Pasta Restaurant Marketing Plan

Sigmund's Gourmet Pasta

Executive Summary
1.0 Executive Summary Sigmund's Gourmet Pasta will be the leading gourmet pasta restaurant in Eugene, OR with a rapidly developing consumer brand and growing customer base. The signature line o innovative, premium, pasta dishes include pesto with smo!ed salmon, pancetta and peas linguini in an al redo sauce, and resh mussels and clams in a marinara sauce. Sigmund's Gourmet Pasta also serves distinct salads, desserts, and beverages. Sigmund's Gourmet Pasta will reinvent the pasta e"perience or individuals, amilies, and ta!e out customers with discretionary income by selling high #uality, innovative products at a reasonable price, designing taste ul, convenient locations, and providing industry$benchmar! customer service. %n order to grow at a rate consistent with our ob&ectives, Sigmund's is o ering an additional '()),))) in e#uity. E"isting members will be given the irst option to subscribe to the additional e#uity to allow each o them to maintain their percentage o ownership. The portion not subscribed by e"isting members will be available or prospective new investors.

Situation Analysis
2.0 Situation Analysis Sigmund's Gourmet Pasta is close to entering their second year o operation. The restaurant has been well received, and mar!eting is now critical to its continued success and uture pro itability. The store o ers an e"tensive o ering o gourmet pastas. The basic mar!et need is to o er individuals, amilies, and ta!e out customers resh, creative, attractive, pasta dishes, salads and desserts. Sigmund's uses homemade pasta, resh vegetables, and premium meats and cheeses.

2.1 Market Summary Sigmund's Gourmet Pasta possess good in ormation about the mar!et and !nows a great deal about the common attributes o our most pri*ed and loyal customers. Sigmund's Gourmet Pasta will leverage this in ormation to better understand who is served, their speci ic needs, and how Sigmund's can better communicate with them.

arget Markets

Market Analysis Market Analysis 2001 Potential !ustomers "ndividuals #amilies ake out otal 2.1.1 Market $emogra%&ics The pro ile or Sigmund's Gourmet Pasta's customer consists o the ollowing geographic, demographic, and behavior actors+ Geographics Growth 8% 9% 10% 9.27% 12,457 8,974 24,574 46,005 13,454 9,782 27,031 50,267 14,530 10,662 29,734 54,926 15,692 11,622 32,707 60,021 16,947 12,668 35,978 65,593 2002 2003 2004 2005 CAGR 8.00% 9.00% 10.00% 9.27%

Our immediate geographic target is the city o Eugene with a population o ,-),)). . ,( mile geographic area is in need o our services. The total targeted population is estimated at /0,))).

Demographics

1ale and emale. .ges 2($(), this is the segment that ma!es up (-3 o the Eugene mar!et according to the Eugene 4hamber o 4ommerce.

5oung pro essionals who wor! close to the location. 5uppies. 6ave attended college and7or graduate school. .n income over '/),))). Eat out several times a wee!. Tend to patroni*e higher #uality restaurants. .re cogni*ant about their health.

Behavior Factors

En&oy a high #uality meal without the mess o ma!ing it themselves. 8hen ordering, health concerns in regard to oods are ta!en into account. There is value attributed to the appearance or presentation o ood.

2.1.2 Market 'eeds Sigmund's Gourmet Pasta is providing its customers with a wide selection o high$#uality pasta dishes and salads that are uni#ue and pleasing in presentation, o er a wide selection o health conscious choices, and utili*es top$shel ingredients. Sigmund's Gourmet Pasta see!s to ul ill the ollowing bene its that are important to their customers.

Selection. . wide choice o pasta and salad options. Accessibility. The patron can gain access to the restaurant with minimal waits and can choose the option o dine in or ta!e out. Customer service. The patron will be impressed with the level o attention that they receive. Competitive pricing. .ll products7services will be competitively priced relative to comparable high$end pasta7%talian restaurants.

2.1.( Market rends The mar!et trend or restaurants is headed toward a more sophisticated customer. The restaurant patron today relative to yesterday is more sophisticated in a number o di erent ways.

Food quality. The pre erence or high$#uality ingredients is increasing as customers are learning to appreciate the #ualitative di erences. Presentation/appearance. .s presentation o an element o the culinary e"perience becomes more pervasive, patrons are learning to appreciate this aspect o the industry. ealth consciousness. .s .mericans in general are more cogni*ant o their health, evidenced by the increase in individuals e"ercising and health club memberships, patrons are re#uesting more healthy alternatives when they eat out. They recogni*e that an entree can be #uite tasty, and reasonably good or you. Selection. People are demanding a larger selection o oods, they are no longer accepting a limited menu.

The reason or this trend is that within the last couple o years the restaurant o erings have increased, providing customers with new choices. Restaurant patrons no longer need to accept a limited number o options. 8ith more choices, patrons have become more sophisticated. This trend is intuitive as you can observe a more sophisticated restaurant patron in larger city mar!ets such as Seattle, Portland or 9ew 5or! where there are more choices available.

Market #orecast

2.1.) Market Gro*t& %n ,:::, the global pasta mar!et reached '; billion dollars. Pasta sales are estimated to grow by at least ,)3 or the ne"t ew years. This growth can be attributed to several di erent actors. The irst actor is an appreciation or health conscious ood. 8hile not all pasta is <good or you,< particularly the cream based sauces, pasta can be very tasty yet health conscious at the same time. Pasta is seen as a healthy ood because o its high percentage o carbohydrates relative to at. .nother variable that is contributing to mar!et growth is an increase in the number o hours our demographic is wor!ing. Over the last ive years the number o hours spent at wor! o our archetype customer has signi icantly increased. .s the number o wor! hours increases, there is a high correlation o people that eat out at restaurants. This is intuitively e"plained by the act that with a limited number o hours available each day, people have less time to prepare their meals and eating out is one way to ma"imi*e their time.

arget Market Gro*t&

2.2 S+, Analysis The ollowing S8OT analysis captures the !ey strengths and wea!nesses within the company, and describes the opportunities and threats acing Sigmund's Gourmet Pasta.

2.2.1 Strengt&s

Strong relationships with vendors that o er high$#uality ingredients and ast7 re#uent delivery schedules. E"cellent sta who are highly trained and very customer attentive. Great retail space that is bright, hip, clean, and located in an upscale mall, suburban neighborhood, or urban retail district. 6igh customer loyalty among repeat customers. 6igh$#uality ood o erings that e"ceed competitors o erings in #uality, presentation, and price.

2.2.2 +eaknesses

Sigmund's name lac!s brand e#uity. . limited mar!eting budget to develop brand awareness. The struggle to continually appear to be cutting edge.

2.2.( ,%%ortunities

Growing mar!et with a signi icant percentage o the target mar!et still not aware that Sigmund's Gourmet Pasta e"ists. %ncreasing sales opportunities in ta!e out business. The ability to spread overhead over multiple revenue centers. Sigmund's will be able to spread the management overhead costs among the multiple stores, decreasing the i"ed costs per store.

2.2.) &reats

4ompetition rom local restaurants that respond to Sigmund's Gourmet Pasta's superior o erings. Gourmet pasta restaurant chains ound in other mar!ets coming to Eugene. . slump in the economy reducing customer's disposable income spent on eating out.

2.( !om%etition !ational Competition

Pastabilities" o ers consumers their choice o noodles, sauces, and ingredients, allowing the customer to assemble their dish as they wish. =ood #uality is average. PastaFresh" has a limited selection but the dishes are assembled with high$ #uality ingredients. The price point is high, but the ood is #uite good. Pasta #or$s" o ers pasta that is reasonably resh, reasonably innovative and at a lower price point. The company was sold a ew years ago, and conse#uently the direction o management has been stagnant lately and has resulted in e"cessive employee turnover. Per%ect Pasta" has medium$priced pasta dishes that use average ingredients, no creativity, and less than average store atmosphere. Sigmund's is not sure how this company has been able to grow in si*e as their whole product is mediocre at best.

&ocal Competition

'estaurant A" This is an upscale %talian restaurant that has a limited selection o pasta dishes. .lthough the selection is limited and pricey, the dishes are #uite good. 'estaurant B" .n %talian restaurant with a decent pasta selection, however #uality is inconsistent. 'estaurant C" .n upscale restaurant with a large wine selection and good salads. Everything else is mediocre at best and over$priced. Service can o ten be poor.

Gro*t& and S&are Analysis Gro*t& and S&are

!om%etitor Restaurant A Restaurant Restaurant !

Price 16 12 14

Growth Rate 7% 6% 7%

Market Share 15% 11% 13%

Average otal

14.00 42.00

6.50% 19.50%

13.00% 39.00%

!om%etitor .y Gro*t& and S&are

2.) Service ,//ering Sigmund's has created gourmet pastas and salads that are di erentiated and superior to competitors. 4ustomers can taste the #uality and reshness o the product in every bite. The ollowing are characteristics o the product+

,. 2. -. /.

Sigmund's dough or the pasta is made with %talian semolina lour. 4heeses are all imported. >egetables are organic and resh with three shipments a wee!. 1eats are all top$shel varieties, organic when possible.

.t Sigmund's, ood is not a product, the e"perience o dining is a service. Sigmund's prides themselves on providing service that is on par with ine dining. This is accomplished through an e"tensive training program and only hiring e"perienced employees. .t a Glance$$The Protype Sigmund's Store+

?ocation+ an upscale mall, suburban neighborhood, or urban retail district. @esign+ bright, hip, and clean. Si*e+ ,,2))$,,A)) s#uare eet. Employees+ si" to seven ull time. Seating+ -($/(. Types o transactions+ ;)3 dine in, 2)3 ta!e out.

2.0 1eys to Success ?ocation, ?ocation, ?ocation. Sigmund's site selection criteria are critical to success. .rthur Bohnson, ormer >P Real Estate, Starbuc!s, helped us identi y the ollowing site selection criteria+

@aytime and evening populations. Shopping patterns. 4ar counts. 6ousehold income levels.

2.2 !ritical "ssues Sigmund's Gourmet Pasta is still in the speculative stage as a retail restaurant. %ts critical issues are+

4ontinue to ta!e a modest iscal approachC e"pand at a reasonable rate, not or the sa!e o e"pansion in itsel , but because it is economically wise to. 4ontinue to build brand awareness which will drive customers to e"isting stores as well as ease the mar!eting e orts o uture stores.

Marketing Strategy
(.0 Marketing Strategy Sigmund's advertising budget is very limited, so the advertising program is simple. Sigmund's will do direct mail, banner ads, and inserts, with inserts in the Register Guard li!ely to be the most success ul o the campaigns. ?astly, Sigmund's will leverage personal relationships to get an articles o Sigmund's in the Register Guard. Previous riends who have had their restaurant eatured in the Register Guard has seen a dramatic increase o sales immediately a ter the article was published in the RG.

(.1 Mission Sigmund's Gourmet Pasta's mission is to provide the customer the inest pasta meal and dining e"perience. 8e e"ist to attract and maintain customers. 8hen we adhere to this ma"im, everything else will all into place. Our services will e"ceed the e"pectations o our customers.

(.2 Marketing ,.3ectives

,. 1aintain positive, steady, growth each month. 2. Generate at least '/),))) in sales per month. -. E"perience an increase in new customers who are turned into long$term customers. /. Reali*e a growth strategy o one store per year.

(.( #inancial ,.3ectives

,. . double$digit growth rate or each uture year. 2. Reduce the overhead per store through disciplined growth. -. 4ontinue to decrease the variable costs associated with ood production.

(.) arget Marketing The mar!et can be segmented into three target populations+

%ndividuals+ people that dine in by themselves. =amilies+ a group o people, either riends or a group o nuclear relatives dining together. Ta!e out+ people that pre er to eat Sigmund's ood in their home or at a di erent location than the actual restaurant.

The Sigmund's customer are hungry individuals between the ages o 2( and (), ma!ing up (-3 o Eugene DEugene 4hamber o 4ommerceE. .ge is not the most de ined demographic o this customer baseC all age groups en&oy pasta. The most de ined characteristic o the target mar!et is income. Gourmet pasta stores have been very success ul in high rent, mi"ed$use urban areas, such as 9orthwest 2-rd in Portland. These areas have a large day and night population consisting o business people and amilies who have household disposable incomes over '/),))). 4ombining several !ey demographic actors, Sigmund's arrives at a pro ile o the primary customer as ollows+

Sophisticated amilies who live nearby. 5oung pro essionals who wor! close to the location. Shoppers who patroni*e the high rent stores.

(.0 Positioning Sigmund's Gourmet Pasta will position itsel as a reasonably priced, upscale, gourmet pasta restaurant. Eugene consumers who appreciate high$#uality ood will recogni*e the value and uni#ue o erings o Sigmund's Gourmet Pasta. Patrons will be both single as well as amilies, ages 2($(). Sigmund's Gourmet Pasta positioning will leverage their competitive edge+

Product. The product will have the reshest ingredients including homemade pasta, imported cheeses, organic vegetables, and top$shel meats. The product will also be developed to enhance presentation, everything will be aesthetically pleasing. Service. 4ustomer service will be the priority. .ll employees will ensure that the customers are having the most pleasant dining e"perience. .ll employees will go through an e"tensive training program and only e"perienced people will be hired.

Fy o ering a superior product, coupled with superior service, Sigmund's will e"cel relative to the competition.

(.2 Strategy Pyramids The single ob&ective is to position Sigmund's as the premier gourmet pasta restaurant in the Eugene, OR area, commanding a ma&ority o the mar!et share within ive years. The mar!eting strategy will see! to irst create customer awareness regarding their services o ered, develop that customer base, and wor! toward building customer loyalty and re errals. The message that Sigmund's will see! to communicate is that Sigmund's o ers the reshest, most creative, health conscious, reasonably priced, gourmet pasta in Eugene. This message will be communicated through a variety o methods. The irst will be direct mail. The direct mail campaign will be a way to communicate directly with the consumer. Sigmund's will also use banner ads and inserts in the Register Guard. This will be particularly e ective because the Register Guard is a popular local paper that is consulted when people are loo!ing or things to do in Eugene. The last method or communicating Sigmund's message is through a grassroots PR campaign. This campaign will leverage personal relationships with people on sta o the Register Guard to get a couple o articles written about Sigmund's. One will be rom the business point o view, tal!ing about the opening o the restaurant and the people behind the venture. This is li!ely to be run in the business section. The second article will be a ood review. %n spea!ing with many di erent retailers and restauranteurs, signi icant increases o tra ic ollowed articles in the Register Guard. Fecause o this level o e ectiveness and low7*ero cost, Sigmund's will wor! hard to get press in the Register Guard.

(.4 Marketing Mix Sigmund's mar!eting mi" is comprised o these ollowing approaches to pricing, distribution, advertising and promotion, and customer service.

Pricing. Sigmund's pricing scheme is that the product cost is /(3 o the total retail price. Distribution. Sigmund's ood will be distributed through a ta!e out model where customers can call in their order and come to the restaurant to pic! it up, come into the restaurant, place the ta!e out order and wait or it to be completed, or come in and dine at the restaurant. Advertising and Promotion. The most success ul advertising will be banner ads and inserts in the Register Guard as well as a PR campaign o in ormational articles and reviews also within the Register Guard. Customer Service. Obsessive customer attention is the mantra. Sigmund's philosophy is that whatever needs to be done to ma!e the customer happy must occur, even at the e"pense o short$term pro its. %n the long term, this investment will pay o with a iercly loyal customer base who is e"tremely vocal to their riends with re errals.

(.5 Marketing Researc&

@uring the initial phases o the mar!eting plan development, several ocus groups were held to gain insight into a variety o patrons o restaurants. These ocus groups provided use ul insight into the decisions, and decision ma!ing processes, o consumers. .n additional source o mar!et research that is dynamic is a eedbac! mechanism based on a suggestion card system. The suggestion card system has several statements that patrons are as!ed to rate in terms o a given scale. There are also several open ended #uestions that allow the customer to reely o er constructive criticism or praise. Sigmund's will wor! hard to implement reasonable suggestions in order to improve their service o erings as well as show their commitment to the customer that their suggestions are valued. The last source o mar!et research is competitive analysis7appreciation. Sigmund's will continually patroni*e local restaurants or two reasons. The irst is or competitive analysis, providing Sigmund's with timely in ormation regarding other restaurant's service o ering. The second reason is that local business owners, particularly restaurant owners, are o ten part o an in ormal raternal organi*ation where they support each other's business.

Financials, Budgets, and Forecasts

).0 #inancials6 -udgets6 and #orecasts This section will o er a inancial overview o Sigmund's Gourmet Pasta as it relates to the mar!eting activities. Sigmund's will address Frea!$even .nalysis, sales orecasts, e"pense orecasts, and how those lin! to the mar!eting strategy.

).1 -reak7even Analysis The Frea!$even .nalysis indicates that '/),))) will be needed in monthly revenue to reach the brea!$even point.

-reak7even Analysis

-reak7even Analysis -reak7even Analysis

Mont&ly Revenue -reak7even

23,037

Assum%tions8 Average Percent 9aria.le !ost Estimated Mont&ly #ixed !ost ).2 Sales #orecast The irst two months will be used to get the restaurant up and running. Fy month three things will get busier. Sales will gradually increase with pro itability being reached by by the beginning o year two. 45% 22,000

Sales Mont&ly

Sales #orecast Sales #orecast 2001 Sales "ndividuals #amilies otal Sales 103,710 150,304 254,014 262,527 380,474 643,001 327,424 474,528 801,952 2002 2003

$irect !ost o/ Sales "ndividuals #amilies

2001 46,669 67,637

2002 118,137 171,213

2003 147,341 213,538

Su.total $irect !ost o/ Sales ).( Ex%ense #orecast

114,306

289,350

360,879

1ar!eting e"penses are to be budgeted so that they are ramped up or months two through our and then lower and plateau rom month ive to month ,). Restaurants typically have increased business in the all. This generally occurs because during the summer, when the weather is nice and it does not get dar! until late, people tend to eat out less. =rom months ,)$,2, the mar!eting costs will increase again.

Mont&ly Ex%ense -udget

Marketing Ex%ense -udget Marketing Ex%ense -udget 2001 $irect mail -anner ads ,t&er 5,267 11,704 7,022 !!!!!!!!!!!! otal Sales and Marketing Ex%enses Percent o/ Sales 23,993 9.45% 2002 5,605 12,455 7,473 !!!!!!!!!!!! 25,533 3.97% 2003 5,421 12,047 7,228 !!!!!!!!!!!! 24,696 3.08%

Controls
0.0 !ontrols The purpose o Sigmund's Gourmet Pasta's mar!eting plan is to serve as a guide or the organi*ation.

0.1 "m%lementation Milestones The ollowing milestones identi y the !ey mar!eting programs. %t is important to accomplish each one on time, and on budget.

Milestones Milestones

Advertising Marketing %lan com%letion -anner ad cam%aign :1 -anner ad cam%aign :2 otal Advertising -udget PR ,t&er ,t&er otal PR -udget $irect Marketing $irect mail cam%aign :1 "nsert cam%aign :1 $irect mail cam%aign :2 "nsert cam%aign :2 otal $irect Marketing -udget +e. $evelo%ment 'ame me ,t&er otal +e. $evelo%ment -udget ,t&er 'ame me ,t&er otal ,t&er -udget otals 0.2 Marketing ,rgani;ation

Start "ate 1+1+2001 2+1+2001 10+1+2001

#$% "ate 2+1+2001 4+1+2001 1+1+2002

&'%(et 0 3,754 4,900 8,654

Ma$a(er ,e-i$ ,e-i$ ,e-i$

"e)art*e$t "e)art*e$t "e)art*e$t "e)art*e$t

Start "ate

#$% "ate

&'%(et 0 0 0

Ma$a(er

"e)art*e$t

Start "ate 2+1+2001 2+1+2001 10+1+2001 10+1+2001

#$% "ate 4+1+2001 4+1+2001 1+1+2002 1+1+2002

&'%(et 1,689 2,252 2,205 2,940 9,086

Ma$a(er ,e-i$ ,e-i$ ,e-i$ ,e-i$

"e)art*e$t "e)art*e$t "e)art*e$t "e)art*e$t "e)art*e$t

Start "ate

#$% "ate

&'%(et 0 0 0

Ma$a(er

"e)art*e$t

Start "ate

#$% "ate

&'%(et 0 0 0 17,740

Ma$a(er

"e)art*e$t

Gevin ?ewis, the owner, is primarily responsible or mar!eting activities. This is in addition to his other responsibilities, and does depend on some outside resources or graphic design wor!, and creativity.

0.( !ontingency Planning

@i iculties and ris!s+

Problems generating visibility. Overly aggressive and debilitating actions by competitors. .n entry into the Eugene mar!et o an already e"isting, ranchised gourmet pasta restaurant.

8orst case ris!s may include+

@etermining that the business cannot support itsel on an ongoing basis. 6aving to li#uidate e#uipment or intellectual property to cover liabilities.