Chapter 13 - 張瑞釗 Chang Reed-joe · PDF fileChapter 13 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for

Chapter 13

© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.

This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Speak softly, love.

指導老師：林建信教授

學生： 004 張瑞釗

006 林東榮

106.3.28 011 李靜

R_mp4_speak_ softly_love_1050630.mp4


This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-2

• A small restaurant in Evanston, Illinois.

• It was written by five MBA students as part of my marketing strategy course at the Kellogg School of Management: Ryan Farnan, Matt Fitzgerald, Matt Hanculak, Matt House, and Chris Reynolds.

• Edzo’s Burger Shop is a premium, independent, quick-serve hamburger restaurant. Store owner Eddie Lakin, nicknamed Edzo, estimates that he sells between three hundred and five hundred burgers per day. The shop is open Tuesday through Sunday from 10:30 a.m. to 4:00 p.m.

• Edzo is the face of the brand, and he operates the cash register daily. Marketing Plan: Edzo’s Burger Shop

Rare Initiatives, Well Done December 6, 2011



EXECUTIVE SUMMARY

• Edzo’s Burger Shop is struggling. Revenue has fallen 20 percent in the last year as competitors, especially Five Guys, have stolen market share. Not surprisingly, the revenue decline has had a major impact on profitability.

• This marketing plan is focused on rebuilding profits. The goal is to

increase profit by 50 percent over the next year with a focus on three strategic initiatives: raising prices, building the store experience, and increasing buying rate. (策略方案)



STATE OF THE BUSINESS

POSITIONING

• Critics and diners alike deem Edzo’s the highest-quality quick-serve burger shop in Evanston because of its impeccable ingredients and unrivaled freshness.

• Edzo’s grinds its meat daily, it never freezes its meat, it hand cuts its fries daily, it double fries its fries so they are crispy, and it cooks the burgers to order. Furthermore, it works with local farms to provide the highest-quality beef. No other outlet provides such quality and freshness.



STATE OF THE BUSINESS

• Edzo’s targets burger enthusiasts who prioritize freshness and quality. Macro food trends such as local, organic, humane, sustainable, antibiotic-free, and grass-fed carry considerable weight with this target.

• What’s more, they value quality measures like grinding the meat daily and cooking it to order. Edzo’s does not target calorie counters.

• Edzo’s positioning is clear: For burger connoisseurs, Edzo’s is the brand of burger shop that provides the highest-quality burger experience because of its premium, fresh ingredients and exceptional preparation.

(行家, 優質的, 特殊的)



RECENT RESULT

• Despite its premium positioning, nearly unanimous positive reviews, and strong word of mouth, Edzo’s business has decreased 20 percent over the last year. (一致同意的)

• The primary reason for this decline was the opening of a popular Five Guys Burgers & Fries franchise nearby in October 2010.

• A secondary factor is sustained competition from a crowded marketplace. Direct competitors include other quick-serve burger eateries such as Neu Uber Burger and Burger King.



• When analyzing possible growth strategies, a major constraint for Edzo’s is its limited hours.

• But since Five Guys opened in October 2010, Edzo’s has lost approximately 20 percent of its revenues, falling to $806,400, with profits of just over $172,000.

• In the process, Edzo’s lost a quarter of its net margin, which fell from 28 percent to 21 percent.



GOALS/OBJECTIVES

• Given the current state of the Evanston market and the

current financial state of the business, we believe that Edzo’s

should set an aggressive but attainable goal of increasing

profits by 50 percent in the next twelve months.



• STRATEGIC INITIATIVE 1: INCREASE PRICES

• STRATEGIC INITIATIVE 2: BUILD IN-STORE EXPERIENCE

• Tactic 1: Ensure That All In-Store Communication Articulates

• Tactic 2: Discontinue Delivery Service

• Tactic 3: Create a Second Line for Faster Ordering

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• STRATEGIC INITIATIVE 3: INCREASE BUYING RATE

• Tactic 1: Create a Loyalty Program Centered on a Once-per-Month inner Event

• Tactic 2: Drive Additional Usage with Off -Peak Promotions

• Tactic 3: Utilize Existing Web Properties to Keep Edzo’s Top of Mind with Customers

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• Prior to the entry of Five Guys, Edzo’s was averaging approximately 425 customers per day, earning annual profits of about $275,000 on revenues of just over $975,000, as shown in exhibit 13 entry of Five Guys, Edzo’s lost nearly 20 percent of its business, lowering annual revenues and profits to approximately $800,000 and $175,000. This lowered margins significantly, from over 28 percent to just 21 percent, and overall profit fell by nearly 40 percent.

• The suggested strategic initiatives of taking price increases as well as increasing repeat business provide two separate levers to increase profits. There are various combinations that will deliver profits of at least $259,000, reaching the targeted 50 percent increase, as shown in exhibit 13.4.

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• As explored above, it seems reasonable to assume that Edzo’s could

realistically generate and support between twenty-five and fifty

additional visits per day with better repeat business.

• This would increase total visits per day to between 375 and 400. Along

with pricing increases that increase the average sale to between $8.50

and $8.75, Edzo’s could easily increase profits to the targeted range.

• Amounts toward the higher end of both ranges would improve annual

profits to nearly $330,000, which represents a 20 percent improvement

over the pre-Five Guys period.

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• Of the initiatives proposed, increasing prices is the most risky recommendation.

• Because Edzo’s does not have the resources to conduct research into consumer price elasticity, it is unclear what consumers’ reaction to price increases will be. Therefore, the implementation of in-store signage around freshness and quality of food is paramount in importance and will give customers the proof that they should be paying more for an Edzo’s burger.



• The planned increase in business from the above initiatives will be for naught if Edzo’s cannot operationally process more customers during peak hours.

• The length of the line during Edzo’s peak operating hours leads to abandonment.

• With a bevy of lunch and burger options nearby, consumers can still easily get their burger fix. The second line, with a limited take-out menu, should alleviate this, but it remains to be seen if Edzo’s can deliver the same quality product in an even more crowded environment at a reasonable or faster pace.



• Edzo’s needs to monitor its progress as it seeks to increase its profits by 50 percent over the next twelve months. The following will provide insights into the health of the marketing plan.

• Price increase: Track unit sales and average check to determine if pricing increase is effective; this should be measured each month for twelve months, and compared against plan.

• Build in-store experience: Track the incremental revenue and utilization rate associated with second line on a monthly basis.

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• Additionally, in order to track the success of the new in-store messaging, Edzo’s could track how many Facebook comments and Yelp reviews cite “freshness,” or they could casually ask people at the register to do word association with the Edzo’s brand name.

• Although these are not empirically rigorous techniques, they would at least give Edzo’s a sense of whether the repositioning has been at all effective.

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• Buying rate evaluation: To understand if Edzo’s is increasing its buying rate among repeat users, it must assess the success of its loyalty program. On a monthly basis, Edzo’s can simply track how many people are qualifying for, and participating in, its special dinner events.

• Edzo also needs to increase his “likes” on Facebook. He can monitor website traffic to understand how people are using the site. Edzo’s should seek to go from 1,189 to 2,000 “likes” within twelve months, and engage with fans or create public posts at least once per day.

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• As a sole proprietor, Edzo primarily measures “success” by his quality of life—he makes a living doing what he loves, and he gets to spend ample time with his family. However, that should not preclude him from implementing some practical strategies to generate growth in his business. Quite simply, we believe a goal of increasing profits by 50 percent over the next twelve months is eminently achievable.

• Central to attaining this goal is consistent reinforcement of the perception that Edzo’s provides the highest-quality burger experience available..

CONCLUSION



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• This informs our three strategic recommendations for the company:

- Increase prices to drive profitability and enhance the perception

of quality;

- Build the in-store experience to consistently communicate the

quality of Edzo’s ingredients and preparation;

- Increase the buying rate through tactics that drive the perception

that Edzo’s is a special restaurant that caters to the most

sophisticated burger lover.

• Following these recommendations will help Edzo ensure that he

maintains the quality of life that he has worked hard to achieve, while

creating more wealth for himself and his employees.

CONCLUSION



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CONCLUSION

Exhibit 13.5 Edzo’s Marketing Plan Summary

Goals/Objectives Strategic Initiatives Tactics

Increase price

Increase profits by +50% next year

Build in-store experience

Increase buying rate

Raise prices on all burgers

Update in-store signage Discontinue delivery Create a second line

Create a loyalty program offer off-peak promotions Use web properties

How to write English well - with a review of NCSIST website

21

Culture is the habit of being pleased with the best and knowing why.

Thank You

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Chapter 13 - 張瑞釗 Chang Reed-joe · PDF fileChapter 13 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for