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Lesson 9 - Marketing and Sales (Revised)
Lesson 9 - Marketing and Sales (Revised)
Lesson 9 - Marketing and Sales (Revised)
Lesson Overview
9.1 Introduction
9.2 The changing marketplace for bars
9.3 Marketing opportunities and strategies
9.4 Positioning for competitive advantage
9.5 The mix for your marketing strategy
9.6 Sales in the bar
9.7 Food costing
9.8 Control and calculations of costs to achieve profit margins
9.9 The mystery shopper
9.10 Loyalty schemes
9.11 Social media
9.12 QR codes for marketing
Conclusion
References
Lesson 9: Sales and Marketing
9.1 Introduction
Marketing and sales are critical components of
running a bar business,
A lot of bars use ineffective and inefficient marketing
and sales strategies.
Successful marketing and sales programmes grow
organically and evolve with your customer’s
demands.
Marketing strategies are commonly associated with
endeavors such as branding, selling, advertising and
many other functions.
Lesson 9: Sales and Marketing
Dramatic changes in the marketplace are creating many marketing opportunities and challenges for bars .
Major marketing developments can be summed up in single theme; connections.
Huge growth in connecting technologies (social networks, IPhones, lap top computers, telecommunications and
information technologies) has created exciting new ways for bars to learn about and serve consumers in large
groups or one-to-one.
Bar owners are redefining how they connect with their customers, locally and internationally.
Lesson 9: Sales and Marketing
Bars cannot appeal to all purchasers in their markets, or at least not all consumers in the
Same way. The bar owner must carefully design their marketing plans to ensure that they
complement their bar capacity, capabilities and financial constraints.
The different elements of your marketing strategy can be divided into seven
basic decision areas that bar owners may use to devise an overall marketing
strategy for a single product or the complete bar. This is often referred to as the,
seven Ps;
These seven decision areas are applied to bars the following way; (chapter 9 – Figure 9.4)
Lesson 9: Sales and Marketing
Macleod (1994) contends that ‘pleasing the customer, is a tall order, as all customers are
different with varying interests, ideas and demands’.
Telling is not selling: communicate with the customer to ascertain their needs, and
personalize the sales pitch to take their expectations into account and demonstrate the
benefits of the product or service to them.
Personal selling: selling – preparation, sales play, the follow-up. (Chapter 9 – p. 176)
The pricing of the food and beverages is perhaps one of the most important
mathematical functions we perform in the bar, consider initially;
your bar companies formation and the owners philosophy, ability to drive the best
deals through purchasing power, value and beliefs of the company founder in supporting
certain local or national food and drinks companies
scale selling prices to different areas of the bar premises to achieve performance
yields, late bars, restaurant, night clubs, private bars
Calculating your cost price (formula: total unit price divided by the amount of units divided by amount
per service will equal the cost price)
Calculate the sales price while excluding the vat price (formula: remove the vat, to do this simply
divide the sales price into vat level this equals the sales price excluding vat)
Calculating the gross profit and the gross profit percentage for your stocks when the sales price and
cost price is supplied or not known (formula: subtract the sales price from the cost price this equals the
gross profit, then divide this gross profit into the sales this equals the Gross profit percentage (calculating
your gross profit percentage is also useful for working acceptable profit margin which you would require
for your individual bar products)
Calculate the sales price when a gross profit percentage is also required (formula: set the target or
margin you wish to achieve then subtract it from 100 this equals the cost percentage then multiply the
cost price by 100 and divide the result by the cost percentage this equals the sales price excluding vat.
Multiply the vat level by the sales price this equals the sales price required.
Lesson 9: Sales and Marketing
Mystery shoppers pose as your normal customers behaving in a certain way to create real life
scenarios, mystery shoppers at a restaurant may pretend they are lactose- intolerant, celiac or
unreasonably disruptive. Not all mystery shoppers include a purchase.
Mystery shoppers provide detailed reports or feedback about their unique experiences to management
The mystery shopper diagnostic auditing tool for bars - Appendix III pp. 220-221)
Some of the areas which the mystery shopping team will explore include;
date and time of the pre-visit phone call, name of the bar visited
number of employees in the premises on entering
how long it takes before the mystery shopper is greeted
name of the employee, whether or not the greeting is friendly
the questions asked by the shopper to find a suitable product
types of products shown, if or how the employee attempted to close the sale
whether the employee invited the shopper to come back to the bar
cleanliness of the bar and the other service staff, speed of service
compliance with the agreed company standards relating to service, bar appearance, and
grooming/presentation.
Lesson 9: Sales and Marketing
‘Loyalty programs are structured marketing efforts that reward, and therefore encourage loyal buying behaviour –
behaviour
which is potentially beneficial to the firm’ (Sharp & Sharp, 1997).
Loyalty schemes and cards are a system of the loyalty business model.
Cards typically have a barcode or magstripe for scanning some are even chip cards.
Small key ring cards (keytags) serve as key fobs used for convenience in carrying and ease of access.
The five most common kinds of loyalty schemes (are as follows)
Rewards: award points for purchases, unrelated to brand, used to differentiate your brand and attract new customers, used with limited product
lines, administration can be complex – needs special equipment, cards and database systems to optimize the benefits. Members expected to track
and redeem their points on-line (i.e frequent diner programs).
Rebate: awards a gift certificate redeemable for the next purchase, when guest reaches a certain spending level. Wide selection of products, this
reward program good for motivating new incremental purchases, increase store traffic. Department stores use this to increase additional sales from
existing guests. (i.e. Coffee Cards, Clubs and casinos where card holders have a swipe card which accumulate points from gambling spends
towards F & B purchases).
Appreciation: Goal is to increase your customers’ LTV (lifetime value), not to acquire new guests. Also used to get good customers to sample
more of your products. Airlines, hotels, phone companies used this to accumulate points for additional services within their own brand (seat
upgrades, free tickets, hotel stays at different locations).
Partnership: rewards a guest’s accumulated purchases with a partner’s products or services. Primary goal is to acquire new guests where you
have a partnership arrangement to use the partner’s extensive guest database. Airlines use this frequently when they give you points for renting cars
and sleeping in hotels. Works well in small rural areas with businesses (shop local concept, local loyalty rewards).
Affinity: Used where rewards are no longer needed to cultivate a long term relationship. Offers special communications, value added benefits
and bonuses and recognition as a valued guest.
Lesson 9: Sales and Marketing
Loyalty coupons
Offered as a component of an overall reward scheme where customer is rewarded for dining and drinking in your bar or
local establishment.
Encourages customers to become a VIP member to get valuable coupons, offers and event information delivered
straight into their computer or mobile phone.
Customers either print a hard copy or to display a digital copy for presentation upon arrival at your bar to take up offers.
Livingston as cited in Anderson (2012) contends that ‘some businesses use them as a distraction from the fact they are
not price competitive’
Other ways to strategically bridge offline and online media with QR codes (examples include).
QR code with a link to the bar’s Google places page with customer reviews and coupons
QR code next to the bar’s main products to view product demonstrations and reviews
QR code on a food, beverage, cocktail takeout menu, which links to a mobile bar and restaurant website for online
reservations, orders and interactive directions.
Lesson 9: Sales and Marketing
Conclusion
References
Anderson, G. (2012) Publix to Test Digital Coupons Sans Loyalty Card, available at
www.retailwire.com/discussion/15978/publix-to-test-digital-coupons-sans-loyalty-card [retrieved 2/3/13]
Croner. (1998)Croner’s Management of Public Houses, Croner CCH Group Ltd: Surrey.
Dopson, L. R., Hayes, D. K. (2011) Food and Beverage Cost Control, 5 th ed, New Jersey: John Wiley & Sons.
Lesonsky, R. (2012) Bar and Restaurant going social, accessed at
www.score.org/resources/bar-and-restaurant-going-social [retrieved 10/1/12]
Macleod, S. (1993) Food & Drink Service in the Restaurant, Hodder and Stoughton, Edinburgh’s Telford College: UK.
Murphy, J. (2009) ‘Strong merchandising can Drive Sales’, July Issue, Licensing World, Jemma Publications Ltd: Dublin.
Murphy, J. (2009) ‘Promoting Bar Sales’, November Issue, Licensing World, Jemma Publications Ltd: Dublin.
Murphy, J. (2010) ‘Improving Customer service through mystery shopping’, Licensing World, Jemma Publications Ltd:
Dublin.
Murphy, J. (2009) ‘Customer Relationship Management (CRM) in the Licensed Trade Industry’, Licensing World, March
Issue, Jemma Publications Ltd: Dublin.
Murphy, J. (2013) Principles and Practices of Bar and Beverage Management, Goodfellow Publishing Ltd, Oxford: England.
Kaplan. A, Haenlein, M. (2010) Users of the World, unite ! The challenges and opportunities of social media, Business
Horizons, Vol. 53, Issue 1.
Kotler, P. and Armstrong, G. (2001) Principles of Marketing, 9th edn, Prentice Hall International Edition: USA.
Sharp. B, Sharp A. (1997) Loyalty Programs and their impact on repeat purchase loyalty patterns, International Journal of
Research in Marketing, 14 (5), 473-86.
Web resources
http://www.mcmullens.co.uk/businessplan.pdf McMullen Brewers (UK Company), Business and marketing plan for tenancy.
http://m.wpi.edu/Pubs/E-project/Available/E-project-121909-212418/unrestricted/GoatsHead IQP.pdf Goats Head pub marketing
plan.
http://www.morningadvertiser.co.uk/Opinion/The-Guv-nor/A-marketing-plan-can-really-help-your-pub Case study Marketing Plan.