RUNNING HEAD: Menu of Changes at Applebee’s

Menu of Changes at Applebee’s

Marketing Management

Situational Analysis
While their menu changes from region to region to accommodate the tastes of people in different parts of the country, it is still a mostly "American" menu with large portions. Usually the menu consists of such items as spinach and artichoke dip, fried chicken, different types of steaks, salads, as well as hamburgers, French fries, ice cream and apple pie. These are different types of foods from those offered by Chili's, and they promote more of a small town family feeling as compared to Chili's party mood.
Atmosphere is another characteristic that shows how Applebee's is a small town restaurant and Chili's is a party restaurant. For example, it can be seen that Applebee's strives to be a hometown restaurant bar and grill. Applebee's likes to call itself a "neighborhood" place to go. In order to enhance the small town neighborhood image, Applebee's uses light pinewoods for trim for the tables, bench seats, and chairs. The booths are roomy to accommodate lots of people. Free balloons are offered to kids in the restaurant as well, further promoting the neighborhood feel. In general it can be said that Applebee's atmosphere is that of a small town, neighborhood, and family restaurant.

External Environmental Analysis (outside the organization)
Economic
According to restaurant.org, restaurant-industry sales are forecast to advance 3.9 percent in 2010 and equal 4 percent of the U.S. gross domestic product. This shows that there is a growing trend in the restaurant industry. As mentioned earlier, we will also be aiding the local economic situation by creating more local jobs and by bringing more industry into the local area.
Social
According to Jill McFarland, senior manager of digital and social media at Applebee’s, “One way we measure our social investment is monitoring and flagging social conversions. They can monitor in real time. For example, we might discover a Twitter user asking her followers where she should eat dinner. The customers who frequently visits Applebee’s restaurant have a pre-set expectation of what their dining experience will be. Applebee’s plans are to continue to meet and exceed that expectation. Applebee’s restaurant will have the same look and feel as any other Applebee’s and continue to offer that “America’s Favorite Neighbor” atmosphere and reinforce the concept's inviting atmosphere.
Political
Applebee’s has established good corporate relationships with majority of other organizations and outside of the United State internationally. The company mainly follows the rules and regulations of United States political parties. Applebee’s Corporation’s business practices get influenced by the political environments of the host and the home countries where it carry outs its business.

Natural
Applebee’s carry a variety of natural/organic and recycling products, they copartner with weight watcher to make sure that take place in their restaurant.
Internal Environmental Analysis
Applebee’s business model have been known for the dedicated commitment to cost effectiveness and centering on their customer’s needs and desires, while maintaining an internal culture of creativity, community, and teamwork. According to this case analysis, it have shown that Applebee’s belief systems is that its company have a long-term thinking that is owed to not just the shareholders but also to the employees, families, and the communities that they serve.
Market Analysis-Description of the market
Applebee's International develops, franchises, and operates casual dining restaurants in the United States and internationally. It offers beverages, sweet desserts, burgers and sandwiches, seafood, chicken and pork items, beef, appetizers, and salads. The company was founded in 1980 and is based in Kansas City, Missouri. It has locations in the United States. As of November 29, 2007, Applebee's International, Inc. operates as a subsidiary of Dine Equity, Inc.
Primary customers
Applebee’s first started as a meeting place were friends could come out for drinks and then on to their destination. It has become a well-respected family restaurant welcoming all age groups. The Applebee's menu is much more complex and diversified. The company consistently added specials and new items to their menus also activities for children. Some items have become real favorites.

Evaluation of Marketing Strategies
Applebee's has historically concentrated its marketing and advertising efforts primarily on food-specific promotions, as well as on Weight Watchers and other Applebee's branded messaging. Their marketing and advertising includes national, regional and local expenditures, utilizing primarily television, radio, direct mail and print media, as well as alternative channels such as the Internet, social media, digital, product placements and the use of third-party retailers to market our gift cards.
Product
The menu features a broad selection of signature dishes and traditional entrees, as well as appetizers, salads, sandwiches, specialty drinks and desserts. All Applebee's restaurants offer beer, wine, liquor and premium specialty drinks. Applebee's updates its menu offerings regularly to better serve our customers and give them new reasons to return to their restaurants. Since 2007, more than 90% of Applebee's menu now consists of either new offerings or improved offerings with high quality ingredients. Their signature “2 for $20” menu, first introduced in 2009, and the “2 for $24” trade-up option continue to resonate with their guests, and have been imitated by many of Applebee’s competitors. Their "Sizzling Entrees" menu, introduced in 2010, has also generated strong guest appeal. The innovative “Unbelievably Great Tasting & under 550 Calories” menu provides their guests with great tasting, generous portions that support their health and nutritional goals. Each of these platforms is refreshed regularly throughout the year with new menu choices to give guests reasons to come to Applebee's every day. In 2009, Applebee's entered into a non-exclusive endorsement agreement with Weight Watchers International. "Weight Watchers" to offer Weight Watchers branded menu items to our guests. Under the agreement, Applebee's and participating franchisees pay Weight Watchers a royalty equal to 2.5% of the proceeds from the sale of Weight Watchers-endorsed items on the Applebee's menu. The agreement has been extended through at least November 2014.
Price
According to Applebee’s a typical guest check will range from $9.50-$10.00. Appetizers range from as low as $2.00 during Happy Hour to approximately $7.00, entrees at Applebee’s range from $6.00 to around $18.00. We feel that these prices will be extremely competitive with those offered by other local restaurants.
Distribution
Applebee’s have maintaining high food quality, system-wide consistency and availability is the central focus of our supply chain program, which includes the franchisee-owned purchasing cooperative established in 2009. They have established quality specifications for products used in the restaurants, and also maintain a list of approved suppliers and distributors from which the company and their franchisees must select. Applebee’s periodically review the quality of the products served in our domestic restaurants in an effort to ensure compliance with these standards. Due to cultural and regulatory differences, we may have different requirements for restaurants opened outside of the United States.
Promotion
Applebee’s have devised many different ways to advertise their new Applebee’s location. They include being included in all the local hotel guides and yellow page advertising, due to the fact that they offer carry-out service. They are also planning on getting their restaurant on the state highway signs that offer food at local exits. Other promotional ideas that they have coming up with include: sponsoring local sports, offering Happy Hour specials, and being extremely active holiday events. During any grand opening, they always make sure that everyone in the area aware of the new store through fliers, radio promotion, and nationally through television advertising. Recently Applebee’s encourage guests to taste around its new summer menu, Applebee’s launched a new “Take Two” promotion that allows guests to sample two dishes for one price, starting at $10.99.
Evaluation of the other Functional Areas
Finance
According to Applebee’s financial report by the completion of the final three Applebee’s refranchising transactions in late 2012, DineEquity has successfully transitioned to a 99% franchised system. Over the course of the last five years, they have also completed several major objectives for the business, beginning with substantially lowering general and administrative (G&A) expenses; reducing their total debt by over $1 billion since the acquisition, and re-pricing their senior secured credit facility. They have reengineered the Applebee’s menu for profitability. Furthermore they have also completed a sale-lease back agreement for181 Company-owned properties and improved performance at the Company-owned restaurants. Applebee’s have announced a capital allocation strategy in February 2013 that will create additional value for their shareholders. They have re-priced their senior secured credit facility, lowering the effective interest rate from 4.25% to 3.75% in keeping with their objective to lower interest expense on borrowings. At the same time, they are modifying debt covenants to reduce limitations on DineEquity’s capital allocation options, providing the Company with added flexibility. As of December 31, 2012, the outstanding principal balance of the Company’s senior secured credit facility was reduced from $844 million as of December 31, 2010 to $472 million.

Human Resources
According to Applebee’s data December 31, 2012, they had approximately 2,450 employees, of whom approximately 500 were full-time, non-restaurant, corporate personnel. Applebee’s employees are not presently represented by any collective bargaining agreements and the company has never experienced a work stoppage. Applebee’s believe their relations with employees are good.
Technology
Technology plays significant role in all businesses where the competitions are moving at a fast paste. Technological advancement is very important for Applebee’s Company due to their competitors marketing strategies.
SWAT Analysis
Strengths
* Strong brand portfolio * Strong financial performance of business segments * Diversified operations * Research and Development
The companies have developed franchise and operate restaurants in the bar and grill segment of the casual dining category of the restaurant industry under the name "Applebee's Neighborhood Grill & Bar." With 2,034 system-wide restaurants as of December 31, 2012, Applebee's is the largest casual dining concept in the world, in terms of number of restaurants and market share As of December 31, 2012, 68 franchise groups operated 2,011 of these restaurants and 23 restaurants were company-operated. The restaurants were located in 49 states, one United States territory and 15 countries outside of the United States. Each Applebee's restaurant is designed as an attractive, friendly, neighborhood establishment featuring high quality, moderately-priced food, alcoholic and non-alcoholic beverage items, table service and a comfortable atmosphere. Applebee’s restaurants appeal to a wide range of customers including young adults, senior citizens and families with children.
Weaknesses
* Low inventory turnover * Ratings downgraded * Manufacturing plants in the US dependent on economic environment
According to Applebee’s, their business is dependent to a significant extent on national, regional and local economic conditions, and, to a lesser extent, on global economic conditions, particularly those conditions affecting the demographics of the guests that frequently patronize Applebee's restaurants. If the customers’ disposable income available for discretionary spending is reduced; because of circumstances such as job losses, credit constraints, higher housing costs, increased tax rates, energy costs, interest rates or other costs or if the perceived wealth of customers decreases; because of circumstances such as lower residential real estate values, increased foreclosure rates, increased tax rates or other economic disruptions, the company could experience lower sales and customer traffic as potential customers choose lower-cost alternatives such; as quick-service restaurants or fast casual dining or choose alternatives to dining out.
Opportunities
* New product launches * Changing consumer habits * Further international expansion * Growth of Emerging Markets
Applebee’s, the largest casual dining chain in the world, currently has outstanding career opportunities for restaurant managers, support center/corporate positions and talented hourly team members. The companies have also teamed up with weight watcher to help their customer changing their eating habits. The companies continue to prosper and grow in a highly competitive marketplace by attracting energetic team members who know how to serve up the Applebee’s experience. Applebee's restaurant franchises offer a friendly, welcoming, neighborhood environment for both staff and guests that makes everyone enjoy their Applebee's experience.
Threats
* Private label growth * Increasing competition and industry consolidation * FDA regulations * Losing business to other suppliers
According to Applebee’s many factors, in addition to their operating results, may have an impact on the trading volatility and price of their common stock. These factors include general economic and market conditions, publicity regarding us, their competitors, or the restaurant industry generally, changes in financial estimates by securities analysts, changes in financial or tax reporting and accounting principles or practices, trading activity in their common stock, and the impact of their capital allocation initiatives, including any future stock repurchase programs or dividend declarations. A number of these factors are outside of their control, and any failure to meet market expectations whether for sales growth rates, earnings per share or other metrics could cause the company share price to decline.
State the Main Problems
The main problems stated in the case are that Applebee's has seen signs of a turnaround lately; they believe that they would be benefiting from revamped marketing and the remodeling of restaurants. The company also stated that their restaurant needs some de-clutter. Based on the article, other problems that arrives in the company is that they do not treat their employees well, that would cause the company to lose a lot of revenue due to this case, because the employees would start developing low energy towards their customers.
Evaluation of Strategic Alternative
One of the strategies that Applebee’s have implemented is franchising to gain royalties and revenues. Another strategy Applebee’s is doing is renovating some of their restaurant.
Recommendation of the better Alternative
The recommendation for this case would be that Applebee’s should find ways to cater to all stake holders not just customers.
Implementation Techniques * How
The owners of Applebee’s and their chains should conduct meetings, and also have some type of training on how to treat their employees, and also employees should be able to contact someone in regard to mis-treatments and other issues that may arise, this should happen in each restaurant that Applebee’s own/franchises.
When
Due this situation within the company they would need to start implementing these changing as soon as October 2013. * Where
These changes should be conducted in each Applebee’s restaurant even their franchise locations, here in the United of States and Internationally. * Why
Because it will help the company increase revenue, if employees are happy they will treat customers well, that will enhance their experience and encourage and make Applebee’s a favorite place to dine.

Control Procedures
The Company will need to follow up on training that teaches managers how to treat their employees. Get feedback from employees that will measure the effectiveness of treatment from their employers. Use this measure to re-valuate and re-train managers. Employees should also take training classes that teach them how to cater to the customer and in like manner, a simple survey should be placed on their receipt that give feedback on the service they received; after which, corrective measures should be taken to reinforce good customer service.