Marketing Simulation #1: Local Restaurant

This being my first article here, I'm going to start talking about what marketing is and why it is so important for your business.

Marketing begins before you've even made the product because you should not create a product and then try to find the right people to buy it, you need to find the right people with a specific need or desire and then create a product for them to satisfy that need or desire. Marketing is not just about the promotion of the product as many people think it is but it also includes the product, the price and its place in the market( the 4 P's of the marketing mix: Product, Price, Place, Promotion). You have to sell the right product, at the right price, in the right place and promote it to the right people to be successful.

Many small business owners don't understand the value of marketing and consider it an unnecessary cost. However, they should look at it as an investment. The more you invest in good marketing campaigns the more customers you will get. You just have to make sure you're not doing it the wrong way and make it a bad investment. This why I'm starting to write on this blog to guide you through making some good decisions about marketing you business. I'm going to write about a different business every time.

Here are some of my tips on marketing a local restaurant:

1. Location, location, location
First of all choose a very good location, one with a lot of people traffic around it, an intersection for example. Some of the people that pass by are bound to stop and eat at your restaurant.The more traffic the more customers you will get. The more people pass by that location the more expensive the rent will be but you should not worry about this. The number of customers you will get should make up for the rent. So if you have to choose between cheap rent and few customers and expensive rent and lots of customers, the choice is easy, the latter one. Of course watch out not to get tricked and pay a higher rent than the place is worth. Compare it with other places in the town.

2. Stay visible
Make sure your restaurant can be viewed from as many directions as possible, from as far away as possible and in any weather conditions or moment of the day. Don't hide it. The more people see it the more customers you will have. Put signs around your area, where they can't see the restaurant, to point people to it.

3. Great service
Make sure that all your customers are treated a little better than they expect to be in your restaurant so they will want to come back as often as possible. Don't keep them waiting long for their order or for a waiter to come by their table and take their order. Make sure your restaurant doesn't have all the tables occupied for most of the day. You may say "but that's a good thing", well not really because that also means there are a lot of potential customers that can't get a table throughout the day and next time they might just go to the competition instead of checking out if you have a free table or not. Have as many available tables as you can afford so that almost always a person should find a free table.

4 Food differentiation
You can't serve the exact same food as your competition, you must give them an incentive to come to you instead but don't differentiate just for the sake of differentiation. You must serve what the people in your local community wants to eat the most so keep 2-3 types of food that are ordered the most and in rest bring something that is not served by the competition. Replace the least ordered type of food with a new one every month to get people to keep visiting your restaurant and to tell their friends about your new food type.

5. Offer meal deals
Make meal deals to sell more food for a single price. Like you'd get from McDonald's a burger, fries and coke and pay for them a single price rather than separately, but make that price slightly lower than the sum of the each taken separately. This gives incentive to buy that "deal" and selling more food/customer means getting more money/customer.

6. Give discounts
Give bill discounts for people that come to eat in groups of at least 4 or so. This way you'll get more customers/table.

7. Spread fliers
Hire some students to spread fliers in other parts of the the town. It's a good way to get new customers especially if you offer an incentive with it.

8 Send mail
You can send your menu with a coupon in people's mail and invite them to your restaurant. Give directions to it.

9. Contracts with local businesses
You can make exclusivity contracts to deliver food to local businesses in their lunch break and offer discounts on volume.

10. Build a website
People should see here your location, phone number, e-mail address, hours of operation, menu items and they should also be able to make reservations. You can also come up with a series of new marketing tactics on the website, like making a contest for those that order online and winning free meals, offering coupons for those that register to your newsletter and so on.

Remember there are 3 ways to increase your sales but if you do all 3 together your sales will grow exponentially:
a) increasing your new customers number
b) increasing the quantity of food that is ordered/customer at one time
c) increasing the number of times the customers come back per month

Example: If you manage to double each one then your sales volume will be 2*2*2=8 times bigger.