Marketing plan development and strategy

Assemblage

The marketing objective is going to be twofold. It is important to build brand awareness for the Assemblage, as the brand is being launched into the U.S. market beginning in New York. The second marketing objective is going to be to create an association with the Assemblage brand of fun times. The ultimate vision is to see the consumer immediately think of the Assemblage when they decide that they are looking for a fun time with friends.

The Assemblage is going to operate in the casual dining segment. There are a number of key reasons for this. The first reason is that this segment is one of the largest in the American restaurant industry. The industry is worth an estimated $75 billion annually (Horovitz, 2008). The industry has strong penetration of two key target markets -- under 35s and higher income earners (Mintel International, 2009). We believe that these two markets are among the largest spenders at restaurants and we wish to court these audiences. The economic slowdown has reduced capacity in the industry (Mintel International, 2009) and we feel that this reduction is temporary so we want to move in to fill this gap. This is possible because the industry is highly diffused with literally hundreds of concepts competing for business. While there is a high degree of brand loyalty, we believe that consumers in this segment are also more willing to explore new options than are consumers in, for example, the fast food segment.

The economy is already showing signs of life, with GDP figures improving in each of the past three quarters. We believe that as economic recovery takes hold, the industry will recover rapidly. During the downturn that casual dining segment lost 1.6% of revenues, or $1.2 billion. Thus, we see at least $1.2 billion in growth over the next year or two, which means significant opportunity for an innovative concept.

The target market for the Assemblage concept will be the under 35 market (but over 21), with middle to higher income. They will live in urban or suburban areas, generally have an education of at least high school or some college, and will be most likely without children. The target market will be multiethnic and multigender. In terms of psychographics, this group will be interested in fun and socializing as their primary means of entertainment. They like dining out and relaxing with friends for drinks. These customers may combine a trip to the Assemblage with a trip to a movie, concert, club or other entertainment. Our target market is more adventurous than their parents in terms of taste -- they know good food and drink and demand it when they go out. We anticipate spending of between $15-20 per head for this target market at the Assemblage, in line with the industry averages (Horovitz, 2008). Checks will be lower at lunch, when fewer alcoholic beverages are consumed.

This target market has been selected because it is the biggest consumer group for casual dining. This group is more likely to hang out with friends, meaning that we will have high capacity utilization. This group is more likely than other casual dining markets to purchase alcoholic beverages, from which we earn a healthy markup. This group is also more likely to dine out multiple times per week, including on weekdays. This will not only serve to increase our capacity utilization but will also serve to spread our customer base throughout the week. Some other large demographics limit their dining out to the weekend, which causes staffing and unused capacity issues for any restaurant.

This group is also more responsive to marketing via social networks. We are a startup company, and we realize that in the casual dining segment most of our competitors are better capitalized. These competitors have strong advertising campaigns that enable them to build their brands and attract business. We simply cannot compete with their marketing muscle, so we anticipate that our marketing strategy will be geared towards lower-cost forms of promotion. As such, we want to have a target market that will respond to such marketing tactics.

In order to understand the environment that the Assemblage faces it is important to conduct a SWOT analysis. This framework compels thought on the important features of the company's internal and external environment. The Assemblage has many strengths upon which to draw. The first is that the restaurant has a fresh concept. We understand that today's urban and suburban 20 and 300-somethings have grown up in a diverse America with a wide range of food tastes at their disposal. They are adventurous, willing to try just about anything as long as it tastes good. To that end, we intend to deliver. Our recipes come from around the world or down the street -- we have no limitations on what we will put on the menu. We assemble a fresh menu every week in addition to a menu of staples so that our customers can always have a fresh menu. We also take great pride in our drinks, serving microbrews, local wines where possible and we have a professional mixologist to design mixed drinks the quality of which would normally be found in nightclubs, not casual dining establishments.

Another strength is our experienced personnel. The Assemblage team has a strong mix of business (accounting, marketing) and restaurant (front of house, kitchen) experience. The diverse knowledge and experience of this team ensures that no stone is left unturned in developing the ideal dining experience. We have top designers giving our restaurants a look and feel that is unique in the industry, our mixologist, beer and wine sommeliers as menu consultants and we draw our recipes from chefs from around the world. The use of such contract help gives us expert abilities in all areas without necessitating the hiring of expert staff full-time. Lastly, our team has tremendous marketing savvy, especially in the area of Internet and social networking marketing. This will allow us to reach our target market more effectively than our competitors do, by speaking to our target market more directly and in their language.

Despite these strengths, we have some weaknesses. Overall, the firm has limited capital. We have enough to expand to a few restaurants and survive a few years, but before long we will need to expand on the strength of our revenues and growth. In addition, the brand is as yet unknown. In an industry dominated by dozens of well-known brands, it is difficult to establish business with a new brand. We will need to work hard to overcome this disadvantage. Despite the strong experience of our management team, the team in inexperienced at the logistics of a chain operation, which could result in a steep learning curve.

There are a number of opportunities in the casual dining industry. An estimated 1000 outlets are expected to close (Horovitz, 2008) which indicates weaknesses in our competitors. We can come in and take this market share from them as they struggle. In addition, our competition is stale. The industry's growth spurt was nearly twenty years ago and our competitors have typically done little updating to their concepts and facilities since (Horovitz, 2008). As a result, we have the opportunity to come in as a fresh idea and fresh face, giving us competitive advantage over our stale competition. The economic recovery represents another opportunity, as we believe it will fuel more growth in the industry. Lastly, our core demographic, roughly corresponding with the baby boom echo, is entering its peak population (Roach, 2008).

There are a number of expected threats as well. The competition in the industry is intense. In recent years, price competition has become the norm, which makes for more difficult operating conditions. Customers have high pricing power, so it can be difficult to earn the expected margins. Another threat is rising food costs, which again makes for a more challenging operating environment. Another factor, which can influence both cost and the customer service experience, is the relative scarcity of quality staff. There are ample employees available given the high unemployment rate, but we wish to deliver a truly special experience, and that means finding and retaining the best. This may mean that we need to pay extra in order to do this, again putting pressure on our margins. Alternately, we may struggle to deliver the service we intend if we cannot find enough top people to work in our restaurants.

Within the casual dining segment, we plan to adopt a premium position. There are two key reasons for this. The first is because of necessity. The major chains are engaging in price competition in part because they can -- they have operational economies of scale that help them to drive down costs. We do not have that luxury, so we need to be able to charge higher prices. In casual dining, that means delivering a differentiated experience. Service and atmosphere are going to be a major part of that, with further emphasis on food and drink. We wish to outscore our competitors on customer satisfaction with all of these key demand drivers.