5.10: Chapter Glossary and Notes

Glossary

Positioning. The process of determining how to differentiate a firm's product offerings from those of its competitors in the minds of consumers by answering the question ‘What do we want consumers to think about our company when they see our restaurant, look at our signage, our logo, marketing literature, advertising, and so forth?’. Positioning is the marketing activity and process of identifying a market problem or opportunity, and developing a solution based on market research, segmentation, and supporting data.

Consumer Mix. These attributes will differ by product or service, but some of the more important attributes would include price, value, quality of food, type of food, service quality, menu variety, employee friendliness, location, atmosphere, service speed, cleanliness, parking, and so forth.

Perceptual mapping. A technique used to construct graphic views or representations of how consumers in a market perceive a competing set of products relative to each other because of the difficulties associated with graphing and understanding multidimensional presentations, in evaluating comparisons between alternative brands.
Unique selling proposition (USP). The opportunity to differentiate the product-service mix from that of the competition and thereby gain a competitive advantage.

Traditional marketing mix. The traditional 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.

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.'

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.

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.

Discretionary income. This refers to the income that is available for spending after deducting taxes and necessary expenditures on housing, food, and basic clothing.

Economic environment. Consumers' 'purchasing power' or ability to purchase ‘products and services’, is directly related to the economic health of the city, sate, and country. As marketers study the economic environment, they are concerned about such things as inflation, recession, unemployment, resource availability, interest rate trends, personal income growth, business growth and performance, and consumers' confidence in the economy.

Social environment. The social environment is under the effect of all of the other environments to come into play. Changes in the economy, advances in technology, competitive actions, and government regulations all shape the way consumers view the world from both demographic and psychographic perspectives.

Competitive environment. Within all markets, competitors seek to win the business of consumers by offering what they believe to be the best combination of products and services designed to result in maximum consumer satisfaction. The competitive structure in an industry can range from a monopoly, with one seller and many buyers, to perfect competition, with many buyers and sellers of homogeneous products that are almost the same.

Political/Legal environment. Understanding the political and legal environment means understanding the rules and regulations from which competitive actions stem. At all levels of government - local, state, national, or international - there are laws and regulations that businesses must follow. To compete successfully, an organization must understand not only the current laws and regulations, but also any new ones that might come into play in the future.

Technological environment. Using data base software, marketers have improved their ability to target their customers, track their behavior and preference, and then provide exactly what the customers desire when they want it. Through the careful use of technology, marketers can monitor guests' purchasing behavior and then tailor service offerings to meet their needs.

Secondary data. Data that is already available from other sources and summarizes information about operations, marketing, human resources, financial performance, and other topics of interest to restaurant management.

Primary data. Primary data consists of original research done to answer current questions regarding a specific restaurant operation. For example, a foodservice manager may attempt to ascertain consumer attitudes towards new menu offerings or to solicit consumer perceptions of increased menu prices or different portion sizes. This type of data is very pertinent to an individual organization but my not be applicable to others. The advantages of using primary data include specificity, and practicality.

Fast food - Quick Service (QSR). Fast food restaurants emphasize speed of service. Operations range from small-scale street vendors with food carts to multi-billion dollar corporations. If table seating is available, ordering does not occur from the table but from a front counter. Diners typically then carry their own food from the counter to a table of their choosing, and afterward dispose of any waste from their trays. Drive-through and take-out service are generally also available. The accurate name for fast food restaurants in the restaurant industry is ‘QSRs’ or quick-service restaurants.

Fast casual. ‘Fast casual’ restaurants are primarily chain restaurants. More of the food is prepared at the restaurant than is the case at fast food chains. Fast casual restaurants usually do not offer full table service, but may offer non-disposable plates and cutlery. The quality of food and prices tend to be higher than those of a conventional fast food restaurant are but may be lower than casual dining.

Casual dining. A casual dining restaurant is a restaurant that serves moderately priced food in a casual atmosphere. Except for buffet-style restaurants, casual dining restaurants typically provide table service. Casual dining comprises a market segment between fast food establishments and fine dining restaurants often have a full bar with separate bar staff, a larger beer menu, and a limited wine menu. They are frequently, but not necessarily, part of a wider chain, particularly in the United States.

Theme Restaurants. Theme restaurants offer a dining experience that evokes special times, places, or events, such as English pubs, restaurants owned by sports celebrities, and re-creations of diners from the 1950's.

Ethnic Restaurants. Ethnic restaurants tie closely to the cultures or food ways from which they originated. They include Mexican, French, German, Thai, and Japanese, Chinese, or Indian restaurants to name a few.

Fine dining. Fine dining restaurants are full service restaurants with specific dedicated meal courses. Décor of such restaurants features higher-quality materials, with an eye towards the "atmosphere" desired by the restaurateur. The wait staff is usually has higher skill levels and often wear attire that is more formal. Fine-dining restaurants are usually small businesses and are generally single-location operations or have just a few locations. Food portions are visually appealing. Fine dining restaurants have certain rules of dining which visitors must follow often including a dress code.

The following establishments are subtypes of fast casual drinking restaurants or casual dining restaurants.

Brasserie or Bistro. A brasserie in the US has evolved from the original French idea to a type of restaurant serving moderately priced hearty meals - comfort foods—in an unpretentious setting. Bistros in the US usually have more refined decor, fewer tables, finer foods and higher prices.

Buffet. Buffet restaurants offer patrons a selection of food at a fixed price. Food service occurs on trays around bars, from which customers with plates serve themselves. The selection can be modest or very extensive, with the more elaborate menus divided into categories such as salad, soup, appetizers, hot entrées, cold entrées, and dessert and fruit. Often the range of cuisine can be eclectic, while other restaurants focus on a specific type, such as home cooking, Chinese, Indian, or Swedish. The role of the waiter staff in this case relegates to removal of finished plates, and sometimes the ordering and refill of drinks.

Push promotion strategy. Marketing managers uses the ‘push promotion strategy’ when they want to push the product-service mix through the service delivery system or channels of distribution. This approach encourages an increase in purchases and consumption by consumers. This method includes point-of-sale displays, cooperative advertising, traditional and electronic collateral material such as brochures.

Pull promotion strategy. This strategy aims at stimulating consumers’ interest and having them pull the product through the channels of distribution. This in turn puts additional pressure on the retail outlets to supply the products and services most in demand by consumers. These methods include sampling, price reductions, coupons, combination offers, and premiums.

Notes

Addison, T. and M. O' Donohue. 2001. Understanding the Customer’s Relationship With a Brand: The Role of Market Segmentation in Building Stronger Brands. Market Research Society Conference, London.

Bardakci, A. and Whitelock, L. 2003. Mass-customization in Marketing: The Consumer Perspective. Journal of Consumer Marketing, 20(5).

Kennedy, R. and Ehrenberg, A. 2000. What’s in a brand? Research, April.

Kotler, Philip and Gary Armstrong. 2012. Principles of Marketing. Pearson, 2014; 2012

Martin, James H. and James M. Daley. 1989. How to develop a customer-driven positioning strategy. Business, 39.

Ries, Al, and Jack Trout. 1981. Positioning: The battle for your mind. New York: McGraw-Hill.