Market for Toscani\'s in Parramarra

Market for Toscani's in Parramarra consists of three segments: (1) locals, particularly families, who come fairly often to the restaurant, (2) out-of-towners from cities in Australia which also have Toscani's (and there is therefore a brand identity, and (3) tourists from elsewhere, whether from Australia or outside Australia, who may have heard of Toscani's or have made an impulsive decision to enter the restaurant.

Market Forecasts for the product/service in the target market (including current size of market [units and values and future trends).

Parramatta is one of the "new cities" around Sydney, which has benefitted from a $900 million renovation of the town centre. As a result, it has attracted a population of better-heeled professionals and their families to the area. That means that the mix of population has therefore changed, and is an important component of the marketing mix.

The population of Parramatta in 2005 was 152,000, and is expected to continue its growth at the rate of 0.7 to 1.0% per year, reaching a population of 187,000 by 2026.

Market Characteristics, Developments and Trends for the:

Product/service,

Italian restaurants are well-understood and widely-distributed in Australia. With a large Italian population and a substantial liking by non-Italians for this type of ethnic food, defining an Italian restaurant solely as "Italian" may no longer be sufficient in a town as sophisticated as Parramatta or Sydney. Given the demographic changes (see Market Forecasts) within the nearby area, it is unlikely that "Italian" is enough of a draw to differentiate the restaurant for any of the three target groups.

For this reason, it makes sense to move "deeper" into the Italian brand image, and project the image of a family-style Italian restaurant serving specialities from one or two regions. While the region is less important than the segmentation, it may be best to choose Tuscany or Rome as the focus.

With family-style, the focus should be on serving larger portions to a table. This would be particularly attractive for larger families and intergenerational visitors. It would also appeal to families who are touring.

Since Italian is generally known, there is little education needed for the "impulsive" crowd or the "tourist" crowd. The notion of "family Italian food" would be attractive to local residents and their families, and assure constant business from regular customers.

Distribution channels (and any barriers to entry),

This restaurant needs to focus on its three target customers. It makes no sense to try to lure in Sydney residents from other towns or more than a 5-mile radius from the restaurant.

Prices and pricing practices (including government controls),

Pricing needs to encourage repeat business. The restaurant can use pricing as a differentiator, but need not do so for the other two market segments (tourists and those familiar with the restaurant from other parts of Australia). Therefore discount coupons, orientated to potential customers in the area, would make the most sense. In addition, the restaurant should pursue methods to insure that customers keep coming back. Since families (even those in higher income groups) are sensitive to the overall cost of the meal, they may respond to "bring your children for free," "9 meals and the 10th is on us," or similar loyalty programs which promise a reward through discounts for frequent visitors.

The marketing campaign needs to focus on two elements:

Trial: How can the restaurant encourage locals who may never have visited the restaurant to come? Very local, focused "try us" coupons, advertising and local events can drive residents of Parramatta into the restaurant.

Repurchase: How can the restaurant ensure that diners keep coming back? The above-described loyalty programs can help, but it may take more in order to keep people visiting the restaurant over and over, and to bring their families. Some of these programs may include:

Family-oriented events, such as birthday parties, anniversaries and other such events.

Local office parties, which are encouraged for those who live/work in the area.

Child-oriented events, such as after-school parties, which bring in the parents and fill the restaurant during slack periods.

Local events which promote Parramatta spirit, such as sack races, special commemorative days, or restaurant-sponsored sports events.

Industry Practices (Voluntary codes, bribes etc.),

Stage in product life cycle.

This restaurant exists in a highly-competitive market with a very mature definition of its product and customer base. The classic move in such a market is to segment. The segmentation recommended in this marketing plan includes the following:

Ensure that locals (there is an advantage to the restaurant's site) become regulars.

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 segment are those who are familiar with the restaurant from elsewhere in Australia. 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.