1. Applebee’s
I. Executive Summary
The National Restaurant Association reports that the U.S. restaurant and food service
industry currently employs more than 12.5 million full and part-time workers making this
industry the largest employer in the Nation after local, state, and federal government. In 2006,
the industry's 925,000 locations will serve over 70 billion meals and snacks . Applebee’s in one
of these top restaurants founded nearly three decades ago on the principal of exceptional value
and family fun. In 1980, Applebee’s Rx for Edibles & Elixirs was founded in Atlanta, Georgia by
Bill and TJ Palmer. It isn’t until 1986 that Applebee’s changed its name to “Applebee’s
Neighborhood Bar & Grill”. In 2000, Applebee’s expanded internationally to open res taurants in
Latin American and the Middle East. Applebee’s has a strong customer base, serving over
20,000,000 guests every month. Applebee’s combines quality food with outstanding service
and an inviting atmosphere, making them “America’s Favorite Neighbor.”
Applebee’s target market is consisting of predominately Caucasian with African
Americans being the second largest market. Average age range is 18 to 34 years segment
followed by the 35-54 years segment. Applebee’s audience consists of middle class families
with $30-$60K a year income. 64% of guests are married and those families with children that
attend Applebee’s make up from about 42% of patrons. Applebee’s recognizes that a diverse
culture means more than just recognizing differences. Applebee’s is dedicated to diversity and
fostering a diverse work community that reflects the cultural neighborhoods surrounding the
establishment. However, Applebee's universal marketing messages, "You Belong at
Applebee's" reinforce the concept's inviting atmosphere, "World Class Service" operating
philosophy and largely suburban development pattern for any Applebee’s guest.
Applebee’s mission is to provide and create an experience for each guest and employee.
It is Applebee’s commitment to the community to do anything it takes to provide, friendly
service, high quality products and create a memorable dining experience. Applebee’s achieves
this level of “World Class Service” by hiring and training the most qualified and top employees
in the market. Applebee’s prides itself at balancing our dedication to its staff and guest, with
the expectation of a reasonable profit, insuring continuous growth. Applebee's continues to
grow and prosper, and further differentiates themselves with innovative attractions and high
standards of service.

2. II. SWOT Analysis
Internal Factors Strength Weakness
Management -Experienced and thoroughly trained.
-Excellent communication skills.
-Quick reaction time with fast delivery.
-75% of all Applebee’s restaurants are owned
by independent franchise operators.
- Management bending rules.
- Switched management not too long ago.
- High franchise rate.
Offerings (product) -Exceptional value and family fun.
-American inspired casual dining style.
-Wide variety and customizations.
- Offers a full bar.
- Traditional favorites and signature dishes.
- Believe in the importance of animal welfare.
- Similar to the offerings of TGI Fridays,
Chili’s and Ruby Tuesdays.
Marketing
(promotions)
-TV, radio, direct mail, print ad, merchandising.
- Sends out E-mails and coupons.
-Fundamental positioning is "neighborhood".
-Recently rebranded.
- Largest casual dining concept in the world.
- Product based commercials, or just
advertising one specific aspect.
- Forced to double the amount of money
adverting department was getting to break
through the clutter and create action.
- Needs support from the server to push
promotions and new products.
Personnel -Well trained work staff.
- Excellent communication skills.
- “Team” atmosphere.
- Polite, quick, knowledgeable.
- Treats every table as their own family.
- Never experienced a work stoppage.
- Help give back to the community like
Toy for Tots
- Each attendance is a new experience; poor
customer service can hinder re-attendance.
- Dinner rushes and weekends.
- Competitive attitude because servers work
for $4.50 plus tips.
Financial - Excellent growth in sales revenue.
- Stock now worth about $33 a share.
- DineEquity owns both Applebee’s and
IHOP.
- Economic recession.
Research &
Development
- Discovered they have to energize the brand,
improve operations and refranchise company
restaurants.
- Located in 49 states and 16 countries.
- Development of newer products.
- Alliance with Weight Watchers.
- Lack of new ingredients.
- Balancing old patrons while trying to attain
new guests.
Versatility -Causal dine-in
-Car-Side to Go
-Full Bar
-Catering
- Resembles versatility of TGI Fridays,
Chili’s and Ruby Tuesdays.
- Multi-tasking
Price - Average ticket around $10 a guest.
- Moderately priced.
- Prices set by corporate based on various
factors.
- Unpredictable economic issues that
fluxgate situation to situation

3. - In the price range of other competitors
like TGI Fridays, Chili’s and Ruby
Tuesdays.
- Fast food and quick service restaurant.
Purchasing -Have quality standards for products used.
- Maintain a list of approved suppliers and
distributors.
-Agreements with suppliers that allow
volume discounts.
-Selective.
- Franchisers are limited and restricted.
External Factors Opportunities Threats
Consumer - Middle class families.
- Family oriented.
- 60% female demographic.
- 18-34 age range.
- 81% Caucasian.
- Average income of $30-60K is 29% and
an income of $60-100K consists of 26%.
- Ongoing changes in food habits and
preferences.
- Population trends and traffic patterns.
- Falling consumer confidence. Failing to
meet customer needs.
- Low ethnicity rates on attendance.
- Prior customer loyalty to competitors.
- Price Sensitivity.
Competition - Distinct marketing brand and packaging.
- To become unique by offering superior
food and beverages with excellent service.
- Find and take advantage of loose bricks
in competitor’s strategy.
- Fast food and quick service restaurants.
- Competition from: fine dining, family
dining, casual dining.
-Direct competition is: TGI Fridays, Chili’s
and Ruby Tuesdays.
- Opening new restaurants may
jeopardize the sales of an existing
restaurant.
Economic - Stimulus package might motivate people
to spend money.
- Parents forced to work one if not two
jobs, offering a health and nutritious meal
without the hassle of dinner or clean up.
- US economy experiencing a slowdown.
- Rising unemployment rates.
- To an extent relies significantly on
national, regional and local economies.
- Long term debt of $1.9 billion.
Financial - Stimulus money relieving tension from
existing debt.
- Increase in food costs including rising
commodity cost.
- Increase in labor cost including increase
of minimum wage.
- Increase in other operating cost
including: advertising, utilities, lease-related
expenses and credit card
processing fees.
Socio-Culture - Summer time brings an increase in
patrons.
- Incorporate local events.
- Health trends and fads that scare
customers away from products.

4. Environmental -No federal, state, or local environmental
law or regulations to affect revenue, cash
flow or competitive position.
- High US Food & Drug Administration
standards.
- Cannot predict future environmental
regulations and legislations.
- Risk of shortages /interruptions of food
and beverage due to adverse weather,
political unrest, terrorism, outbreaks of
food borne illness, and other factors.
III. Marketing Program
The four marketing mix elements for Applebee’s marketing program are detailed below.
Product Strategy
Product Line. Applebee’s offers traditional options in a casual dining restaurant.
Delicious appetizers, fresh salads, mouth-watering steaks, irresistible ribs and fajitas, flavorful
chicken, succulent seafood, tasty extras, warm pastas and bowls, juicy burgers and sandwiches,
fun kid’s menu, sweet deserts and enticing beverages. The key to maintaining competitive
advantage is being committed to constant improvement. Applebee’s hold true to that motto
introduced two new lines of product. One being the “New Sliders” cons isting of BBQ pulled
pork, French dip, cheeseburger and southern chicken. The second product line is called “Skillet
Sensations,” not yet introduced in America. This includes a new appetizer, three entrees and
one dessert. Applebee’s offers guests a casual/family dining restaurant with table or take out
service.
Unique Product Quality. Applebee’s uses the highest quality of ingredients and products
from the most prestige and select suppliers. Every Applebee’s guest receives above par
customer satisfaction with educated and helpful staff priding itself on being quick and
responsive with good retention rates. Applebee’s offers a non-cluttered, relaxing, casual
atmosphere striving to be your “favorite neighborhood.”
Packaging. Applebee’s atmosphere most guests are familiar with falls into the same
design as TGI Fridays, Chili’s and Ruby Tuesdays. To differentiate, Applebee’s has undergone
remodeling. The new Applebee’s allow for a more open floor plan with the main focus being at
the bar. With red leather booths and wood accents all around, it gives it an upscale feel without
the luxurious price. Rebranding the Applebee’s logo allowed for a fresh new appeal to break
barriers and reach a wider more diverse audience.
Price Strategy
Applebee’s entrees range in prices from $6-$12, with the average ticket being around
$10 a customer. Applebee’s aligns pricing with cons ideration of competitors pricing such as TGI
Fridays, Chili’s and Ruby Tuesdays. Pricing for Applebee’s also depends on outside

5. environmental factors as well. Instances of surplus and shortages in specific products, cost of
living, health and legislation all place impact pricing. Through those times of impact Applebee’s
fights to stay cost friendly, convenient and reliable.
Promotional Strategy
In-Store Sales. Due to the rough and uncertain economic times Applebee’s have offered
a deal that really is a steal. The promotion is called “2 for $20” which includes one appetizer
and two select entrees. Applebee’s also offers discounts on specific alcoholic drinks depending
on which day of the week a guest attends. Applebee’s during lunch time also offers the “Pick
and Pair” were a guest chooses from soup or salad and half a sandwich or half an entrée.
Apple Rewards. Apple Rewards is an Applebee’s program inspired to motivate young
children. Teacher, parents, grandparents or any patron can buy a coupon book which allows
one free kids meal, with the purchase of an adult entrée.
Radio, Television & Print Ads. Applebee’s utilize the available mediums to its benefit.
Applebee’s commercials shows parents interacting with their happy children and guests
enjoying the company of friends plays to the emotional appeals that make Applebee’s thrive.
Radio ads use a more product oriented approach discussing new menu items or promotions to
entice the listener to take action. Applebee’s billboards along major highways allows for more
viewership, even though billboards don’t stimulate a high rate of action.
Internet &E-mails. Applebee’s website allows visitors a glimpse into the environment
and culture that make Applebee’s unique. A plethora of information from nutrition, location,
articles, contacts, links to DineEquity and finical reports. Applebee’s website allows for e-mail
sign up informing customers of new promotions and offering coupons for patronage. Feedback
is also very important to Applebee’s encouraging guest to speak out about what they like and
do not like. The internet allows for valuable exchange and start building the fundamental levels
of relationship.
Place Strategy
The distribution channels of Applebee’s is various and complex. Distribution of customer
service ends with customer, who received amazing service from their server. The most
important asset to Applebee’s, and other companies, is their hardworking employees. To
promote great customer relations, managers must maintain a good employee relation. Ensuring
that employees are happy and taken care of in a way ensures managers employees are making
guest are happy and taken care of in return. Lastly, good owner to manager relationship can
secure a successful company growth and long term success. Applebee’s supply chain is a little
more complex still ending with the customer. The supply chain starts with raw material

6. packaging/fresh produce packing which includes supplier set standards from institutes such as
American Meat Institute, United Egg Producers, National Chicken Council and National Pork
Board. From that point products are taken to processors and then cold storage/redistribution.
The next step in the Applebee’s product chain is product going out through the distribution
network to the restaurant where it is served to the customers by the servers. As sales grow,
Applebee’s will shift to a more efficient system using a broker who sells the product to retail
chain.
Place in terms of location, Applebee’s has prided itself at being consistent and
convenient. By sticking with the same suppliers allows guest to travel to one of 2,000
establishments and receive the same quality of product. Applebee’s has usually been a free
standing establishment or blended into a strip mall. Offers a wide variety of setting options
including the bar, booths, table, high tables, allowing Applebee’s to accommodate a party of 2
to a party of 22. To expand reach Applebee’s is aiming to set up locations in desires locations
such as airports, train stations, shopping malls and hotels.
IV. Conclusion
Each Applebee’s Bar & Grill is designed as an attractive, friendly, causal/family dining
restaurant that entices neighbors to swing by relax and enjoy the comfort of their own
neighborhood. It is because Applebee’s is always innovating and reinventing it is allowing them
to maintain the competitive edge many other restaurants have lost, like Bennigan’s. Applebee’s
use of the marketing mix: price, product, place and promotion helps define their market and to
be successful in all four aspects. Applebee’s focus on hospitality and customers first, is the
steady foundation that allows Applebee’s to be so versatile and fun. The hospitality and
customer relationships that Applebee’s are able to create and maintain, allows for long term
success on a global level.