Effective marketing strategies are essential to having a strong customer base which promotes sales and profits. Marketing strategies such as word of mouth and print media are useful in attracting customers. However, as in the Irie Caribbean Restaurant and Caterers, the strategies are not effective enough considering that the restaurant has a lower customer base, and declining sales. Instagram is an effective solution in reaching more potential customers essential in widening the customer base which increases revenue. Instagram marketing reaches a wider market increasing potential customers.
Key case facts
Irie Caribbean Restaurant and Caterers enjoys various strengths. The restaurant has a rich management background with experienced founders. The second strength is lower employee turnover which is associated with efficiency. The restaurant’s weaknesses include poor layout, and weak marketing. The opportunities include high demand for the Caribbean cuisine, and good location. High competition is s threat to the restaurant. The problem of the restaurant is based on its processes which limits it from generating greater value. From the SWOT analysis, the primary problem is poor marketing whose symptoms are clear in small customer base and declining revenues.
Symptoms of the key problem
The restaurant was not developing the financial viability level expected by the owners. Rather than increasing the sales were decreasing. Despite the fact that Canada was experiencing a strong economy, the restaurant was facing a tight working capital due to declined sales. The annual sales reduced by 23% (Jackson, n.d). The net operating income reduced by 43%.
Weak customer base
Although the restaurant had a loyal client base, shown by the higher repeat business, the faces were the same. The limited number of customers is seen in the low customer count during lunch time. While the restaurant was selling a good product, it still experienced a small number of customers. The decreasing sales suggest that customer visits are minimal.
Lower demand for catering services
The catering revenue in the restaurant was achieved at a lower average revenue per function suggesting that the demand for the service was low. According to a survey in the restaurant, 96% of the respondents were willing ti use the catering service of the restaurant while 92% were unaware of the existence of the service (Canadian Restaurant & Foodservice Association, 2011). This explains the low demand for the service.
The primary problem
Although the layout is a problem for the restaurant that limits customer visits, poor marketing strategy is the primary problem. Having a good product is not enough to increase customer base. The direct competitors offer good products too and therefore more is demanded to attract customers. Although word of mouth advertising is effective it is limited in terms of how many potential customers get the information. The restaurant relied on word of mouth advertising and print media to reach its target. Print media did not advertise catering service explaining why many people are unaware of this aspect. Although the two marketing strategies had brought in customers, the effect was not as expected. Declining sales, a small number of customers, and low demand for catering services confirm that the adopted marketing strategy is ineffective (Jackson, n.d). The restaurant has to address the marketing problem in urgency as it has direct impacts on its profitability, employee motivation, direction of the business, and it is a source of competitive advantage.
Use of Instagram
The advancing technology has brought in many marketing opportunities that help in reaching a wider audience. Instagram is one platform that is useful in marketing. Visual content has a high demand in the online world. Drool-inducing photos are essential for attracting hungry eyes. Irie Caribbean Restaurant and Caterers should consider taking top-notch photos of their products including the ingredients used in preparing the Caribbean cuisine and share it on Instagram. The important thing is to share high quality photos and this will not only reach many potential customers considering the amount of time many people are spending online but also attract them into buying the product. Many businesses utilizing the Instagram platform have expressed their satisfaction with the kind of results they are getting. Research also indicates that this in one of the most effective marketing strategies especially in hospitality industry.
Setting up Google+ account
By setting up Google+ account, Irie Caribbean Restaurant and Caterers will have made it easy for customers and potential customers to access their information. When a customer visits Google and searches for a business, Google’s Knowledge Graph provides details of the business in the sidebar provided that the business has an account with Google. Customers who hear of the restaurant from word of mouth and would like to know more about the business, they are able to do so by just searching the business. This has a great potential of attracting more customers as long as the provided details are clear and enticing.
Many food apps have sprung up with the high demand from buyers. By installing a food app, consumers are able to identify the nearest restaurant. Irie Caribbean Restaurant and Caterers should consider taking advantage of the mobile technology wave of food apps and partner with them to ensure that the restaurant is enlisted. The strategy is a competitive advantage as it ensures that potential customers are directed to the restaurant. In case other competitors have partnered with the apps, then there is a high possibility of losing potential customers. It is therefore important to partner with food apps.
TV, radio, and newspaper ads
To reach a wider audience which has a potential role in expanding customer base, Irie Caribbean Restaurant and Caterers should consider traditional advertising especially placing ads on TVs, radios, and newspapers. The three tools are commonly used by the majority which means that the information gets to as many people as possible across the country. Referring to the website of the restaurant in the ads will enable the business to get more benefits.
Analysis and evaluation of the alternatives
In analysing and evaluating the alternatives, the advantages and disadvantages of each alternative were listed. The more the advantages the better the alternative. The analysis shows (Figure 1) that Instagram has more advantages followed by food apps, TV, radio, and newspaper ads, and Google+ account consecutively.
|1. Attracts more potential customers2. Improves profitability3. Increases sales4. Affordable5. Easy to implement6. Less competition compared to other social media marketing platforms7. Its within acceptable parameters||1. Difficult to maintain2. Difficult to measure its impacts3. Demands attention|
|Google+ account||1. Improves profitability2. Increases sale3. Easy access to information to potential customers||1. Difficult to implement2. Expensive|
|Food apps||1. Brings in potential customers2. Improves profitability3. Increases sales4. Acceptable||1. Takes time to implement2. It demands attention3. Expensive|
|TV, radio, and newspaper ads||1. Reaches more potential customers2. Acceptable3. Improves profitability4. Increases sales||1. Expensive|
To expand customer base, the restaurant should consider using Instagram in marketing. Contrary to the belief that such a strategy would not generate demand, other large corporation in the industry are using the strategy and have been effective in increasing sales. Research indicates that people are spending more time online than offline (Bryan, 2014). This means that using Instagram will reach more potential customers than word of mouth or even use print media. The implementation process involves downloading the Instagram app and signing up, taking quality photos, selecting the best of these photos, and then posting them. Instagram has a user base of more than 150 million and tapping to this can be of great value to the restaurant. However, the restaurant should strive to implement the other alternatives, to take advantages of all the benefits offered by these strategies associated with the stronger customer base, increased sales, and increased profitability.
The marketing strategies that a business decides to adopt determines the success of that business. Irie Caribbean Restaurant and Caterers offers excellent products and has its founders and managers have a great experience in the industry. However, the restaurant experiences declining sales and low customer base associated with poor marketing strategy. While word of mouth and print media helps in reaching potential customers, the strategies cannot reach as many customers as Instagram does. The heavy online presence on the current generation provides business with opportunities for reaching a wider audience. Instagram is one way of reaching many potential customers increasing its customer base which increases sales and profitability. Therefore, Irie Caribbean Restaurant and Caterers should invest in the marketing strategy considering that it is affordable, acceptable, increase profitability, sales, and it is easy to implement.
Bryan, R. (2014). 5 Simple Digital Marketing Strategies That Can Help Your Business Grow. Huffington Post. Retrieved on 9th March 2018 from https://www.huffingtonpost.com/roger-bryan/5-simple-digital-marketin_b_4816425.html
Canadian Restaurant & Foodservice Association. (2011). Foodservice Operations Report. Retrieved from Canadian Restaurant & Foodservice Association Research: http://www.crfa.ca/opsreport/login.asp.
Jackson, M. (n.d). Morrison’s Dilemma: Case Study. Journal of Hospitality & Tourism Cases, 2 (2), pp. 28-38.