[pic]

La Fiesta Marketing Plan

Deanna Huneycutt

[pic]

La Fiesta, Marketing Plan

I. EXECUTIVE SUMMARY

La Fiesta is an authentic Mexican restaurant located in the small town of Greenwood, population of just under 9,000 people. Opened and owned by Able Gonzales since 1995, it has become a very popular eatery in the town. As with most restaurants, La Fiesta has peak times around lunch and dinner that are much busier than the rest of the day. This causes scheduling challenges for cooks and wait staff. Another challenged faced, although a somewhat positive one, is the lack of parking space during the peak hours. Also, the bottleneck around customers paying out could be eased with some change in procedures or additional equipment.

The marketing plan was developed based off a SWOT analysis and focuses on continued growth and customer relations. La Fiesta can gain visibility in the community by being more involved with the school district and expanding into social networking. Another focus of the plan is the efficiency of customer service and ease of congestion inside and outside of the restaurant. Better communication between wait staff and customers is also addressed. Since La Fiesta is a restaurant, it is considered a business-to-customer marketer.

II. ENVIRONMENTAL ANALYSIS

Open since 1995, La Fiesta has made a strong presence in the town of Greenwood. It was established after another authentic Mexican restaurant had already been opened and performing well. It seems Greenwood’s booming population is easily supporting both restaurants as demand for Mexican food is high. La Fiesta is in a better location near a busy intersection on the main thoroughfare through town. Targeting those customers that are seeking a sit down restaurant, La Fiesta is popular with families, school-age students, church groups, and working lunch crowds. It is estimated that Americans spend 13.3% of income on food, of which 42% of that is dining out. The median income for Greenwood, Arkansas is $38,827.

A. The Marketing Environment

1. Competitive forces. The competition in the food service business is strong locally and regionally. In Greenwood there are fast food restaurants such as Sonic, McDonald’s, KFC/Taco Bell, Arby’s, Geno’s, Simple Simons and Subway. There are also dine-in restaurants including The Bulldog Diner, Lin’s House, Alice’s Diner, Mazzios and ImAJerk Barbeque. A very tight competitor would be El Palenque which also offers Mexican style food very similar to La Fiesta’s and also has competitive prices. La Fiesta has the better location of the two, but also has more traffic congestion. In the neighboring metropolitan of Fort Smith, many restaurant choices are available. Some of the bigger well-known restaurants such as Olive Garden, Fuji’s, Chili’s, TGIFriday’s, Applebee’s, Western Sizzlin, Furr’s and Red Lobster are available along with several Mexican style restaurants. There are also numerous fast-food chains available. Fort Smith is a short 20 minute drive from Greenwood and is the main shopping area for Greenwood residents aside from Wal-Mart.

2. Economic forces. Economic forces have affected all aspects of business in Greenwood, as well as the whole country. Rising unemployment and gas prices are affecting the disposable income of households. Customers could be choosing to prepare more meals at home as opposed to dining out. Also, a lower priced fast-food restaurant might better fit their budgets during this time period.

3. Political forces. There are no expected political forces that could affect La Fiesta.

4. Legal and regulatory forces. All restaurants are subject to Food Safety Regulations. The purpose of these regulatory agencies is to ensure the food served is safe and free of harmful bacteria. The local Health Department will send out safety inspectors unannounced to make sure food safety guidelines are being followed. Fines can be issued for violations and the restaurant can even be shut down by the regulatory commission. A HACCP (Hazard Analysis Critical Analysis Point) procedure should be clearly defined and followed by all employees.

5. Technological forces. Technological forces that could improve La Fiesta’s business could include a more advanced computer system for ordering supplies and raw materials, tracking employee hours, placing customer orders, and customer payments. Currently, there is only a single cash register and a credit card scanner available. Also, replenishment needs and labor hours are tracked manually. Upgrading to Point of Sale (POS) hardware and software would be a significant improvement in current technology at the restaurant.

6. Sociocultural forces. In today’s society, most families have either a single parent or two parents that both work full-time jobs. This does not allow much time for preparing meals or sitting down as a family to eat a meal. La Fiesta offers affordable food to customers and a family atmosphere where they can meet for a meal together.

B. Target Market

By offering an affordable authentic Mexican cuisine, La Fiesta has successfully provided a diversified flavor to the town of Greenwood. While offering authentic food and fast service, this restaurant provides a place for families, friends, and students to sit down for a meal. Greenwood families make up 80.1% of the population which is higher than the national average. The median age is 30.8 which is younger than the national average.

C. Current Marketing Objectives and Performances

La Fiesta strives to make quality authentic Mexican food for patrons of their restaurant. Competitive prices and fast service keeps customers returning time and again. Friendliness of staff and convenient location allows for the restaurant to operate at full capacity during peak times.

III. SWOT ANALYSIS

A. Strengths

1. La Fiesta is located at a busy intersection in the middle of town and is near the street that leads to the high school and elementary school. This is a great location that receives a lot of traffic through downtown.

2. Service is quick once orders are placed and the chips and salsa are delivered as soon as you are seated. Drink orders are taken promptly and delivered. Wait staff are good to ask if everything is okay and to re-fill drinks or salsa and chips as needed.

3. The staff is very friendly and appears to be happy in their working environment. It is often observed that the waiters joke with patrons and play with children that come in.

4. Hours are 11 am to 9 pm Sunday through Thursday and 11 am to 10 pm on Friday and Saturday. Many school sporting events draw in large crowds for home games on Friday nights. Also, more people are out later on weekends.

5. La Fiesta has become a birthday tradition with some since they come to the table and sing Happy Birthday to patrons in Spanish while letting them wear a sombrero. Also, a free desert is provided to the customer celebrating their birthday.

6. The big screen televisions located throughout the restaurant provides entertainment as if you were at home.

B. Weaknesses

1. The location of the restaurant has limited parking and no room for expansion. It is bordered by two very busy streets on two sides and a creek runs along the other two sides of the restaurant. At peak times, many people park in places that are not actual parking places which makes the lot very congested and somewhat dangerous. There are only 40 marked parking spaces, which includes two handicap spots. Since there is no place to put a drive-thru window, maybe a 10 minute parking spot would be beneficial for those that place orders to go.

2. Tickets are brought to each table and then are taken to the register to pay out. Oftentimes there is a line of several people trying to pay so they can leave. It makes the area around the door very congested for customers as well as staff. An additional register or possibly allowing patrons to pay from the table could cut down on waiting times and congestion.

3. Staffing needs to be more balanced so that during peak times there is ample wait staff but during slow times the number of waiters should be decreased so that they are not just standing around with nothing to do.

4. Joining Facebook or Twitter could improve their visibility to new and existing customers. There are numerous ‘check-ins’ for La Fiesta already on Facebook by customers. Adding a link to ‘like’ them on their website would be simple. The page could show their menu and pricing, hours of operation, and special discounts. It also could be an outlet for them to show their support for the community and schools.

5. The menu offers a wide variety of authentic Mexican style foods including a children’s menu, however the children’s menu is not listed on the website.

6. Some waiters seem to be less fluent in English than others. Spanish is their native language, but some English training might assist in breaking the language barrier that currently exists between waiters and customers.

7. Gift certificates need to be offered.

C. Opportunities

1. Greenwood is steadily growing in population as more and more people are moving in for the excellent school system or to be close to their jobs in neighboring Fort Smith. Greenwood’s population has grown 25.9% from 2000 to 2010.

2. Advancing technology could provide for on-line ordering for customers wanting to carry-out. La Fiesta’s website could be amended to offer on-line orders if the technology in place in the restaurant to receive the order.

D. Threats

1. This particular restaurant has flooded twice since opening. The creek that runs behind and alongside the building has overtaken the area during heavy downpours. This shut down the restaurant and wreaked havoc on the building itself. It took some time for it to be cleaned up and re-opened to the public. The city of Greenwood has taken measures to prevent future occurrences such as putting in a new bridge and keeping the drainage area cleaned out. This could continue to be a threat in flash flood conditions.

2. A worsening economy could affect the number of people visiting the restaurant. As unemployment grows and gas prices rise, disposable income for the average family decreases. If given the option of La Fiesta or a fast food restaurant, some families may begin turning to the less expensive fast food or preparing more meals at home.

E. Matching Strengths to Opportunities/Converting Weaknesses and Threats

1. With an increasing city population, La Fiesta could increase the amount of carry-out orders by implementing an on-line ordering tool. Amending the already existing website to include on-line ordering could help serve more customers without the congestion. Also providing 10 minute parking for those picking up orders would compliment this service.

2. Offering a 10% discount to students could also increase the traffic from that target market. Discounts are already offered for senior citizens.

3. Sponsoring the public schools hospitality rooms for football and basketball games where the coaches and referees eat for free could also be a positive contribution to the community.

4. Expanding parking by leasing part of the dirt parking area across the street and getting a crosswalk put in could relieve some of the parking congestion that is now faced. Some patrons are already parking across the street, so this would only alleviate some of the growing pains of the community.

IV. MARKETING OBJECTIVES

La Fiesta is a restaurant specializing in authentic Mexican cuisine. As the area population grows and new restaurants begin to appear, La Fiesta will need to adjust to environmental changes to continue to be competitive. Increased efficiencies, promotion, and building on a convenient location are all factors that will make this restaurant more profitable. The future of this restaurant is positive as it is established in the community and has loyal customers.

Increasing efficiencies of the restaurant will add to profits and increase customer satisfaction. One way to accomplish this goal is to manage staffing. Knowing that peak hours are from 11am-1pm and 5pm-7pm, increasing the number of waiters and cooks during those times will insure faster service. Also being aware of school activities such as big games on certain nights or even community events will allow for better scheduling of staff. Another way to increase efficiencies would be to improve existing checkout area or use a different method for customer payments. An additional cash register or providing a pay at your table service could speed up customer visits and increase turnaround times all while decreasing congestion around the entrance of the restaurant. Another option would be promoting call-in/take-out orders. Paper menus need more prominent placement near the registers and also business cards should be made available providing the phone number, hours of operation, and website for viewing the full menu. Since a dollar per order is already tacked on for call-in orders, not much would be lost by increasing the number of take-out orders.

Promoting the restaurant would also help achieve marketing objectives. Since Greenwood School is the largest employer in the area, sponsoring school activities through donations or ad purchases would provide more visibility to the community it serves. Even a ‘10% off’ or ‘free cheese dip’ coupon placement in football and basketball programs could be a positive promotional tool. Also managing the restaurant’s website and possibly offering weekly or monthly specials could give La Fiesta an edge over competitors.

Increasing convenience is another way to reach marketing objectives. Since parking is limited and there is no room for expansion in this location, there is little that can be done to ease congestion outside the restaurant. One possibility is to lease the parking area across the street from the restaurant. This could be considered ‘overflow’ parking for those peak times when no parking is available. This property is currently owned by Ace Hardware, so this matter will need to be discussed among business owners to see if this may be a possibility. Also, possibly providing a 10 minute parking spot for pick-up orders could prove to be beneficial as long as customers respect the idea. A sign would need to be prominently displayed stating it is for pick-up orders only.

V. MARKETING STRATEGIES

A. Target Markets

Target Market 1: Families

Example: Many families go to La Fiesta to dine. It is a good place for a family to meet and dine together. Greenwood is a very family oriented community.

Target Market 2: School age students

Example: Many high school students meet at La Fiesta before or after a big game or just to hang out together. Greenwood also has a large population of students.

Target Market 3: Working lunch crowd

Example: Many people employed in town will dine at La Fiesta on their lunch breaks due to the fast service and convenient location.

Target Market 4: Sunday church crowd Example: La Fiesta is one of the first restaurants in town to fill up after Sunday church services each week. The parking lot is so full that people sometime park across the street in the dirt Ace Hardware parking lot just to get to eat there. There is at least eighteen churches in the Greenwood area.

B. Marketing Mix

1. Products. La Fiesta offers a wide selection of authentic Mexican dishes. Appetizers, salads, side orders, a la carte items, combination dinners, special dinners, various soft drinks including virgin daiquiris and margaritas, and desserts are all offered. There is also a special lunch menu offered Monday thru Friday from 11 a.m. to 3 p.m. Vegetarian options and meals for two are also listed in the menu.

2. Price. La Fiesta prices are comparable to that of other authentic Mexican restaurants in Greenwood as well as neighboring Fort Smith, Arkansas. Appetizers range from $2.75 to $7.99, while dinners range from $6.99 up to $17.99 (fajitas for two). The lunch menu offers a large selection from $4.99 to $5.99. Soft drinks are average $1.59 while desserts range from $1.75 to $2.49.

3. Distribution. La Fiesta provides a food service to its customers. Distribution of product happens at the restaurant itself. Customers may decide to dine-in or carry-out product. There is no delivery offered at this point in time.

4. Promotion. A tall customized sign stands by the highway for La Fiesta with the name and phone number provided. A smaller flashing sign sits near one of the entrances. It is used to advertise any specials they may have going on. La Fiesta is already a member of the Chamber of Commerce. Another way that could be utilized for promoting the restaurant would be by sponsoring ads in the football or other sporting event programs. Even a coupon for a free cheese dip or something similar could be included in the programs. The school system is by far the largest employer in the city and great exposure could be gained by advertising via the school system.

VI. FINANCIALS

1. Sales Forecast – La Fiesta first opened in 1995 and Able Gonzales has been managing the restaurant ever since. It is one of several La Fiesta restaurants in the region. Therefore, time series analysis can be used for forecasting. There is a history that can be analyzed not just for this particular restaurant, but for all restaurants in this chain. Past sales should be a good reference for forecasting future sales. Trend analysis, cycle analysis, seasonal analysis, and random factor analysis are all tools that could assist in forecasting sales.

2. Market Potential – La Fiesta has 22 booths for four people each and six tables for eight people each. Total, 136 seats are available in the restaurant. At full capacity just during peak times of the day with an average of 30 minute visits, over 2000 meals could be served per day.

3. Market Share – La Fiesta has over 60% of the market share for sit down restaurants in Greenwood. The next higher market share holders are El Palenque and Lin’s House.

4. Competitive Structure – Most restaurants are considered pure competition structures since there are little or no barriers for entry into the market, the competitors are unlimited, and products are mostly homogeneous. However, when looking at the geography of Greenwood and the product offered, an oligopoly may better fit La Fiesta’s competitive structure. It is only one of two authentic Mexican restaurants in town. Some barriers do exist for entry into this market considering the population of the town and the fact that two similar restaurants already exist. The product provided at both Mexican restaurants are very similar as well as the price.

5. Fixed and Variable Cost – Fixed costs for La Fiesta include the mortgage or lease on the land and building, insurance, personal property taxes, and insurance costs. Estimated fixed costs average $5,000 per month. Variable costs include labor, raw material (food), and utilities. Variable costs average 50% of selling price.

6. Contribution per Unit – La Fiesta’s contribution per unit is $5. An average meal will cost approximately $10 and variable cost per unit is averaging $5 per unit.

7. Break Even – The break even point for La Fiesta is approximately 1,000 meals per month. At an average of 4,000 meals served per month, the $10,000 break even point should be easily attainable.

8. Cash Flow Requirements – Cash flow for La Fiesta is positive. The cash flow should allow for improvements suggested such as ESL classes and an additional cash register or POS software and hardware. As improvements are implemented, the cash flow should continue on an upward trend.

9. Expected ROI – With an estimated income of $480,000 and a total of fixed and variable costs of $300,000, expected return on investment is 60%. This is relatively high, but considering the relatively low costs of many raw materials such as beans, rice and salsa, it is not unrealistic to have a 60% ROI.

VII. MARKETING IMPLEMENTATION

A. Marketing Organization

The marketing organization itself will not change much. La Fiesta is a franchise where most decisions are made at a higher level as far as menu, pricing, and hours are concerned. However, the restaurant manager will be the main decision maker at the restaurant level.

B. Activities, Responsibility, and Timetables for Completion

All implementation activities are to begin on June 1 of this year. The responsibility will lie with the restaurant manager/owner Able Gonzales.

• On June 1, owner creates a schedule for wait staff and cooks to maximize efficiencies of employees concentrating on peak hours and special events. Post the schedule weekly and revise as necessary.

• By June 1, owner contacts website design team to update menu and pricing, also including children’s menu.

• By June 15, owner appoints an assistant manager and assigns task of creating and maintaining a Facebook page for the restaurant. Also add a Facebook link on the La Fiesta website.

• By June 15, owner turns one parking space up front to a 10 minute parking space for pick-up orders.

• By June 15, owner contacts owner of Ace Hardware to discuss using their dirt lot across the street for overflow parking.

• By June 30, owner attains pricing information for an additional cash register as well as computerized POS (point of sale) software and computers. Have one or the other installed by September 1. Do a time study before and after changes have been made to determine if wait time decreases for customers.

• By August, owner contacts the school, if the school has not contacted them first, to place an ad and/or coupon for the restaurant in the football programs.

• By mid-August, owner contacts the Booster Club and offer to sponsor the hospitality room for one of the home football games.

• By September 15, owner requests the website design team to add weekly specials to the website. Also has assistant manager post the same specials on the Facebook page.

• By August 1, owner will have an ESL (English as a second language) training course set up for employees at the restaurant.

• By December 1, owner will make gift cards available. These cards will be available in any amount and re-loadable for those wishing to re-use the card.

VIII. EVALUATION AND CONTROL

A. Performance Standards and Financial Controls

The following performance standards and financial controls are suggested:

• Track the number of coupons used from the school’s athletic programs to see if this is a practice that should be continued for the subsequent academic terms.

• Analyze time studies for customers paying to see if the additional equipment or software decreases the time it takes for patrons to pay their bill and decreases the congestion around the entrance.

• Track the number of fans on the Facebook page to see how many can be gained in the first year. Take any criticisms into account and address them individually.

• Require all Spanish speaking employees to attend ESL classes and provide certificates of completion.

• Determine if all the implemented improvements are making a difference by measuring the cash flow as compared to the previous year.

B. Monitoring Procedures

For the marketing plan to be successful, both customers and employees must be satisfied with the results. The monitoring procedures could include the following:

• Provide a customer satisfaction survey both in the restaurant and on the website. Use these surveys to adapt new procedures as recommended by customers.

• Hold weekly meetings with entire staff to get their ideas on improvements or changes that need to be made in the workplace. Use this time to address safety issues, HACCP policies, staffing conflicts, and customer service improvements.

Works Cited

Greenwood Arkansas, A Great Place to Live, Work and Shop. Greenwood Chamber of Commerce. Web. 12 Apr. 2011. .

"Greenwood Arkansas Churches." Web. 1 May 2011. .

"Greenwood, AR ZIP Codes, Demographics, Job Listings, Schools, Income Stats & More." MuniNetGuide - Your Hub for Municipal Related Research. Web. 12 Apr. 2011. .

Holland, Laurence. "How Americans Make And Spend Their Money - Forbes.com." Information for the World's Business Leaders - Forbes.com. 19 July 2006. Web. 01 May 2011. .

Improving Profits One Table at a Time." Restaurant.com - Improving Profits One Table at a Time. Web. 01 May 2011. .

"La Fiesta - Greenwood." Urbanspoon. Web. 12 Apr. 2011. .

Mealey, Lorri. "Food Safety Regulations." Opening a Restaurant. Web. 14 Apr. 2011. .

The Best Authentic Mexican Food - La Fiesta Mexican Restaurant. Web. 12 Apr. 2011. .

Western Arkansas Planning and Development District. Web. 12 Apr. 2011. .