Food & Beverages

Food Marketing. Food products often involve the general marketing approaches and techniques applied the marketing of other kinds of products and services. In food marketing, topics such as test marketing, segmentation, positioning, branding, targeting, consumer research, and market entry strategy, for example, are highly relevant. In addition, food marketing involves other kinds of challenges--such as dealing with a perishable product whose quality and availability varies as a function of current harvest conditions. The value chain--the extent to which sequential parties in the marketing channel add value to the product--is particularly important. Today, processing and new distribution options provide increasing increasing opportunities available to food marketers to provide the consumer with convenience. Markting, services, and processing added do, however, result in significantly higher costs. In the old days, for example, consumers might have baked their own bread from locally grown flour. Today, most households buy pre-manufactured bread, and it is estimated that the farmer receives only some 5% of the price paid by the consumer for the wheat.

The “Four Ps” of Marketing.  Marketers often refer to the “Four Ps,” or the marketing portfolio, as a way to describe resources available to market a product:

• Product.  Firms can invest in the product by using high quality ingredients or doing extensive research and development to improve it.  Both McDonald’s and Burger King, for example, literally spend millions of dollars to perfect their French fries!  In today’s Western markets with varying tastes and preferences, it has generally been found that products that offer a specific benefit—e.g., a very tart taste in jam—tend to fare better than “me, too” products that merely imitate a competitor’s products.  Less is known about Eastern and developing countries.
• Price.  Different strategies may be taken with respect to price.  Generically, there are two ways to make a profit—sell a lot and make a small margin on each unit or make a large margin on each unit and settle for lesser volumes.  Firms in most markets are better off if the market is balanced—where some firms compete on price and others on other features (such as different taste preferences for different segments).  The same idea applies at the retail level where some retailers compete on price  while others compete on service while charging higher prices.
• Distribution.  Most supermarkets are offered more products than they have space for.  Thus, many manufacturers will find it difficult to get their products into retail stores.
• Promotion involves the different tools that firms have to get consumers to buy more of their products, possibly at higher prices.  Advertising is what we think of by default, but promotion also includes coupons, in-store price promotions, in-store demonstrations, or premiums.

The Value Chain.  A central issue in food marketing is the value chain, the process by which different parties in between the farmer and the consumer add value to the product.  In an extreme case, the farmer only receives about five cents for every dollar ultimately charged for bread in the store.  Part of the added cost results from other ingredients, but much of the value is added from processing (e.g., milling), manufacturing, distribution (transportation, wholesaling, and retailing) and brand building.  The value chain provides an opportunity for many firms to add value to a product.  This, of course, pushes up the ultimate retail prices of foods.  However, these added costs usually result from consumer demand where consumers are willing to pay for additional convenience.  In recent years, for example, there has been a sharp increase in the demand for prepared foods—from supermarkets or from dine-in or take-out from restaurants.

food marketing is defined as a chain of marketing activities that take place within the food system between a food organisation and the consumer.This has the potential to be a complicated procedure, as there are many processes that are used prior to the sale the food product. These include food processing, wholesaling, retailing, food service and transport. Due to these many processes, a multitude of organisations have to be involved in the sale of one food product

Segmentation

In order to market its food products, an organisation must first understand whether its product will satisfy the consumer's needs better than competitors do. In order to achieve this, an organisation must understand the four types of segmentation.

Geographic

An organisation must understand where it is marketing its food products to in a geographical sense. Clarifying this will help an organisation to grasp which food products will satisfy the needs of a particular consumer culture.

Demographic

A food organisation must understand the demographic segment that it will be marketing towards . Factors that must be considered are a consumer's age, gender, education, social class, income, religion and ethnicity . All of these aspects can impact whether the consumer will prefer one food product over another.

Psychographic

A food organisation must understand its consumer psychographic. Factors such as lifestyle, personalities, opinions, activities and interests of its potential consumers must considered. Identifying these aspects can help an organisation to improve its food products.

Behaviour

A food organisation must understand how its consumers may behave towards a food product . For example, information researching the benefits sought, frequency of food purchase, attitude towards the food product and nutritional knowledge of the product are all beneficial .

Marketing of Food and Beverage

2. marketing and sales “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements”. Marketing is the process that facilitates an exchange of goods for money to the mutual satisfaction of both the producer and the consumer. The management process that defines anticipates and supplies customer’s requirements efficiently and profitably.

3. marketing and sales : A SALE is an exchange of goods for money. It is the end point of the marketing effort. What is a sale?
4. marketing environment Marketing Environments are the actors and forces internal and external to the marketing effort that impinge on the establishment’s efforts to develop and maintain successful transaction with its customers.
5. market research A systematic collection, storage and analysis of information about the market. Market Segmentation – is the identification of subsets of buyers within a market who share similar needs and who have similar buying processes.

Market segments: • Geographic • Demographics • Psychographics

6. Marketing plans “The managerial process of developing a viable fit between an organization’s objectives, skill and resources and its changing opportunities, to shape and re-shape the company’s business and products so that they yield target profits and growth”.

Types of marketing plans: • Strategic plans • Long-term plans • Short-term plans • Annual plans • Tactical plans

7. marketing mix:  Marketing mix constantly engages in fashioning creatively a mix of marketing procedures and policies in an effort to generate a profitable enterprise.

The Five ‘Ps’ • Product • Price • Promotion • Place • Packaging Another 3 ‘Ps’ that improves the marketing effort: • Process • Physical Evidence • People

8. Marketing mix: A product has several facets that a customer consciously and unconsciously evaluates. product Core Benefit – is the basic need of a customer that a product satisfies. Physical Features – type of cuisine, taste, presentation of the meal. Intangible Features –the courtesy, atmosphere, hygiene and food safety of the restaurant.

9. Marketing mix Product Life Cycle – any product, whether it is a restaurant, menu or service style has a definite end. product Introduction – sales are low and therefore, profits are low. Growth – sees improvement in sales and profitability. Maturity – stays longer when sales plateau. Decline – sales dip and costs of operations become high

10. Marketing mix Product Positioning - is used by a company to distinguish its products from those of its competitors in order to give it a competitive advantage within a market. product Criteria for positioning: • Benefits or needs of the customer is satisfied • Specific features of the products and services • Customer usage occasions • Customer categories to include demographic factors • Positioning in relation to other competitors.

11. Marketing mix Product Positioning - is achieved through product differentiation. product Strategies for differentiation: • Branding • Quality • Pricing • Defining customer needs • Identity

12. marketing mix Is a crucial component of marketing as it directly relates to profits and profitability. It should cover direct costs, contribute to overheads and leave a reasonable profit margin to the investor. pricing Strategy: An owner may set his pricing strategy according to the type of restaurant, its location and market segment he wishes to serve.

13. marketing mix Is a mix of communication concerned with informing the market about the establishment’s products, services and persuading to buy them. promotion Types of Promotion: • Advertising • Merchandising • Personal Selling • Sales promotion • Publicity • Public Relations

14. marketing mix The belief was that if the establishment was positioned close to the segment it served, business was automatically going to take place. place

15. marketing mix Packaging as a marketing tool has played a great role in traditional consumer goods and industrial products. packaging • Wines and spirits are packaged in attractive cartons ensuring in the internal packaging that they are safe from breakage in transit.

16. marketing mix packaging • In a broader sense, the décor of a hotel or restaurant, the uniforms the staff wear and the food presented on a plate or dish are extension of the packaging concept.

 Food promotions
18. food promotions Are activities that revolve around a central food theme.

Objectives of promotions:

1. To increase sales in low periods 2. To give regular guests something different 3. To attract new customers 4. To establish that the property is exciting always. 5. To break the routine of existing staff.

19. food promotions Objectives of promotions: 6. To do a public relations exercise 7. To create publicity for the property. 8. To introduce new menu. 9. To re-introduce the property after renovation. 10. To celebrate special occasions like the national day, festivals, etc. 11. To clear slow moving stock of lobsters that are not moving, by offering “Specials of the Day”.

20. food promotions Three types of promotions: 1. Internally controlled promotions 2. Promotions tied with another hospitality partner 3. Full destination promotions A food promotion has no special rules. When profit is always the motive, some food promotions may be public relations exercises.

21. Internally controlled promotions 1. Daily Specials – a chef’s signature preparation for the day to create variety and to move slow moving stocks. 2. Happy Hour – to boost sales at low periods of the day used especially by bars during 3pm to 6pm when there are usually no sales. Are planned and executed solely by the hotel. The promotion is done with existing resources.

22. Internally controlled promotions 3. Weekly Ladies Night – a night for ladies only. The would have special presentations of interest to women. 4. Singles Night Out – is another special night for the unattached. In western societies they are very popular for the unmarried to meet future mates. 5. Dance Competitions – restaurants can make good sales with a niche market interested in dancing.

23. Internally controlled promotions 6. Fancy dress party – restaurants are able to boost their sales especially if they are targeting a children’s market. 7. Halloween Night – restaurants that want to promote their property for the children’s market may find this a useful occasion to market their wares.

24. Internally controlled promotions 8. Special Occasions – like Valentine’s Day for the romantic or religious holidays like Diwali, or Easter weekend. 9. Sports Matches – popular to sports lovers. Bars specially set-up huge screens to televise a big game while making brisk sales in liquor.

25. Promotions with other travel partners These promotions are done on a larger scale, involving products, services and investment by partners. Examples of such promotions: • Oktoberfest • Greek Food Festival • Indian Food Festival • Madrid Fusion

26. Full destination promotions A whole city or state gets involved to promote a destination.

 Benefits of food product Promotions

1. It generates word-of-mouth publicity. 2. It increases customer awareness in other market segments. 3. It helps the property in being seen in a more positive light. 4. It improves the morale of staff, which gets bored with daily routine. 5. It is conducted at a relatively low cost if other partners are co- opted into the promotion. 6. It solves many problems at once.