Prepare a market strategy for Lucky Restaurant.
TABLE OF CONTENTS
INTRODUCTION 1
AIMS & OBJECTIVES 2
AIMS 2
HYPOTHESIS 2
OBJECTIVES 2
Primary Research Method 1 4
Primary Research Method 1 4
Research result 1 - Public Questionnaire 4
Primary Research Method 2 8
Research Result 2 - Managerial Questionnaire 8
Secondary Research 10
Result 1 - SWOT Analysis 11
Secondary Research Result 12
CONCLUSION 16
RECOMMENDATION 19
BIBLIOGRAPHY 22
MAP 1
MAP 2
APPENDIX 1
APPENDIX 2
APPENDIX 3
Introduction
Lucky Restaurant is situated in the rural town of Coleford in the heart of The Forest of Dean, which is 20 miles West of Gloucester, 31 miles East of Newport, 32 miles North of Bristol and 23 miles South of Hereford. (See Map 1 & 2)
Lucky Restaurant (See picture below) is a family owned business with two partners who are brothers; it is a well-established business that has traded since September 1974. It has provided services to the community of Coleford and surrounding areas for 28 years.
Coleford has an average population of 8,100 in the mid 1998, according to the figure given by the Office for National statistic (See Appendix 1). Lucky is now well situated in the central business district, as most of the businesses are mainly gathered in the area around the clock tower in Coleford. There are a number of competitors around the area. Such as, other Chinese takeaway shops, fish & chips shops, cafés, pub restaurants, supermarket etc. This has pulled custom down towards the place where Lucky is. It is not modern and attractive in design, but being well established it has built up a loyal customer base through its quality goods and services.
The target audience of Lucky is mainly people lives in Coleford and surrounding area e.g. Cinderford, Lydney, Ross-on-Wye. Especially age group 26-35 which has 1264 population which is the largest age group in Coleford. (See Appendix 5. They are likely to have a secure job and higher income among the other age group. The other main customers are people who like takeaway meals. The delivery service for meal attracts anyone that does not have a car or desire a meal but leaving their home.
Aims & Objectives
Aims
The aim of this investigation is to prepare a market strategy for Lucky Restaurant, so that volume of sales can be increased. Sales have declined within the last two years due to fierce competition and customers being spoiled for choice, due to the variety number of fast food outlets.
A structured marketing strategy should help to increase sales by attracting new customers. To do this it should not excessive expenditure, that the service and the product is maintain and to retain existing customers.
The main aim of the strategy is producing promotional materials that would increase sales revenue by 10%. When all the factors in the study have been considered, it will be possible to draw a conclusion about the most appropriate marketing mix for Lucky to adopt.
Hypothesis
An effective market strategy should allow potential customer who purchase from Lucky to find out about the restaurant and purchase their desired goods.
The plan for the Lucky's marketing strategy must include:
* Assessment of the current situation of sales and marketing strategy. Including a managerial questionnaire
* A survey of the public to ascertain their point of view on the current marketing strategy of Lucky
* Various method of marketing will be investigated. Promotional material will be produced which satisfies the aim.
Objectives
To help generate a fully comprehensive marketing strategy for Lucky Restaurant. I will use four source of information to investigate the way it wish to be perceived and the way other firms have achieved this
Primary Research Objectives
Research objectives can be identified as follow:
* To identify who is the target audiences for Lucky Restaurant, their age group
* To determine which medium is the most effective to reach the target audiences
* To determine how the customers satisfy their needs and wants with the services and food offered
* To determine whether the distribution of the services and meals to customers is appropriate and convenient
* To determine how to improve for market strategy including advertising and promotion method
* Find out the main reason why demand of Chinese meals from Lucky is declining
* Find out about the current marketing strategy, so that new strategy can be formulated to increase sales revenue.
Secondary Research Objectives
. Discover if the chosen location will generate sufficient custom, by assessing the competition in surrounding areas and conducting a SWOT analysis of Coleford.
This may be investigated by comparing the services offered by competitors to Lucky Restaurant and conducting a head count of the number of clients served at particular hours on particular days.
2. To discover the average number of population that likes take-away food, this can be determined by various age groups.
3. To determine the disposable incomes of population of the target age.
The information for the above two objectives, may be discovered from demographic information obtained from social trends (national statistics)
4. Investigate the cost of advertising the business.
This may include method of above and below the line promotion and research into local radio, newspaper and leaflet drops must be considered.
After the objectives above had been achieved, I will examine the results of the former market research in order to create a marketing strategy and valuate the effectiveness of it. Finally, to construct a compilation of recommendations as to how to possibly help solve their problem.
Primary Research Method 1
The first step in research is often the most important. The problem would be defined and set the objectives of the research.
The aim of the research for Lucky Restaurant is to discover why the number of customers is declining and decide on the most appropriate marketing strategy to increase sales. This will include determine ways to retain present customers and attract new customers.
The questionnaire was focused on the marketing strategy of Lucky Restaurant and whether it is doing its job, in terms of fulfilling AIDA. An overall rating of the marketing strategy adopted by Lucky Restaurant was also included.
Research result 1 - Public Questionnaire
The following results have been taken from the Public questionnaire that was given to thirty people. This is a form of quantitative research which gathered measured numeral data. This questionnaire was carried out at the Lucky Restaurant. For the questionnaire see Appendix 2.
Figure 1.1 shows the majority of clients, at 33%, that filled in the questionnaire were in the age group 26-35. Only 3% were in age group Under 15. A large chunk of 27% was in the age between 15-25. 7% lay in the 56-66 age category as well as in the 66+ group. A pie chart has been used rather than a bar chart because visually it gives a better representation of the proportion of age groups that purchase from Lucky Restaurant.
Fig 1.2 is displayed to show the huge discrepancy in the advertising of Lucky Restaurant. Despite adverts in newspapers, the results reveal that most clients, with a majority of 33% heard about Lucky Restaurant through word of mouth. Marketing messages, which take place on the basis of word of mouth, is a non-controllable promotion method. Lucky Restaurant does not pay off its marketing budget for promotion by word of mouth. People must recommend others about the range of meals and the quality service at Lucky Restaurant and through this, new people are attracted to the restaurant. This is a valuable asset to the business. The next largest response was window display (30%). This also is not included in Lucky Restaurant's marketing budget. People are attracted to the shop when they walk past. The rest of the responses distribute by other advertising methods such as advert in the local directory (13%), newspaper (10%), yellow pages and town/shop signs (both 7%). Most of the marketing budget spent in those adverts, however, the return on investment has room for improvement.
This question is related to the distribution of Lucky restaurant. Figure 1.3 shows that the majority of 38% who took part in the questionnaire travel less than 2 miles to get to the restaurant. Perhaps this is because they work there or live within Coleford. Most of the loyal customers are local residents, part of customers from some nearby areas also willing to travel a longer journey to eat their meal. Almost 60% participants travelled 3-12 miles whilst only 6 % travel further than this. This bar chart has been used to emphasise the fact the bulk of customers only travel between 0-2 miles, therefore are more likely to live locally.
Figure 1.4 shows that the level of satisfaction that the customers felt for the food offered by Lucky Restaurant. It shows how they satisfied with the cleanliness, taste and smell. However, they felt that the colour and portion size have to be improved.
Figure 1.5 displays how satisfied general customers with the packages on offer at Lucky Restaurant. It also gives us a quantifiable measure of what the public says is 'good'. All packages were rated average or above, the majority believing the service was excellent. Most (30%) rated the service as very good, being above good ...
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Figure 1.4 shows that the level of satisfaction that the customers felt for the food offered by Lucky Restaurant. It shows how they satisfied with the cleanliness, taste and smell. However, they felt that the colour and portion size have to be improved.
Figure 1.5 displays how satisfied general customers with the packages on offer at Lucky Restaurant. It also gives us a quantifiable measure of what the public says is 'good'. All packages were rated average or above, the majority believing the service was excellent. Most (30%) rated the service as very good, being above good but still room for improvement and 25% rated it as good. Improving customer service may be the most cost effective way of retaining custom.
Figure 1.6 shows how the customers are attracted to Lucky Restaurant over others for a variety of reasons. About a third of all respondents (33%), said that they purchase at Lucky Restaurant because of the friendly and knowledgeable staff. 27% said that it is not far from their home which implies that it served most of the local market. 20% mentioned that the products were reasonably priced and this also encouraged them to return. 13% liked the after sales service provided by the Lucky Restaurant.
In Figure 1.7, 47% of the respondents feel that the best way for Lucky Restaurant to improve their promotion would be reduce prices and give out special offer, as consumers are more concern of money than anything else. 22% feel that website advertising was a good method for a business's marketing. Because of the large numbers of consumers with access to the Internet, and because it attracts potential audience in different areas. On-line shopping and e-commerce are good examples. 3-13% feel that window display, sales literature, coupons and sponsorship should help to improve Lucky Restaurant's promotion. However, this may be very costly.
Primary Research Method 2
Primary research was also collected from Mr. Tony Chung, the manager of Lucky Restaurant from and open managerial questionnaire and follow up interview. (See Appendix 3) He gave opinions, impressions or motivation for the current marketing strategy.
Research Result 2 - Managerial Questionnaire
The short-term marketing objective of Lucky is to survive as they are currently just about breaking even. Also they aim to continue to offer short promotional offers to keep attracting potential customers. In the long term, they aim to improve customer satisfaction ratings by market segmentation and eventually increase its profits.
Mr Tony Chung, the manager and owner of the Lucky restaurant, said in the questionnaire that the demand for Chinese takeaway in the market is declining, that leads the sales falling as well. The foot and mouth crisis may be one of the factors that aggravate the rate of falling sales. Over the period March, April and May of this year, the demand of Chinese meal were down by 30%. They are now only just beginning to recover to their normal level. This may also due to the fact that the current marketing strategy that Lucky is using has become unattractive and obsolete. It may not be working, in terms of attracting new customers and retaining present customers. As it is too out of date and the advertising messages via media may not competitive enough or reach the target audience.
An effective promotional message needs to stand out from the crowd. The mnemonic AIDA is used to prompt the stages necessary in an effective promotional message:
A - the message should grab the attention ensuring product awareness
I - attention should be maintained and converted to interest
D - interest should result in desire or demand for the product
A - desire needs to prompt action to buy
The current marketing strategy involves advertisements in the local pages, local directory, sales literature i.e. menu (See Appendix 3), window display and free prawn crackers for customers who purchase over £12.
Mr. Chung thought that this strategy was an effective one as it is appropriate to the type of small-scale business. The strategy is evaluated by increases in sales, whether the image amongst the public is good. It requires all staff must wear a uniform to help create a more corporate image.
The marketing tool, SWOT analysis is used twice a year as an aid in evaluating the marketing strategy. Mr. Chung said that, as a businessman, he is always looking for opportunities and applies the effective way which other competitors used to improve his marketing. A SWOT analysis of the current situation and marketing strategy is shown on next piece of secondary research.
The current marketing budget of Car Care is £2,000 per year. Mr. Chung also agreed to spend more £1000 on marketing Lucky. Hoping this would help the sales revenue would increase to cover the cost and generate some profits as well.
Secondary Research
Method 1
Secondary data often provide a broader picture of the whole market. Collecting secondary information using reports complied by others is much cheaper and quicker than primary research. However, disadvantages are that the information may not be what ideally needed and may not be sure of the reliability. Here, the data and statistics for Lucky are mainly gathered from the Internet, the Office for National Statistics (ONS) and key notes. These data provided a broader picture of the whole Chinese takeaway market. By using these external data, Lucky could be more clearly in its business environment in order to make decisions on its marketing strategy.
A wide range of competitors information was also assembled such as brochures, price lists or other marketing information etc.(See Appendix 1) It provided evidence for generating the SWOT analysis. The strengths and weakness elements refer to Lucky itself and would be the basis of asset-led approach to its marketing strategy. The other two aspects, opportunities and threats, involve considering the wider environment and how PEST has impact on Lucky Restaurant. PEST stands for Political, Economical, Social and Technological. Above and below the line promotion which some small businesses used to market themselves were discovered and look at. It will provide ideas and methods, which could be used in the final marketing mix.
Result 1 - SWOT Analysis
Strengths
* Strong, consistent and established name
* Locate in a Coleford where deposable income of population in this area are high
* Target audience known
* Most customers are age 26-35 which has higher income
* Good customer loyalty
* Provide long service hours services, from Monday to Saturday
* Our prices, with our fast service, are competitive with other takeaways
* Provide a comfortable area for customers to enjoy their meals
Weaknesses
* Capital is not easy to acquire
* Lost some customers of telephone orders because of delivery delay in busy hours
* We are price follower not leader
Opportunities
* To completely dominate the market of Coleford and the small surrounding towns as the main service provider
* Construct internet site or advertise on other internet site
* Number of tourist visit Forest of Dean increase
Threats
* Increase competition
* Burden with taxation/VAT
* Changing interest rates
* Changes in lifestyle
* Disease problem of beef, pork and sheep
Secondary Research Result
Promotional materials supplied with a product are known as publicity and although they are not regarded as advertising, they do support the advertising process.
In order to measure objectives, DAMAR-Defining Advertising Goals for Measured Advertising Results-has become a fundamental part of good advertising practice.
Above the line promotion
Advertising is a method of above the line promotion, to communicate with groups in the market place in order to achieve certain objectives. Messages sent through the media which are intended to inform or influence the people who receive them. It may be used to promote goods.
Broadcast media include commercial TV and commercial radio. TV is the most powerful medium as it reaches 98% of households, and viewing figures for some programmes can exceed 20 million. The main disadvantage of such an expensive medium, even for off-peak local TV prices can be around £50,000 for a 30 sec advert.
it is sometimes difficult to target a broadcast to a particular group of consumers.
Today, the use of commercial radio on advertising has showed a rapid growth over the last 20 years. There are more independent local radio stations (ILRs) in Gloucestershire than ever before and a number of independent national radio stations. Commercial radio is listened by over 60% of listeners under the age of 55. It enables these group of potential consumers could be target on marketing for Lucky. In addition, advertisements are low cost in comparison with those of TV.
Internet-based e-commerce is now, according to many surveys, the greatest single business opportunity for most existing and growing small businesses. However, widely voiced fears over the security of online transactions are being conquered and the wider choice and convenience of Web shopping is making itself felt. The internetTrak survey found that Web buyers had spent an average of £1,356 each in the past six months.
The UK has 7 million Internet users - a figure that is growing at a rate of 1 million every six months. In deciding on the cost-effectiveness of using internet as an advertising medium, Lucky need to consider whether its adverts will be viewed by the user who may just browse through the contents of a web page without paying any attention to the adverts. One advantage of a website is that it is relatively easy to monitor the number of hits to that site. Many site are also of a specialist nature. It is therefore possible to use a website for targeted advertising.
Below the line promotion
This type of promotion uses media over which the business has control such as direct marketing and sale promotion offers on it product. It is easier to target specific customers.
It is generally required less capital to implement and are often more effective. There is a list of options that Lucky Restaurant could choose to implement in its marketing strategy.
Coupons
Coupons which offer money off or money back may also be attractive incentives for consumers. They could appear in magazines, be distributed on the street corner, at trade shows, or anywhere there may be potential customers.
They are designed to build customer loyalty and perhaps increase the volume purchased by existing customers.
On average, nearly one in five in- or on-pack coupons is redeemed. This presumably is because the coupons will be reaching many people who already like and use the product and will therefore be motivated to buy it again, using the coupon. Effectively, this is reward for current users.
In contrast, these is much wastage with the media because many readers will not be even remotely interested in the coupon's product and those who are interested have to remember to keep the magazine, cut the coupon out, take it to the shops and use it.
Free Gifts
The free gifts attract the consumer and encourage a higher response rate, and the responses potentially provide the business with direct marketing opportunities. This will also get the name and logo
Discounts for frequent customers
It is useful for building loyalty incentive for businesses, especially in food industry. The more common approach is to give regular customers a discount card on purchase upon presentation of their "Frequent Buyer" discount card. For example, after spending £100 at the Lucky restaurant you might receive 5% off of your next meal of £25 or more.
Cross promotions
The dealer might consider offering free tickets to the local theatre with each purchase of a particular item or price level. Lucky restaurant could team up with the cinema in Coleford for example.
Give-aways
Give-aways have their place in just about any type of business. Selling business -to-business, it can generate goodwill with the people you choose, its best customers or select roster of potential clientele-by occasionally by giving them a small gift when call on them. The giveaway should not be so expensive that a feeling of bribery is conveyed, but nice enough that it doesn't end up trashed the minute you leave. For consumer service businesses, it may want to offer its product for free trial periods, or offer free estimates if it is a service-oriented business. Retail businesses may hand out balloons or other novelty items to build traffic or retain customer interest.
Contests and sweepstakes
Various prizes, such as cash, goods or holidays, may be used in sales contests to raise the profile of a product and create a short-term incentive. Unfortunately, the prizes often need to be significant and clearly within the reach of all sales assistants if they are to make any real difference to the selling effort. This is especially true when other competitors may adopt similar methods.
Events
Lucky could associate its name with local music events and cultural events in Coleford e.g. Music Festival and Christmas light opening. Hosting a special event in the business establishment is a good way to introduce people to the business or maintain contact with existing customers.
A numerous of pricing scheme that Lucky Restaurant could attempt to set its price for a Chinese meal.
Competitive pricing
Competitive pricing simply involves selecting prices with the competition in mind. Lucky would have little power to determine prices in the market will have to refer to the market in selecting price.
Two major variants of competitive pricing that are normally uses by other small businesses. These includes:
Setting a price at the current market price. Their pricing decision is thus heavily dependent on the market.
This is typically the case for fruit and flower sellers in a local market - if they fail to sell their produce, then the product will spoil. Similarly, if Lucky fail to sell their meals, then the food will decay.
Discount pricing. This involves selling goods at a price which is less than the market leader. A number of businesses know that if they charge the same price as the market leader, then people will choose to buy from the market leader - they are thus forced to discount.
Psychological pricing
Consumers have a feel for what is the 'right price' for a product or service. It is therefore important for the seller to understand the psychology of the customer, that is, why consumers buy product what makes them feel that a price is appropriate. The danger of charging too high a price is that consumers may instinctively feel that they are not getting value for money., that they are being 'ripped off'. However, if the price is too low, then consumers may feel that there is something wrong with the product or service that they are being offered.
Cost-based and market-based pricing
In choosing a pricing method the price setter will tend to lean towards pricing according to cost or according to market-based consideration such as demand and the level of competition. In the real world, a very high proportion of business using no other basis than a mark-up on the cost of providing the product or service concerned. Information about cost is usually easier to piece together than information about other variable such as likely revenue. Price setter will often simply add a margin to the unit cost.
Talk to many owners of small businesses and they will tell you that they 'cost out' each hour worked and then add a margin for profits; or they will simply mark up each item sold by a certain percentage. The process of cost-plus pricing can best be illustrated in relation to large firms where economics of scale can be spread over a considerable range of output.
While cost-plus pricing is very popular, there are many dangers associated with it. If the price is set too high, sales may fall short of expectations; and if the price is set too low, then potential revenue is scarified. However, the greatest danger of cost-based pricing is that it indicates a production-orientated approach to the market. Emphasis on costs leads to tunnel vision that looks inwards at the product rather than outwards to the customers' perception of the product. In contrast, market-based pricing has far more of marketing orientation based on an understanding of customer perceptions and of rivals.
Conclusion
In reality, this would be very time consuming and expensive and we therefore need to select a sample to question. The skill of sampling is to select a sample who provide answers which are typical of the whole group.
A range of sampling methods could have been used in the market research. These included:
Quota sampling
This method involves the population being segmented into a number of group which share specific characteristics. Interviews are given a target number of people they must question, once they have achieved this quota no more people should be questioned from that group. They advantage of this sampling method is that it can be cheaper to operate than many of the others. However, results from quota sampling are not statistically representative of the population and are not randomly chosen. Therefore they must be treated with caution
Cluster sampling
The population is divided into 'clusters', usually in different geographical areas. A random sample is then taken from the clusters. Cluster sampling is easy to implement and it provides data quickly which can be easily analysed.
Convenience sampling
It involves gathering information from the most convenient source irrespective of background. It is attractive because it is the least expensive and time-consuming of the sampling methods. Respondents are accessible, easy to measure and cooperative.
The problem with this type of sampling method is that one might not be aware of the extent of errors or biases introduced into the information as its reliability is limited.
Random sample
A random sample was used to survey the public about the Lucky marketing strategy. This method is not aimed at any particular group of population gives each member of a group an equal chance of being chosen. However there is no certainty that those who are randomly selected will be of any value to the Lucky Restaurant concerned. It would not necessarily end up providing a representative sample of all those segments. The validity of the random sample can be increased by taking a large sample.
Therefore, I decided to improve after considering the drawbacks of random sampling by replacing a stratified random sample. This involves dividing the whole group into segments or strata based on previous knowledge about how the population id divided up. The market could have been stratified by age, as this would show what different age groups think of the marketing strategy and how it could be adjusted for a certain target age group.
Having defined the market and objectives of Lucky Restaurant, selected the information sources, then, I had formulated a list of questions and complied a questionnaire. The public questionnaire was designed with two different types of open and closed questions that are used to prompt questions and record responses. Open questions are ones that encourage the respondent to express opinions and perhaps to talk at length. These are appropriate to obtaining qualitative data from small groups but they are difficult to analyse for larger sample. It has advantage of avoid leading the respondent and bias. This type of questions was generally used in the personal interview with the manager of Lucky Restaurant, involved a face-to-face meeting.
Closed questions, where respondents are asked to choose between options and give specific answers, are generally more appropriate for questionnaires. Care should be taken, however, that questions provide an appropriate range of options and are open enough to avoid bias. That is, they do not lead respondents to answers that do not accurately reflect their options. The questionnaire was used as a checklist to ensure that all relevant questions are asked. It provided a means of standardising questions so that information gathered can be combined and compared. Then, the questionnaire presented to a random sample of population in Coleford. Continuous data was presented in a line graph, different segments from group in a pie chart and numbers of individual data in a bar chart.
During the primary and secondary research, I considered that there are some factors that would influence the result. Reliability is the main problem with data collected from field research, which are caused by human behaviour and bias. Sometimes people try to guess what you want to hear on a questionnaire and so are not entirely truthful. Questionnaire must be worded carefully to avoid this. Sample size is often not large enough to obtain accurate results. This is especially the case with random sampling (used in this project). A large sample size would also have helped the accuracy of this project, as anomalous results would be averaged out.
Whilst secondary data is quicker and cheaper to get hold of than primary information, it is not always in the right format or up to date. The research may have been undertaken in the previous year when what you want is this year's figure.
Lucky Restaurant, as a marketing-orientated business gathers more information and begins to understand its customers better it recognises that their needs vary and different types of customer have different opinions, preferences, tastes and purchasing characteristics.
According to the primary and secondary research that had been carried out, I determine that the market segment with the best potential for profit for Lucky Restaurant was age group from 26 to 35. They have higher disposable income and are more likely to spend money on weekends. Also, the public has become, generally, more affluent. Most of young people are willing to change and try some special, typical and traditional Chinese meals.
Therefore, I decided to target on this large market segment in order to achieve the objectives of introduce an effective market strategy in order to increase sales revenue by 10%.
Lucky Restaurant is well known and many of the people who knew the shop have also make order their meal there. This sounds encouraging, but as these people already in Coleford, Lucky need to attract people who do not usually come to town as well as retaining the people who do.
Word of mouth is the most common way for people to find out about the restaurant. This indicates that the restaurant has a good image and people recommend tit to others. This is a valuable asset to the business and this should be used in the new promotional material. Lucky could also improve it quality of food by meeting standard set by the Healthy Food Authority
At current, Lucky is using a cost-based pricing by adding mark-up on the cost. The questionnaire showed that special offers and reducing in prices would attract more people to the restaurant. This may be hard for Lucky Restaurant to adopt as they do not set the special offers, the suppliers do. If the price is too low, then consumers may feel that there is something wrong with the food or service that they are being offered. The only thing that the restaurant could do is give discount to some good frequent customers. It may hope to give incentives to those existing customers.
Lucky only have little power to determine price in the market will have to refer to the market in selecting price as it is just a small restaurant. This involves offering the takeaways and meals at a price which is less than the market leader to attract new customers. A number of businesses know that if they charge the same price as the market leader, then people will choose to buy from the market leader.
Another valuable asset to Lucky Restaurant is its friendly and knowledgeable staff. The staff are crucial to retaining custom as service was the main reason for people returning to the restaurant.
Lucky may attempt to implement an advertising campaign on local papers or web sites. It is quite cheap to advertise on a web site than local papers, some may even free of charge. However, local papers is easier to target a market rather than website advertising which can be browse by everyone in the world. An effective local paper advertisement should be measured by DAMAR. This would therefore form a part of the new marketing strategy for Lucky.
Adverts on delivery vehicle could be a useful for marketing Lucky, this may help to provide a form of publicity. They are relatively cheap and get attention of people in different areas. Other below the line promotion such as coupons, free gifts, sale literature and point of sale materials could be produced to add value to the product or service that it provides.
In conclusion, Lucky requires developing a mix of product, price, place and promotion suited to the market segment and the positioning it want to achieve within it. This will allow the restaurant to reach and communicate with target consumers about the products and services that Lucky offers. The marketing objectives are to increases sales revenue by 10%.
Recommendation
First of all, Lucky restaurant needs to implement a marketing strategy with SMART objectives. There are ones that are statistical, measurable, attainable, realistic and timely. The reason for this is so that they can measure where they are now and then work towards where they want to be. Also by setting short term and long term objectives, it will force them to draw up a marketing plan.
Promotional objectives may focus on intermediate objectives which make sales easier at the end of the day.
Lucky should focus on promotional campaign by following the stages of AIDA, to become an effective marketing strategy.
Secondary research had already been carried out to show that above the line promotion is very expensive because it is in high demand, as it reaches a large number of people.
For a one minute television advertising would cost around £150,000. It is impossible that Lucky can afford that kind of money, although it would allow Lucky to promote their shop in many homes where there is captive audience. This would also be an disadvantage for a small business like Lucky restaurant. Even if the advert were to be displayed on local television, many people would not drive all the way across Forest of Dean to get a Chinese meal when there are alternatives around. There is some other cost effective promotional method could be used, such as advertising on local newspaper e.g. Citizen (It is a local paper of Gloucestershire) would be a very good way of reaching a large number of local customers. It would cost around £400 for a small to medium size advert, for a period of a year. This would require a quarter of the current marketing budget, so it is the main focus area for promoting Lucky restaurant. It would aim to increase sales revenue by 5%. A more significant increase in sales revenue of approximately 8% would be expected in holiday time, such as Christmas, Valentine's Day, it would add value to the special meals.
The public survey show that approximately 22 % of respondents suggest that website advertising would be a good idea to market Lucky restaurant. Website advertising is a cheap way of promotion which will cost about £20 per month. Menus would allow to be browse by consumers, they will not need to leaving their home. They could just order their meal by give a ring, then their meal will be deliver and arrive in their home. The distribution is shortening by using telesales through Internet. One advantages of a website is that it is relatively easy to monitor the number of hits to that site. This enables to measure the effectiveness of the marketing strategy much more easier. In deciding on the cost-effectiveness of using Internet as and advertising medium, Lucky need to consider whether their adverts will b viewed by the target users.
Coupons could be attached to the menus and distribute to potential consumers. The cost of making coupons is very cheap and easy. As part of below the line promotion, Lucky could hand out coupons offering 10 to 15 % off their every purchase either purchase on new food. This would attract people to the restaurant for saving and probably become a price leader with other competitors in the area.
During the Music Festival last year, people from different surrounding area (e.g. Cinderford & Monmouth) attended. Lucky teamed up with other businesses in Coleford held a competition. Lucky provided a number of prizes -£50 voucher for the winners. The winners actually turn up to have their meal in the restaurant. It showed that respond was quick by took part in the event. The sales were boots up about 2 % for a few months. This was get into papers and provided Lucky with free publicity. Apart from the prizes it was very cheap to run. As it would attract new customers, Lucky should carry on with the contest, I would expect to gain sales revenue of around 3% this year.
A free gift could be given, such as a calendar, to all the customers who spend £12 or more. Also, some of the marketing budget could be used to support special offers, as these attract many customers.
The creative and conspicuous logo and telephone number could be printed on the delivery car so that more people in different area could know about Lucky restaurant. It would increase the number of customers and sales. It might be difficult to measure the effectiveness of this method. The sales revenue would be predict to rise for roughly 0.3%.
After implementing the marketing strategy, more people will be interested in the Lucky restaurant, it should see the sales revenue figure rise by at least 10%. Area of promotion will fulfil the AIDA credentials and provide Lucky with targeted marketing. Lucky should evaluate this strategy constantly, measuring its effectiveness; sales figure should be monitored and questionnaires could be used as part of primary research to find out the public view of the promotional material. If something is not working it is a waste of money! Also, if a certain area is doing well, e.g. local paper advertising, more money could be put in to this area to advertise in more papers or to enlarge the advert.
Lucky would eventually expect to see a profit as the sales rise after four to six weeks. Bear in mind that, it may fail as threats in the market environment which may affect Lucky so they should react instantly if there is a change in aspect of PEST.
This market strategy should give some ideas for Lucky of how to identify, anticipate and satisfying of customer requirements profitably, by getting the right goods or service to the right place for the right customers at the right time and at the right price.
Ansoff is best known for his matrix of strategic options for growth, which compares developing new products and new market.
In Ansoff's matrix , shown below, the options are numbered from one to four in order of increasing degree of risk:
Market penetration
Product development
Market development
Diversification
Market penetration - selling more of the same product to the same types of people
This is possible to increase market share at the expense of others, by developing a competitive advantage, or by growing the total market size.
2 Product development - selling new products to existing customers.
This involves a business exploiting the strength of its relationship with customers and using its creative ability to develop new products suited to their needs.
3 Market development - selling existing products to new customers.
New customers can be more difficult to develop than products, but where a business has significant product strength this can be a good opportunity for growth.
4 Diversification - selling new products to new customers.
This involves developing new expertise, both in terms of product and markets and is the highest risk alternative. Often businesses, rather than develop their own expertise, will buy another business to achieve their objectives.
Market development
As the trend of vegetarian product is growing for the last 10 years, there is increasing in number of vegetarians. Many businesses attempt to produce a new line of product to target on the vegetarian market. They usually printed a label "suitable for vegetarian" on their product which easier for potential buyers to identify.
Lucky could also apply this market development on the meals they provides. They should target on the vegetarian market, by launching some new dishes which suitable for vegetarians. Menu should alter by adding a symbol to show the consumers which meal is suitable for vegetarians. Alternatively, all the vegetarian portions could be list in a column to get attention of consumers as other competitors do. Hopefully, sales revenue would rise roughly 1 to 2%, and attract a group of new customers.
Bibliography
Title
Author
Publisher
Date Published
Principles of Marketing
Dr Frances Brassington
Financial Times Prentice Hall
2000
Business Studies
David Hall et al
Causeway Press
993
The Business Enterprise Handbook
The Sunday Times
Colin Barrow, Robert Brown, Liz Clarke
2001
Source from internet
www.neighbourhood.statistic.gov.uk
www.luckyrestaurant.fsnet.co.uk
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