Differentiate the "Italian" notion for those who want something different from "standard," "middle of the road" Italian fare.

Come up with very targeted marketing which ensures focus on the three target customer groups:

Those living/working within a well-defined radius

Those who may know the restaurant from other experiences in Australia

Spur-of-the-moment tourists who see the restaurant and walk in.

Cost structure of industry (especially whether variable cost is a small or large proportion of the normal selling price, and whether there are significant economies of scale of production, importance of transportation costs etc.),

The relative margins earned by restaurants vary from zero to 10% of total sales. Price discounts may be attractive to customers, but can have a dramatic impact on the bottom line if not properly managed. These discounts are also so prevalent (easy to implement), that they offer little differentiation for the prospective customer.

Things that are relatively inexpensive to the restaurant may be highly-valued by the customer. It is important, therefore, to emphasize free additional food, particularly during slack hours, or when attempting to convert customers from occasional to frequent visitors.

Role of tariffs subsidies, dumping, grey markets etc.

Target Market Behaviour, including:

Market segmentation (ie. how the market might be meaningfully segmented by buyer characteristics as a proxy for buyer needs),

Market segmentation is as follows:

Families living in the area, especially focused on those who bring their spouse and children.

Customers from other parts of Australia who may already be familiar with the one of the other 15 restaurants, and Tourists and "spur-of-the-moment" impulse customers who see the restaurant and walk in.

Potential target market segment(s) for the product/service (and whether a separate marketing mix is needed for each market segment),

Of the three major segments, the most profitable for the restaurant may be the first -- locals, particularly families, who live and/or work in the Parramatta area. That is because a family which eats once a week at the restaurant, spending on average $50 per time, will spend $2,500 in a year. This makes these families and groups particularly attractive to the restaurant.

The second most-profitable...

Although they visit relatively infrequently, the cost of acquisition for these customers is very low.
The third most-profitable segment is the walk-in, impulse customer. It is unlikely that this customer will come from far away to this restaurant, but the customer's impulse decision (based on what he/she sees and the time of day) means that customer acquisitions are inexpensive.

Those segments that should be ignored include the following:

Very price-sensitive customers who either eat a lot or are looking for a bargain.

Customers who don't know about family-style, regional Italian food, and are unwilling to travel or pay for the difference.

Young, transient, single people.

Those who live in Sydney and the surrounding area in a radius greater than 5 miles from the centre of Parramatta.

The market can be therefore segmented as follows:

Local regulars

Tourists

Those who know the chain

Times per year per cheque year/customer

Percentage of total

Number per year

Revenue/Customer segment

300,000 (average)

7.0 RECOMMENDED MARKETING STRATEGY

7.1 Target Markets

It is suggested that Toscanis' market can be segmented into four target populations:

Locals with families

As we can see from the above analysis, Parramatta's emerging "yuppies" with families can be a very lucrative group for Toscani's. With 152,000 residents in Parramatta, one can assume that there are 50,000 households. If half those households have children, then the total target market is 25,000 households with an assumed four people per household (2 children and 2 the spouses). If Toscani's is successful in recruiting 200 families to eat once a week, it only needs find 200/25,000, or 0,8% of the target available market.

If Toscani's were able to double the attraction to those regularly-eating families, it could nearly double overall sales. In addition, the families are likely to eat earlier, which helps with table turns.

Those from other parts of Australia who know Toscani's

This category is "pre-sold," meaning that they already know and like the brand. By letting them know through other branches that they are there, Toscani's can attract