In-N-Out Burger serves a very specific and limited menu of products, including hamburgers, cheeseburgers, French fries, soft drinks, milkshakes, Neapolitan shakes and grilled cheese sandwiches. This minimalistic simple menu keeps the ordering process quick and simple for both customers and staff. They have a much-touted secret menu, but the secret menu builds on the ingredients from the offerings on the traditional menu.
2.4 Keys to Success
The key to in-N-Out Burger's success is to provide excellent customer service, fresh cooked from scratch food, and a mystique generated from such items as a "secret menu," all of which garner it a large fan following. They have incorporated the following elements into their success: knowing and understanding their target audience; using strong branding elements, offering fresh made-to-order products, treating employees and customers well; managing growth; and attracting a loyal following (Kalb, 2011). They have also been able to successfully harness the power of a simple menu; it simplifies decision making for consumers, many of whom are actually overwhelmed by large menus with seemingly unlimited choices.
2.5 Critical Issues
The critical issues for in-N-Out Burger are that it maintain its cult-like following while engaging in expansion. This is important because in-N-Out Burger risks losing its current customer base if it gets too mainstream. At this point, everyone wants one nearby, but because the company is family-owned and operated it is difficult to be everywhere. The company is also careful to avoid unlimited expansion, because difficulty of access helps drive the brand's image. There is also some air of mystery when it is hard to find and "a company spokesman said, "…we are still expanding, but are always careful not to open a new location until we can guarantee the same quality food and service as we provide in our existing locations" and patrons like that about the company" (the Franchise Hound, 2011).
3.0 Marketing Strategy
In-N-Out Burger is positioned in the niche of the quick service market (QSR) between fast food restaurants and sit down restaurants and the marketing strategy is to lure customers from both of those categories into the quick service market. in-N-Out Burger can do this by using social media to expand upon its already successful marketing strategy, which has been based on a three-prong strategy: relationship building, uniqueness, and high quality customer service (Local Pulse Marketing, 2011).
In-N-Out Burger's mission is to provide a comfortable dining experience with good food and great customer service. The food and the emotions associated with a wonderful atmosphere create happy people.
Maintain slow and controlled growth of additional restaurants.
Generate additional mystique with the "secret menu" and fan following in social media.
Achieve a steady increase in market share in the quick service restaurant category, and taking overall market share away from fast food and sit down restaurants
3.3 Target Markets
With the general public eating outside of the home more and more, there is an incredible surge in restaurant eating. Fast food and quick service restaurants are well positioned to provide a speedy service for the public's fast paced lives. The target market for the chain is older fast food consumers. They are not trying to take away market share for those who need happy meals and playgrounds for their children while they eat, but targeting people who want good quality, affordable burgers.
In-N-Out Burger seeks to position themselves as the best quick service restaurant available, offering superior customer service, great food from scratch and catering to their customer's desires. Leveraging this goodwill and providing customers with a familiar and customized experience (with the "secret menu") provides an excellent word of mouth effect (Perman, 2009). Additionally, with the rise in social media's influence over the United States, in-N-Out is well situated to take advantage of the social commentary and be a continuous component in its customer's lives.
In-N-Out Burger can employ several strategies. Its largest strategy to date has been the use of the secret menu to drive its cult status and WOM campaigns. Engaging in social media to drive this cult-like status and expand it beyond the Southwest is going to be a key strategy in maintaining its continuous but slow paced expansion Use (Scott, 2009).
4.1 Break-even analysis
The break-even analysis indicates that a revenue stream of $75,000 per store will be required in monthly sales to reach the break-even point.
Average Per-Customer Revenue
Average Per-Customer Variable Cost
Estimated Fixed Costs
4.2 Sales forecast
The sales forecast for 2012 per location is $2,000,000 and with 252 locations, the yearly revenue is targeted to be $504 million dollars.
Per Store Sales
Total Number of Stores
Direct Cost of Sales
Per Store Costs
(Fixed + Variable Costs)
Total Cost of Sales
4.3 Expense forecast
The expense forecast is a means to keep the company within a goal range and provide a signal for when changes are required to ensure that the marketing plan will be successful.
Secret Menu Development
Food Dev. Mgr
Website Upgrades for Social Media
Facebook Campaign #1
"Secret Menu" Campaign
Social Media: Marketing development
Market Studies for Potential New Restaurants
VP Chain Expansion
4.4 Expense budget
The expense budget for this marketing plan is shown in the table below.
Total Sales and Marketing Expense
The marketing plan for in-N-Out Burger should have metrics that establish that its performance is meeting the targets for both cash flow and that the desired effects are being realized. The general public can be very picky and if the social media push backfires and brings about negative sentiment, it could lead to a boycott of the restaurant which could have severe negative consequences to the bottom line. This worst case scenario could be mitigated by careful monitoring of the social media (i.e. Facebook, message boards, and the major news outlets such as Yahoo!). If there is a problem and customers and potential customers are unhappy, quickly dealing with the concerns and providing a bonus or incentive to fix it could actually turn the potentially damaging incident into a positive for the company. Another potential risk with the same side effect is if a new "secret menu" item is offensive or upsets a particular subset of the demographic. In this case the concessions may have to be to provide some coupon or freebie (say a free secret menu item of the customer's choice) which might hurt the bottom line in the short-term, but will go a long way to helping the business grow and maintain the strong fan following.
Davenport, K. (2011, May 23). Why I love in-N-Out Burger . . . And it's not the fries. Retrieved February 28, 2012 from Entertainment Marketing website: http://www.entertainmentmarketing.com/2011/05/why-i-love-in-n-out-burger-and-its-not-the-fries/
Fujinaka, M. (2012.) in-N-Out Burgers. Retrieved February 28, 2012 from Answers.com website: http://www.answers.com/topic/in-n-out-burgers-inc
In-N-Out Burger. (2012). History. Retrieved from http://www.in-n-out.com/history.asp
Kalb, I. (2011, June 21). How to compete against the big guys. Retrieved February 28, 2012 from CBS News Moneywatch website: http://www.cbsnews.com/8301-505125_162-48540340/how-to-compete-against-the-big-guys/
Local Pulse Marketing. (2011, November 18). 3 local business marketing tips from our friends at in-and-Out Burger. Retrieved from: http://localpulsemarketing.com/3-local-business-marketing-tips-from-our-friends-at-in-and-out-burger/