Marketing Mix 4 Ps Product Price Place Time

Marketing Mix (4 P’s) § Product § Price § Place & Time § Promotion § Politics (Cem Boyner) → Marketing Mix is a STRATEGY to be applied to different CUSTOMER TARGETS, TO DIFFERENT SEGMENTS

Maslow’s Hierarchy of Needs Self Actualization Esteem needs Belongingness needs Safety needs Physiological needs

Concept Development Very Convenient - 30 minutes Very Fast service Less Convenient + 30 minutes High street fast Food store Takeaway service Carveries Pizza restaurants Home delivery Slow service Local ethnic restaurants Destination restaurants

Idea-Screening Process Does the ides meet customers’needs? Is the group of customers with these needs large enough to make the idea worthwhile Does the food and beverage operator or potential operator have the necessary resources available to deliver the idea? Will the idea generate customer satisfaction? Will the idea generate a benefit to the operation?

Meal Experience Concept Food and beverage Level of service Cleanliness Hygiene Price Atmosphere

Level of Service If there are different type of service, service is mainly the human interface, the personal interaction between the product and the consumer Service can deliver benefits to the customer such as feeling valued and should therefore be part of the concept There are 2 factors affecting service. 1. how timely consistent and organised the service is 2. friendliness and attitude of the staff.

Cleanliness Tidy prenises, smart, clean and ironed uniforms and the use of protective gloves have positive cleanliness perception Holding equipment badly, fiddling with hair, bad smell, poorly presented food, poor standards of personal hygiene give a negative impression

Atmosphere Sight: furniture, texture, colour, employee, shape, space and customers Acoustic: music, speech, material Touch: Quality of air, quality of equipment with which customers come into contact Taste: Recipes, wines. . . Smell: used by F&B operators to attract customers, such as coffee, bread + Focal Point to be continued…

Atmosphere Policies for: Customers dress requirement Smoking/non-smoking Mobile phone usage Maximum group size Accepting children Guest behaviour

Pricing Cost plus Prime costing methods Backward pricing Rate of return pricing Profit per customer pricing Elasticity pricing

PRICING & DESIGNING THE MENU Demand Oriented Price Market Skimming (Selective Market Penetration): In the market skimming approach to pricing, operators use a relatively high price to attract a small segment of the market, who can and will pay the higher prices, where the competition is probably to undercut the prices set for similar products, and where the customers perceive that the value given in the form of the restaurant experience is greater than the prices charged. Market Penetration: market penetration on the other hand, involves setting prices as low as possible, while still contributing to profits. In general, lower prices generates greater sales volume and long term profitability. This philosophy works best when demand is price elastic, that is, when changes in price result in a greater change in demand.

PRICING & DESIGNING THE MENU Demand Oriented Price Market Skimming (Selective Market Penetration): In the market skimming approach to pricing, operators use a relatively high price to attract a small segment of the market, who can and will pay the higher prices, where the competition is probably to undercut the prices set for similar products, and where the customers perceive that the value given in the form of the restaurant experience is greater than the prices charged. Market Penetration: market penetration on the other hand, involves setting prices as low as possible, while still contributing to profits. In general, lower prices generates greater sales volume and long term profitability. This philosophy works best when demand is price elastic, that is, when changes in price result in a greater change in demand.

PRICING & DESIGNING THE MENU Competition Pricing Competitive pricing establishes prices according to those set by the competition. Prices are typically slightly below or above those of the competition. It is not advisable to compete principally on the basis of price, because price is a factor that can be easily be met by a strong competitor. It is also not advisable to offer the same product as the competition but at a higher price. An increasing valueconscious and educated consuming public will by from the competition.

PRICING & DESIGNING THE MENU Menu Price Rounding Strategy When a restaurant sets menu prices by only applying a formula, you see strange prices such as YTL 7. 32 or YTL 19. 68 Value perception pricing dictates that for mid and expensive items, the guest does not recognize price points other than $0. 50. When the guest subconscious “read” one cheap price, they only see the 2 in YTL 2. 95. As a general rule, menu items with price points set as level of. 25, . 50, . 75 and. 95 seem to be friendly. In other words, if you can charge YTL 1. 15 for a menu, you can probably charge YTL 1. 25 without any resistance. Once a restaurant operator just apply this simple pricing philosophy, the profit will increase by at least 2 -3%.

PRICING & DESIGNING THE MENU Page Positioning There are two theories regarding the placement of items on a menu: Menu Sequence & Focal Points. Menu Sequence: Some believe that sequence of dishes on the menu should follow the progression of a meal. Others believe that focal points should be used on a menu. Customers’ eyes are naturally drawn to specific points, focal points, when presented with a menu. The restaurateur should place menu items that he/she wants to push in the focal points of a menu.

Food & Drink F&B items are a list of items to meet the guest need How ?