Chapter 4 – Marketing and Sales Strategy

“Every event is a learning experience, and each better than the last.” 

—Chef Shuchi Naidoo, PopUp Republic

Chapter Warm-Up

Prechapter Reading Materials

• “How to Manage It All” (Baras 2015)
• “Eminem Has a Mom’s Spaghetti Pop-Up at Coachella” (Harris 2018)
• Food and Beverage Cost Control (Dopson and Hayes 2019, 38–41)

Prechapter Exercise

• Read the interview with Chef Shuchi Naidoo, founder of Twenty-Nine Calories Pop-Up Restaurant (Baras 2015, chap. 35). What do you think accounts for Chef Naidoo’s increasing success with each staging of her pop-ups?

Chapter Outline

• Market Segmentation
• Seven Ps of Marketing
• Market Positioning
• Sales Forecasting
• Advertising and Promotion

Market segmentation

7 Ps of marketing

Depending on who you ask, various schools of marketing identify 4- or 5- or 7-P’s of marketing, commonly referred to as the marketing mix, to include any or all of the following:

1. Price​
2. Promotion ​
3. Place​
4. Product​
5. People​
6. Physical environment ​
7. Process ​

For purposes of this text, we will discuss the first four factors, considered most relevant to a pop-up restaurant business. Price can act as a signaling mechanism for your pop-up restaurant. As the only revenue-impacting factor, price points should reflect perceived benefits or value in the mind of the diner. Common approaches to pricing are cost-based and contribution margins, where the former considers input costs and the latter considers the desired profit level as a starting point.

Promotion refers to the collective effort to attract and retain repeat customers. The very nature of a pop-up restaurant is promotional—whether it features new menu items, new chef talents, or new ingredients. Advertising and promotional activities have become increasingly sensitive to customer needs in the post-COVID-19 era. For example, in the face of rising prices and disrupted supply chains, several restaurants have had to increase their prices. To counter negative perceptions, especially among loyal customers, promotional specials (e.g., conversion to a prix-fixe, use of tasting menus) have been employed to attract and retain business. Promoting a pop-up restaurant is facilitated by the novelty factor that appeals to customers.

Place encompasses the physical location of the pop-up and is reflected in both the nature of the pricing and the promotion strategies employed. More than any other factor, place has been impacted by COVID-19, as at the time of this writing, patrons remain hesitant to dine out in public spaces. To enhance appeal, pop-up restaurants employ servicescape strategies to create a memorable experience—for example, pairing food with art in a local gallery, pairing food with music in a local jazz house or garden, utilizing rustic food ingredients that feature locality in a barn or farmhouse, and pairing food with the arts in a theater.

Product or service offerings represent both tangible and intangible parts of the pop-up experience. The physical food, ambience, and service quality amount to the delivery of a hospitality experience. For this reason, popupreneurs must consider the holistic experience of customers rather than discrete and separate components. According to Taylor, DiPietro, and So (2018), pop-up restaurants draw the experiential diner—an individual who craves an exciting dining experience and not just an amazing meal.

A successful pop-up restaurant creates a winning Place strategy as part of its marketing and sales mix.

Market positioning

Market or product positioning involves the placement of a product or service relative to rivals and competitors and is associated with much of the image-based marketing currently seen on social and other media. Effective positioning of a product/service leads to a greater likelihood of success in reaching the target customer. Perceptual mapping involves the placement of the product or service based on how it is seen by the consumer. Marketers base their product-positioning decisions on where vacant niche (unmet need) may exist in the market. The use of product-positioning maps helps pop-up marketers determine the optimal placement of a pop-up. This may be determined by (consumer) affordability, luxury, innovativeness, or conservative-versus-traditional market variables.

Sales forecasting

A plan or forecast for sales helps with the projection of key inputs such as food, beverage, labor, and space (layout). Restaurants typically use historical sales data for forecasting. However, in the absence of data, what options exist? Let’s look at an example: Given the following historical data on pop-up restaurant dinner sales at Penn State Berks, what insight could be derived to help forecast 2022 sales (total number of dine-in and takeout guests)?

^{*no pop-up restaurant due to SARS-Cov-2 pandemic}

Advertising and promotion

Promoting the pop-up restaurant. The advertising and promotion of the pop-up restaurant involve understanding key components of the event budget, the target market, and the desired positioning strategy. Given the nature of the pop-up dining experience, the role of nontraditional marketing media—in particular, social media—is important to the marketing strategy.

Social media and internet marketing. Chapter 1 discussed the benefits of pop-up restaurants’ use of social and internet marketing strategies. Social media marketing (SMM) is a form of digital marketing that directly engages existing and potential customers. Popular examples of SMM platforms include Instagram, Meta (formerly Facebook), and Twitter. Whereas traditional marketing heavily utilizes print media (e.g., billboards, newspapers) or broadcast media (e.g., radio, television), SMM provides a real-time mass exchange of digital ads and marketing messages between marketers and individuals in their target market. Traditionally, a restaurant would advertise its menu and location. Today, they may opt to engage customers by posting images of prepared plates, posting recipes, or having their chef demonstrate a cooking technique on their social media page.

SMM is critical to strategically marketing a pop-up restaurant and is more a matter of engaging rather than informing the customer. The online community is similar to the offline community, with the exception that engagement is faster, cheaper, and more effective. SMM is far more dynamic, as it can reach a wider audience, spur dialogue, and create relationships. In addition, SMM levels the playing field among small and large competitors and can significantly reduce marketing budgets.

KEY TERMS

• Influencer
• Market positioning
• Market segmentation
• Perceptual mapping
• Sales forecasting
• Seven P’s of marketing
• Social media marketing

REVIEW Questions

1. 1. What are the four Ps of marketing? How does applying the four Ps differ between traditional and pop-up restaurants?
   2. What is market segmentation? Which segmentation variables might be most important to identifying your pop-up restaurant’s primary target market?
   3. What is perceptual mapping? Identify two advantages and two disadvantages of applying perceptual mapping to pop-up restaurant marketing.
   4. How does the COVID-19 pandemic impact the ability to forecast sales? What factors or trends should you consider for staging a pop-up restaurant?
   5. How does marketing in the digital age differ from traditional marketing?

Review Activities

1. 1. In teams of 3, identify what you think would be important social media marketing platforms for your pop-up restaurant. Justify your selection(s).
   2. In SimplyAnalytics, use the Related Data Table to create a view for Reading, PA using the data variable % SEGMENTATION SOLUTIONS | FOOD LIFESTYLE SEGMENTATION | TRUE FOODIES, 2019. (Hint: search for “true foodies” in the Data menu. Review the SimplyAnalytics Data Cookbook for more tips on using SimplyAnalytics.) Simply Analytics will populate your table with similar data variables. How would you characterize the Food Lifestyle Segmentation of Reading, PA?
   3. What are the key considerations for segmentation, placement, and positioning your pop-up?