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Leveraging Social Media Marketing

  • 24 Pages
  • Published On: 13-12-2023

Executive Summary

Consumers now play a coproducer role in sharing product and brand information with other consumers. Therefore, new marketing approaches are changing how firms communicate with consumers to handle their complaints and requests – through turning conversations from face to face to online word of mouth. To keep pace with this trend, firms must adopt integrated marketing and communication strategies that interact with consumers and allow them to actively build coproduce marketing messages. This strategy report suggests how All-in-1takeway can use social media marketing to effectively develop its customer base.

Introduction

Survival is an issue for full-service restaurants with fewer than 100 employees because most of them fail almost as rapidly as they open (Olimovich et al, 2020). In a study by Parsa et al (2011), the researchers found that independent restaurants are 59% more likely to fail than chain restaurants, 25% of them expected to close within their first year of operation. All-in-1takeway is one such restaurant that is facing the threat of closure, even 25 years after the operation. The restaurant is a food takeaway business in Brighton that serves a variety of dishes such as burgers, pizzas, chicken and kebab and has been in operation for 25 years. The business has two branches within one mile of each other and employs less than 15 employees. All-in-1takeway offers both takeaway and delivery services with most of the customers coming from within 2.5 miles of the business. Whereas 70% of the customers mostly collect food from the restaurant, 30% of them prefer deliveries.

While All-in-1takeway is currently a profitable business, a critical analysis of its operations reveals a declining number of customers. The new managing director ordered for a customer audit through the electronic point of sale system (EPOS) and found quantitative data (Appendix 1) indicating that since 2010, the number of customers ordering food from All-in-1takeway has been declining since 2010 to date. Yet, according to Mandabach et al (2011), customers are considered as the top external factors for success for any independent restaurant, over competition, economy and location.

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The purpose of this report is to develop an effective marketing strategy that will help All-in-1takeway acquire more customers and overturn the challenge of decreasing the customer base. The strategy will focus on understanding how to effectively communicate and attract new customers through an effective marketing strategy that increase its ability to not only survive the COVID-19 related business crisis but also thrive in its future endeavors.

This strategy report will be organized in sections, after presenting the organization and defining the main problem, the report will make use of academic literature to identify what is already known about the declining customer base in the independent restaurant industry. Moreover, the second section will explore various marketing theories and concepts to effectively understand how they can be applied in All-in-1takeway’s scenario to address the issue of declining customer base. The last section of the report will give conclusions and recommendations on how All-in-1takeway can increase its customer base. Here, the report will focus on the various academic theories, models and concepts to identify options for actions while critically evaluating whether these actions can be effective in helping All-in-1takeway increase its customer base. More importantly, this section will make recommendations for further research on how independent restaurants such as All-in-1takeway can improve their customer base.

1.1 Statement of the problem

Despite the emergence of more efficient marketing tools such as social media and the internet that are constantly replacing traditional forms of marketing, small independent restaurants still face a challenge in selecting and implementing the most effective marketing strategies for their survival (Alsheikh, 2020). Yet, existing research (e.g. Perry,2014) has identified marketing as one of the major factors of success or failure of small independent restaurants. In another study by the Bureau of Labour Statistics (2015), it was found that independent small restaurants have a lifespan of 4.5 years, 175 of them failing within the first year due to poor marketing strategies. The general problem for a most independent small restaurant that contributes to their failure is to develop a sustainable customer base, which results in loss of revenue and declined profitability (Shamsudin et al, 2020). On the other hand, according to Lu et al (2020), the specific problem is that the managers have failed to establish effective marketing strategies that would help them grow their customer base and increase revenue.

This strategy report could bring value to All-in-1takeway’s business environment by allowing its managers to identify and understand customer needs through marketing strategies. It will help the managers to understand and implement the best practices for using marketing strategies that are effective in increasing their customer base and market share. Similarly, the report will contribute to the general business practice by enabling managers to learn how to use effective marketing strategies for developing a customer base. Because independent restaurants majorly rely on customers to increase profitability, this strategy report will come in handy for managers who are looking for a comprehensive approach to effective marketing for small scale independent restaurants.

2.0 Literature review

2.1 The Marketing Mix Theory

There has been a considerable evolution of the marketing theory over time. Even though the original 4p marketing theory developed in 1960 strictly focused on the promotion, product, place and price, modern approaches to marketing such as social media marketing have presented various challenges for the original 4p (Fitzgerald 2014). An academic analysis of this topic indicates that the process of creating the 4ps marketing theory missed critical aspects of marketing. However, as found by Zhang & Yang (2017), there has not been a widespread consensus on how to modify the original 4P. nonetheless, Goclowska & Piatkowska (2020) insists that there is a need to modify the 4ps of marketing since the inception of social media marketing.

A critical analysis of existing research reveals several attempts by other scholars to revise the 4Ps marketing mix – others seeking to replace or enhance it through other theories. For instance, as per Koll et al (2010), one of those alternative theories is the associative network theory, which seeks to establish marketing pathways that lead to a network of connections within the consumers’ memory. Therefore, the associative network theory holds that consumers can influence a brand without realizing it – through techniques such as free association, which influences buyer behaviour (Lu et al, 2020). Other previous marketing research such as Barnes & Jacobsen (2013) highlight Roger’s theory of diffusion, which entails the use of technology.

However, Gordon et al (2013) noticed the confusion around 4p and developed a new model namely: capability, opportunity, motivation and social marketing (COM-SM). According to Gordon et al (2013), the COM-SM model provides an easier, effective, and quicker scope of implementation. That said, focusing on the scale and scope of social marketing as part of the marketing mix can link consumer behavior to various approaches to marketing (Hati et al, 2020). However, all these marketing theories and concepts focus on marketing innovations rather than on people, meaning that an additional P on the 4Ps model may present a better marketing theory for all markets and industries.

Mahmoud (2018) argued that the traditional model of 4P does not account for important aspects of the marketing mix such as process, people, and their physical evidence – all of which are unique to the service industry. In this context, people represent the customers and staffs who interact with each other, while process refers to the policies and procedures involved in the operations, such as handling and interacting with customers. On the other hand, the physical evidence represents the environment in which the customers may interact or purchase the products or services.

The application of these new components to the marketing mix can provide a better relationship between businesses and consumers, which can contribute to enhanced brand loyalty (Venaik & Mid). Yip and Chan (2012) also used a 7P’s conceptual framework developed by Boom’s and Bitner’s for its accessible, widespread and comprehensive applicability.

Jain (2013) proposed that the 4Ps marketing mix does not have a customer-oriented focus that is needed for the modern business world. According to him, the 4Ps requires an alignment with more emphasis on consumer-marketing messages and relationships. Similarly, Jain (2013) recommended a new e-marketing mix that includes the additional Ps into the marketing strategies through Boom’s and Bitner’s 7Ps theory. He supported the use of extended marketing mix theory as a new conceptual framework for further research on marketing strategies.

In another study by Madiba (2009), the researcher evaluated the effects of extended marketing mix theory on consumer behaviour within the restaurant industry as a result of a lack of understanding among marketers of how this theory can influence the restaurant environment. The study found that the extended marketing mix theory is widely applicable in the restaurant industry due to the three additional components of: physical access, people and process; and that the theory can help restaurants gain additional competitive advantage. Specifically, Madiba (2009) found that the restaurant personnel had a 62% influence on customers, the physical evidence had a 68% on consumers while the process had a 58% direct influence on what customers ordered in the restaurant. Based on these findings, the researcher made several recommendations including the need for restaurant managers to focus on these elements when developing a marketing mix. Ideally, applying the extended marketing mix facilitates a focus on other aspects of services that other theories overlook.

2.2 Size and Survival of independent Restaurants

According to observation s made by Kim et al (2021), most full-size restaurants are small and independent businesses with less than 100 employees. Furthermore, many such restaurants operate independently, with seven out of ten having single-unit operations (Chen, 2018). Similar observations by Byrd et al (2021) also indicate that an averagely of 50% of those restaurants fail within their first years of operation. Therefore, restaurant survival presents as a significant issue with restaurants with less than 100 employees. They fail as rapid as they are opened. More, unfortunately, during the challenging economic times (e.g. COVID-19 pandemic), small restaurants become the most significantly impacted segment of the hotel industry, and therefore owners must be steadfast in understanding the strategic plans and business cycles (Cho et al, 2020).

Researchers have largely disagreed on the exact cause of small restaurant failure and have attributed such failures to various external and internal factors, indicating the extent to which managers can also be confused about the causes of failure (Wu et al, 2021). Wu et al (2021) observed that most restaurant managers do not understand the connection between internal business factors and costs, profits and general survival. On the same note, Byrd et al (2021) discussed how various organizational factors such as poor organizational culture, poor service or product quality and poor marketing strategies contribute to restaurant success or failure.

But other sets of scholars have established a link between consumer-driven marketing and small restaurant success. In this regard, Wallace (2019) observed that customer base is considered the top factor determining the success of small restaurants; over competition, location and economy. Moreover, Kim et al (2021) took note of how important it is for restaurants to adopt effective communication strategies with customers and its role in determining success.

A good customer base is not only vital to small restaurants in their first years of operation but also during other sections of the business’ life cycle, because repeat customers account for most sales in those restaurants (Chen, 2018). Similar remarks were made by Wu et al (2021), who observed that loyal customers were a vital factor in the success of small restaurants, emphasizing the need for managers to understand their customers and build customer loyalty. Having a customer base that expresses loyalty to the restaurant is one of the most desirable determinants of competitive advantage because they contribute to referral, greater market share and overall business survival (Chen, 2018).

Traditional media allowed marketers to develop key marketing messages and push them to consumers – giving the marketers some feedback and input from the consumers (Wu et al, 2021). However, modern marketers have also adopted push marketing strategies that incorporate consumer input and aligns them with technology (Chen, 2018). On this note, Cho et al (2020) strongly believe that understanding the influence of personal media such as a mobile phone is important when developing an effective restaurant marketing strategy. Furthermore, Kim et al (2021) learned that the relationship between the firm and the consumer must demonstrate more pull-like participation. As per Wu et al (2021), firms must allow consumers to play a more active role after opting into the relationship so that they can develop a valuable and mutual relationship that coproduces marketing and communication efforts for the firm.

Against this backdrop, Kim et al (2021) agreed that new media (online) has created a better opportunity for businesses to move from push marketing to pull marketing. Similarly, Hargittai et al (2012) evaluated this change by identifying the two-way communication capabilities that social media renders to forms, empowering the consumers to be confident in expressing their opinions to other potential customers.

Kim et al (2021) observed that in traditional marketing techniques, marketers used to be the only producers of marketing material and controlled the sharing of brand and product information. However, with the emergence of new marketing techniques and platforms such as mobile phones and social media, consumers now play a coproducer role in sharing product and brand information with other consumers. Therefore, new marketing approaches are changing how firms communicate with consumers to handle their complaints and requests – through turning conversations from face to face to online word of mouth. To keep pace with this trend, firms must adopt integrated marketing and communication strategies that interact with consumers and allow them to actively build coproduce marketing messages (Cho et al, 2020).

2.3 Consumer-driven marketing

Considering the competitive nature of the restaurant business, managers need to focus on consumer needs by developing a consumer-driven approach to marketing. However, research by Harrington et al (2013) indicate that most restaurant managers do not have the knowledge, expertise or skill to do so. In a consumer-driven market, consumers select the restaurant of their choice based on the restaurant reputation, promotional activities, food ratings and reviews (Kim et al, 2021). This implies that the consumers play a more active role in purchase decision-making – which is mostly driven by the consumer’s use of online word of mouth and information shared through online platforms such as social media (Chen, 2018).

Consequently, researchers have emphasized the need for more marketing strategies that focus on the consumer’s emotions so that they can share information about the firm and influence others towards the firm’s products and services (Cho et al, 2020). While on online social media platforms, consumers must communicate with colleagues, friends, families or even strangers. As such, according to Wu et al (2021) people want to share with others the information about what they feel is valuable while at the same time want to receive valuable information from like-minded people. That said, failure to focus on consumers’ emotions might affect the firm’s ability to attract a new customer base.

However, while establishing the link between consumer behaviors and marketing strategies, marketing managers must be concerned with how the marketing strategy impacts the bottom-line and marketplace of the firm. In this regard, Corstijens and Umblings (2012) coined a model to analyze the effects of social media marketing strategies on a brand’s marketplace performance even though the study was limited by the restrictions to one industry. Nonetheless, the researchers evaluated two real-world examples that link social media marketing strategies to firms’ market performance and found that social media marketing, as a form of modern marketing strategies, has a positive impact on the firms’ marketplace performance.

Similarly, Bronner & DeHoog (2014) studied how consumer-driven marketing strategies such as site relevance, consumer experience, accessibility and electronic word of mouth and found that more purchases were attributed to domain search platforms such as Tripadvisor and open opinion platforms such as Facebook. Therefore, there is a high possibility that adopting modern marketing strategies that are more consumer-focused may help to increase All-in-1takeway’s customer base.

3.0 Recommendations

Against this backdrop, All-in-1takeway’s has a range of consumer-driven marketing strategies that it can adapt to increase its customer base. In the subsequent section, this report gives a set of detailed recommendations of how All-in-1takeway can explore social medial marketing as a modern form of consumer-driven marketing to address the issue of a declining customer base. But, first, is an overview of the concept of social media.

3.1 Social Media

There has been an increased uptake of technology use among small business marketers, especially the use of social media marketing tools (Dwivedi et al, 2020). according to Jacobson et al (2020), social media present a platform for firms to stay current on news, communicate their concerns, engage with others and offer their opinions. This makes it attractive as a form of electronic word of mouth marketing for All-in-1takeway, especially if it intends to capitalize on the extended 4Ps of marketing that is consumer-driven.

By adopting social media as its new social media marketing strategy, All-in-1takeway should assess what the customers want and identify how it can deliver those needs (Iankova et al, 2019). even though Facebook, Twitter and Instagram are the most common social media marketing platforms adopted by small restaurants (Duffett, 2017), YouTube, Pinterest and blogs have recently gained popularity. Below is an evaluation of some of the social media platforms that All-in-1takeway can use and how they can be can contribute to the strategy.

3.1.1 Facebook

As of now, Facebook presents as the best social media marketing tool for small restaurants. According to Shareef et al (2019) all kinds of business, regardless of their size, can leverage on Facebook and drive a huge number of customers, especially by expanding the reach of their electronic word of mouth reach through ads. For All-in-1takeway, Facebook is not just an option but mandatory, especially when it needs to increase the number of online orders. This is because Facebook has tools that enable customers to place orders directly through it.

To effectively make use of Facebook, All-in-1takeway needs to create a (or upgrade the existing one) Facebook page that reflects its brand. As recommended by Duffet (2017), All-in-1takeway should ensure that everything, from the cover picture to the log and display images reflect the firm’s mission and vision. More importantly, All-in-1takeway should ensure that it keeps a consistent brand identity while advertising on Facebook because studies (e.g. Tafesse & Wien 2018 and Yadav & Rahman, 2017) have established a link between this consistency and brand loyalty.

Still, on Facebook, All-in-1takeway’s Ads target should be based on the current customers and match them with several other prospects that have similar interest, demographics and preferences. According to Alalwan et al (2017), this will facilitate the much-desired electronic word of mouth sharing, which has largely been associated with repeat purchase and consumer loyalty. Apart from targeted Ads, All-in-1takeway should also consider promoting interactive content that engages with the audience. According to Zollo et al (2020), it is through such engagements that the audience connects and share their experiences with the brand, promoting electronic word-of-mouth marketing. Furthermore, Vinerean (2017) pointed out that engagement means good brand awareness and good brand awareness means good business.

Most importantly, All-in-1takeway should consider developing an efficient system that allows mobile users to place orders directly from Facebook. According to Jaakonmaki et al (2017), this is especially important when the firm is seeking to take advantage of online engagements and to convert those engagements into sales. Any audience who hears about the brand from an online Facebook engagement could easily place an order through Facebook.

Another effective strategy for Facebook would be develop an email list of the existing customer base and upload this list directly into Facebook to directly target them of create what is called a ‘lookalike audience’. The look alike audience is one that exactly looks like the original target audience that Facebook helps to develop a similar target audience for marketing.

3.1.2 Instagram

Instagram presents as the most effective way of promoting visually stimulating content to develop engagement from the target audience. According to Vinerean (2017), sharing the photos and menus of the restaurant is a great way of attracting the audiences’ attention and create a buzz about the brand on the platform. That said, All-in-1takeway can execute this in many ways, including either contracting an Instagram marketing specialist with cameras and good lighting for high-quality pictures or purchase the items and develop the content in-house.

In the process of visually promoting the brand on Instagram, All-in-1takeway should ensure that it adopts a consistent brand voice throughout and leverage on Instagram Stories feature to spread awareness about any events that the firm is planning, sharing information of how the audience can participate in them (Yadav & Rahman, 2017). Instagram also presents an opportunity for using the hashtag feature to drive in more traffic.

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Through Instagram stories, All-in-1takeway can make its potential customers feel like insiders, giving them a chance to view behind the scenes parts of the business while keeping them up to date with what is going on at the restaurant. Through Instagram hashtags, All-in-1takeway can take advantage of food holidays and showcase what they have in store for customers. Meanwhile, the other Instagram strategy that can be useful for All-in-1takeway retargeting ads, whereby the restaurant can use enticing photos and videos of its menu items to retarget customers who have already visited the restaurant or the restaurant website. Through this technique, the customers will remember the restaurant next time they need food services.

The other tip that Zollo et al (2020) gave is to engage with Instagram users by searching for photos that are tagged to its two operating locations. All-in-1takeway can then interact with those users by reposting their photos, reposting the, complementing or just commenting on them. As per Vinerean (2017), this will help All-in-1takeway build a fan base and engage with customers on Instagram. Ideally, there are probably thousands or hundreds of Instagram photos on which the restaurant’s two operation locations are tagged. Failure to interact with these photos means that the firm is missing out on an opportunity build relationships and interact with customers. Because the restaurant might not have the time to interact with every customer on Instagram, a good strategy would be to interact with individuals who have a bigger Instagram following – ensuring that the brand gets in front of as many Instagram users as possible.

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Appendix 1: Quantitative data from the EPOS

Quantitative data from the EPOS date by members since
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