Promotion Strategies of Restaurants Essay

Though there are sufficient amount of literatures highlighting the promotion strategies, but a few of them has emphasized on the discussion of the promotional aspects of hospitality industry. At the same time, the literature attempted to deal with promotion strategies of hospitality industry is not available enough and is very limited.

Promotion Promotion is one of the four Ps in the marketing strategy, together with Product, Place and Price. Promotion is an important part of hospitality industry, especially when penetrating new markets and making more customers. (Kotler, Armstrong and Wong as cited in Meljoum, 2002).According to Kotler, et al (2006), promotion is defined as activities that communicate the product or service and its merits to target customers and persuade them to buy.

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Further, promotion refers to decisions on how the business will communicate its offering to its customers. In the strategic marketing plan, this is the creation of the promotional campaign. (www.

tourism. bilkent. edu. tr) Promotion is one of the most important elements of modern marketing which includes the action plan that basically intend to inform and persuade the potential customers or trade intermediaries to make a specific purchase or act in a certain manner.Modern marketing calls for more than developing a good product, pricing it attractively, and making it available to target customers (Kotler, et al, 2006). The authors mentioned that companies must also communicate continuously with their present and potential customers that lead every company inevitably cast into the role of communicator and promoter. Promotion consists of those activities that communicate the merits of the product or service and persuade target customers to buy it (Kotler, et al, 2006).

Promotion strategies can be categorized into five classes: personal selling, advertising, sales promotion, public relations (Kotler, et al, 2006), and repositioning competition (Trout and Ries, 2006). Personal Selling Personal selling is the presentation by the firm’s sales force for the purpose of making sales & building customer relationships (Kotler, 2006). Further, personal selling is when an employee of a company personally meets customers for the purpose of building relationships or making sales.

Personal selling is the most effective tool at building buyer preference, conviction, and purchase.It involves personal interaction between two or more people, allowing each to observe the other’s needs and characteristics and make quick adjustments. It let all kinds of relationships spring up, from a matter-of-fact selling relationship to a deep personal friendship. The buyer usually feels a greater need to listen and respond, even if it is a polite “no thank you.

” However, these unique qualities come at a cost. Personal sales are useful in understanding customers’ needs and are especially important in the early stages of the buying process.The direct communication is more persuasive than advertising, but comes at a much higher cost per exposure than advertising. Kotler, et al (2006) argues that personal selling is more detailed and customized than advertising and increases the chance of closing a deal.

Moreover, personal selling, as the most impelling type of selling, provides excellent potential for increasing business. All of the staff should be sales-minded. They must be trained to offer sales suggestions to guests when opportunities are presented. Friendly cooperation from all staff is essential (McIntosh, 2002).In his book, “The Full House,” C. DeWitt Coffman offers numerous suggestions for promoting internal and external selling. Here are a few examples: tent cards, posters, lighted pictures of guest rooms, dining and beverage rooms; ads under dresser top (glass), reminder cards, bathroom mirror stickers, morning paper with sticker, menus, cocktail napkins, bulletin boards, elevator cards, stiff paper folder containing ads.

Advertising Advertising can be defined as paid, public messages designed to describe or praise the business (McIntosh, 2002).Further, he avers that this can be done through the use of posters, newspapers, radio or other media. Furthermore, advertising is any type of non-personal presentation and promotion of goods or services by an identified sponsor (Kotler et al, 2006).

Effective advertising gains the attention of the prospective guest, holds it so that the message can be communicated and makes a lasting, positive impression on the prospect’s mind. Moreover, every lodging business needs some form of advertising to keep revenues at a sufficient level to produce a profit.In addition to word-of-mouth testimonials and endorsements, the most valuable of all ways of increasing business, a well organized advertising program is essential.

Like a mirror, the advertising reflects the hospitality establishments. Thus, it cannot afford to use anything but the very best advertising to create the most favorable image in the customer’s mind. To most prospective guests, advertising will be their first introduction to the business.

The success of this introduction will depend upon the impression and image made.To ensure that this impression will be favorable, all advertising should have the touch of quality – cleanness of form, and a dignified, convincing message. To meet the competition, effective advertising must stand out as superior to anything else in the vicinity.

Print Advertising. The average person is exposed to some 6,000 advertising impressions per day, from signs, posters, newspapers, magazines, radio, TV, and other media. Since there are so many forces trying to persuade him to buy, printed advertising must be done well and be effectively distributed to be worth its cost (McIntosh, 2002).Newspaper Advertising. Newspaper advertising has proven to be particularly effective for cottage resorts, American Plan, and winter sports resorts. It can also be helpful in promoting business for motels, particularly for food and beverage sales.

Motels and resorts which serve transient guests are probably best served by ads in special travel issues. These highlight periods of greatest tourist and vacation sales. Moreover, they direct the reader to specific vacation areas. Thus, an own ad could be supported by a tourist association advertising effort which boosts the area (McIntosh, 2002).

Magazine Advertising. Magazine advertising research indicates that heads of households who read magazines regularly do more pleasure traveling than heads of households regularly exposed to the other major national media. Thus, a ready-market exists which can be reached through magazine advertising. Ads in sportsmen’s magazines should bring excellent results for resorts in good hunting and fishing areas. Other advertising possibilities are magazines for brides to attract honeymooners or travel magazines read by those interested in vacation suggestions (McIntosh, 2002).Radio Advertising.

For transient business, radio is an important advertising medium. Since most motorists do not make advance reservations, spot announcements on the radio can reach prospects and influence their decision. Nearly all cars have radios. If the prospective guests come from large cities, a powerful station covering that city is the best station to use. A large coverage provides a radio signal for a long time as the driver moves rapidly toward his destination.

However, smaller stations can be effective, especially in the north (McIntosh, 2006). Television Advertising.Hospitality managers have learned that television is usually too costly for the individual businessman. However, in a community with a rather large number of hotels and motels, restaurants, group TV advertising sponsored by the Chamber of Commerce or a tourist association would be feasible. This should help attract business to the area, and each place could then get its share (McIntosh, 2002). Outdoor Display Advertising. This medium is probably the most important single promotion method for hotels and restaurants.

Signs must be carefully planned, located, and maintained, to be effective.For resorts and hotels, signs may be less important, but are still needed to direct guests to their destination and induce prospective guests to drop in and make inquiries. Impressions made by signs can definitely encourage (or discourage) patronage. Between 85 and 90 percent of all travelers travel by automobile. The highway travelers’ eye is attracted to a large number of advertising and directional signs.

Because there are so many signs, an outdoor advertising program must be very skillfully planned and carried out to bring good results. The most important single aspect of the sign system is clever, creative design.Signs should be keyed to the architectural design of the building and incorporate a distinctive symbol or logotype. This symbol is effective in creating an impression in the prospect’s mind.

Signs can be interesting and help relieve the monotony of driving. Thus, signs that are well designed and placed are often welcomed by the traveler. Creative, interesting and attractive signs, carefully placed and well maintained, can mean successful sign advertising instead of just some signs. Thus, signs help to increase profits. Hospitality businesses used them to emphasize what they have that their competitors do not (McIntosh, 2002).

Folders and Brochures. Folders and brochures constitute one of the most effective forms of direct advertising. Nothing can so completely tell the story of the place as the folder.

All types of tourist businesses can use folders. For maximum effectiveness, use well-chosen full-color photographs of the principal features of the place. Art work can also be used effectively, especially when building and rooms are not involved. Good folders include a rate sheet, which is printed separately, a reservation form, examples of activities, a map and description of location. Of course, there are variations in presentation.

The map and other components could be printed separately (McIntosh, 2002). Sales Promotion Sales promotion consists of those activities directly involved with the day-to-day business of selling rooms, food, beverage, and other lodging services. It can be thought of as the fundamental processes of training all employees to be sales-minded; the preparation of sales training materials; guest sales literature; direct mail programs; posters; use of give-a-ways and similar efforts to increase sales (McIntosh, 2002). Coupons.

Coupons are certificates that offer buyers savings when they purchase specified products.More than 220 billion coupons are distributed in the United States each year, with a total face value of more than $55 billion. Coupons are most popular in the restaurant industry; however, hotels also use coupons. American Express cardholders received coupons packs featuring mid and upscale restaurants. The prestige of American Express allows these restaurants to use these coupons without detracting from their image.

Besides stimulating sales of mature product, coupons are also effective in promoting early trial of a new product. For example, when a fast-food chain evelops a new product, it often introduces the product in print advertisements featuring a coupon. The coupon provides an incentive and reduces the risk for customers trying the new product (Kotler, et al, 2006). Premiums. Premiums are goods offered either free or at low cost as an incentive to buy a product.

For example, fast-food restaurants often offer a free promotional glass instead of their normal paper cups. Many restaurants such as Hard Rock Cafe have discovered that promotional items such as caps, T-shirts and sweatshirts can be sold at a good profit, thus creating another profit center for the company (Kotler, et al, 2006).Contests and Games. Contests and games give consumers a chance to win something, such as cash or a trip. A contest calls for consumers to submit an entry – a jingle, guess or suggestion – to be judged by a panel (Kotler, et al, 2006). Patronage Rewards.

Patronage rewards are cash or other awards for regular use of a company’s products or services. Hotels and restaurants also create events to show their appreciation to loyal customers. Another type of patronage rewards are specials for repeat customers.Thus, this promotion creates goodwill with their frequent customers and gives them another reason to dine at the restaurant.

The unique promotion has also generated publicity for the restaurant (Kotler, et al, 2006). Packages. Promotions often involve packages of a number of the company’s product. Packages are particularly popular with hotels that have number of products to offer. The Ritz-Calton in Tyson’s Corners developed packages around meals, tastings and demonstrations. Promotions such as these bring the business during a slow period and create a memorable experience for the guest (Kotler, et al, 2006).Public Relations As stated by McIntosh (2002) favorable acceptance of the business by the public is of utmost importance. No business is more concerned with human relations than the public hospitality industry – motels, resorts, hotels and restaurants.

It is essential to have good public relations outside the walls, as well as smooth and harmonious relations between managers and employees. Public relations may be defined as an attitude of management which places first priority on the public interest when making any management decisions. In other words, the manager of the business tries irst to produce satisfactions for his public – guests, employees, owners, neighbors and the whole community. Public relations is a “social conscience” permeating the entire organization. Thus, the hospitality managers must create conditions within the business which are conducive to social well being and then vigorously sell these conditions to the public. Try to tell everyone what a fine place is being operated in their community.

Catching the public’s attention through some publicity-generating events can add to the positive impacts of the paid advertising campaign.Successful publicity approaches include knowing how to conduct successful interviews, how to write informative news releases and having a working relationship with local newspaper, radio and television reporters. For example, the opening of the lodging business, the addition of a major new facility or hosting a group of travel writers could be a newsworthy event for the local newspapers. However creative the hospitality establishments are in generating publicity via special events, the main factor in its success is your overall effort in good public relations.Any public relations activities should relate to the paid advertising and sales promotion strategies to be most effective.

Imaginative and responsible public relations activities will help to establish the reputation with the employees and in the community. The human relations you have with the employees, potential and existing customers, the press, public officials, other hospitality owners and managers and the local community will be directly or indirectly reflected in positive or negative word-of-mouth advertising about the hospitality business. Events.

Hospitality companies can draw attention to a new product or other company activities by arranging special events, such as the Homestead wine and food festival. Events include news conferences, seminars, outings, exhibits, contests and competitions, anniversaries, and sport and cultural sponsorships that will reach the target publics (Kotler, et al, 2006). Speeches. Speeches are another tool for creating product and company publicity.

The creation of a high-quality speech is costly for any company. A considerable amount of staff and executive time must be devoted to the project.It therefore makes sense to obtain maximum PR mileage from each speech.

This is by printing copies of the speech or excerpts for distribution to the press, stockholders, employees and other publics. A speech that is given but not distributed represents a wasted PR opportunity (Kotler, et al, 2006). Product Publicity. Product publicity involves various efforts to publicize specific products.

New products; special events, such as food festivals; redesigned products, such as newly renovated hotel; and products that is popular because current trends, such as nonfat desserts, are all potential candidates for publicity (Kotler, et al, 2006).Repositioning Competition Repositioning the competition is about hanging a “negative perception on the competition as a way to setup a positive perception for the company, product, or service,” (Trout, 2008). Crucial to success of the strategy, the negative must come from “a simple observation the public can verify themselves. ” It can’t make up a negative. It has to have a basis in reality. Altman (2009) supports that sometimes there are no unique positions to carve out, and in such cases, authors Ries and Trout suggest repositioning a competitor by convincing consumers to view the competitor in a different way.

Repositioning the competitor is different from comparative, as comparative advertising seeks to convince the consumer that one brand is simply better than another and consumers are not likely to be receptive to such a tactic. There’s a psychological flaw in the advertiser’s reasoning which the prospect is quick to detect, “If your product is so good, how come it’s not the leader? ”, and a look at comparative ads suggests why most them aren’t effective, as they fail to reposition the competition.Once a company decides what type of specific promotion it wants to use, it must decide what approach should carry it. A company is interested in a number of areas regarding promotion, such as frequency, impact, timing, and reach. Frequency Frequency refers to the average number of times that an average consumer is exposed to the promotion. As pointed out by Kotler (2006), a hotel and restaurant or even fast-food chains usually establishes frequency goals, which can vary for each promotion strategies. For example, a hotel ight want to have the average consumer exposed to the message at least six times during the promotion duration.

This number might seem high, but in a crowded and competitive market repetition is one of the best methods to increase the product’s visibility and to increase accommodation and food and beverages sales. Further, Kotler (2006) frequency is a measure of how many times the average person in the target market is exposed to the message. The more exposure a company desires for its product, the more expensive the promotion.Thus, often only large hospitality establishments can afford to have high-frequency promotion during a campaign. In addition, a decision on the qualitative value of the exposure through a given medium must be made. For products need to be demonstrated, television using sight and sound are more effective. The same message in Newsweek Magazine may be more believable than in National Enquirer.

Impact Impact generally refers to how effective promotion will be through the various media outlets (e. g. , television, Internet, print).A hotel restaurant and fast-food chains must decide based on its product, the best method to maximize consumer interest and awareness. For example, a company promoting a new food product might fare better with television commercials rather than simple print ads because more consumers are likely to see the television commercial. Similarly, a luxury hotel which markets expensive products, might advertise in specialty magazines to reach a high percentage of its potential customers. Before any money is spent on any media, a thorough analysis is done of each one’s strengths and weaknesses in comparison to the cost.Once the analysis is done, the company will make the best decision possible and embark on its promotion (www.

bbamba. info). Timing Another major consideration for any company engaging in an promotion campaign is when to run the promotion.

For example, some companies run ads during the holidays to promote season-specific products. The other major consideration for a company is whether it wants to employ a continuous or pulsing pattern of promotion. Continuous refers to promotion that are run on a scheduled basis for a given time period.The advantage of this tactic is that a promotion can run longer and might provide more exposure over time. For example, a company could run a promotion for a particular product that lasts years with the hope of keeping the product in the minds of customers. Pulsing indicates that promotion will be scheduled in a disproportionate manner within a given time frame. Thus, a company could run thirty-two television commercials over a three-or six-month period to promote the specific product is wants to sell.

The advantage with the pulsing strategy is twofold.The company could spend less money on promotion over a shorter time period but still gain the same recognition because the promotion is more intense (www. bbamba. info). Reach Reach refers to the percentage of customers in the target market who are exposed to the promotion for a given time period. A company might have a goal of reaching at least 80 percent of its target audience during a given time frame. The goal is to be as close to 100 percent as possible, because the more the target audience is exposed to the message, the higher the chance of future sales (www.

bbamba. info).

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