend
their hours for delivery and maybe add a few more drivers when delivery
business picks up. The Stetson student target market will be more inclined
to buy pizza if they are open later and can get the pizza relatively quickly.
The competition has later hours so in order to compete they need to stay
open until at least 11 o’clock on Thursday, Friday, and Saturday. These
are the most popular days to order late night pizza because the on-campus
cafeteria is not open late on these night causing students to look else
where for food! This project should be implemented and running by late
January, when students come back from winter break.
Another distribution enhancement would be to have the name
printed on the outside of the box. I know that he was concerned with the
taste factor of the cardboard, but I believe they can print the logo on the
outside box too. This is a great way to advertise for virtually nothing.
People walking back with their pizza and the smell fills the room or
wherever they are and others are drawn to it. The thoughts are “where did
they get that pizza, it smells great!” That is when the name and number on
the outside of the box would come in handy. It gives new meaning to the
saying “one man’s trash is another man’s treasure.” A pizza box in the
garbage still smells and to a hungry student or passer by it will be a great
way to reach more people through word of mouth advertising. This should
be implemented as soon as the stock of pizza boxes diminishes so as not
to waste them. This will be a huge asset to the sales because the pizza
can sell itself it just needs a so called voice to do it with, hence the
information on the outside box.
Promotion Activities:
The restaurant is having it’s three year anniversary in January, they
need to take advantage of this marketing opportunity by having a day
where they give back to the community. A Day of Thanks to the
community can be held on one day during the week that is specified
through an ad in the local newspaper and flyers in the restaurant. They
could offer a buy one slice get the second free or even a more substantial
discount. There just needs to be an emphasis on the “Thanks” part to
make the customers feel appreciated and give them the true feel of the
restaurant. This should be done around the anniversary date in January to
make it realistic and heartfelt.
Another promotional activity that would increase revenue would be
the Punch/Stamp Card. This would be a business-sized card that you
would have punched/stamped when you ate from the restaurant, and when
you reach a certain number of punches/stamps you would receive a free
pizza. This would be a good way to track new and repeat customers and
entice customers to visit more often to work towards their free pizza.
These are great tools to use to attract and keep business growing. The
cost of these cards would only be the cost of printing them and the free
pizza when the card is full. There would be no need to mail anything out
since you have to come to the restaurant to benefit from this. This is
something that you can start and stop whenever you like. There is no
need to advertise this promotion; the card will speak for itself. This can be
implemented at anytime but should be soon to be ready for the
Anniversary Thanks celebration.
The last promotional activity that should be looked into would be a
daily special promotion. This would include a special every day that would
run for at least one month so. The specials would be the same each week,
for example every Monday make it college night and have a pizza and
beer special during football season, on Tuesdays it could be family night
where you offer specials on lasagna or other meals. Wednesday could be
local business lunch day and offer specials to the local businesses. These
daily specials would allow the customers to know what was happening
each day and they could expect it and plan accordingly. There is no hurry
on this promotion since the rest of the recommendations are suggested to
be implemented soon.
Marketing Budget Plan
RecommendationCosts
Monthly Yearly One-Time
Launch a Salad bar 150 700
* Purchasing the Salad bar is under the One-time Cost.
* The Monthly Cost to fill the bar with fresh Salad
TV - 200 Tables - 500
* Price is for One TV with its bracket * Price is for 5 small-size tables with 4 chairs
Creating Italian Theme 1,000
* Pictures on the wall, Colors, Music, Light
Name on Pizza boxes 50 -
* $50 In addition to the current cost of Pizza boxes
3rd Anniversary 1,000 - * Cost of discounted and free food, plus the place
preparation
Punch/Stamp cards 20 -
* Price of printing 400 cards per month + stamp/puncher cost
Punch/Stamp rewards $500 * Allocation for Punch/Stamp rewards
** This is not recognized as expenses unless redeemed, and that doesn't happen until the Punch/Stamp program success in raising sales*** Punch/Stamp reward is not included in the monthly cost total
Daily Special / Monthly Special 500 -
* Discounted or free food Other/ current marketing 3,000
Total $3,720.00
$1,000
$ 2,400
Average Monthly cost of Marketing + Improvement costs (first Year Only)
$4,003.33
Average Monthly Marketing cost for 2nd year and
thereafter $3,803.3
3 * All $ amounts are estimated
Evaluation and Control
To measure the success of our marketing plan, we will implement a
method of tracking return customers to the business. We will also keep
track of first time customers so that we can tell how many new customers
are coming through our doors and hopefully we can develop ways of
keeping them. As for the catering business, we will keep track of the
number of companies that want our business and also the size of the party
we are catering for. We hope to greatly improve our orders through
delivery and we will count those too.
We hope to look into the following aspects that we want to see
improve:
Assess location, facility, interior, and market position
Review new customer experience, follow-up, awareness,
communication
Staff interaction
Group session to maximize team effort in marketing
Monitoring procedures for accurate response gauge
Media/Public Relations opportunities
Pinpoint competitive challenges and referral opportunities
Every business has different needs and a unique structure. We are a
private firm unaffiliated with any other company. This means that we
are still pretty small scale and performing a formal marketing audit can
be limited to once every six months. The audit will ensure that:
Projects are competed as scheduled
Marketing remains within an approved budget
Projects correlate to your target market
Response monitors are maintained and evaluated
Staff communication and support is available
Ongoing opportunities and solicitations are evaluated
Quarterly marketing reports are compiled