Briefly explain the level and quality of the customer service at Patty's Pizzeria.How does it affect the marketing outcomes?

Who are the potential customers and what are their key pressure points?

Upon reviewing the components of the marketing mix for Patty's Pizzeria (and your responses above), explain how each item affects / interacts with the other components and their importance to the customer base.

PEST analysis to identify and assess environmental factors and how they impact on the marketing mix.

Patty's Pizzeria is a small family run Pizza restaurant located in Sandy Beach, Australia.The restaurant has both a dine in service and take away.At present, the restaurant does not deliver, but many customers use Uber Eats for a delivery service.

Patty's Pizzeria has been operating for five years.The restaurant offers a range of pizza toppings as well as "Make your own" pizzas.Last year, the restaurant also began offering Spaghetti Bolognaise and Spaghetti Carbonara in addition to its pizzas based off of market research.

Market Analysis:

Overview of Sandy Beach:

Large % of families.

Area growing at 10% per year (growing faster than the city and state at 7%).

Geographic:

Our immediate geographic target is the area of Sandy Beach with a population of 130,000.

Demographics:

Male and female.

Ages 25-50; this segment makes up 53% of the Sandy Beach market.

Young professionals who live close to the location.

Have tertiary education.

An income over $60,000.

Eat out several times a week.

Tend to patronise higher quality restaurants.

Behaviour factors:

Enjoy a high quality, affordable meal without making it themselves.

Want a selection of 'healthy' pizzas

Want accessibility and convenience

Want friendly customer service

Market Trends:

• Food quality -preference for high quality ingredients
• Presentation/appearance - preference for aesthetically pleasing food
• Selection - People are demanding a larger selection of foods

Market Growth:

Last year, the global pizza market reached $10 billion.Sales are estimated to grow by at least 10% for the next few years.The target market is working longer hours and this has lead to an increase in demand for convenient, quick foods such as pizza.As housing prices are increasing and interest rates are flat, this means less disposable income for customers which may lead to a decrease in sales.Patty's Pizza is hoping that this decrease in income will be offset by the demand for pizza and the growth of the pizza market and that sales will either remain flat or increase.

SWOT Analysis:

Strengths:

oStrong relationships with vendors providing ingredients

oExcellent loyal staff

oGood location - convenient near train and bus and with parking lot

oRepeat customers

oHigh quality food

oWood fired oven

oOrganic vegetables and meat

Weaknesses:

oLow brand awareness

oLimited marketing budget

Opportunities:

oGrowing market and growing neighbourhood

oDecrease in customer's free time leads to increase in demand for convenient food

Threats:

oDecrease in customer disposable income

oPerception that Pizza is "unhealthy"

oOther restaurants entering the neighbourhood

oPizza chains with cheaper products entering Sandy Bay

oSlumps in the economy further reducing disposable income

Competitor Analysis:

National Competition

Pizza Buzz: offers consumers their choice of sauces and ingredients, allowing the customer to assemble their dish as they wish. Food quality is average.

Pizza Hut: international chain - low price, average quality, convenient to order online and delivery - limited to no seating

Dominos: international chain - low price, average quality, convenient to order online and delivery - limited to no seating

Local Competition

Stella's: This is an upscale Italian restaurant that has a limited selection of pizza. Although the selection is limited and pricey, the dishes are quite good.

Peri Pizza: An Italian restaurant with a decent pizza selection and wood fired oven, however quality is inconsistent.

Niccolo: An upscale restaurant with a large wine selection and good salads. Everything else is mediocre at best and over-priced. Service can often be poor.

Growth and Share

Competitor

Price

Growth Rate

Market Share

Stella's

$25

8%

16%

Peri Pizza

$19

5%

10%

Niccolo

$22

7%

12%

Average

$22.00

7%

13%

Total

38%

Growth and Share Analysis

Potential Customers

Market Analysis

Growth

2020

2021

2022

2023

2024

Individual

6%

12,000

12,720

13,483

14,292

15,150

Take away

10%

9,000

9,900

10,890

11,979

13,177

Family

12%

25,000

28,000

31,360

35,123

39,338

Total

9.27%

46,000

50,620

55,733

61,394

67,665

Marketing Strategy:

Patty's Pizzeria has a limited marketing budget.Marketing largely consists of direct mail and local advertising (including ads in the local newspapers).

Mission Statement:

"To provide families with convenient, high quality pizza".

Marketing Objectives:

1.Maintain positive, steady, growth each month.

2.Generate at least $45,000 in sales per month.

3.Experience an increase in new customers who are turned into long-term customers.

4.Realise a growth strategy of one store per year.

Financial Objectives

1.A double-digit growth rate for each future year.

2.Continue to decrease the variable costs associated with food production.

Target Marketing

The market can be segmented into three target populations:

Individuals: people that dine in by themselves.

Families: a group of people, either friends or a group of nuclear relatives dining together.

Take out: people that prefer to eat pizza in their home or at a different location than the actual restaurant.

Combining several key demographic factors, Patty's Pizzeria arrives at a profile of the primary customer as follows:

Sophisticated families who live nearby.

Young professionals who work close to the location.

Positioning:

Patty's Pizzeria is reasonably priced, high quality pizza.Pizzas are made with fresh, organic ingredients.Pizzas look aesthetically pleasing, are cooked in the wood fired oven and are cooked quickly.Patty's Pizzeria is family run and employs experienced, friendly staff.

Strategy:

The marketing strategy will continue to be three-fold:

1.Direct mail - with coupons

2.Local marketing - window displays, local newspaper and events

3.Word of mouth and public relations campaign - testimonials from customers, reviews on websites, social media posts, articles in newspapers and magazines

Marketing Mix:

In addition to the above information on product, promotion and position:

Pricing - Patty's Pizzeria is competitively priced with other restaurants in the area, but is priced above Pizza Hut and Dominos.Pizzas range in price from $15 for a plain Margherita to $28 for Seafood.The average pizza is $22.The cost to make the pizzas is 35% of the retail price.

Distribution - customers can eat in the restaurant, take away or use a delivery service such as Uber Eats.

Market Research:

Five years ago and two years ago, market research, in the form of focus groups, was conducted to ensure that Patty's Pizzeria was offering pizzas that customers wanted at a competitive price point.The last market research lead to the introduction of two pasta dishes in addition to the "make your own pizza" option.

In order to understand the macro factors, you recently researched the following reports to obtain findings on the demographic, economic, ethical, geographic, political/legal, social/cultural, and technological influences.You discover the following:

Australian Bureau of Statistics (ABS)

ABS statistics on age distribution - Findings are the same as the information in Appendix A.

ABS statistics on growth rates - Findings: Growth in young families with a government incentive on new births and an increase in retirees.

ABS statistics on regional distribution of the population - Findings: Increasing in the Sandy Bay area but were mostly retirees.

ABS statistics on the population size - 130,000.

Australian Treasury report

Treasury's current interest rates - Findings: Rising incrementally throughout the year.

Treasury's current levels of credit availability - Findings: Tightening on credit card limits.

Treasury's current unemployment levels - Findings: Unemployment falling due to more opportunities created by mothers leaving the workforce.

SIBIS World - Market research 2019

SIBIS World industry report on strategies adopted by each of the major competitors - Findings: Expansion by the chains into interstate markets - Price war created due to reducing sales and fight for market share.

SIBIS World industry report material shortages - Findings: Drought conditions in most states sees shortages.

SIBIS World industry report on market demand - Findings: Steady.

SIBIS World industry report evolving needs and satisfactions being sought by the buyers in this market - Findings: Growing need for healthy options like salads, and more information on ingredients.

SIBIS World industry report substitutes for this product - Findings: Supermarkets introducing a range of pre-packaged 'heat & eat' pizza products.

Household Income survey - Findings: Steady, no change.

Political and legal - Findings: Employees working longer with emphasis on economic growth. New legislation relating to labelling on take-away products delivered to consumers.

Focus Group:

You organised a focus group from the local community and from some of Patty's Pizzeria regular customers. The following consensus was reached among the participants.

Customers want convenience products and more healthy options.

Take-away and eat-at-home was the preferred dining option rather than sit-down.

Pizza products should be low fat. Tomato-bases preferred over cream-bases.

Customers want to order via the internet and not be stressed out by the phone system with its delays and difficult to understand accents and noise.

Customers prefer fewer flyers, which they saw as 'junk mail', and flyers should be more informative about ingredients and offer a full menu.

Comment: 'They may be great cooks, but they don't know how to handle telephone sales'

Interviews:

You recently conducted interviews with some of the staff to further understand the business issues.

Interview with Patty's Pizzeria Owner (Patty):

She believes that there is no one thing that caused the lower sales figures, but possibly many factors

Her partner Mario makes all the marketing decisions for the business

She and the staff wanted to introduce a new online ordering system, but Mario rejected it and insisted on retaining telephone orders for take away sales

She wanted to hire a PR specialist, but Mario felt that it wasn't worth the money and that he would do PR.However, he didn't have time to do write up this year for the local newspaper or magazines.

Mario believes in doing flyers to mailboxes, but customer research surveys showed that most customers thought it was junk mail.

Interview with Mario (co-business owner, Marketing Manager and Patty's partner) and the Finance Manager:

Mario said that due to construction on the street, the pizza restaurant had been hard to access this year.

He said that one of the competitors (Stella's) seems to have a full restaurant and doing a good business and Pizza Hut had opened in a nearby suburb.

This competition lead to Mario having to drop the price of pizzas.The accountant confirmed that Gross profit was 45%.

Mario was focusing on single product promotion instead of brand promotion or the assortment of product offerings.He was focused on getting next week's sales and not any further into the future.

The marketing flyer had gone up in price.The accountant thought that it was the high gloss and full colour.Mario confirmed that gloss was needed to promote the pizza to look appetising and promote the eat-in specials.

The accountant said that the growth was in the take-away business and not eat in specials.

Mario said that PR was too expensive and so was market research, so he just uses the account's figures and his gut feeling to forecast sales.

Interview with Adriana (Sales Manager):

Also worked as Kitchen Supervisor

Her qualifications are in kitchen management, not sales

She said a big problem was that the phone ordering system was in the kitchen next to the cook which created a logistics problem

She said new pizza ideas were created by Patty and Mario based on their ideas on how exotic they were or how easy to make.

She said another problem was that the promotional flyers did not always match when products were in sufficient supply in the restaurant so they often were not able to make the promoted item.Often the cook and staff didn't know that an item was being promoted until a customer presented the coupon.