Final Draft - MKT 202_Anindya

8/8/2019 Final Draft - MKT 202_Anindya

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Executive Summary:

Sophia’s Ristorante is a traditional Italian Restaurant that serves home cooked Italian food,

located in a small shopping center. Sophia’s Ristorante has been in business not for long.

Like Rising Phoenix from ashes Sophia’s Ristorante has risen from obscurity into a running

business within a year. College educated Sophia Manderino is the sole owner and operator of

the business. Sophia is no novice in restaurant business. She has brought in her experience of

six years in operating a successful restaurant prior to opening Sophia’s Ristorante. Although

business growth has been reasonably slow and there are few nationally recognized franchise

operating in local market but many are missing; Sophia has been contemplating between

transforming her place into one of the missing franchise or to continue her sole proprietorship

with some new twist in the strategy.

In order to keep things into perspective Sophia would like to implement some new strategy

that may begin by becoming a champion in customer service. Services that may include

things like knowing her customer by their first name or knowing the birthday/anniversary of

her most exclusive patrons.

A knowledgeable, well experienced group of servers along with an excellent chef who is all

about his culinary art can become the second building block of Maria’s successful venture. In

essence what Sophia would like to build is a competent well organized team which would

only require some minor adjustment in her present team.

Like any successful business strategy, pricing of the foods and service has to be well

competitive. In short Sophia’s patrons should get the following subliminal message, “Quality

need not be expensive.”

Core of any strategy is communication, without it the most successful strategy would fail.

The most effective communication is the word of mouth. However, the “others” may include

the uses of all major media like newspaper, radio and local TV ad. Sophia has been

effectively spreading the words about her restaurant through radio and newspaper. The result

is evident in her weekly gross, which has jumped up as much as 50 % in a recent review.

Therefore it would be highly recommended to continue the strategy that has been effective so

far and at the same time incorporate the new ones along with it. If all else fails , some of the

nationally recognized franchise can always be an option to fall back.



Current Market Situation:

Company Background:

• Market Description

Presently, “Sophia’s Ristorante”- the fairly large restaurant, is located in a small

shopping center. The customers are mainly the middle-income Americans. Since there

are virtually no competitors around, therefore Sophia needs to have a winning strategy

to lure in these customers into her place.

• Product Description

Foods served at “Sophia’s Ristorante” are basically home cooked Italian dinner. An

average American family likes to have home cooked lasagna at least once in every

two weeks. Similarly “Chicken Alfredo”, “Pizza”, “Egg plant parmesan” are all

signature Italian home cooked meals that if present in the menu can always bring in

any sample of crowd not necessarily Italian ethnicity. Since Sophia’sRistorante is

situated in a heavily traveled major traffic route therefore, people from all

backgrounds and lifestyle can be potential patrons.

• Competitive Review

Sophia’s Ristorante at present can be qualified as a “Large Restaurant” judging by the

floor area. She has few local restaurants and franchisors as competitors near her.

Franchisers are an established brand name with greater financial muscle in terms of

reaching customers through advertising, an efficient supply chain and a tried and

tested product. Hence, she would have to establish her own brand name and offer

something that is unique or perform better than her competitors.

Current Issue:

Sophia’s Ristorante has a fairly new construction which means it will not face any structural

damage in the near future. Sophia has a ten years lease on the place with ten years of

extended option which provides her significant advantage on rent control. Her five

waitresses and one cook employee team qualifies her to be in the small business tax bracket.The business has spent substantial sum of money for renovation and at present has less then



$24,000 in cash reserve. From a future perspective the interior design may not require any

additional investment and the cash reserve can always act as a buffer for any minor financial

spending. Since the place is a sole proprietorship, for the good will of the business Sophia has

not yet taken in any salary instead she has considered hiring two more extra staff at the cost

of her salary. Since the opening of the business it has seen some noticeable growth in recent

review. However that was not able to meet Sophia’s expectations.

Possible future directions:

In order to achieve some favorable expectation Sophia needs to incorporate some initial

strategy immediately. One of them is to set a realistic goal like, selling forty orders a day

instead of twenty or twenty five average. She needs to concentrate on developing a signature

product like delicious spaghetti sauce or scrumptious lasagna; a product that would set her in

the league of excellence of that particular category of product. Considering setting up a

classy bar that would accommodate good selection of wines and beers can be a major

significant future development as well.



SWOT Analysis:



Position Strategy:

Sophia has to find her “place” in the minds of her guests or her “niche” and be famous about

it. She would have to differentiate her market offering based on product and service. She

would then have to promote her differentiation highlighting superiority, distinctiveness and

preemption. In the end she would have to find her overall positioning strategy by offering

“more value for money” which is synonymous to “more for less”.

The “product” in this case “food”, needs to taste good and

look great. The menu needs to be rich, comprising of traditional come regional influences (pre emptive) and a few

contemporary dishes. All ingredients are going to be freshly

procured, and hence this will accentuate quality. For instance

the wines could be obtained from a local winegrower, that

specialize in making wines (distinctive) or the spices bought from specialty producer of

Italian herbs and spices. Service needs to be customer centric. Staff needs to do everything in

their power to keep diners happy. Making customers feel important, asking them for feedback

or questions like “How can we be of any service to you” should be indoctrinate in the staff.

They need to be knowledgeable about the food and be swift in their operation. Service is also

a lot about rapport building. Sophia would have to go from behind her desk and be the

“mayor”. She would have to put time and energy in developing relationship at the cost of

time. Through nurturing connections with her guests and community she could build a loyal

base of customers. Hence, good food and great service adds a lot to customer experience

(superiority).

Sophia should position her restaurant as a place for casual dinner that will serve delicious,

distinct and authentic Italian dishes combined with great service. Her restaurant will be a

cozy place where people can feel at home, be treated like royalty and have great food over a

glass of wine, all of this at a fair price; this will shape her competitive advantage.



Product Strategy:

Product quality is going to be paramount. Food should be prepared using fresh, simple

ingredients and timeless preparations. The food that is going to be served is what Maria

knows and familiar with. The dishes are going to be segmented based

on regional influences within the Italian community like for example

Tuscan cooking. Similarly traditional dishes (spaghetti with

meatballs, ravioli, lasagna, risotto, baked zuchini) that are found on

menus throughout Italy should be available. Hence, it is going to be

food that tastes great but with “Grandma Rosaline’s” twist.

Apart from serving the regular items, she needs to discover her specialty dish; something that

has an “umph”. A Signature item like ‘meat sauce’ or specialty dish like ‘chicken marsala’

cooked in Marsala wine. To achieve that she would have to labor considerably to better her

product line, with the help of a chef, working together towards a common goal. She would

have to seek feedback from her customers on the dishes, and through constant research and

experimentation she can achieve product excellence. Finally her signature dish is going to be

the one nominated by the patrons of her restaurant and that specific dish will provide the

“wind in her sail” for uniqueness and better promotion.

It will be vital to have a descent collection of wines; since Italian cuisine is incomplete with

out wines. This could be an extra feature on the menu. Another feature could be Italian

pastries.

To build guest loyalty would mean to create an experience that guests will remember. Guests

are counting on only two things, good food and great service. Hence it is

important that menus are constantly revised, so that dishes are

alluring enough to keep guests coming back for more.

Employing a talented Chef or bright students from the local

community colleges, culinary department could be one way.

Getting students to do internship at the restaurant can give

them the much needed experience and the opportunity to



hone their skill. This could be a win-win situation from the restaurants point of view since

Sophia would be able to add pre emptive, distinct dishes to her menu while sticking to the

idea of traditional Italian cuisine, along with some regional delicacies. Feedbacks from guests

would have to be sought on all dishes and the strategy then would be to attain the perceived

value that guests place on every dish. Communicating with interns and getting their input on

how to improve the gastronomical value of menu items (product design), food presentation

and its other aesthetic value (product style) should be practiced.

A competent staff to serve guests is important. Staff would need to be passionate about what

they do, friendly and knowledgeable about what they are serving. They need

to excel the fine art of interacting with customers so the quality of

service delivery is high. The employee should build personal

relationships with customers because a personalized customer is a

repeat customer. This will enhance brand equity and customer

experience. Certain incentives need to be provided to the employees

who work at the restaurant. An example would be

"Employee Challenge" Cards that will encourage them to complete some sort

of task. These efforts could give the employee an extra $50 / $100 a month

and besides that, the employee will get the recognition of a “job well

done”. Every employee wants to be a winner and be recognized as part of a

team that's doing a good job and also be compensated for the extra effort. When

Maria creates this type of atmosphere, everything else will fall into place

Therefore, a product strategy is all about serving great tasting food, freshly prepared that

exhibits an overwhelming value along with a championship team.

Pricing Strategy:

The pricing strategy is going to be good value pricing. Good value pricing is

finding the right combination of price and good service at a fair price. A

customer segment price adjusting strategy can be applied for senior citizens

and college students. The restaurant can initially try promotional pricing to

create more awareness and induce trial. Later, as brand equity increases, psychological



pricing could be introduced. An example would be attaching trailing ‘9’s’ to a price ($39.99),

can make any dish look like a “value meal”. Cost structures of variable and fixed cost should

be closely scrutinized so that overhead costs are controlled.

Communication Strategy:

Sophia has to promote her restaurant aggressively. She can do this by approaching local T.V.

channels, newspapers and magazines to review her place based on her product, service,

environment and lastly pricing. Reviewers tend to show up in total obscurity. This means that

her winning team has to provide premium service while maintaining optimum product qualityin order to receive a five star review from the independent panel, at all times. In this way, she

is building good public relations by consciously appealing to media, to review her work.

Sophia could promote to the masses at events like homecoming football games. She could

provide free cappuccino to people in small cups with labels showcasing the restaurants name.

She could rent vehicles that are especially meant for advertising. These

“advertising” vehicles are constantly on the move and

carry billboards in the back, where “slides” with product

information’s are being displayed. The purpose is to

advertise as extensively as possible in any particular area of a

city. Sophia could ‘place an ad’ with one of the service providers

followed by instructions on which areas of the city she wants the vehicle to be

strategically placed. Since, her restaurant is located in a heavily traveled street she could also

contemplate, investing in high billboards on the road. These billboards will display messages

like “Kids Eat Free” campaigns or “Take Away Dinners” and should provide enough

incentive to draw the “family” crowd.

Sophia could have certain “pull” schemes like “Kids eat free”, that can be used wisely

depending on slow weeknights and “Price Packs” that offer meals at reduced price like

“Single Parent Family Discounts” (as mentioned in “Market” description) for takeaway

dinners. Sales can be increased through other promotional pricing, like “Invite a Guest” plan.

In such a plan, a list of loyal customers are encouraged to bring along a “guest” ,to try out



new recipes; the offer for regular customers will be a discounted meal or accommodations

for birthday parties. Another method can include suggestive selling programmed(s), offering

the customer the chance to upgrade their order to larger portions or by allowing separate

dishes to be added to meals. These types of promotional campaigns can create the necessary

“buzz” through guests who have already tried them and contribute to viral marketing. Thus

investing in such plans can be a good strategy where the return on future sales could be

substantial.

Close attention needs to be paid on ways to increase the number of instead of always trying to

bring in new ones. This can be achieved by providing impeccable customer service through a

team of servers who are well trained in the art of personal interaction and active in seeking

regular customer feedback. Thus this approach is more effective and better for Sophia’s

business while being less expensive than targeting new customers.

Sophia should always look to develop good relations with her customers so that she can

retain them. When she has done this she needs to mold it into “relationship marketing”. She

would have to channel all her people skills in

converting loyal customers into “market ambassadors”

or “brand evangelist”. Brand Evangelist can operate as

opinion leaders and contribute to adding the “buzz” or

put the wheels in motion for “viral” marketing, so

necessary for any new restaurant. Hence, if this

reference group can succeed in spreading the good word around, this restaurant will come

under the sonar of a lot of people leading to increased number of Guests.

In terms of being “socially responsible”, she could provide free lunch to the firefighters and

the police, on special Italian holiday like “Columbus Day” or during Thanksgiving, when

they would be working. This will build publicity for the restaurant, gravitate more customers

to her place and also is a humble way to give back something to the people who protect the

community.

Distribution Strategy:



Sophia needs to maintain good relations with her suppliers at all times and resolve any

probable conflicts wisely. Sophia could look to employing local wineries to supply her wines

for her restaurant. This would give her suppliers the platform to compete with other ‘spirit’

giants and will be cost effective for Sophia as well. Her new suppliers can match her

preference of wine selection and in this way her channel members can add value. Ensuring a

healthy credit history with suppliers and the suppliers in turn doing their deliveries on time

will establish a good supply chain management; this will add to Sophia’s competitive

advantage.

Sophia can also implement a home delivery system for customers who like to eat in the

convenience of their homes. She can launch a new website, where

suppliers can log in and checkup on her current supplies. Through

this website Sophia can also provide recipes for her customers and

as well as an “online table booking system” based on the future

growth and popularity of her business.

Sophia should look to implement Just-in-time inventory logistics because restaurants by

nature are “J-I-T”. Just-in-time inventory process relies a great deal on the efficient

monitoring of the usage of materials in the production of goods and ordering replacement

goods that arrive shortly before they are needed. Restaurants need to order food based on

their current supplies and menu needs. When restaurants use the Just-In-Time inventory

control system, they purchase supplies and produce dishes only as needed to meet actual

customer demand. So, Sophia will be able to maintain the delicate balance between carrying

too little inventory and carrying too much. She will not have to incur any cost related to

holding large inventories hence operational expenses will be cut as well taxes paid for

holding large inventories will be kept to a minimum.

Back Up Plan:



A good back up plan for Sophia could be ‘franchising’ – a major factor in the growth of small

business. Franchising is a contractual business arrangement between a manufacturer or

another supplier and a dealer. The contract specifies the methods by which the dealer markets

the good or service. A franchisor has already developed

and tested the concept, and the brand may already be

familiar to prospective customers. The franchisor typically

provides building plans, site selection help, training and

managerial and accounting systems. The franchisor also

provides name recognition for the small business owner who

becomes a franchisee. Essentially, franchisees are store

owners, except that they're simply using the reputation of the

company in order to grow and succeed. Franchising has been prominent in fast foods

industry, and in Sophia’s case the Olive Garden, Luciano’s are great options. She can buy

into a franchise like Olive Garden that grosses large amounts of profits each year. Olive

Garden has a family friendly brand image and a tried and tested menu of items that has

recognition and popularity. The noteworthy element besides the food is the signature Italian

family table inside the restaurant that represents the family gathering for a meal, a key aspect

of Italian culture. Owning a franchise like Olive Garden, will allow her a revenue stream that

she can count on, a tested management program that will help her avoid any pitfalls, as well

as the experience of owning her “own store”. Hence if Sophia wants to consider buying into a

franchise, she could do so because she has the right personality to be successful in the

endeavor.

Adding a bar to her current “setup” will be a good decision for Sophia. Italian food and wine

go hand in hand. By serving drinks in the restaurant along with the promise of great food is

too good a prospect to be overlooked; this will automatically draw in more customers. The

bar should cater to serving a great selection of wines (along with other beverages) from the

traditional Merlot to the refreshing French wine Chianti, popular among Italians. Hence a bar

could be a “gold mine” for Sophia as it is a promised revenue stream. In an nutshell, this

could make her business more attractive and the business potential of doing good then is

immense.

Overall Recommendations:



Sophia is a protagonist, a fighter and an experienced campaigner in her line of work. Her

restaurant is situated in a neighborhood, populated with people of Italian descent and a

hotspot for traffic. She has a fairly large floor area for a restaurant, a lengthy lease period aswell as an improving streak of sales. Sophia needs to position her restaurant as a place where

families can enjoy great authentic Italian food in the midst of outstanding hospitality. Good

value pricing will have to be her pricing strategy. She needs to promote her place through

more T.V. & radio advertisements and witty sales promotions, develop good PR through print

media, and also be “socially responsible” by conducting charitable events. She should look to

make as many personalized customers possible, create brand equity and strive for excellence

in food quality and service.

The main areas of debate on strategy have been outlined, but it all comes down to what works

well for Sophia in the business environment. By adopting the strategies, and a “just in case”

back up plan if things don’t go according to plan, Sophia’s Ristorante should be able to

provide a product that will be a collision of graceful, original Italian flavors and a ‘service’

that will be a landmark in itself.

Documents

Final Draft - MKT 202_Anindya