Marketing Management

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Executive Summary

An organisation’s success depends a lot on the degree to which marketing strategies are

both efficient and effective. The aim of the project was to assist the marketing manager of

a restaurant with the design of a marketing plan for her restaurant.

The project was undertaken to fulfil a contractual obligation that warranted that the

consultant helped the marketing manager of a specific restaurant in Muscat to attain a

complete understanding of how to design a marketing plan.

Face to face and over the phone discussions as well as explanations over email were used

extensively to achieve the understanding referred to above. Additionally, the current report

was prepared to offer a formal and comprehensive guide to the marketing manager of the

restaurant.

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1.1 Introduction

The report includes a total of 7 main sections. Section 1.2 describes the role of SWOT Model in a

marketing plan. A description of the types of strategic goals that may be considered with examples

is provided in Section 1.3. Section 1.4 explains the ‘Growth Matrix’ (Ansoff Matrix) and illustrates

each of the four options with an example. A description of the marketing objectives and examples

of two of these are provided in Section 1.5. Section 1.6 explains the four steps included in the

segmentation process. Section 1.7 describes how segments identified are evaluated and what

targeting options the marketing manager may consider. The positioning process based on

perceptual mapping will be discussed in Section 1.8. Marketing decisions pertaining to branding,

pricing, distribution and promotions or integrated marketing communications will be discussed

respectively in sections 1.9, 1.10, 1.11 and 1.12. The final section of the report, that is, Section

1.13, will identify and briefly discuss the metrics used to determine if the marketing action plans

are being implemented as expected.

1.2 The SWOT Matrix/Model

This section describes the role of SWOT Model in the development of a marketing plan. It also

illustrates the SWOT factors with examples.

• Role of SWOT model in marketing planning

Al Shukairi (2019) states that the SWOT model enables a firm to identify its strengths and

weaknesses; and the opportunities and threats that exist in its external environments. It also allows

the firm to understand the strategic implications of these factors resulting in the development by it

of efficient and effective marketing strategies.

• Examples of the SWOT factors

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A strong marketing team is an example of a company strength. A weakness, on other hand, may

be that the company lacks marketing expertise. Whereas recession in the economy poses a threat

to a company, an opportunity may exist when there is an increase in demand for its product or that

a productive segment is discounted by its other competitors.

1.3 Setting the strategic goals

The section here offers a definition of strategic, describes the four strategic goals and gives two

examples of strategic goals.

• Definition of the strategic goal

Strategic goals are the top goals and results that a firm seeks to achieve, typically, over three to

five years (Syed 2018).

• Strategic goals: Build, Hold, Harvest and Divest

The four strategic goals that may be considered are ‘Build’, ‘Hold’, ‘Harvest’ and ‘Divest’. A build

is a goal where the company intends to increase its sales/market share. A hold goal focuses on

maintaining the current market share. It is a harvest strategy if a company attempts to maximize

its short-term cash flows and profits. The divest goal is pursued when the company has decided to

discontinue with the product or brand and is planning to withdraw or sell it.

The Boston Consulting Group (BCG) model can be used by the restaurant to see how the four

strategic goals are implemented. Henderson (1970) developed the model on the basis of two

dimensions: relative market share and market growth rate. These dimensions together result in four

combinations:

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LOW

RELATIVE MARKET SHARE

HIGH

RELATIVE MARKET SHARE

HIGH

MARKET GROWTH RATE

STARS

Build

QUESTION MARKS

Build

LOW

MARKET GROWTH RATE

CASH COWS

Hold

DOGS

Harvest/Divest

Figure 1: BCG or Growth/Share Matrix

Question marks are high growth, low share brands. Stars are high growth, high share brands. The

brands that are in the low growth but high share market, are called the ‘cash cows’. The low growth

and low share brands are known as the ‘dogs’. A company may invest in and build the ‘question

marks’ so that they become ‘stars’. It may invest in and build the ‘stars’ so that they eventually

become ‘cash cows’. The company should try to hold the positions of its ‘cash cows’. With the

‘dogs’, the company may consider harvesting or divesting

• Examples of two strategic goals:

1. To become the market leader in Oman in three years

2. To expand into all other regions in Oman by 2023

1.4 The Growth Strategies

There are strategic actions that this restaurant may pursue to grow with regards to its sales and

market shares. One model that can be used by it to devise growth strategies is known as the

‘Growth Matrix’ or the ‘Ansoff Matrix’ (Ref.).

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• The ‘Growth Matrix’ or the ‘Ansoff Matrix’

The matrix is based on four product/market combinations (Ref). EXISTING NEW/RELATED

a. Market penetration/expansion: Current product/Current market: 1. Penetration: new

users within the same segment; and 2. Increase frequency of purchase: encouraging

customers to buy or use more of the product. E.g., persuading customers to brush teeth at

least twice a day.

b. Market development: Current product/New market: reposition the product.

Horlicks/Glucose was initially targeted at ill customers but now it is used by athletes or

regular customers as nutrients or source of energy.

c. Product development: New product/current market: it is used to increase sale by

improving present product or developing a new product. i-Phone versions are all examples

of product modification. All new drugs are examples of new product development.

Market penetration Market development

or

Market expansion

Product development Diversification

Product development Diversification

PRODUCTS

MARKETS

EXISTING

NEW/RELATED

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d. Diversification: New product/new market: Dunhill’s perfume, pen are examples of new

products (from Dunhill’s standpoint) aimed at different markets (new for Dunhill). Heinz

developed a new service ‘Weight Watchers’ to support a new range of low-calories brands

targeted at dieters.

1.5 Marketing Decisions: Setting Marketing Objectives

• The types of marketing goals that may be considered.

The restaurant may consider marketing objectives including sales objectives and market share

objectives or new product/service development objectives or pricing objectives or promotional

objectives or brand loyalty objectives.

• Descriptions of two marketing objectives

1. Sales objective: Hence, the restaurant may consider increasing its sales or revenues by reducing its prices or using aggressive promotional strategies.

2. Brand loyalty: The marketing manager may consider increasing customer preference or even customer loyalty through building strong relationships with its customers.

• Two examples of marketing objectives

1. To achieve a market share of 25% in 2021

2. To achieve a 35% loyalty among all our customers in 2021

1.6 Marketing Decisions: Segmentation, Targeting and Positioning

Segmentation and targeting are key to marketing effectiveness.

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• Segmentation: Markets consist of buyers, who differ in one or more ways. Through market

segmentation, companies divide large, heterogeneous markets into smaller segments that

can be reached more efficiently and effectively with products and services that match their

unique needs (Ref).

• The segmentation process: There are four steps that the restaurant may use to segment

its market. Each of the steps is discussed in sections to follow.

1. Identifying segmentation bases/variables

The major variables that might be used in segmenting are major geographic, demographic, and

psychographic and behavioural variables (Ref).

2. Divide the market into distinct groups of customers

Use the base chosen in step one to divide the market into segments in a way so that the customers

in the same segment have similar needs and wants (homogeneity) but there is heterogeneity

between the segments, that is, customers in different segments are clearly different. Most

distinguishing variable, such as the benefits sought by customers, would be used to break the

market down into individual segments or groups of customers.

3. Nickname the segments

Give a unique but meaningful name to the segment (s) to give it an identity. For example,

customers who come to the restaurant mainly to socialize may be nicknamed as, ‘Sociables’.

4. Develop segment profiles

Each segment identified would then be described using various variables such as age, income,

occupation etc. to develop a complete profile of each for clearer and comprehensive understanding

of each segment of customers.

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• Targeting: This is selecting one or more of the segments identified in the segmentation

process depending on their degree of attractiveness (Ref).

Each of the segments identified is evaluated based on a range of criteria such as the segment size,

its growth rate, the bargaining power of the customers, the relative strengths and weaknesses of

the main competitors, the relative market share of the restaurant and its financial strength as far as

the segment is concerned.

• Targeting strategies

The options available to the restaurant are as follows:

i. Undifferentiated or Mass Marketing

The restaurant may ignore the differences in the segments and choose instead, to focus on the

entire market with one standardised marketing mix for all customers.

ii. Differentiated or Multiple Segment Strategy

There is also a multi-segment approach available to the restaurant. Here, the restaurant will target

a variety of different segments with a series of differentiated products.

iii. Single segment strategy or Niche Marketing

The restaurant has the option to choose just one segment. This will be known as single/mono

segment strategy (Ref).

Another choice is to focus on a subgroup within one of the segments identified. A niche is a more

narrowly defined group, usually identified by dividing a segment into sub segments (Ref).

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• Positioning: Positioning is creating a distinct and valued place in the minds of the

customers (Ref).

The core essence of ‘Positioning’ will be to favourably influence the customers’ perception of the

restaurant’s performance across their ‘choice criteria’. Customers have ‘Ideal Values’ with respect

to their choice criteria. If the ‘Values’ offered by restaurant do not correspond to the customers’

‘Ideal Values’, customers would negatively perceive the performance of the restaurant in terms of

the ‘Choice Criteria’. The technique is to enhance the restaurant’s performance in relation to the

‘Ideal Values’ and thereby, change the perception of the customers favourably.

Positioning is a process that follows seven steps as follows:

1. Identify the two most critical choice criteria of the customers

2. Through research, determine the customers’ Ideal or Desired values as regards the

choice criteria

3. Find out how customers perceive competitors’ performance

4. Determine how customers perceive the restaurant’s performance

5. Plot the values in 2, 3 and 4 on the “perceptual map” to be able to visualise where

the restaurant’s brand is in relation to customers’ ideal values and the positions

occupied by the competing brands in the minds of the customers

6. Identify the marketing implications based on the position occupied by the restaurant

7. Reposition the restaurant as per the implications

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1.7 Marketing Decisions: Marketing Mix Decisions

The marketing mix decisions pertain to branding, pricing, distribution and promotions decisions.

1.7.1 Branding decisions: Hence, decisions on brand naming, logo, adding values, tagline, rebranding, co-branding are made:

i. 3 brand naming strategies:

a. Branded House (Or Family Branding): One name for all items. E.g., Sony, Philips, etc. b. House of Brands (or Individual Branding): Each item is given a separate name. E.g.,

Lux, Head & Shoulders, Herbal Essence, Clear.

c. Combination Branding: Ideally, combining the Company name with a product/brand name. Examples: Kellogg’s Cornflakes, Hyundai Sonata, Hyundai Elantra, Honda

Vezel, Microsoft Windows.

ii. Creation of a logo:

The logo/mark usually legally and exclusively belongs to the company. E.g., McDonald’s golden

arches.

Ideal Values (5, 6)

1

7

71

Your Brand’s Perception (5, 3)

Com 1: Perception

Com 2 : Perception

Com 3 : Perception

Price

Design

* Perceptual Map and Positioning

Very Good

Very Poor

Very ReasonableVery High

´ Positioning

4

6

5

5

3

2

6

G

A

P

DR M. MONIRUZZAMAN

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iii. 3 ways to create or add value to a brand:

• Functional values: On a simple level value is added to brands through superior technology

or systems to give functional values beyond those of competitors.

• Expressive values: Expressive values should be added to brands, which enable consumers

to make statements about themselves that more clearly express aspects of their individual

personality; and

• Core values: Central or core values can also be added and act as the brand ‘soul’, showing

what the brand believes in.

iv. Creation of a tagline:

The tagline or strapline must be consistent with the ‘Brand Promise’ and the Brand Personality.

“Just Do It” and “I'm Lovin' It” are some examples.

v. Rebranding strategy:

The objective here is usually to reposition your product in the market, using a combination of:

1. Changing the brand name, the logo and its imagery.

2. Changing elements of your marketing mix and marketing strategy.

3. Re-launching using a new marketing communications/advertising strategy.

vi. Co-branding strategy

Co-branding with a well-reputed entity or even another highly recognised restaurant may be an

option to consider.

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1.7.2 Pricing

The restaurant should decide which of these four pricing frameworks (or combinations) to use to

develop its pricing strategy:

1. Objective based strategy:

• Penetration Pricing: The restaurant may set a low price to attract as many customers as

possible.

• Price Skimming: If the aim is to generate profits, the restaurant may consider setting a

high price.

• Quality driven pricing: The restaurant may set a price in accordance with the level of

quality of its food and service. E.g., High Quality-High Price.

2. A cost-based strategy:

• Mark-up: The typical procedure for determining price under the mark-up approach

is to first calculate the cost per unit by adding variable cost to fixed costs divided

by an expected level of unit sales.

• Target Return Pricing: Operationally, this pricing approach demands that

managers (1) estimate the unit sales volume of the product, (2) figure unit costs

(variable costs plus overhead attributable to the product), (3) estimate the amount

of capital involved in producing and selling the product, and (4) select a target rate

of return on investment.

• Break-even Pricing: When the price is set based on an overly optimistic sales

estimate, the actual return falls below the target. This is because the fixed costs

have to be covered by a smaller unit volume. A break-even price results in a revenue

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that is enough to cover all costs at a given production level. At this level, there is

neither profit nor loss.

3. A customer-based strategy

• Product-line pricing: It involves selling all products in a category at one of several

predetermined ‘price points’ or levels. Each price line represents a different level

of quality.

• Differential pricing: Here, identical products are priced differently for different

types of customers, markets or buying situations. This is to take advantage of the

fluctuation in demand of customers across segments, times, locations or situations.

For example, if you want to fly or book a hotel in Salalah during Winter, it will

cost you more.

• Promotional pricing: This can be defined as temporarily pricing a product or

service below list price or below cost in order to attract customers. Price-off

promotions (10% or 20% or 30% off), for example.

• Psychological pricing: The restaurant may take advantage of the fact that many

consumers use price as a measure of quality. For example, Apple successfully

repositioned one of its brands by substantially raising its price. The 8 per cent price

increase reduced the brand’s market share by 1 per cent but produced a 30 per cent

increase in profit. Some perfumes are priced high to elevate their status as a gift.

Another common psychological pricing practice is called odd pricing. For instance,

a product or service might be priced at RO29.95 instead of RO30.00. Odd prices

convey the psychological impression of a lower price.

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4. A competitor-based strategy

• Competitive parity: The restaurant may charge the same price as its major

competitors. Also, known as ‘Going Rate’.

• Discount Pricing: Hence, the restaurant sets its price below that of its major

competitors.

• Premium Pricing: The restaurant may set higher prices than its competitors.

1.7.3 Distribution: It involves making the product or service available at the right time, at the right place and at the right level quality (Ref).

• Location of a business: The location convenience is essential. The restaurant must

note that people, in the modern world, pay for convenience. The restaurant may

consider opening multiple branches based on feasibility results. It may also assess

different franchise options to expand its operations locally as well as overseas.

• The ambience: The ambience of the restaurant will be directly related to its

atmosphere and character. Very importantly, it will facilitate the nature and degree

of quality of its food and service.

• The opening hours: Again, convenience is critical. Research must be undertaken

o determine the exact times when customers would feel comfortable to visit the

restaurant. The internal considerations as to how long the restaurant can remain

open must also be taken into account.

• Take away: Usual take away facilities must be provided. Packaging, timely

preparation, and both quantity and quality of food should be considered.

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• Home delivery facilities: Hence, timely delivery along with regular

communications are key in addition to the factors specified in the earlier section on

‘take away’.

1.7.4 Promotions:

The channel options and the budgeting will be discussed in this section.

• Channel Options

The following options can be considered having assessed their advantages and disadvantages:

Types of channels Advantages Disadvantages

Email marketing Inexpensive. Trust issue. Emails not recognised

are often deleted without being

opened.

Newspapers Broad reach.

Disposable (here today, gone

tomorrow).

Television Can provide positive

entertainment, humour and

excitement.

Costly (media and production) with

long production timelines.

Online marketing The Pay-per-click (PPC) can be the most cost effective method.

Intrusion, viruses, spam, pop-ups

and other issues.

Mobile marketing Easy verification of response

(SMS and telephone).

Negative brand association may

result due to its intrusive and

intimate nature.

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Social media marketing Very high possibility of

Maximising brand awareness.

Negative publicity exacerbated by

open, possibly more negative

comments may destroy the

restaurant image.

• Promotions budgeting

i. Competitive Parity: Same amount as the main competitors spent on their promotion

campaigns. If they spend 10% on promotions, the restaurant, too, would spend 10%.

ii. Affordable Approach: The restaurant may choose to spend on all other activities first and

then, spend whatever is left over on its promotion campaigns. It may, for example, spend

on its operational and other marketing activities (such as branding) first and then, spend

the remainder on promotional activities.

iii. Percentage of Sales: A specific percentage of sales spent on promotions campaigns. E.g.,

10% of sales spent on promotions.

iv. Objective and Task Method:

Steps followed are:

1. Determine the Objectives. E.g., Create awareness of 20% in the next 3 months

2. Determine the actions needed to attain the objectives. E.g., place three adverts

and distribute 200,000 leaflets

3. Compute the costs of each of the above actions and add them up to determine the

budget.

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1.8 Monitor and Correct

The restaurant may use the metrics to follow to determine if its marketing action plans are yielding

results as expected:

• Awareness: The percentage of customers aware of the restaurant as a result of specific

marketing action plans.

• Perception: The nature and degree of positive customer perception of the performance of

the restaurant achieved by specific marketing action plans.

• Market share: The increase in market shares due to specific marketing actions.

• Net Promoter Scores (NPS): This will help the restaurant to measure the likelihood that

the customers will recommend it to other customers. Depending on the scores, it would be

possible to know which customer is a ‘promotor’ or a ‘passive’ or even a ‘detractor’.

• Profitability: Profit margin generated by specific actions serves as a measure if of course,

profitability is a performance indicator.

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• References (CU Harvard Referencing):