5.2: The Marketing Mix

Previous discussions refer to the product-service mix, or 'marketing mix' that a restaurant operation can bundle to position itself among competitors. A more detailed look into exactly what is involved in an operation's marketing mix now defines the current discussion.

The term 'marketing mix' has been universally accepted and used by marketing organizations for quite a long time. The discussion begins with the traditional marketing mix and then moves to the hospitality marketing mix components tailored more to this industry as a more appropriate alternative. A successful restaurant organization is one that focuses on the needs and wants of the consumers and markets the product-service mix that it brings together to attract consumers to its operation. Management of a restaurant operation must be able to integrate the components of the marketing mix into a marketing 'program' that will appeal to potential consumers and meet the goals and objectives of the restaurant.

The traditional marketing mix

The marketing mix consists of four individual elements that come together to form the marketing mix and are often referred to as the four P's of marketing: price, product, place, and promotion.

Price

The price component refers to the value placed by a company on its products and services. Some of the decisions involve pricing the product line, discounting strategies, and positioning against competitors.

Product

This component refers to the unique combination of goods and services offered by a company to consumers. The product includes both the tangible and intangible elements of the service offering. Product decisions involve product attributes such as quality, the breadth and mix of the product line (the number and type of products offered), and services such as warranties and guarantees.

Place

The place component refers to the manner in which the products and services make their way to consumers. Thus, the ‘place’ component can also reference 'distribution,' as it involves decisions related to the location of facilities and the use of intermediaries. In addition, the marketing of services includes the decision regarding customer involvement in the production process.

Promotion

This component refers to the methods used to communicate with consumer markets. The 'promotion mix' includes advertising, personal selling, sales promotions (coupons, rebates, contests, publicity, and so forth. These instruments can be useful to convey the operation's intended messages to consumers. The decisions for promotion involve the amount of spending to occur on each component of the promotion mix, the strategies for each of the components, and the overall message the operation wishes to convey to the consumer. To achieve marketing success, a restaurant operation must closely examine and understand all of the mix components because these components, collectively, must combine into well-conceived marketing programs, and managed properly. Failing to do so is one of the prime contributing factors to the high new restaurant failure rate.

The hospitality marketing mix

As researchers have demonstrated, distinct differences between good and services, some researchers believe that the traditional four P's approach to the marketing mix does not apply to the restaurant operation. Renaghan (1981) posit the necessity for a modified hospitality marketing mix consisting of five components.

Product-service mix

This is a combination of all the products and services offered by the restaurant operation, including both tangible and intangible elements. For example, it would include such things as the dining room, the amenities offered, and the broad array of elements that would also include the restaurant's 'ambience package.' One must remember that once a restaurant consumer leaves the facility, there is usually nothing tangible to show. Because the consumer has purchased and consumed the service, the largest part of the hospitality industry product-service mix is indeed the 'intangible' elements of service.

Presentation mix

This includes those elements that the marketing manager uses to increase the tangibility of the product-service mix that the consumer perceives. This mix includes physical location, atmosphere (lighting, sound, and color), food, and personnel.

Communication mix

This involves all of the communication that takes place between the restaurant operation and the consumer. It includes advertising, marketing research, and feedback about consumer perceptions. View the communication mix as a two-way communication link, rather than a simple one-way link with the restaurant operation communicating to the customer rather than 'with' the customer. This two-way link allows for the traditional advertising and promotion that flow from the seller to the buyer, but it also allows for marketing research and other data collection vehicles. In these cases, the seller is seeking information and data from the consumer, thereby establishing open communication through the various marketing elements at their disposal.

There are some similarities and differences between traditional marketing mix and the hospitality marketing mix. In the hospitality version, the product component undergoes expansion to include some aspects of distribution. People are part of the production process in services, and distribution occurs in the presence of the consumer. The communication mix is almost identical with the promotion component in the traditional marketing mix, although it does include some additional communications such as marketing research. Finally, the presentation mix represents the largest departure from the traditional marketing mix. It includes the price, and some of the aspects of the place component such as location, and it adds elements such as atmosphere and the personal contact between customers and employees.

Pricing mix

In addition to the actual price an operation charges, the pricing mix encompasses the consumer's perception of value. The pricing mix includes such variables as volume discounts and bundling multiple products together for an overall discounted price. Quick service restaurant chains use this bundling approach extensively as a method to increase customer spending.

Distribution mix

This includes all distribution channels available between the organization and the target market. Historically, distribution occurred at the point of production, such as restaurant food production. This has changed since newer distribution channels, such as the Internet, have developed; the importance of the distribution mix has increased.

External Factors

Several external factors can reduce the effectiveness of the operation's efforts to implement all the components of the hospitality marketing mix successfully. These factors, which may have either direct or indirect influence, are consumer perceptions, attitudes and behavior; industry practices and trends; local competition; broad national and international trends; and government policy and legislation. One additional factor that must be part of the overall planning scheme is the 'product life cycle. From a traditional marketing perspective, all products move through four stages of growth over time. The initial introductory stage, a growth stage, a maturity stage, and finally the interest in the products begins to decline. In each stage of the product growth cycle, proven strategic goals exist to maintain momentum and rejuvenate interest in the product offerings and the concept itself. Table 3.2 illustrates possible tactics given the different stages of growth of an operation.