The business Dough Pizza will be an affordable fast food restaurant operating in Lynchburg, VA. The restaurant industry is highly saturated and competitive, consisting of several categories. Dough Pizza will be competing with other fast food establishments, particularly major pizza-oriented chains such as Dominos and Papa Johns. The restaurant sector is growing but at a slow pace, experiencing various issues ranging from declining foot traffic to high costs of operation which significantly lower margins. However, companies that offer a strong foundation such as service and quality in combination with innovative offerings are showing growth in the industry (Zacks Equity Research, 2018). Dough Pizza will aim to be a community-focused business appealing to the local populations of families, students, and employees of surrounding businesses. The restaurant will offer quick, affordable meals with a wide variety of options and great attention to regional taste which will attract the core citizens of this small college town.
Dough Pizza will use a balanced pricing approach in terms that it will maintain prices on average with the industry. However, it will not use pricing as a primary strategy to undercut competitors in order to attract consumers as this would not be sustainable for a small business in the long-term nor is it effective in most cases. Dough Pizza will base its prices based on food costs and profit that will adjust according to the consumer demographic. The establishment will still attempt to be an affordable dining experience but offer prices that accurately capture the quality of food and choices that are offered through attribute-based pricing. There would be discount specials such as lunch deals, athletic events, and student exams that tend to attract customers for this type of cuisine. However, on a regular basis pricing will remain stable, but offer an upsized version of products. For example, if a regular large pepperoni pizza would cost $12.99, one with a cheese crust, extra cheese would go for just $14.99. This increases profit with very little ingredient cost to the restaurant.
Social media marketing is a necessity in the modern world. It allows extensive marketing reach backed by consumer interest and demographic targeting offered by most platforms. However, social media is more beneficial for small businesses because they can utilize the key success to this method – engagement. The limited area and relatively small followings allow engaging with each consumer comment or complaint, driving forward the potency of social media marketing. It does not take much to stand out, demonstrate creativity, and show appreciation at the local level, something that franchises rarely do. Social media marketing has large initial costs which can average to approximately $7,000 a month, but as word of mouth gets out, the networking will lessen customer acquisition costs (Detweiler, 2018).
Radio and television advertising on local networks can be an effective method for small businesses to be heard. There is a wide audience that tunes into these commercials that cannot be ignored and skipped like other methods and can end up justifying the customer acquisition costs. Such advertising should be done effectively to gain attention and done at the right time, with broadcast times that will appeal to demographics that the restaurant wants to attract in the local area. This type of marketing may cost between $1,500 and $1,750 plus product costs per month (The Staff of Entrepreneur Media, 2018).
Flyers are a more traditional method of advertising that should be included in the marketing mix to gain awareness. The traditional practice of handing out flyers at events or in the nearby radius of the restaurant will be more noticeable than other digital means. This applies particularly to the local populations which Dough Pizza is attempting to attract as flyers are handed directly to consumers in the area. Flyers can include special promotions and limited offers tying them to seasonal sales or events where the advertisement takes place which makes them more appealing (Kirk, n.d.). Flyers are relatively inexpensive to implement if printed out in small batches and should cost several hundred dollars for design, production, and distribution, making it the cheapest marketing method.
References
Detweiler, G. (2018). 10 expert social media tips to help your small business succeed. Forbes. Web.
Kirk, I. (n.d.). Does flyering work for small business? Here’s what you should know. Web.
The Staff of Entrepreneur Media. (2018). Start your own business: The only startup book you’ll ever need (6th ed.). New York, NY: McGraw-Hill Education.
Zacks Equity Research. (2018). Restaurant industry outlook. Web.