Lecture 2:

Sales and Marketing

AHHM2623 CATERING SERVICE AND OPERATION
Learning Outcomes
 Discuss the differences of market segmentation
 Discuss about the 4Ps
 Discuss on The Marketing Cycle
 Determining Prices for Catering Events
Association Market
 The largest segment for catering organization.
 An association is a group of people who share a common interest.
 Participate in local chapter meetings, educational events, charitable works and
regional, national and international conventions.
 Held at least once a year.
Association Market
 Trade association represent people employed in a particular trade.
 Association of people or companies in a particular business.
 Usually is sponsored and paid by member’s employer.
 Example: American Culinary Federation (AFC) – membership fees are paid by the chef’s
employer.
Association Market
 Professional associations represent people who practice a particular professional
activity.
 Membership are sponsored and paid by and individual member.
 Example: American Medical Association (AMA).
 Business Market
 Meeting and Conventions  Anniversaries
 Incentive events  In conjunction with (ICW) or “affiliate” events
(combine 2 events at the same time and at the
 New product introductions (product launch) same place)
 Building openings  Travelling exhibitions (MATTA fair)
 Recognition events  Customer appreciation parties
 Training session and seminars
SMERF Market
 Social, military, education, religious and fraternal – special events by their client.
 A daily event generally occurs spontaneously while special event planned in advanced.
 SMERF events have low budgets.
Social Events
 Weddings  Birthdays
 Wedding anniversaries  Gourmet clubs
 Reunions  Fund-raising events
 Bar
SMERF Market
Military events
 Award functions

Educational events
 Continuing- seminars, symposiums, graduations parties, alumni events, donor
recognition events, fund-raising events and fraternal and sorority events
SMERF Market
Religious Events
 Passover dinners, church fund raisers and etc.

Fraternal
 Brotherhood or a type of social organization (religious, welfare)
 Rotary, Lions, and etc.
 Desire to meet at the same location each months.
Market Classifications
 Low-end
 Midlevel
 High-end
 Marketing Budget
 Total revenue  Number of functions
 Average revenue per functions  Space utilization percentages
 Average revenue per type of function  Popularities of different types of functions
 Average guest count per function  Percentage of repeat business
 Average check (average transaction amount)  Percentage of business that comes from
referrals
 Average contribution margin
Market and Competition Surveys
1. Competitor name and address
2. Amount and type of function space available
3. Guest capacity
4. Major market serviced
5. Franchise or chain afflation, if any
6. Number of catering employees (service level)
7. Average check or similar
8. Main products and service offered (menus, package plans)
9. Daily analysis of any reader boards in the facility lobby or foyer.
10. Styles of ambience (rustic, elegant, trendy, traditional)
The Marketing Cycle
Identify Customer
Needs

Create a Product or
Measure Success Service

Develop Customer
Interest
Identify Customer Needs
- Customer needs are shaped by demographic and social trends
- Trends – demographic increases in two-income families and working mothers
- Satisfy two major customer priorities : convenience and time management
Create a Product or Service
- Identification of customer needs provides an opportunity to create new catering
products and services
- Idea options = customer survey, focus groups, comments forms, local trends
- Research and development of new product and service
Develop Customer Interest
- Customer interest for catering functions is developed through a combination of
advertising and online promotions
- Use of a variety of promotional vehicles
- To advertise specials and promotions
direct-mail campaign, brochures, newsletters
A data bank of Internet e-mail addresses
Posting specials promotion on websites, social media pages (FB, Twitter, Instagram)
Evaluate Success
- By customer responses
- Request from clients who plan business functions on an ongoing basis
- Financial success
Web Marketing Campaign
 Customer can now take a virtual tour
 Check the venue’s blog/website for reviews
 Book destination wedding, social function or business meeting
 Negotiate online, pay online from home or office
Internet Marketing Process

Internet Search Website Reference : Facebook

Website : Wedding Page

Request for Proposal (enter the

information and function needs)
Marketing Mix

4Ps
Product
- Product concept, based on quality, style, safety, functionality and uniqueness
- The catering company can meet a wide variety of consumer needs for entertainment by
arranging to offer the services of qualified musicians, entertainers and deejays as part of their
overall product

Place
- How and where the product will be made available to the customer
- Physical environment and reservation process
- Also include transportation
Promotion
- Communication of information about the business to customers with positive end result
- Advertising and public-relation activities supporting a product or service
- Promotion material during exhibition or any event to promote catering service, displays,
advertising and promotional calendar

Price
- Identifying a price that both reflects the profit-and-cost reality of the business,
acceptable to the customer on a perceived-value basis
- Can be affected by seasonality, availability, volume discounts, pricing from competitors
Options for Determining Prices for Catering
Events
Management Experience
Reasonable price method
- Best guest to decide what customers will pay and what you need to charge to make a profit
- The reasonable price method considers what similar products are available, what people are
already willing to pay for similar items

Highest price method

- Picking the highest price that company believes the item can sell for
- Works off the premise that customers are willing to pay more for an item that has the
perception of quality and excellence
Loss leader price method
- Some products in a specific business are priced such that the company doesn't make a profit on
the sale of that product.
- Not necessarily to make the most profit on any given item, but to generate a profit as a whole
on the entire business activities.
- Used to promote a new product.

Intuitive Price Method

- Picking a price through guessing what price customers will pay for the menu item.
- The item doesn't sell at the original price, the price can then be changed to something else until
customers start to order the item in enough quantities for it to be worth offering the item.
- Based on personal opinions, trial and error
Other Pricing Consideration
Clients generally want good-quality product and services at lowest prices.
Consider what the competition is charging.
Consider the total income from the event.
Caterer should develop website, brochures and other promotional material.
Pricing strategies including build-in provisions for complimentary upgrades (added
value to the client).
Other Pricing Consideration
 The profit margins catered events generally are much greater than those in the typical
restaurant operation.
 If applicable, the director of catering must determine room rentals rates and other
similar charges.
 Deposits, guarantees, cancellation fees, gratuities, tips and refund policies need to be
detailed by DOC and reviewed by senior management.
 Menu options will need to be revised periodically.
Promotion
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