A Marketing Approach - Frank Rainsford - Assignment Example

Case Study Analysis Author’s Name: Institutional Affiliation: Question 5 Frank Rainsford first concern was the ability of the new restaurant outlet to attract customers. Frank has been running his barbeque restaurant for more than 30 years and appreciates how difficult it is to acquire a loyal customer base to support a restaurant. Frank believes that the opening of a new restaurant is a huge financial risk since the business will have to rely on acquiring a loyal customer base to survive; something that takes expertise and years of persistent low-cost marketing. Frank also argues that “knowing your customers” is the key to success in the restaurant business. Frank is not sure how his son will understand the customer needs in the Darien location. Robert will have to put up a very strong argument of the new restaurant’s competitive edge in the new location in order to allay the fear that his father harbors concerning the ability of the business to attract and retain loyal clientele. First of all, the Fairfield restaurant has succeeded simply by offering customer quality inexpensive barbeque in a family friendly setting. This model proved to be hugely successful. The new restaurant will implement the same best practices to attract loyal customers to a brand that is recognized nationally and unmatched in the entire Connecticut. The new restaurant will also be complemented by online ordering system and extensive digital marketing through the website and social media accounts. The choice of location has also been carefully selected by factoring in aspects such as population size and density, family size, and income levels. It is expected that the demographic composition of Darien will support Frank’s all American Barbeque as it is the case in Fairfield. Statistics in the business plan indicate that Americans have spent at least five percent of their disposable income on eating out. In addition the projected 1.7% growth in GDP and 4% growth in disposable income in the coming will increase the purchasing power of the target market. This means the new restaurant will not find it difficult to attract customer provided the food and service quality is exceptionally high, while the prices are low. Franks other fear is that the ramping up of sauces’ sales might present some problem for the business since most consumers outside Fairfield locality are not aware of the brand. The sauces are specialty products that cost higher than other sauces and may, therefore, not be competitive in the wider market. However, the results of a preliminary market research indicate that the company can anticipate a 20 percent annual growth rate in the sales of sauces over the next five years. Frank’s four styles of sauces are an added value to the restaurants barbeque serving. They have already proved popular with customers of a local supermarket. Roberts can initiate a product development program to improve the branding and packaging of the sauce to reflect the rich heritage of quality and value-for-money associated with Frank’s All American Barbeque. Robert must also come up with a production plan that will lower the production cost through automation and economies of scale to lower the cost of the sauce in order to compete effectively in case the market becomes price-sensitive. Question 6 Franks suggestion of serving the takeout segment of the market assumes that there will always be a market for prepared food. This assumption eliminates the need to rely on an ordering system to prepare meals for clients. Frank believes that standard meals prepared in advance can be sold at peak evening hours. This method may result in losses in case of excess inventory of unwanted items. The pricing of standard meals should be guided by a demand-based pricing methodology. In such a, methodology, the price charged is determined by the level of demand of the good[Rob111]. If the demand is high, the restaurant can increase the price to generate higher profits from sale of food items. If the demand is low, the restaurant can lower the prices to attract more consumers to increase the revenue generated and minimize losses from excess inventory. The pricing of Robert’s prepackaged meals will require a combination of cost-based and value-based pricing methods. Such an approach ensures that the business is able to consider the cost of all inputs in preparing a meal [Gai12]. The approach also ensures consumers get great value for their money by pricing quality meal varieties at the most affordable price point that favors both the producer and the consumer. Question 7 The company made the right choice of Darien as the ideal location for the new restaurant. Although Darien does not have a huge population like Stamford, its population is highly concentrated at 1508/Sqr mile. This means that with proper targeting, Frank’s restaurant will be able to understand its target market’s unique needs and preferences and adjust the products and services accordingly to retain them. The income level in Darien is the highest of all the other towns. This means that consumers have more disposable income to spend on eating out. Regular spending at the restaurant means Frank’s new outlet will be able to generate enough revenue to supports its operations and repay the loan. Darien has 81.5% of 3.0 family households’ concentration. Frank’s restaurant targets families with affordable meals served in at family-friendly place. It means the business will stay true to its tested and approved business model of appealing to customers with simple, quality food at affordable price, served in a comfortable place. At 0.8%, the real estate tax in Darien is relatively low compared to other places such as Trumbull at 1.5%. The choice of Darien makes financial sense since the company’s first concern is to generate enough revenue to survive. Darien’s population commutes an average of 36.4 minutes meaning they may derive great value from Frank’s restaurant plans of implementing online ordering system. Robert should have also considered the cost and quality of labor in Darien and other prospective towns as it will have a major implication on the performance of the business in terms of efficiency and cost management. The Fairfield outlet has been successful over the years partly due to exceptional service quality. Robert should have also considered the concentration of competing restaurants in each town in order to develop appropriate marketing strategies that can suit different places. References Rob111: , (Schindler, 2011), Gai12: , (Goodman, 2012), Read More