Sample Marketing Plan

Marketing Management
A Customer-Oriented Approach

Kenneth E. Clow and Donald Baack

0 Marlin Catering (Clow/Baack, Marketing Management), Sage Publishing

Executive Summary

The working purpose and overall goal of the marketing project is to: (1) analyze

Marlin Caterings current situation; (2) determine strategies for reaching potential

clientele; and (3) develop marketing tactics and an implementation plan.

The marketing project opens with an analysis of the company's current situation,

including a review of its internal and external environment, which yields information

regard current company strengths and weakness along with the opportunities and threats

present. Marlin Catering's primary strengths are in the areas of its staff and expertise. Its

weaknesses include consumer perceptions that firm only sells Mexican food, even for

catered events and the company is not well known in the area. The opportunities present

include a growing marketplace. The primary threat is a large number of competing firms

in the area.
The marketing goal for Marlin Catering is to become a viable company in the

catering business in the Fayetteville area serving both individuals and businesses with

high quality food and service. The marketing strategy will begin with offering high

quality food and high quality, on-time service. The distribution strategy will be to sell via

direct sales and to expand via word of mouth endorsements. In the future, indirect

marketing through florists and banquet halls may be pursued.

The primary emphasis will be on advertising and promotion. Marlin Catering

should begin a targeted advertising campaign and develop a colorful brochure that

illustrates the company's services. Personal selling and a presence trade shows should be

used to enhance the image. It will be important to reach the three distinctive markets that

1 Marlin Catering (Clow/Baack, Marketing Management), Sage Publishing

Marlin seeks to serve. Implementation and control measures are outlined in the

conclusion of this report.

Current Situation

Jose Hernandez and Clay Shields own Marlin Catering. They combine their

experience, management expertise, and financial resources to conduct business. Jose

Hernandez is also the co-owner/business manager of Marlin Catering Party Planning and

Marlin Caf. Clay Shields serves as the silent partner and is not involved in the daily

managerial activities of the business. The Marlin Catering business was established in

January 2008.

The owners of Marlin Catering would like to eventually concentrate on the caf

and catering business and discontinue the party planning business. Jose and Clay are in

the process of relocating the caf to another facility while expanding the services of the

catering business. This leaves the current caf as the only location to be used for the

catering business.

Presently, Marlin Catering carries out every aspect of the catering process. After

the initial meeting with the client, Jose Hernandez prepares a menu selection including

prices. The next meeting involves the contract signing and down payment. During the

catering event, Marlin Catering provides the food along with servers, linens, and china.

They set up the food display and clean up the venue at the conclusion of the event.

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Internal Environment

An analysis of the current situation for Marlin Catering includes examining the

companys internal environment, external environment, competition, and customers. The

mission statement was the first component examined in the internal environment. The

current statement reads, Marlin Catering is dedicated to providing service for their

customer base in the local catering market in the Fayetteville, Arkansas area. Marlin

Catering is committed to providing high quality and reliable services to existing and

potential customers.

Though Marlin Catering is a new business with little name recognition in the

catering market, the opportunity for exposure and interest is increasing. Catering is

widely used for many different occasions, and the demand for this service is continuously

increasing.

In developing the catering business, the owners of Marlin Catering investigated

the current market and current trends for catering services. According to the 2009

Economic Census, the catering market for the Fayetteville area produced $2,723,918 in

sales. There are various events in need of a caterer including, but not limited to:

weddings, banquets, graduation parties, engagements, showers, and political rallies. The

market appears to be saturated with a wide variety of catering vendors. Despite this

saturation, the owners entered the market because they believed with the right business

and marketing plan they could succeed.

The experiences of the owner and the operation of their current cafe creates a key

competitive advantage for Marlin Catering relative to competitors The experience in food

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preparation and in party planning helps the company acquire customers and expand the

clientele list. Also, the extensive resume of the owner gives the company a competitive

edge.

With regard to resources, Marlin Catering has an established facility in working

condition. The current production capacity for Marlin Catering is ten major events per

month. The business concentrates on high-quality production method which means the

company has the opportunity to focus on the quality section of the market. Although the

business is able to outsource for employees, the dependability and resourcefulness of the

employees place a limit on the firms current operating capacity.

Marlin Catering operated at a profit during the second year of operations;

however, this was partly due to the owner managing the business and sharing a facility

with the caf. Income statements for the first two years of operation indicate growth and

profitability potential.

2008 2009
Gross sales revenue $76,219 $109,347
Cost of goods $29,143 $46,023
Gross margin $47,076 $63,324

Labor $21,212 $30,425

Payroll taxes and
benefits $5,091 $7,302
Supplies $15,327 $9,352
Operating costs $5,328 $8,214
Facility rent/payment $0 $0
Marketing/Advertising $0 $1,242
Insurance $754 $982
Total Costs $47,712 $57,517

Net profit/loss ($636) $5,807

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 Currently, the catering service uses the van owned by the caf. In the future, a

vehicle dedicated to the catering service should be purchased. Supply costs went down

the second year, after the initial costs for purchasing serving equipment had been

absorbed. The new caf will soon be finished, which means the current facility will house

only the catering business. This will mean that the monthly payments on the building will

be charged to the catering service along with utility expenses.

External Environment

Due to the recession and slow down in the United States economy, sales in

catering services actually declined in 2009 in the Fayetteville area. The growth of the

university and new businesses in the area should help the economy rebound quickly,

including the catering business marketplace.

The cost of food increased in 2008 due to the rise in fuel costs, as did costs of

operating the catering vehicle. The costs remained relatively flat during 2009. Analysis of

economic data for the area and fro the United States indicates a slight increase costs in

the near future.

The demand for catering services tends to fluctuate during the year, primarily

because catering services reach peak demand for special occasions. Demand increases

during holidays and during the spring and summer for weddings. The majority of

weddings are held from April through July of each year. During this past year,

approximately 1,000 wedding ceremonies were performed in Fayetteville and

approximately 40,000 occurred in Arkansas.

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 Additional events that utilize catering services are political parties, corporate

parties and banquets, and private parties. Again, these tend to have higher concentrations

during the spring and summer, and around holidays. Catering for political parties

increases prior to local, state, and national elections.

Catering services are culturally diversified in the types of food dishes it provides

in order to meet all of the customers tastes & preferences. The most common requests

are for:

Mexican-style food

Oriental-style food

Italian-style food

American-style food

Seafood

Social-cultural trends indicate an increasing demand for catering service. An

increase in dual income households creates greater discretionary funds for catering

private events. Tied closely to this is the lack of time and busy schedules. It is easier and

more convenient to hire a caterer to handle the food at an event than do it yourself. This is

also true for weddings. But, another opportunity is present in the wedding market.

Catering is the most socially thing accepted method of serving food and any type of

private preparation of food would be viewed less favorably. This includes the rehearsal

dinner, which is now catered for most weddings in addition to the wedding reception.

Although the economy has affected the number of catering events held by

businesses, the growth in the business sector in the Fayetteville area has created a greater

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demand for catering services. These events vary from a recognition dinner that might

have 25 guests to major corporate events that will have attendance of 1,000 individuals.

Competitive Environment

Marlin Caterings main competitors are full service caterers, turnkey caterers, and

general caterers. According to the 2009 Economic Census, local catering sales totaled

$2,723,918, with Marlin Catering only holding a 4% market share.

The catering business consists of four levels of competitors. At the top level are

full service caterers who also are involved in event planning. They handle the entire

event, including the food. The second level of competitors is full-service caterers who do

not offer event planning services. They only care for the food and tables at the event. The

third level of competitors is restaurants that also offer catering services. These restaurants

tend to be limited by the types of foods served at the restaurant. The lowest, or fourth tier,

are restaurants, primarily fast food operations and grocery stores, that prepare catering

food trays that can be picked up by customers. Some restaurants also provide these food

trays for customers who are concerned about expenses.

The top tier catering services target large businesses and the high-income

residents of the area. Fayetteville Planning and Catering is the market leader in this sector

of the market and controls the largest market share of the catering business. Although

their prices tended to be high, the company has a loyal customer base and its owners are

member of the local social elite class.

It was the second tier of competitors that offer food, service, and prices that are

comparable to Marlin Catering. Fortunately, the location of the caf helped create a

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positive image of Marling Catering through the perception was that it was a local

restaurant that was engaged in catering. Most companies and individuals did not know it

was a full-service catering service and that it operated independent of the restaurant.

For most catering services awareness and recognition are the keys to success. Few

companies, except the large ones, spend money on marketing and advertising. This is

especially true for the bottom two tiers, restaurants and grocery stores. They simply post

signs in their business about the catering service.

All of the companies in the first two tiers have yellow page ads or listings. Some

of the higher-end restaurants also place a listing under catering to inform potential

customers they do provide catering as well. A few of the companies advertise in the

newspaper, especially in the spring and summer and around holidays. A select few have

agreements with other types of services to generate leads, such as bridal shops,

photographers, florists, and bakery shops.

Customer Analysis

Marlin Catering maintains a full service operation. This service offers a menu

selection to customers. The customer then selects the exact menu for an event and

negotiates a price per person. The company provides the china, linens, crystal, and silver

for the event. Employees are responsible for the set-up and clean up of the event. Marlin

Catering is also responsible for replenishing empty trays during the event.

The catering service is currently operating out of the caf and most of the catering

business thus far has been generated through the caf. Sales have been made to individual

customers or businesses that have either dine at the caf or through customers of the caf

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who have heard about the catering service. The restaurant serves primarily Mexican food,

which means that most of the business has been for events featuring Mexican cuisine.

A review of sales for the last 2 years shows three primary types of customers or

events: individual consumer events, wedding receptions, and small business events. For

the individual consumer events, the average attendance was around 15 individuals and

the average charge was $280. For weddings, the average attendance was 60 with an

average ticket charge of $1300. The business segment varied widely with some events for

only 10 to 15 people, but others for as many as 150 and 200 individuals. The figure

below shows the percentage of sales generated from each of the market segments in

2009.

In terms of demographic profiles, the individual customers tended to be 30 to 50

years of age with an income range of $75,000 to $125,000. For the wedding

receptions, the ages were a little older, from about 35 to 60, but similar incomes. The

ethnic makeup of the customer base consists of a high percentage of Hispanic

customers. The figure below displays the ethnic breakdown of the customer base.

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 In examining the business customers, almost all of the customers (93%) were

located within 20 blocks of the caf. Most of the businesses, 63%, employed between 10

and 30 individuals. The types of customers varied from insurance offices to a small

manufacturing facility. Most of the catering events for the businesses involved

recognition dinners. A few were for company picnics or similar company outings.

The final component of this customer analysis is to examine the types of food

being served. Marlin Catering is currently tied to the caf. The result is that the largest

demand is for Mexican-style food, which is served at 82% of the catering events. Second

was for American food, but that was served at only 36% of the events. Italian, seafood,

and oriental were all below 10%. The percentages add up to more than 100% because

some events wanted more than one type of food. The most common combination was for

both Mexican-style food and American style food for individuals who did not like

Mexican.

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SWOT Analysis

The SWOT analysis involves reviewing Marlin Caterings strengths and

weaknesses. The opportunities and threats were taken from the environment in which

Marling Catering operated. Most of the material in this section has already been covered,

but it is beneficial to summarize it here. The figure below provides a table that highlights

the results of the SWOT analysis

STRENGTHS WEAKNESSES

1. Solid, strong owners and leadership 1. Operated from caf

2. Sold reputation with caf 2. Image of Mexican catering service

3. Experience in food preparation 3. Image as a restaurant caterer

4. Low cost facility 5. Low awareness of catering business

5. Financially stable operation

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6. Funds available for marketing
OPPORTUNITIES THREATS

1. Growing local business economy 1. Large number of competitors

2. Changing cultural/social acceptance 2. Low-end suppliers with lower prices

3. Recovering U.S. economy

Marling Catering has solid, strong ownership with considerable experience in

food preparation as well as event planning. The firms other two businesses helped the

catering service to be sound financially. The company has money to invest in marketing

the catering service and making it a viable competitor in the marketplace.

While being tied with the caf and planning business provides some experience

financial benefits, it also is currently a major weakness. The types of food served by the

catering service and the type of clients being served illustrate the catering service has an

image of being tied with the Mexican caf and as a result is a catering service that

specializes in Mexican food. In addition, there is a low awareness of the catering service

in the public, especially among businesses.

The growing local economy and changing cultural acceptance of catering services

provides Marlin Catering with an opportunity to expand the business, despite the threat of

a large number of competitors. If Marlin Catering can disassociate itself from the caf,

this will reduce competition from the low-end market providers and allow Marlin

catering to increase their prices and provide a higher level of service.

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Marketing Objectives

Marketing goals outline the purpose of a company and then marketing objectives

act as a guide whereby the firm can evaluate its marketing decisions and performance.

Based on the analysis of Marlin Catering, the following marketing goal is set forth for

this marketing plan:

The marketing goal for Marlin Catering is to become a viable company in

the catering business in the Fayetteville area serving both individuals and

businesses with high quality food and service.

Objectives are used to evaluate the performance of a business and the success of

the marketing plan. The following objectives of Marlin Catering set goals in sales, profit,

image, and customer awareness to be reached within one year.

Short-term objectives (1 year)

1. Sales: To generate revenues totaling $200,000 for the next calendar year.

2. Awareness: To have 15% of area businesses and organizations, and 20% of middle to
high-income individuals in the local target market aware of the product and
services offered by Marlin Catering during the year.

3. Image: To have 50% of the individuals and businesses who indicate they are aware of
Marlin Catering to also indicate they see it as a full-service catering service that
provides a full array of foods and services.

Long- term objectives (3 years)

1. Sales: To generate revenues of $500,000 within 3 years.

2. Profits: To generate a net profit target of a 10% by the end of 3 years.

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3. Awareness: To have 40% of area businesses and organizations, and 50% of middle to
high-income individuals in the local target market aware of Marlin Catering.

4. Image: To have 75% of the individuals and businesses who indicate they are aware of
Marlin Catering to also indicate they see it as a full-service catering service that
provides a full array of foods and services.

Target Market

The clientele of Marlin Catering can be divided into two segments. The first

segment is the individual who has a desire for social contact through social events and

celebrations. This group is made up of upper middle class married individuals who seek

social and cultural acceptance. They are very brand loyal because of their high-income

status. This group of individuals may also have certain family characteristics. They would

have the presence of children who will in the future engage in social and wedding

activities. Their activities would include social events, entertainment, and shopping. Their

interests include such subjects as family, home, and community. Opinions and views they

hold about themselves and the world around them are social issues, culture, products, and

the future.

The second segmentation of the target market includes area small to mid-size

businesses and organizations, both profit and nonprofit. This group consists of

organizations and businesses engage in community and corporate affairs. They spend

more money and offer more events than the previous segment. Their activities include

work, social events, and entertainment. Their interests include such items as jobs and the

community. The businesses and organizations opinions and views they hold are politics,

business, products, economics, and the future.

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Marketing Strategies

Marlin Catering offers great food and a unique catering service to businesses and

small to medium consumer groups. The overall strategy is a growth strategy with a

concentration on creating awareness. The concept of the awareness strategy is to start in a

local market through an integrated marketing approach and then use the experience and

positive word of mouth to move into subsequent markets. In the case of Marlin Catering,

we suggest starting in the previously defined Fayetteville area. Once the market is

established, Marlin Catering can consider branching into other regional areas, such

Springdale, Rogers, and Bentonville.

Product Strategy

Marlin Catering offers top quality food and beverage catering with high quality

service. Marlin Catering guarantees on time delivery of goods and services, and assures

each customer that their satisfaction is top priority. Jose Hernandez is also one of only

two certified chefs in the Monroe area.

Although Marlin Catering offers services comparable to many of the other

caterers in the surrounding areas, Jose has yet to develop a strong reputation for his

catering company. There are approximately 40-50 advertised caterers in the surrounding

areas, all of which offer basically the same services, which include; a wide variety of

entrees to chose from, preparation of food and beverage, delivery of food and beverage,

and servers to serve the prepared meals. In addition to the basic catering services

provided by Marlin Catering, Jose is also skilled in the art of ice sculpturing. This could

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easily provide him with the competitive advantage he needs in order to get his foot in

the door, and enhance his reputation in this very competitive market.

We recommend that Marlin Catering offer a full-line catering service as opposed

to the basic catering service offered by most of the area caterers. We refer to this type of

caterer as a turnkey caterer or event planner. A turnkey catering service offers more than

just the basic food preparation, and can offer services such as providing stemware,

flatware and dinnerware for the meals, flowers, tablecloths and centerpieces for the

decoration. Everything from basic food preparation to subcontracting the entertainment

for the event can be included in the list of services offered. Joses experience with event

planning provides him with expertise in this area and yet does not involve planning for an

entire event.

Distribution Strategy

Marlin Catering is currently located on 6th Street. By using this location for the

catering service and moving the caf to a new location allows Marlin Catering to expand

the catering operation with minimal costs. The restaurant will still be located nearby so it

does provide the benefit of sharing some resources, especially human capital.

Marlin Catering, being a catering service, deals mainly in direct sales, and

promoting via word of mouth. Creating a website may allow large groups and

companies, as well as individual, to learn more about Marlin Catering. Potential

customers can go to the website to have access to the services offered, the unique items

and possibilities, and discover the "who, what, when, where, and how" information about

the business.

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 Indirect sales could also be an option for Marlin Catering. By networking through

florists and banquet halls, more contacts can be made. Wedding chapels often provide

florists, decorations, photography, and catering. Aligning with a wedding planner or

chapel can create a new client base.

Promotion Strategy

To increase market share as well as gain profits, Marlin Catering should establish

an aggressive awareness campaign using newspaper advertising, tradeshows, networking,

personal selling, and website partnerships.

It is suggested that Marlin Catering consider expanding its advertising endeavors

by placing ads in the local newspaper. Regular advertising should especially be

considered during the spring and summer months when catering services peak.

Advertising during other times of the year can help increase brand name recognition.

We recommend that Marlin Catering develop a colorful brochure for the catering

business, including pictures and the distinctive characteristics of the catering business. It

should also highlight Joses ability to create ice sculptures that could fit in with the theme

of the event. These brochures should be designed for sales calls, tradeshows, and

inquiries.

Trade shows are an excellent venue for reaching consumers and businesses. The

owners should carefully choose tradeshows that will maximize the companys exposure.

For instance, a trade show dealing with weddings would be excellent for that market. A

trade show involving business attendees would be good to reach the business community.

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 A personal selling strategy should be used to introduce the firm to local

businesses as well as networking with floral shops, wedding accessory shops, specialty

bakeries, and other interested establishments. This type of strategy should begin with

personal letters containing information about the company and its services. These letters

should be followed by phone calls in order to set up a sales appointment. These sales

appointments should include a presentation of the services offered and should be

followed up by a personal call or letter.

The website will assist in creating better recognition and acquiring more

customers. It is important for the website to be linked with other services, especially

those that are connected to events such as weddings. Creating mutual link partnerships

with local wedding planners, florists, retail wedding stores, and photographers can benefit

both parties.

Pricing Strategy

At the present moment, Marlin Catering pricing is equivalent or competitive with

the other caterers in the market. As Marlin Caterings market share grows, the company

should increase prices to relocate to the upper tier of catering services. Not only does this

increase revenue, but it also may enhance the prestige and image of the company.

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Marketing Tactics

The marketing strategy should begin with the development of an advertising

awareness of campaign. Working with a local agency or a free lance creative, a series of

newspaper ads should be designed. Marlin Catering serves three distinctive markets.

Advertisements should be designed to reach each market. If funds exist, it would be

helpful to design 2 or 3 ads for each market, so they can be rotated. Once these are

designed, Jose should negotiate with the local newspaper for regular advertising space

with a heavier emphasis during the spring and summer months. The ads designed to

solicit wedding business should be concentrated more in the winter and early spring when

individuals make wedding plans.

Coinciding with the development of the newspaper ad campaign should be the

development of a color brochure. The brochure should be high quality and created by a

professional agency or service. It should reflect the high quality service and food that

Marlin Catering offers. This brochure will be used for sales calls, tradeshows, and

inquiries about the catering services.

Marlin Catering should designate an employee within the company to examine

the local newspaper and clip every engagement announcement. This employee should

then locate the mailing address of the bride-to-be. A direct mail offer letter should be

designed and sent to each bride-to-be along with the brochure.

Working with the Chamber of Commerce and other local organizations, Marlin

Catering should make a list of all tradeshows in the area. An analysis of each trade show

should be conducted especially in terms of who attends and how well the attendees match

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Marlin Caterings three target markets. Depending on the costs of hosting a booth, Marlin

Catering should select a variety of shows that will allow the company maximum

exposure. To attract attention to the booth, Marling Catering should offer a contest or

sweepstakes offering free catering services as the prize. This goal is to generate interest

and collect names of individuals and businesses that can be entered into a database and

solicited in the future.

In conjunction with the design of the advertisements, brochure, and direct mail

offer, Marlin Catering should to retain a company or individual to redesign the companys

website. The site should be of high quality and the look, graphics, and feel need to match

the brochure and newspaper ads being designed. Everything will be integrated and offer

the public the same image of the company.

Once all of these advertising and marketing pieces have been created, Jose is

ready to start making sales calls. He should start with businesses that surround the

catering facility then move to businesses surrounding the new caf location. At the same

time, Jose should follow up business leads obtained from the trade shows.

The final component of the awareness campaign being recommended is the

development of a follow-up letter and survey to consumers and businesses that use

Marlin Caterings service. The letter should thank them for their business. The survey

should solicit information about the quality of the service and the customers experience.

The final component of the survey should ask for friends or business associates that Jose

can contact and provide information and a brochure. To encourage customers to complete

the survey and provide referrals, a voucher for two to Marlins caf should be sent to

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every person that books a catering event. This allows for that person and his or her

significant other to enjoy a nice "thank you" meal at the Marlin caf.

Implementation

Before launching this marketing strategy, Jose should develop a calendar noting

when each component will be developed. In addition, Jose should estimate the costs of

each component. To ensure a successful completion of the marketing strategy, funds will

be earmarked for each component. By spreading the costs over a year, Joe can use monies

generated by the business to support the marketing effort. It may also be necessary to

borrow some cash from the caf or corporate business to ensure the marketing plan

timetable is followed. Based on our analysis, we recommend the following time table.

Costs are a very rough estimate based on limited knowledge and investigation into the

recommendations.

Step Activity Starting Date Implementation Date Estimated

Costs
1 Develop newspaper ads January March $1,700
Run newspaper ads March-December $18,000
2 Color brochure January February $12,000
3 Direct mail letter February March $200
4 Trade shows March March-December $10,000
5 Website design March March $3,000
6 Follow-up letter April April $100
Total Costs $45,000

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Evaluation and Control

The companys performance will be evaluated in four key areas: sales, profits,

awareness, and image.

In sales performance, actual sales should be compared to the sales objective. This

can be completed at the end of each quarter. The owners Marlin Catering can look to see

whether the company is on target to reach the first year sales goal. In addition to

reviewing sales figures, the owners can examine the number of clients served to see if

any increase in sales was due to more clients and/or clients spending more per event.

Company sales should be compared to the industry average and that of competitors, if

this information can be obtained. Careful records and detailed reports on performance

will assist the monitoring process.

For profit performance, the sales revenue and costs from the previous year should

be compared to that of the current year. Actual and estimated profits should also be

compared to determine differences. A cost control system should be developed to

maintain costs that remain within the specified budget. This will help to control

profitability within the business. The investments in marketing during the year will make

it more difficult to turn a profit the first year. But, by year 2 and year 3 of this marketing

plan, a profit should be generated with the objective of earning a 10% net profit by the

end of year 3.

Awareness should be measured on a regular basis. This will be conducted by a

marketing research firm or an independent agency to ensure validity of the study. The

costs of retaining an outside company may be prohibitive until the end of each year.

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When it is financially feasible, it would be beneficial to conduct an awareness study.

Hopefully this will occur at the end of 6 months, so corrections can be made if the

company is not on target. The effects of advertising and the awareness campaign may be

somewhat delayed. It will take time to get word out about the company.

The image component of the plan can be measured along with awareness. It

should be measured at the end of each year to determine if the marketing campaign has

changed or developed the image of the company.

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