Chapter 6 - Competitive forces in food service. In this chapter students will be able to: Explain the differences between qualitative and quantitative research methods, describe the reasons to use qualitative research, list the nine types of qualitative research designs, distinguish between primary and secondary data, use triangulation in a research design. | Competitive Forces in Food Service Chapter 6 Copyright © 2010 by John Wiley & Sons, Inc. All Rights Reserved COMPETITIVE CONDITIONS IN FOOD SERVICE Managers must pay attention to competition now more than ever because of the following: There are more competitors than ever The “pie” is only so big The market is growing more slowly than in the past Markets are changing COMPETITIVE CONDITIONS Some notes to consider: Slim profit margins at risk Shortage of prime locations left Entry of more domestic competitors Entry of international competitors Continued dominance of chains New business environment—some companies have left food service COMPETITION = MARKETING Companies must try harder than ever before through their marketing efforts Marketing is not just advertising Marketing is “communicating to and giving customers what they want, when they want it, where they want it, at a price they are willing to pay” (Lewis, 2000) PRODUCT LIFE CYCLE RESTAURANT CONCEPT LIFE CYCLE COMPETITIVE . | Competitive Forces in Food Service Chapter 6 Copyright © 2010 by John Wiley & Sons, Inc. All Rights Reserved COMPETITIVE CONDITIONS IN FOOD SERVICE Managers must pay attention to competition now more than ever because of the following: There are more competitors than ever The “pie” is only so big The market is growing more slowly than in the past Markets are changing COMPETITIVE CONDITIONS Some notes to consider: Slim profit margins at risk Shortage of prime locations left Entry of more domestic competitors Entry of international competitors Continued dominance of chains New business environment—some companies have left food service COMPETITION = MARKETING Companies must try harder than ever before through their marketing efforts Marketing is not just advertising Marketing is “communicating to and giving customers what they want, when they want it, where they want it, at a price they are willing to pay” (Lewis, 2000) PRODUCT LIFE CYCLE RESTAURANT CONCEPT LIFE CYCLE COMPETITIVE CONDITIONS The Marketing Mix consists of four main activities (the 4 Ps – sometimes the 6 Ps): Promotion Product Price Place PROMOTION Two major forms of Promotion (paid communications) are: advertising sales promotion Recent data show full-service restaurants (check averages between $15 and $) spent of sales on marketing while QSRs spent 2% In total, the food service industry spends over $5 billion each year on advertising (most is still radio and television) Less is spent on the Internet (only about 10%) PROMOTION Sales promotion consists of paid activities other than advertising and include: Coupons (Applebee’s, Doug’s Fish Fry) Games/Contests (“Roll up the Rim”) Promotional merchandise (QSR - toys, DVD’s) The use of all three are increasing in restaurants ADVERTISING MEDIA PRODUCT The “product’ in hospitality is actually the guest experience This represents some combination of the tangible and intangible aspects of that experience Food and service are large parts of the .
