Marketing Plan for Local Business

Marketing Plan for Melina's. A pro bono project I completed following graduation from Applied Marketing @ McGill.

Transcript

1. A Marketing Plan to Reposition Melina's Phyllo Bar David McIver November 20, 2014
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2. Executive Summary Joanna, a brief recap of my main observations and a suggested list of things to do. Melina's strengths: Authenticity, friendly, positive DNA, meeting buyer needs, convenience, and elements to build a backstory for the business. Most of your competitors are off the mark. Em Cafe is doing well enough. Nouveau caters to a different need. Crudessence is off the mark in my opinion because it is expensive and is not a clearcut improvement over Panthėre vert. Melina's weaknesses: First, you are not as visible as you could be. Second: your offering needs to be wider to bring in new faces and familiar faces more often. Problem: Low visibility means less new traffic and narrow offering means less visits by your buyers. Recommended strategy to fix: Develop a wider range of product to offer and build a coordinated and integrated marketing communications campaign. Product: greek sweets to build out your coffee business. Pret a manger for time pressured neighbourhood moms, singles, and students. Price: once your traffic is up you can consider creeping prices up on certain items. Adverts and promo: flyers, connect with bloggers, sandwich board, 5-7 special, free trials at the bus stop. Do the flyers the week after you do trials. Redesign your window and its frame. Make it flash so people know you're there and get a feel for the business. Your window says who you are. Situation Analysis Internal Melina's Phyllo Bar, a local take out bar, services the area around Avenue du Parc and Bernard. It offers Greek specialties including phyllo and light fare such as salad/ sandwich. Melina's, a three year old business, is growing, but a little more slowly than owner/operator Joanna would like. Joanna has expressed interest in strategies to accelerate growth. Melina's Value proposition: High food quality, a good fit with her segment's needs, and convenience. The business is also about an idea and vibe that contributes to a positive customer experience. The idea revolves around an independent, local seller of high quality, convenient offerings. It is about authenticity, savvy, and being a little different. Pricing Strategy: Melina's price point generally aligns with its clientele's sense of value. Indeed, Melina's relies on competition pricing - a strategy where local competitors do not offer equivalents or substitutes at lower prices. Indeed, Melina's prices are lower 2
3. than almost all her competitors in her primary trading area. Implication: once repositioned, Melina's will have room to increase prices on some or many items. Distribution: Melina's is well dependent on local traffic. Implication: visibility, reminder, and relationships are critical for growth. Located in front of bus stop, the Bar is perfectly positioned to be first choice of STM commuters for quick take out. Implication: Conveying convenience and using an activation trigger to turn STM commuters into buyers is critical to this plan. Promotion: Melina's depends primarily on WOM (word of mouth) and pedestrian traffic in her primary trading area. Joanna indicated that a website is at some point of development with an uncertain completion date. A website may be useful once and only once Melina's has effectively addressed the primary challenges to the business. For a website to be useful to Melina's, Joanna would have to devote regular time to produce content to make the site viable. Currently, other priorities take precedence. In the meantime, the website is not a primary promotions instrument because Melina's traffic is almost entirely in the store's primary trading area. The website could become a useful tool once the store has been repositioned and Joanna has the time to devote to the website in order for it to add value to her promotions toolkit. In addition, social media exposure may actually be more effective in providing online visibility. Positive exposure from bloggers is way more credible than a website. Competitors Competitors are local restaurants, which include Nouveau Palais, Comptoir 21, Crudessence, and Em cafe. Of these, only Em is a direct competitor. Crudessence must rebuild the Panthere business after a months long interrupt. Indeed, Crudessence appears only began operations in early November, 2014. It has priced itself well above that of competitors and the business' DNA remains unfocused. Of Melina's direct competitors, only Em and Crudessence cater to those who do not want heavy, high cal meals. Nouveau Palais capitalizes on its historic diner feel and the fact that it is now a primo hipster scene. Other competitors fail to offer a convincing value proposition or have visibility challenges. Nouveau is expensive and not convenient. Crudessence is convenient but conveys much less of a home cooking offering and is quite expensive. The local market, defined as Melinas' primary trading area, is crowded but nowhere near saturated. Many of the competitors are either undifferentiated or fail to convincingly communicate their value proposition. Market summary and customers Customers are neighbourhood singles and families, employees of local businesses, and weekend tourists to Mile-End. Most travel to the Bar on foot or by bike. 3
4. Who is not a customer (apart from Hasidim): • those who are not aware of the Bar • those who do not understand what a phyllo is • those who prefer heavier meals • and those who know about the Bar but have yet to come in for whatever reason. Some potential customers may be intimidated by the small space. Who is a customer: Melina's segment looks for quality, value, convenience, authenticity, and savvy urban lifestyle. Singles, young couples, or young families. Need for authenticity: While Montreal has an an abundance of franchised fast food eateries throughout the city, particularly in the downtown core, neighbourhoods tend to be serviced by independents (where rents are more accessible). Franchises have bland offerings geared to lowest common denominator. Authentic, local independents offer products that are differentiated and convenient, along with a perception of value (being either affordability, quality or both). In addition, customers look for either an experience and/or a specific vibe or feel to the establishment. New frugality: Buyers have tended toward more frugality since 2008, often regardless of their socio-economic position. Frugality benefits well run independents who have a convenient, accessibly priced offering while still delivering on their value proposition. In Mile-End and Outremont, family incomes trend above city average. In addition, the concentration of young professionals, students, and young families is ideal for local independents, such as Melina's. Lifestyle choices and personal values make these buyers predisposed to independents where value (price, quality equation), differentiation, and business vibe combine to authenticity. Convenience: Convenience is often an important factor in the purchase decisions of these buyers when they select prepared or take out meals. They are often time pressured by professional and/or family commitments. This works well for Melina's because the offerings are ready to go in short order. To summarize, Melina's is located in a neighbourhood that aligns very well with its offering because of the demographic profile and the values of the people that live in Melina's primary trading area (say 3-5 blocks in every direction from 5733 Avenue du Parc). SWOT - Analysis of Melina's strengths, weaknesses, opportunities, & threats S Authenticity: Perceived as a business for the people, owned by a local operator, staying true to the traditions of Greek cuisine. Not at all perceived as trying to take advantage of buyers. Implication: the business becomes psychologically associated 4
5. with integrity, and quality because it is real and authentic. This is massive for building the brand. Friendliness and funk: Joanna and crew are friendly, unpretentious, personify urban chic, and engage with guests. The business exudes an urban vibe that resonates with creative types. Implication: most would rather spend their hard earned money with a business that makes them feel welcomed - the foundation of successful retail. Quality: Food quality is high and offerings are fresh. Implication: perceptions of quality are critical for the value buyer and those buyers who like to eat well and healthfully. 2nd Implication: value for the buyer is some relationship between price and quality (or benefits from the purchase - like convenience). The higher the perceived quality of the offering, the more room in the equation there is for higher prices. Marketers refer to this as value pricing. Value pricing is charging to the upper threshold of what the buyer thinks is good value for the offering. More quality, more room for price. Differentiation: Of the neighbourhood offerings, only Melina's does healthful, convenient Greek. Implication: It is not hard to make Melina's stand out. Convenience: A very strong point for Melina's. Very easy to pick up phyllo and salad with little wait time. Implication: The quality convenience elements of the offering solve a problem for many of the buyers who come into the Bar. Healthful food, easily obtained makes life easier for time pressured single mom or student. Reputation: Those who know Melina's speak highly of the establishment. Although Melina's does not have an online presence, reviews in social media are all favourable. Implication: positive WOM means buyers come in to the Bar open to the experience. Aligns very well with market needs: Quality, differentiation, convenience, and business DNA meet the wants of many neighbourhood buyers. The foundation of retail. Right place, right offering, right price. W Narrow offering: Offering focused on phyllo, sandwich, a pizza offering, and salad. Coffee and some baked goods are available. Implication: existing customers may not come in as often because they don't want phyllo a few times in a row. May lose business if a family member, a friend, or partner does not want phyllo even though your regular buyer does. Low visibility: Melina's has invested little in a sustained and coordinated integrated marketing communication (IMC) effort. In addition, the storefront can easily become lost in a cluttered and somewhat chaotic pedestrian environment of Avenue du Parc. Implication: Melina's has a large potential of untapped business right at its door step. 5
6. O Product development: Can build offering for wider appeal to bring in new buyers and have existing buyers come in more often. Increase visibility (market penetration): A rigorous IMC campaign can give visibility. T New entrants: A competitor with resources and a solid value proposition could disrupt the restaurant ecosystem in the neighbourhood. However, being relatively crowded makes the neighbourhood somewhat less attractive to new entrants. Shift in buyer preferences: A shift to out of home dining, or different food styles could disrupt Melina's business. Quantitative SWOT matrix Direction/Strength (where you are) Importance to your growth Total impact on your growth S Authenticity 3 3 9 Friendliness 3 3 9 Quality 3 1 3 Differentiation 2 2 4 Convenience 3 3 9 Reputation 2 2 4 W Narrow offering -3 3 -9 Low visibility -3 3 -9 O Pret a manger 1 3 3 Develop market 1 3 3 T New Entrants -1 1 -1 Buyer prefs -1 2 -2 6
7. This matrix presents strengths, weaknesses, opportunities, and threats on a scale between -3 and 3. Their total impact falls between -9 and 9. The worst thing for you business is a -9, the best things are 9s. Direction/strength is the actual situation of these factors in your business. For example, we gave quality a 3 because you have great quality product. But we gave its importance a 1 because you are already there. Quality is important if you take it out of your product - people would not accept lower quality. But would you do that much more business if you increased your quality? Probably not that much more because buyers are satisfied. The opposite is true with the visibility of your business. There is a lot more you can do and doing will probably grow your business. So visibility is currently having a large negative impact on your growth. Melina's Positioning Melina's current positioning strategy of quality, authentic, convenient offerings at accessible prices works well. The business might position itself slightly more upscale with a wider range of offerings. Growth will come from widening the offering to draw in a broader range of local customers, more frequently. This means a broader offering of baked goods to build up early day and snack business, and a deeper offering by considering lunch/diner items - pret-à-manger - for take away. Problem Statement - why Melina's is not where it could be Two challenges have restrained Melina's growth. First, the business has insufficient street visibility to draw in new business and to remind existing business to come back more frequently. Second, the business' product offering is too narrow to attract new customers and to bring existing customers more frequently. Alternative growth strategies Market penetration: This is about staying with the same offering for the same segments in your market. The main effort of this marketing strategy is more integrated marketing communications (IMC or just simply more adverts and promotions). Pros: less costly, would help some with your visibility issue, and gives a sense of comfort by staying with the familiar. Cons: risk of complacency - "got it right, just have to get the word out." More importantly, it does not deal with the narrow offering issue. Product development: The strategy here focuses on more/new offerings for the same segments in your market. A broader offering seeks to have people come in for different 7
8. reasons at different times. The strategy tries to persuade the snack seeker, the family meal seeker, and the coffee break seeker all the same time. Would also include a serious advert effort to deal with visibility issues. So more more IMC and more offering. Pros: The strategy deals with both limitations of your business by providing a way to persuade new customers to come and to seduce existing customers to come more often. This is what marketers call building brand equity. Cons: The strategy is more complex, costly, and risky than market penetration. It is more work. Diversification: This strategy goes all out with new offerings and new markets. For Melina's that would mean additions to the menu and trying to lure new customers from other neighbourhoods. Pros: If it works, the strategy really could draw quite a bit of traffic. Cons: The strategy is quite complex and costly. Also, you are becoming less of a neighbourhood business. If mishandled, the strategy could give the impression that the business is less authentic. Decision matrix: Which strategy best fixes Melina's challenges? Decision Matrix The decision matrix connects the three potential strategies to your strengths and weaknesses. It basically tells us which strategy would best build on your strengths and would best fix or reduce your limitations. The highest possible score for each box is three, meaning it will help the goal the most. The bottom row says which strategy received the most points overall. Marketing Objective The marketing objective of this marketing plan is to increase Melina's visibility in its primary trading area (to bring in new buyers) and to broaden the Bar's offering to draw existing buyers more frequently and to appeal to a wider range of tastes of buyers in the neighborhood. This will build the Melina's brand in its primary trading area and develop lasting relationships with buyers in the neighbourhood. In the long run, these Market Penetration Product Development Diversification Authenticity 2 3 1 broader offering 1 3 3 Visibility 2 2 2 Total 5 8 6 8
9. relationships will translate into increasing revenues by increasing sales and giving Melina's the room to strategically increase prices. Recommended Strategy and Position The recommended strategy concentrates on product development (new offerings) and using a streetwise Integrated Marketing Communications (IMC) campaign to make sure that everybody in the primary trading area knows that Melina's is there and what Melina's has to offer. The strategy concentrates on buyers looking for convenient, well priced quality offerings from a seller that is authentic and embedded in the community. Joanna —> You're pretty much there! You've the got the right vibe going and the authenticity bit is already there. The trick is to make sure everybody "de-planing" from the 80 knows you're there, that they remember you, and give them variety so that its a no brainer to come in a couple of times a week or more. Product The goal of the product development strategy is to get your existing buyers to come in more/buy more. It is also to draw in people who want something other than phyllo. Part of the strategy is to position Melina's as a stop for high quality, authentic, super easy pret-à-manger. It is also designed to drive coffee sales by offering the baked treats for a coffee/snack on the go. Sweet treats to drive coffee sales. As Mamie Clafouti is not a viable option, Moisson is an acceptable alternative. Another possibility is to work something out with one of the Mediterranean bakeries in Park Ex. Maybe one of the better Greek Park Ex bakeries for a range of awesome baklava? Pret-à-manger. The perfect way to turn the Coke fridge into a revenue generator. You've already started on this project. A reminder: the client group you're seeking here are the young families and the singles in the neighbourhood. So you may consider large and small portions. Perfect for getting people into the Bar as they "de-plane" from the 80 after a hard day's work. Pret-à-manger is the core of the product development strategy. Price Melina's is currently pursuing a strategy of competition pricing. Basically, this means that no competitor is less expensive than Melina's. This strategy works for start ups is competitive markets. You can price your pret-à-manger at higher margins. 9
10. You can price your phyllo a little higher as well - just consider that the price plus tax hits a psychological barrier at $5. (PS: as a regular buyer of phyllo, i know i will regret writing this last sentence! lol) Staying under $5 is important. Distribution No recommended changes to how you deliver product. You may consider delivery (through one of the delivery services like Just Eat) or selling to resellers at a later time once you've worked through some of the projects on product development and IMC. IMC Ok, here's the other big piece in this plan. IMC is a business' total advertising, sales, and promotions efforts. In today's world, that means both bricks and mortar and online. Because Melina's is a neighbourhood business, the goal of any IMC program for Melina's has to be to increase Melina's visibility and emphasize that the business is different. The messages are to be directed to buyers who live and/or work in the primary trading area (the neighbourhood). The messages should convey authenticity, convenience, and the home cooking theme. The tone and format should be funkyfied elegance, like the business. Let's start with the advertising pieces. Advertising: Sandwich board The centrepiece of IMC strategy is a new and very chic sandwich board that will attract pedestrian traffic and people from the 80. Something unique, authentic, and designed will help reflect Melina's brand. Most businesses in the immediate area do nothing that counts as designed IMC, so right off the bat, the sandwich board would draw attention from the type of buyers who would appreciate Melina's offerings. L'Arbre has agreed to provide a quote on the sandwich board. He seemed reasonably interested in the project. They don't do stools. You may also want to contact Pineault Ebenistrie @ 514 663.9189. They did the renos at Depanneur on Bernard. The work looked good. There is another ebenistrie option at 10 Duluth street. they look like they would be reasonably priced. Cost effective and a less demanding option involves having one the many sandwich board outlets in Montreal provide a pre fab or custom kit. Doable for under $250 but wont look as good as the L'Arbre or Pineault option. 10
11. http://www.pinecrestmtl.com/products/sandwich-boards.html Plastic sign for wood sandwich board: 68x46 cm - $20 + tax/shipping from Vista. Advertising: Flyers Generally flyers are a cost effective way to message a primary trading area. One concern here is that so many residents in the trading area cannot buy from Melina's because of religious dietary restrictions. Flyering may work better on cars parked in Park ave. Concentrate on apartment buildings as they will have the singles or young couples that are core to your business. Consider flyering on the side streets but not leaving a flyers at Hasidim homes - they can't become customers and those flyers are an expense. vistaprint.ca is an affordable supplier of printed marketing tools. Postcards look nicer than fold out menu flyers. • Standard 139x107mm - 2500 @ $235 + tax/shipping • Oversized 216x139mm - 2500 @ $350 + tax/shipping Promotion: Melina's window Melina's window is your most important advertising tool. It draws attention, provides information to potential buyers about what they can buy, and says a ton about the business' DNA. Melina's logo would work better if raised to top corner of the window. It must stand out when people look to the window from the sidewalk or bus stop. Paint the white space around the aluminum frame and above the window. Something striking without being tacky. Perhaps bright pink or safety orange? Promotion: Trials Trials of phyllo is an excellent, excellent idea for two reasons that tie into deep consumer behaviour psychology. First, potential buyers meet you in person. They will remember your voice and look way better than an advertising slogan! Also in one bite, the trial removes uncertainty about Melina's offering by giving proof of taste and quality. Second, taste and olfactory are strong stimulus response vehicles. The taste of the phyllo will remain in the buyer's conscious and subconscious minds for quite some time. Tactical suggestions: do this is early evening when people are getting off the bus from work. They're probably hungry. So the trials gives a taste, and create a powerful reminder for next time they get off the bus hungry. 11
12. Consider doing trials the week before flyering. That way the trial primes potential buyers and the flyers are a reminder. If it's possible, do trials at St-Viateur and Fairmount as well so the trial reach to more buyers. The best way to do IMC is to connect all the IMC pieces together so that they build on each other. Promotion: STM special This promotion is to draw after work traffic. Inspired by the 5-a-7 2-1 happy hours of past days. Consider some form of promo that makes it easy for the afterwork crowd to come in because they feel they're getting a deal. It does not have to be a massive deal, maybe just combine salad and baklavah with soup and phyllo for a nice round number. If you decide to go with this, connect the promotion to themes of afterwork and the bus ride ride home. Consider calling it the "5-à-7 STM - Spanakopita Collectif" or something along that line. PR At some point, it would beneficial to have an event for MTL food bloggers or neighbourhood bloggers. Just something to put you on their radars and to deepen your rapport with them. They are by far your best online advertisers because they are perceived as credible. Partnerships Absolutely continue your partnerships with Rialto and POP. If there are ways to build these relationships out with the goal of exposure to heighten your visibility, absolutely invest in those opportunities. Re Rialto: Is it possible to have a regular little stand in the theatre on show nights when their restaurant is closed? Something easy to set up in order to sell phyllo and baklava. The goal here is the same as trials. Getting people who never thought or noticed Melina's to actually put their taste and olfactory senses to work. That way they will remember. The space (servicescape) From my perspective the space works quite well, and constraints impose on a redesign. You may consider removing all but one of the tables and convert to standing counters all along the walls and in front of the window. Think european take-out casse-croute, where buyers eat on the go. Cost effective and permits a good number of people to eat at the same time. Having people in store is always a good thing - folks are always attracted to places that appear busy. You may also consider developing and really highlighting the Melina's cinema theme. Gives the business a story line, ties into the Rialto, and gives people something to 12
13. associate the business with. Consider more cinema artefacts in store to funkify. The actress and cinema themes give the business a backstory - this makes it easier for people to remember. You want to be more than the nice lady who sells the greek pastry. Evaluation Strategic marketing plans need criteria to judge if they worked or not. Naturally if sales increase after the plan is executed, it looks like it worked. But what if the economy started to boom? Was it the plan or the economy that helped, or both? Sales give part of the story, but it is better to look at other changes alongside sales. Here are some aspects of the plan to look at: • Are there more new faces coming in? • Are regulars buying more or coming more often? • How is pret-à-manger doing? • Is there more coffee/baked goods business? 13