Seans Spot Café
Seans Spot Café
Place is one the essential elements of the marketing mix. This entails establishing channels that will ensure that the products are able to reach the customers (Wenderoth, 2009). There are two main channels in which the restaurants can use to deliver its services to the consumer. The first channel entails selling food directly to the consumer. The second channel entails using intermediaries to reach the clients. There are two choices when it comes to selection of intermediaries. The first option for Spot Café is to deliver food through meal delivering services. There are various firms within the organization that offer delivery services. Spot café can select one of these firms and use them as intermediaries for distributing products (Wenderoth, 2009). The second option available to Spot Café is to establish franchises. Franchising is the practice of licensing independent entities to offer the company products and brand. The franchisee pays a royalty fee and agrees to adhere to the standards set by franchiser. Spot Café may consider exploring this option. The choice of distribution channel depends on various circumstances. One of these circumstances is coverage
- Coverage
Companies opt to select distribution channel that provides them with the best coverage of the target market. The three distribution channels offer different advantages when it comes to coverage (Bowman & Gatignon, 2010). The first distribution channel entails selling directly to the consumer. This means that Spot Café has to wait for the client to arrive to the restaurant in order to sell the product. This distribution channel has limited coverage (Wenderoth, 2009). However, it has an advantage in that Spot Café is able to control the production process. It also guarantees the delivery of high quality food because food is consumed at the place of production thus minimizing deterioration of quality.
The second channel entails the use of meal delivery services to distribute meals to customers (Bowman & Gatignon, 2010). This means that the organization has to wait for order from the client and use the distribution services to deliver the orders to the client’s location. This channel has a wide coverage since Spot Café does not have to wait for customers to come into the organization. Another advantage is that Spot Café maintains control over the food production process. However, the coverage is limited to geographical distances that justify delivery of food.
The third channel entails the use franchises. This means that Spot Café has to license separate entities to deliver food using its brand, menu, and standards (Wenderoth, 2009). This channel provides a wide coverage since franchises make their own production of food and, thus, can operate far away from the parent company. The disadvantage of this channel is the Spot Café hand over control over the production process to the franchisees.
- Buying Requirements
Another essential consideration when selecting a distribution channel is the buying requirement of the target market. Different clients have varied needs and expectation when it comes to consumption of products. Consumer will not purchase goods at a high price if they do not perceive the goods to be of high value (Wenderoth, 2009). Spot Café target a wide range of customers who love Spanish food. Spot customers are people who love to be outside. Such customers love to seat out and eat. Therefore, options of direct selling and that of establishing franchises are the most suitable for the buying behaviors of the target market. These channels will enable customers to seat and enjoy their meal within the pristine of the restaurant. The delivery options would better serve office workers or home clients.
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Profitability
Profitability is also an essential consideration when selecting a distribution channel. The distribution channel should enhance the profitability of the company by reducing cost or enhancing revenues (Bowman & Gatignon, 2010). Close to 20% of production cost originates from the cost of distributed products to the consumer. Selling directly to the customers will reduce the cost associated with establishing intermediaries. Establishing intermediaries means that the organization will have to share its margin with these entities. Though franchising will increase sales by expanding coverage, the company will only benefit from a small portion of this revenue.
Sell directly to the Customers
An evaluation of the three factors above has led to the conclusion that selling directly to the client is the most suitable distribution channel (Bowman & Gatignon, 2010). This channel gives Spot Café complete control over it production. The channel also fits perfectly with the purchasing behaviors of the target market. The company target individual who are outgoing and, thus, the channel should provide them with a platform in which they can seat and enjoy their meals. Direct selling is also the most profitable distribution channel.
Promotion
Promotion is also an essential element of the marketing mix. This element ensures that customers get information concerning availability of the products, attributes of the products and benefits associated with the products (Wenderoth, 2009). There is a variety of promotional techniques. The choice of promotional techniques is determined by several factors. These include; the target audience, the promotion objectives and availability of resources.
Target Audience
Spot café targets the middle class families who like eating out and being on the go. This category of consumers is less price conscious and more value conscious (Bowman & Gatignon, 2010). They are willing to pay an extra dollar in order to receive extra value. Spot Café enhances value by providing healthy meals and superior services to the customer. Spot café’s target customers are relatively young, ranging between the 20 and 45 years age bracket. Certain promotional tools would have a better appeal to this target audience than others.
Promotion Objectives
The choice of promotional tools will also be determined the objectives of promotional activity. There are three main objectives of conducting promotional campaigns (Bowman & Gatignon, 2010). The first objective is to inform the customer about the existence of products in the market. Organizations need to inform potential customers about the availability of products in the market so as to create sales. This objective is mainly pursued by organizations that are launching new products.
The second objective of conducting promotional activities is to persuade customers to purchase the product. Promotional activities with this objective focus on explaining the benefits of the product to the consumer (Bowman & Gatignon, 2010). They seek to stimulate purchasing decision by portraying the value of the company’s product. This objective is pursued by both new and existing businesses.
The third objective for conducting promotional campaign is to remind customers about the products. This objective seeks to reinforce the value of the brand (Bowman & Gatignon, 2010). The promotional campaigns are directed to customers who have already had an experience with the company’s products. This objective is mainly pursued by established organizations. The Promotional objective of Spot Café is to inform and persuade clients to purchase the organization’s products.
Promotion Budget
There are several approaches of setting promotional budgets. The first approach is by setting the budget at a fixed percentage of sales (Bowman & Gatignon, 2010). This approach uses the sale projection figure to come up with the value of promotion budget. This method enables the organization to spend within its means. The second approach entails setting the promotion budget at similar levels as those of close competitors. This means that an organization has to study its competitors and establish the value of the promotional budget. This approach enables organizations to keep up with the competition. The third approach entails setting a budget according to tasks that the promotional campaign has to complete (Bowman & Gatignon, 2010). For instance, if the task is to increase sales by 5% then the amount allocated to the promotion budget must match this task (Bowman & Gatignon, 2010). The final approach entail allocating promotional budget according to what the firm can afford after what other expenses have been met. Spot café will set it budget according to task that it would like to achieve. The total promotional budget for the company is $ 10,000.
Promotion Tools
There is a variety of promotional tools. The promotion plan has selected tools that are most suitable for the target audience. One of the tools that will be applied is television. Spot Café target group consists of relatively young, middle income individuals (Bowman & Gatignon, 2010). These sections of the population love to watch television and, thus, television provides the most effective tool for reaching them. Television also consists of features that will enable the realization of the promotional goals. Since television has a visual and audio element it is easy to demonstrate the benefits of the product. However, this form of advertisement requires massive investments.
The internet will also be an instrumental tool for Spot Café. Spot Café target audience is massive consumer of the internet technology (Bowman & Gatignon, 2010). Most of these consumers are members of social networks while others use the internet in the jobs. The disadvantage of this method is that it may take a lengthy period to load bulky files. Spot Café will also make use of magazines to pass it promotional messages to the consumers. Magazines have the ability to target specific audiences. Ads are also easy to place and can incorporate elements of humor and intimacy (Bowman & Gatignon, 2010). Coupons will also be used to stimulate demand for the restaurant’s products.
Pretesting and Posttesting Procedures
Pretesting entails the evaluation of the effectiveness of promotional tools prior to investing resources in these activities (Bowman & Gatignon, 2010). The pretest will involve the implementation of the proposed campaign in small scale. The promotional tools will be evaluated based on the customers’ responses, behaviors and feedback. Post testing is continuous evaluation of the effectiveness of the promotional strategies. Spot café will use various indicators to test the success of its promotional campaigns (Bowman & Gatignon, 2010). These indicators include; growth in sales volume, brand awareness and product usage.
Schedule for Promotion
|
Sales Promotion Schedule |
||
| ABC TV | Jan 1, 2013- March 30, 2013 | $2500 |
| CBK | Jan1, 2012-March 30, 2013 | $2500 |
| Email to available members | 10,000 emails | $500 |
| Social Networking Site | Reach 10,000 subscribers | $500 |
| Coupons | Jan 1, 2013- Jan 30, 2013 | $500 |
Gantt chart
| Task | Task Owner | Start Date | Percent complete | Jan | Feb | mar | Apr | may | Jun |
| Coupon | George |
1-Jan-13 |
100% |
||||||
| TV Adverts | Pauline |
1-Jan-13 |
70% |
||||||
| Emails | Job |
2-Feb-13 |
50% |
||||||
| Social networks | Grace |
2-Feb-13 |
50% |
References
Bowman D. & Gatignon H. (2010). Market Response and Marketing Mix Models. USA. Now Publishers Inc
Wenderoth M. (2009). Particularities in the Marketing Mix for Service Operations. GRIN Verlag
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